Stock Market Outlook for January 9, 2023
*** 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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Wendy’s Co. (NASD:WEN) Seasonal Chart
Franco-Nevada Corp. (TSE:FNV.TO) Seasonal Chart
Sandstorm Gold Ltd. (TSE:SSL.TO) Seasonal Chart
Kilroy Realty Corp. (NYSE:KRC) Seasonal Chart
Invesco S&P International Developed Low Volatility ETF (AMEX:IDLV) Seasonal Chart
Allete Inc. (NYSE:ALE) Seasonal Chart
The Markets
Stocks rallied on Friday following a report from the Institute for Supply Managers (ISM) that indicated the service side of the economy is now in contraction, an event that may stave off further aggression on the part of the Fed to normalize policy. In a good news is bad news scenario, the S&P 500 Index surged by 2.28%, moving marginally above the short-term consolidation band that the benchmark has been in for the past few weeks and reaching towards horizontal resistance at 3900. The horizontal hurdle also aligns with a convergence of resistance presented by major moving averages around the 50, 100, and 150-day in what remains a significant pivot point for the short-term trend of stocks. The more threatening level remains declining trendline resistance that now hovers around 4000, a level that is keeping the long-term path of the benchmark negative heading into a period a seasonal weakness ahead, following the Santa Claus rally period that concluded on Friday. Momentum indicators have hooked higher with MACD even triggering a new buy signal as it crosses back above its signal line, albeit marginally. Support at November’s upside gap between 3770 and 3860 remains resilient and the big test for the bulls will be whether they can overcome the numerous points of resistance overhead between 3900 and 4000, rejection from which would be significantly detrimental to the intermediate direction of the market.
Today, in our Market Outlook to subscribers, we discuss the following:
- Weekly look at the large-cap benchmark
- Downbeat tone in the market following a failed Santa Claus Rally period
- The bounce of treasury bond ETFs from their rising 50-day moving averages
- US Employment Situation
- Canada Labour Force Survey
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Sentiment on Friday, as gauged by the put-call ratio, ended bearish at 1.02.
Seasonal charts of companies reporting earnings today:
S&P 500 Index
TSE Composite
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