Stock Market Outlook for September 20, 2022
The charts of Consumer Staples industries charting significant topping patterns, requiring a new defensive allocation for portfolios before the strongest time of year for stocks begins in October.
*** 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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EOG Resources, Inc. (NYSE:EOG) Seasonal Chart
Patterson-UTI Energy, Inc. (NASD:PTEN) Seasonal Chart
Sierra Metals Inc.. (TSE:SMT.TO) Seasonal Chart
Our Money Show Event
On the weekend, we had the pleasure of presenting at the Toronto Money Show on the topic of “Using Seasonality to Determine Where We are in the Economic Cycle.” It was great to see so many of you in person after more than two years of presenting virtually at these events. For those that could not make it, we have uploaded our slide deck to the following link: https://charts.equityclock.com/featured/toronto_money_show_september_2022
The Markets
Stocks closed mildly higher on Monday as investors await the highly anticipated Fed event on Wednesday. The S&P 500 Index ended the day higher by nearly seven-tenths of one percent, ending just a fraction of a point below the psychologically important 3900 level that has captured the market’s attention in recent weeks. Previous rising trendline support around 3950 presents a minor point of resistance overhead, but the more formidable levels remain the moving averages at the 20 (4007) and 50-day (4042). The 50-day moving average, indicative of the intermediate-term trend, is starting to feel the drag from the recent breakdown below this variable hurdle in the past week. A declining 50-day moving average would raise renewed concerns pertaining to the intermediate path of stocks that we seek to target within our approach. Momentum indicators continue to trend higher from the June lows, hinting for the same for stocks, but the definitive tell of whether or not the worst is over is if major market benchmark can chart a higher significant low above the June bottom, something that may still be weeks away to confirm conclusively. For now, our core equity allocation in the Super Simple Portfolio is in a low volatility dividend ETF that continues to provide the risk metrics that are desired for this point in the year, but we look forward to when we can be aggressive in risk (stocks) for the final quarter of the year.
Today, in our Market Outlook to subscribers, we discuss the following:
- Using Bitcoin as a gauge of whether or not stocks are set to stage another leg lower
- Notable ratings changes in this week’s chart books
- Financials
- REITs
Subscribers can look for this report in their inbox or by clicking on the following link and logging in: Market Outlook for September 20
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Sentiment on Monday, as gauged by the put-call ratio, ended slightly bullish at 0.90.
Seasonal charts of companies reporting earnings today:
S&P 500 Index
TSE Composite
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