Stock Market Outlook for May 7, 2025
Volatility hedges flourishing as investors look for ways to mitigate the erratic movements in the equity market.
*** 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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Electronic Arts, Inc. (NASD:EA) Seasonal Chart
Fair Isaac & Co., Inc. (NYSE:FICO) Seasonal Chart
America’s Car-Mart, Inc. (NASD:CRMT) Seasonal Chart
Protagonist Therapeutics, Inc. (NASD:PTGX) Seasonal Chart
Jewett-Cameron Trading Co. (NASD:JCTC) Seasonal Chart
The Markets
Stocks continued to pullback into the Tuesday session as the rebound rally off of the April low loses steam. The S&P 500 Index shed just over three-quarters of one percent, continuing to react to a point of horizontal resistance at 5650. The 200-day moving average remains overhead, putting every technical trader on watch for potential reaction to the variable hurdle. There remains an implied cap over this market in the range between 5500 and 5800, corresponding with the span of the cloud of major moving averages that was broken in March, that would likely require a catalyst to break (eg. progress towards a trade deal with China); without one, look for the sellers to step in around this zone. We were enticed to use the strength through the end of last week to start legging out of equity allocations heading into the offseason for stocks that begins at this time of year as we brace for the next evolution of the intermediate-term trend in the equity market that is still leaning negative. We continue to monitor the potential impact of the rotation in the market on our list of candidates in the market to Accumulate and to Avoid, but we have found rotation/buying candidates in recent weeks amidst this market tumult.
Today, in our Market Outlook to subscribers, we discuss the following:
- VIX showing signs of curling higher from a point of support
- Easy ways to reduce portfolio sensitivity to broader market gyrations
- Volatility hedges attracting renewed buying demand
- US Vehicle Sales and the auto stocks
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Sentiment on Tuesday, as gauged by the put-call ratio, ended slightly bullish at 0.91.
Seasonal charts of companies reporting earnings today:
S&P 500 Index
TSE Composite
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