Stock Market Outlook for July 28, 2022
Consumer loans are surging as this cohort of the economy seeks to bridge the gap between incomes and spending, typically a precursor event to an economic recession.
*** 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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Canadian Banc Recovery Corp. (TSE:BK.TO) Seasonal Chart
Telesat Corporation (NASD:TSAT) Seasonal Chart
Invesco S&P SmallCap 600 Pure Value ETF (NYSE:RZV) Seasonal Chart
BMO Monthly Income ETF (TSE:ZMI.TO) Seasonal Chart
Berkshire Hathaway, Inc. (NYSE:BRK/A) Seasonal Chart
Air Lease Corp. (NYSE:AL) Seasonal Chart
Telus Corp. (NYSE:TU) Seasonal Chart
Choice Hotels Intl, Inc. (NYSE:CHH) Seasonal Chart
Accenture Ltd. (NYSE:ACN) Seasonal Chart
The Markets
Stocks rallied on Wednesday as Fed Chair Powell alleviated concerns that the Fed would be aggressive normalizing monetary policy through the remainder of the year. The S&P 500 Index jumped by 2.62%, rebounding from intermediate support at the 50-day moving average near 3920. The benchmark continues to make progress above its narrowing trading range from which it broke out of last week as momentum indicators relinquish their characteristics of a bearish trend that had been intact all year. RSI is starting to firm above its middle line at 50 and MACD continues to progress into positive territory. The shift of the prevailing path of lower-lows and lower-highs that has dominated this year is implied, helping to entice sidelined investors to re-enter risk assets, particularly as earnings show better results than feared and as stability in inflationary pressures and the cost of borrowing are observed. It has been our forecast that the back half of the year would be strong for stocks following first half of the year weakness and it appears that this path is already well underway. The revelation of a level of intermediate support at the 50-day moving average provides something tangible to finally ramp up our exposure to risk, particularly now that June’s gap resistance between 3975 and 4020 has been closed.
Today, in our market Outlook to subscribers, we discuss the following:
- Previous resistance now support on the hourly chart of the large-cap benchmark and the action we are taking in the Super Simple Seasonal Portfolio
- Commodity consideration
- US Durable Goods Orders
- US International Trade
- Consumer Loans
- Investor sentiment
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Sentiment on Wednesday, as gauged by the put-call ratio, ended surprisingly bearish at 1.05.
Seasonal charts of companies reporting earnings today:
S&P 500 Index
TSE Composite
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