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Stock Market Outlook for January 4, 2022


Over the past 20 years, January has been a rather lacklustre month for stocks with the S&P 500 index averaging a decline of 0.10%.

 

Real Time Economic Calendar provided by Investing.com.

 

 

*** 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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Constellation Software Inc. (TSE:CSU.TO) Seasonal Chart

Constellation Software Inc. (TSE:CSU.TO) Seasonal Chart

Zynga Inc. (NASD:ZNGA) Seasonal Chart

Zynga Inc. (NASD:ZNGA) Seasonal Chart

Absolute Software Corp. (TSE:ABST.TO) Seasonal Chart

Absolute Software Corp. (TSE:ABST.TO) Seasonal Chart

Invesco Tactical Bond ETF (TSE:PTB.TO) Seasonal Chart

Invesco Tactical Bond ETF (TSE:PTB.TO) Seasonal Chart

ProShares Short Financials (NYSE:SEF) Seasonal Chart

ProShares Short Financials (NYSE:SEF) Seasonal Chart

Philip Morris Intl Inc. (NYSE:PM) Seasonal Chart

Philip Morris Intl Inc. (NYSE:PM) Seasonal Chart

Pentair, Inc. (NYSE:PNR) Seasonal Chart

Pentair, Inc. (NYSE:PNR) Seasonal Chart

Nuveen ESG Large-Cap Growth ETF (AMEX:NULG) Seasonal Chart

Nuveen ESG Large-Cap Growth ETF (AMEX:NULG) Seasonal Chart

Bed Bath & Beyond, Inc. (NASD:BBBY) Seasonal Chart

Bed Bath & Beyond, Inc. (NASD:BBBY) Seasonal Chart

Clorox Co. (NYSE:CLX) Seasonal Chart

Clorox Co. (NYSE:CLX) Seasonal Chart

Stericycle, Inc. (NASD:SRCL) Seasonal Chart

Stericycle, Inc. (NASD:SRCL) Seasonal Chart

Domino's Pizza Group LTD (NYSE:DPZ) Seasonal Chart

Domino’s Pizza Group LTD (NYSE:DPZ) Seasonal Chart

Sun Communities, Inc. (NYSE:SUI) Seasonal Chart

Sun Communities, Inc. (NYSE:SUI) Seasonal Chart

Kinaxis Inc. (TSE:KXS.TO) Seasonal Chart

Kinaxis Inc. (TSE:KXS.TO) Seasonal Chart

Invesco S&P/TSX Composite Low Volatility Index ETF (TSE:TLV.TO) Seasonal Chart

Invesco S&P/TSX Composite Low Volatility Index ETF (TSE:TLV.TO) Seasonal Chart

iShares S&P/TSX Capped Utilities Index ETF (TSE:XUT.TO) Seasonal Chart

iShares S&P/TSX Capped Utilities Index ETF (TSE:XUT.TO) Seasonal Chart

iShares Core Conservative Allocation ETF (NYSE:AOK) Seasonal Chart

iShares Core Conservative Allocation ETF (NYSE:AOK) Seasonal Chart

Schwab US Aggregate Bond ETF (NYSE:SCHZ) Seasonal Chart

Schwab US Aggregate Bond ETF (NYSE:SCHZ) Seasonal Chart

ProShares VIX Short-Term Futures ETF (NYSE:VIXY) Seasonal Chart

ProShares VIX Short-Term Futures ETF (NYSE:VIXY) Seasonal Chart

 

Note: Due to the Canadian statutory holiday on Monday in observance of New Year’s Day, our next report will be released on Tuesday.

 

The Markets

Happy New Year!  First let us take a moment to thank you for your ongoing support to help our service grow in 2021.  We enter the new year with a record high number of members to our service and we continue to find ways to make our service more valuable to all those that are following along with our process, including our new Super Simple Seasonal Portfolio.  It has been another busy year and we don’t expect our job to get any easier as we navigate through the progression of this economic cycle and attempt to provide clarity to an often uncertain market.  We will continue to do our best to deliver you the information that you require to appropriately position your portfolios and assure that you are appropriately allocated to reflect the risk/reward that the market is portraying.  As always, should you require any assistance with your subscription, we are here to help.  Simply reply to any of the emails that we have sent you or reach out to us via our Help page at https://charts.equityclock.com/help.  We wish you a happy, healthy, and prosperous New Year!

