Stock Market Outlook for January 28, 2022
The US Dollar has broken out, following seasonal norms for this time of year and placing itself in a position of a headwind against risk assets.
*** 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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iShares MSCI USA ESG Select ETF (AMEX:SUSA) Seasonal Chart
Zynerba Pharmaceuticals, Inc. (NASD:ZYNE) Seasonal Chart
Smith & Wesson Brands, Inc. (NASD:SWBI) Seasonal Chart
Estee Lauder Cos. (NYSE:EL) Seasonal Chart
SPDR S&P Emerging Asia Pacific ETF (NYSE:GMF) Seasonal Chart
Ericsson Telephone Co. (NASD:ERIC) Seasonal Chart
Visa Inc. (NYSE:V) Seasonal Chart
Dollar Tree, Inc. (NASD:DLTR) Seasonal Chart
Expeditors Intl of Washington, Inc. (NASD:EXPD) Seasonal Chart
Hasbro, Inc. (NASD:HAS) Seasonal Chart
ProShares Ultra Consumer Services (NYSE:UCC) Seasonal Chart
The Markets
The volatile trading action in the market continues as we get closer to capping off the weakest January performance for the equity market on record. The S&P 500 Index closed Thursday’s session lower by half of one percent, remaining stubborn below the 200-day moving average that was broken one week ago. The consolidation below this important long-term hurdle is becoming increasingly threatening given that markets below this level are often ones to avoid until buy programs in the market are re-engaged. On a closing basis, the benchmark continues to hold levels above the October lows, which mitigates the threat of a lower-low in the market, the first step that would be required in order to deem the market as being in a negative trend of lower-lows and lower-highs. We continue to wait for the rebound attempt in the market to play out in order to get a sense of the true health of the longer-term trend as the first flush lower is never indicative of what is sustainable beyond the short-term. We have positioned our ourselves accordingly.
Today, in our Market Outlook to subscribers, we discuss the following:
- The breakout of the US Dollar, the headwind it imposes on stocks, and when it seasonally reverts back to a tailwind
- Weekly Jobless Claims and the health of the labor market
- The one scenario when investors should be long-term sellers of stocks
- US Durable Goods Orders
- Natural gas: The fundamental backdrop of the commodity and its period of seasonal strength
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Sentiment on Thursday, as gauged by the put-call ratio, ended bearish at 1.07.
Seasonal charts of companies reporting earnings today:
S&P 500 Index
TSE Composite
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