Stock Market Outlook for May 26, 2022
Consumers are turning to debt to finance purchases, which is resulting in the first and largest month-over-month increase in Revolving Home Equity Loans since 2010.
*** 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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Bright Horizons Family Solutions Inc. (NYSE:BFAM) Seasonal Chart
Tricon Residential Inc. (NYSE:TCN) Seasonal Chart
The Markets
Stocks closed higher on Wednesday as the market shook off news that the Fed may be more aggressive normalizing monetary policy than originally anticipated. The S&P 500 Index gained just less than one percent, trading back up to the highs of the week and increasingly carving out a short-term base around 3800. MACD has crossed above its signal line, triggering the first buy signal that we’ve seen according to this metric since the middle of March, just prior to the substantial mean reversion rally into month end. Both RSI and MACD remain below their middle lines, which remain characteristic of a bearish tend, however, increasingly, signs of a near-term low are materializing as selling exhaustion becomes defined. Horizontal resistance at 4150 and 4280 remain the logical levels to look towards upon a rebound attempt off of the lows before the bears may become enticed to sink their teeth into this market through the first half of June. The Super Simple Seasonal Portfolio remains positioned according to the risk-reward of the market that is at hand and we continue to see the next logical window to take on risk in the portfolio as being around the middle of June.
Today, in our Market Outlook to subscribers, we discuss the following:
- The pivotal point for the financial sector and opportunities to remain exposed through the defensive time of the year during the summer
- Canadian Banks
- Home Equity Loans
- US Durable Goods Orders
- Significant readings on the Dark Index
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Sentiment on Wednesday, as gauged by the put-call ratio, ended slightly bullish at 0.89.
Seasonal charts of companies reporting earnings today:
S&P 500 Index
TSE Composite
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