Stocks closed marginally lower in the last session of 2021 as investors digested the gains from the past couple of weeks.  The S&P 500 Index shed around a quarter of one percent, remaining within arm’s reach of record high territory.  Previous resistance at 4720 remains in a position of support.  The price action of the market benchmark continues to resemble that of a bull-flag pattern, suggesting the continuation of the rising trend is more likely than not.  Major moving averages are all pointing higher, instilling positive momentum across all timeframes.  The next upside hurdle of interest is 4850, which represents rising trendline resistance that connects the highs from the past eight months.  If achieved, this may provide the ideal level to start thinking about taking some chips off the table/book profits given that it will be difficult to sustain the recent upside trajectory through the year ahead.  We provide further insight in our just released monthly outlook for January.

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Today, in our Market Outlook to subscribers, we discuss the following:

  • December’s return for the S&P 500 and the record setting 21-month rate of change for the benchmark
  • Equity market performance in the month of January and the tilt in portfolios that is often warranted at the start of the year
  • Stocks that have gained or lost in every January over their trading history

Subscribe now and we’ll send this outlook to you.

For the month ahead, while the first month of the year has historically shown a strong jump out of the gate as new funds are put to work, the month is rather lacklustre overall.  Over the past two decades, the S&P 500 Index has slipped by a tenth of one percent, clawing back some of the gain that was recorded through the last quarter of the prior year.  Gains and losses in this first month of the year are equally split at 50%.  January returns over the past 20 years have ranged from a loss of 8.6% in 2009 to a gain of 7.9% in 2019.  We provided further insight and commentary on how to position your portfolio for the month ahead in our just released monthly report for January.

S&P 500 Index Seasonal Chart

Just Released…

Our monthly report for January is out, providing everything that you need to know for the month(s) ahead, including our forecast of how we see the equity market performing throughout 2022.

Highlights in this report include:

  • Equity market tendencies in the month of January
  • Tracking the spread of COVID
  • Driving Activity in the US
  • Highest measure of petroleum demand on record
  • Credit Spreads
  • US Construction Activity
  • State of the consumer
  • Manufacturer sentiment
  • The uptick in volatility at the start of the new year
  • Commodities
  • Bond Market
  • US Dollar
  • Our Base-Case for 2022
  • Equity Market Performance in the Period Surrounding the First Fed Rate Hike
  • The technical status of the S&P 500 Index
  • Examining gauges of market breadth
  • Investor risk sentiment
  • Bitcoin
  • Positioning for the months ahead
  • Sector reviews and ratings
  • Stocks that have frequently gained in the month of January
  • Notable stocks and ETFs entering their period of strength in January

Subscribers can look for this report in their inbox. 

Not subscribed yet? Now is your chance to try us out and receive access to the wealth of content that we provide to subscribers.  Signup here: https://charts.equityclock.com/subscribe

With the new month upon us and as we celebrate the release of our monthly report for January, today we release our screen of all of the stocks that have gained in every January over their trading history.  While we at Equity Clock focus on a three-pronged approach (seasonal, technical, and fundamental analysis) to gain exposure to areas of the market that typically perform well over intermediate (2 to 6 months) timeframes, we know that stocks that have a 100% frequency of success for a particular month is generally of interest to those pursuing a seasonal investment strategy.  Below are the results:

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And how about those securities that have never gained in this first month of the year, here they are:

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*Note: None of the results highlighted above have the 20 years of data that we like to see in order to accurately gauge the annual recurring, seasonal influences impacting an investment, therefore the reliability of the results should be questioned.  We present the above list as an example of how our downloadable spreadsheet available to yearly subscribers can be filtered.

Sentiment on Friday, as gauged by the put-call ratio, ended bullish at 0.82.

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Seasonal charts of companies reporting earnings today:

MillerKnoll, Inc. Seasonal Chart SMART Global Holdings, Inc. Seasonal Chart

 

 

S&P 500 Index

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TSE Composite

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