Stock Market Outlook for September 28, 2022
Look to buy stocks and bonds when the yield on the 10-year Treasury note closes in on the Fed’s year-end target for Fed Fund Rate at 4.4%.
*** 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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Sealed Air Corp New (NYSE:SEE) Seasonal Chart
Brink’s Co. (NYSE:BCO) Seasonal Chart
Cabot Microelectronics Corp. (NASD:CCMP) Seasonal Chart
Lear Corp. (NYSE:LEA) Seasonal Chart
Transmation, Inc. (NASD:TRNS) Seasonal Chart
VanEck Vectors Agribusiness ETF (NYSE:MOO) Seasonal Chart
VanEck Vectors China Growth Leaders ETF (NYSE:GLCN) Seasonal Chart
The Markets
Stocks gave up early gains on Tuesday as interest rates spiked again amidst the rapid re-pricing in the market following last week’s Fed’s forecast shock. The S&P 500 Index ended down by just over two-tenths of one percent, continuing to test the June lows. The benchmark remains significantly oversold following its downfall from the summer highs with the Relative Strength Index embedded below 30. Resistance continues to be pegged around major moving averages, including the 50-day (4030), which has rolled over from its summer rise. Negative trajectories over multiple timeframes are implied. The days ahead see the conclusion to this period of peak seasonal volatility, after which calmer/more level-headed trading resumes as market participants focus on earnings. So long as declining trends over multiple timeframes persist, using declining levels of resistance, such as the 50-day moving average, to sell into is the appropriate course of action, but, in the meantime, a rebound from oversold lows is still seen more likely than not given the extreme bearish sentiment that has prevailed.
Today, in our Market Outlook to subscribers, we discuss the following:
- Looking for treasury yields to reach the 4.4% year-end Fed target
- Bond ETFs testing levels of significant horizontal support
- US Durable Goods Orders
- US New Home Sales
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Sentiment on Tuesday, as gauged by the put-call ratio, ended bearish at 1.15.
Seasonal charts of companies reporting earnings today:
S&P 500 Index
TSE Composite
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