Stock Market Outlook for March 26, 2025
The supply of new homes is surging and this threatens the growth of home prices that Americans have benefited from since the onset of the pandemic.
*** 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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ALPS Medical Breakthroughs ETF (AMEX:SBIO) Seasonal Chart
Prospera Energy Inc. (TSXV:PEI.V) Seasonal Chart
Big Pharma Split Corp (TSE:PRM.TO) Seasonal Chart
Covalon Technologies Ltd. (TSXV:COV.V) Seasonal Chart
Global Healthcare Income & Growth ETF (TSE:HIG.TO) Seasonal Chart
CenterPoint Energy, Inc. (NYSE:CNP) Seasonal Chart
NexPoint Residential Trust, Inc. (NYSE:NXRT) Seasonal Chart
NGL Energy Partners LP (NYSE:NGL) Seasonal Chart
CarParts.com (NASD:PRTS) Seasonal Chart
Acadia Healthcare Company, Inc. (NASD:ACHC) Seasonal Chart
D-Box Technologies (TSE:DBO.TO) Seasonal Chart
The Markets
Stocks closed marginally higher on Tuesday as investors continued to move away from those risk-off groups that got them through the market volatility from the past month and gyrated towards some of the growth laggards (technology, communication services, consumer discretionary) quarter-to-date. The S&P 500 Index closed higher by 0.16%, continuing to inch above long-term support around the 200-day moving average (5754). 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 rebound from the correction continues. A check-back of the now declining resistance at the 50-day moving average (5913) 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 a 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.
Today, in our Market Outlook to subscribers, we discuss the following:
- Defensive sectors being sold off into the end of the quarter
- Industries in the Health Care, Staples, and REITs sectors to play (short) the negative setups that have been charted
- The trajectory of Home Prices across the US
- New Home Sales and the change in the median price of new homes sold
- New home supply
- Housing stocks
- Forestry stocks and the continued positive price action in Lumber
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Sentiment on Tuesday, as gauged by the put-call ratio, ended bullish at 0.79.
Seasonal charts of companies reporting earnings today:
S&P 500 Index
TSE Composite
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