Stock Market Outlook for December 12, 2022
*** 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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Aberdeen Income Credit Strategies Fund (NYSE:ACP) Seasonal Chart
iShares MSCI Emerging Markets Small-Cap ETF (AMEX:EEMS) Seasonal Chart
Invesco International BuyBack Achievers ETF (NASD:IPKW) Seasonal Chart
Chemtrade Logistics Income Fund (TSE:CHE/UN.TO) Seasonal Chart
Bonterra Energy Corp. (TSE:BNE.TO) Seasonal Chart
Western Copper Corp. (TSE:WRN.TO) Seasonal Chart
The Markets
Stocks closed mixed on Friday as a hotter than expected read of producer prices reinvigorated concerns that the inflationary problem in the economy is still very much intact. The S&P 500 Index closed lower by nearly three-quarters of one percent, effectively reversing the prior day’s gain. The benchmark remains between horizontal support at 3900 and declining trendline resistance at 4050. With catalysts encompassing November’s Consumer Price index and the December Fed meeting poised to impact the market in the week ahead, it is likely to see this recent consolidation range broken, whether that be higher or lower. Seasonality in the back half of the month suggests a positive bias, but, until then, the market remains in this weaker half of December when portfolio managers still have their finger on the button of buy and sell trades. Momentum indicators remain on sell signals following the selloff realized earlier in the week and the market benchmark still appears top heavy following its inability to retain levels above the 200-day moving average. The longer-term trend of lower-lows and lower-highs remains intact, coinciding with the deterioration of the fundamentals in the economy, and at this point, we only have the positive seasonality for the back half of December as the “hope” that prices can improve between now and the start of the new year. While we still see the Santa Claus rally period for stocks between December 15th and January 6th as showing high potential for gains, how we get there and how the market digests the catalysts of the days ahead, before this strong seasonal timeframe, is anybody’s guess. Best to stay on your toes for the week ahead as we try to maintain a positive bias of risk assets through year-end, while remaining cognizant of the risks that the technicals and the fundamentals are espousing.
Today, in our Market Outlook to subscribers, we discuss the following:
- Weekly look at the large-cap benchmark
- US Producer Price Index
- Wholesale Sales and Inventories
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Sentiment on Friday, as gauged by the put-call ratio, ended bearish at 1.18.
Seasonal charts of companies reporting earnings today:
S&P 500 Index
TSE Composite
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