Stock Market Outlook for March 25, 2025
A divergence in the relative trends of Canadian and US Small Caps has been highlighting the growing risk sentiment towards commodity sensitive stocks globally, despite tariff threats.
*** 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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Merit Medical Systems, Inc. (NASD:MMSI) Seasonal Chart
PTTelekom Indonesia (NYSE:TLK) Seasonal Chart
Vulcan Minerals Inc. (TSXV:VUL.V) Seasonal Chart
Crinetics Pharmaceuticals, Inc. (NASD:CRNX) Seasonal Chart
The Markets
Stocks jumped on Monday as end-of-quarter portfolio rebalancing helped to elevate the market out of the rut that it fell into over the past month. The S&P 500 Index closed higher by 1.76%, ending marginally above long-term support around the 200-day moving average (5752). The benchmark continues to push above short-term declining trendline resistance from the past month and an upside gap during Monday’s session around 5700 has created a point of support for the market to shoot off of as the recovery from the decline of the past month continues. A check-back of the now declining resistance at the 50-day moving average (5914) remains our base case, 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 been able to confirm, 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. A bullish MACD crossover (a buy signal) was recorded on Monday, but at highly depressed level that is suggestive of the start of a more sustained bearish trend beyond the present rebound that is playing out into quarter-end. The drawdown in the market has been viewed as healthy and ordinary within a bull market, by any measure, but scrutiny is certainly warranted given that some critical levels were broken during the correction, 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.
Want to know which areas of the market to buy or sell? Our Weekly Chart Books have just been updated, providing a clear Accumulate, Avoid, or Neutral rating for currencies, cryptocurrencies, commodities, broad markets, and subsectors/industries of the market. Subscribers can login and click on the relevant links to access.
- Currencies
- Cryptocurrencies
- Commodities
- Major Benchmarks
- Sub-sectors / Industries
- ETFs: Bonds | Commodities | Equity Markets | Industries | Sectors
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Today, in our Market Outlook to subscribers, we discuss the following:
- Our weekly chart books update, along with our list of all segments of the market to either Accumulate or Avoid
- Other Notes
- The outperformance of Small-Cap (Venture) Canadian Stocks
- The lag of US Small Caps
- Commodities
Subscribers can look for this report in their inbox or by clicking on the following link and logging in: Market Outlook for March 25
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Sentiment on Monday, as gauged by the put-call ratio, ended bullish at 0.78.
Seasonal charts of companies reporting earnings today:
S&P 500 Index
TSE Composite
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