Equity Clock

Stock Market Outlook for January 6, 2022

The Technology sector ETF could fall an additional 6% and still maintain its trend of higher-highs and higher-lows.

 

 

 

*** 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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Laboratory Corporation of America Holdings (NYSE:LH) Seasonal Chart

Computer Modelling Group Ltd. (TSE:CMG.TO) Seasonal Chart

Metro, Inc. (TSE:MRU.TO) Seasonal Chart

Wendy’s Co. (NASD:WEN) Seasonal Chart

McCormick & Co., Inc. (NYSE:MKC) Seasonal Chart

Chipotle Mexican Grill Inc. (NYSE:CMG) Seasonal Chart

Marten Transport, Ltd. (NASD:MRTN) Seasonal Chart

British American Tobacco PLC (NYSE:BTI) Seasonal Chart

Catalent, Inc. (NYSE:CTLT) Seasonal Chart

iPath Bloomberg Cocoa Subindex Total Return ETN (NYSE:NIB) Seasonal Chart

Vanguard Small-Cap Growth ETF (NYSE:VBK) Seasonal Chart

 

 

The Markets

Stocks dropped on Wednesday as investors digested the latest Fed meeting minutes that indicated the central bank may be more aggressive in normalizing monetary policy.  The S&P 500 Index fell by almost two percent, plunging below its fourth quarter breakout point around 4720.  What was previous resistance should have been support and the fact that the benchmark could not maintain this hurdle leads to speculation of a false breakout.  The benchmark closed below short-term support at the 20-day moving average, while the 50-day moving average at 4670 is the next major test.  A definitive break below the 50-day moving average would once again threaten the intermediate-term trend, something that plays directly to the health of our seasonal strategy.  As highlighted in our last report, momentum indicators had not confirmed the new high in price coming into the year, resulting in a negative divergence and highlighting waning upside strength.  We have speculated that January could be a tough month for the equity market and it appears this this strain is now materializing.

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

• The update to the Super Simple Seasonal Portfolio
• The downside potential in the technology sector
• Measures of investor risk sentiment deteriorating
• US Petroleum Inventories and the abrupt plunge in demand for gasoline at the end of the year
• Mobility trends in the US
• US Vehicle Sales and the stocks of auto makers following the recent surge

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Sentiment on Wednesday, as gauged by the put-call ratio, ended neutral at 1.00.

 

 

 

 

Seasonal charts of companies reporting earnings today:

 

 

S&P 500 Index

 

 

TSE Composite

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