Stock Market Outlook for July 15, 2022
Often the easiest way to gauge the health of the market and the economy is to simply look at the performance of the banks; it is not looking good.
*** 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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Vanguard Mortgage-Backed Securities ETF (NASD:VMBS) Seasonal Chart
VanEck Vectors International High Yield Bond ETF (AMEX:IHY) Seasonal Chart
iShares Global Financials ETF (NYSE:IXG) Seasonal Chart
IQ Merger Arbitrage ETF (NYSE:MNA) Seasonal Chart
IQ Hedge Multi-Strategy Tracker ETF (NYSE:QAI) Seasonal Chart
ProShares Short Real Estate (NYSE:REK) Seasonal Chart
ProShares UltraPro Short Dow30 (NYSE:SDOW) Seasonal Chart
Vanguard Short-Term Government Bond ETF (NASD:VGSH) Seasonal Chart
Alaska Air Group, Inc. (NYSE:ALK) Seasonal Chart
Archer Daniels Midland Co. (NYSE:ADM) Seasonal Chart
SPDR Barclays Convertible Securities ETF (NYSE:CWB) Seasonal Chart
The Markets
Stocks closed mixed on Thursday as traders started to speculate that the Fed may be even more aggressive normalizing policy than had previously been anticipated following another set of hotter than expected reports on inflation in the economy. The S&P 500 Index closed down by three-tenths of one percent, taking a stab at the 3750 horizontal hurdle that we had designated as our stop to our ramped up equity exposure for the summer rally trade. The deterioration in prices continues the more intermediate trend of lower-lows and lower-highs as this positive seasonal timeframe for the equity market quickly turns to a bust. Momentum indicators are rolling over below their middle lines, keeping characteristics of a bearish trend intact. A potential bear-flag pattern may be at play with the sharp dip in price seen into the middle of June representing the pole, while the recent consolidation between 3750 and 3925 representing the flag. This is a continuation setup and it projects a downside resolution below the lower limit of the pattern. While we are still of the belief that we are closer to a significant low in the market than not, we may have to endure another leg lower before our opportunity to definitively ramp up risk for our forecasted back half of the year strength arrives.
Today, in our Market Outlook to subscribers, we discuss the following:
- Hourly look at the large-cap benchmark and the target suggested should the recent consolidation range break
- The change that we are enacting in the Super Simple Seasonal Portfolio
- Banks ahead of their period of seasonal strength
- US Producer Price Index (PPI)
- Weekly jobless claims and the health of the labor market
- Canada Manufacturing Sales
Subscribers can look for this report in their inbox or by clicking on the following link and logging in: Market Outlook for July 15
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Sentiment on Thursday, as gauged by the put-call ratio, ended close to neutral at 0.94.
Seasonal charts of companies reporting earnings today:
S&P 500 Index
TSE Composite
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