Stock Market Outlook for March 17, 2025
We let down some of our guard on the equity market prior to Friday’s rally and there is no reason not to do more.
*** Stocks highlighted are for information purposes only and should not be considered as advice to purchase or to sell mentioned securities. As always, the use of technical and fundamental analysis is encouraged in order to fine tune entry and exit points to average seasonal trends.
Stocks Entering Period of Seasonal Strength Today:
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Tortoise Power & Energy Infrastructure Fund Inc. (NYSE:TPZ) Seasonal Chart
Sasol Ltd. (NYSE:SSL) Seasonal Chart
Ovintiv Inc (NYSE:OVV) Seasonal Chart
Cross Timbers Royalty Tr (NYSE:CRT) Seasonal Chart
Empire Co. Ltd. (TSE:EMP/A.TO) Seasonal Chart
ARC Resources Ltd. (TSE:ARX.TO) Seasonal Chart
International Petroleum Corp. (TSE:IPCO.TO) Seasonal Chart
NovoCure Ltd. (NASD:NVCR) Seasonal Chart
PepsiCo, Inc. (NASD:PEP) Seasonal Chart
Targa Resources Corp. (NYSE:TRGP) Seasonal Chart
Ecopetrol SA (NYSE:EC) Seasonal Chart
Core Laboratories N V (NYSE:CLB) Seasonal Chart
Shell Plc (NYSE:SHEL) Seasonal Chart
American Intl Group, Inc. (NYSE:AIG) Seasonal Chart
TransAlta Corp. (NYSE:TAC) Seasonal Chart
Constellation Brands, Inc. (NYSE:STZ) Seasonal Chart
The Markets
Stocks snapped back on Friday from their early week decline as traders covered their shorts going into the weekend. The S&P 500 Index ended up by 2.13%, remaining below support around the 200-day moving average (5740). The declining short-term path has been cracked as price moves above trendline resistance that has constrained the path of lower-lows and lower highs since the end of February. As has been highlighted relentlessly in this pullback, a simple sign to suggest that the market is moving beyond this short-term declining path is if the benchmark is able to close above the high of the prior day and on Friday it did just that. A check-back of the now declining resistance at the 50-day moving average (5942) is reasonable and likely, at which point the true health of the intermediate-term trajectory of stocks can be determined. Markets that are showing greater resistance than support must be avoided, a framework, on an intermediate-term scale, we have not seen yet. Momentum indicators on the daily chart have negatively diverged from price since the middle of last year, highlighting the waning enthusiasm investors had been expressing towards tech-heavy (Mag-7) benchmarks, like this, amidst extreme valuations. For now, the drawdown in the market can still be viewed as healthy and ordinary within a bull market, by any measure, but scrutiny is certainly warranted now that some critical levels have been lost, such as 5700 on the S&P 500. Below this threshold, more dire scenarios for risk assets must be considered. We continue to monitor the potential impact of the apparent rotation in the market on our list of candidates in the market to Accumulate and to Avoid and we have adopted more of a neutral stance as segments that were previously noted as Accumulate candidates fall off (eg. Technology) and as areas to Avoid are added.
Today, in our Market Outlook to subscribers, we discuss the following:
- Weekly look at the large-cap benchmark and what we are doing in the Super Simple Seasonal Portfolio
- The most negative that individual investors have been since October of 2022
- Asset managers still heavily exposed to the equity market
- Gamma exposure at the lowest level since October of 2023
- Canada Manufacturing Sales
- Canadian Dollar
Subscribers can look for this report in their inbox or by clicking on the following link and logging in: Market Outlook for March 17
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Sentiment on Friday, as gauged by the put-call ratio, ended neutral at 0.97.
Seasonal charts of companies reporting earnings today:
S&P 500 Index
TSE Composite
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