Stock Market Outlook for October 21, 2022
5-Wave pattern higher on the chart of the 30-year treasury yield setting up for a 3-wave corrective pattern ahead.
*** 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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PC Connection, Inc. (NASD:CNXN) Seasonal Chart
iShares U.S. Aerospace & Defense ETF (NYSE:ITA) Seasonal Chart
Invesco Dynamic Semiconductors ETF (NYSE:PSI) Seasonal Chart
iShares Edge MSCI USA Quality Factor ETF (AMEX:QUAL) Seasonal Chart
Vanguard Russell 1000 ETF (NASD:VONE) Seasonal Chart
West Fraser Timber Co., Ltd. (NYSE:WFG) Seasonal Chart
Global X Internet of Things Thematic ETF (NASD:SNSR) Seasonal Chart
Carnival Corp. (NYSE:CCL) Seasonal Chart
Texas Instruments, Inc. (NASD:TXN) Seasonal Chart
Boeing Co. (NYSE:BA) Seasonal Chart
Buckle, Inc. (NYSE:BKE) Seasonal Chart
Badger Meter, Inc. (NYSE:BMI) Seasonal Chart
MercadoLibre Inc. (NASD:MELI) Seasonal Chart
Invesco S&P 500 Equal Weight Technology ETF (NYSE:RYT) Seasonal Chart
First Trust Cloud Computing ETF (NASD:SKYY) Seasonal Chart
Charles Schwab Corp. (NYSE:SCHW) Seasonal Chart
Old Dominion Freight Line, Inc. (NASD:ODFL) Seasonal Chart
PACCAR, Inc. (NASD:PCAR) Seasonal Chart
Norwegian Cruise Line Holdings Ltd. (NYSE:NCLH) Seasonal Chart
The Markets
Stocks lost early gains on Thursday as treasury yields pushed to new mufti-year highs. The S&P 500 Index slipped by eight-tenths of one percent, once again putting the declining 20-day moving average to the test as a point of support following its early week breakout. Gradually, a consolidation above this previous short-term variable hurdle is being realized, which is highly encouraging to suggest near-term stability returning to the market, lending itself to our view that we will see a retest of the declining 50-day moving average around 3900 in the weeks ahead. Momentum indicators are still showing a path that is positively diverging from price, indicated waning selling pressures, typically a precursor event to a shift of the prevailing trend. A test of the declining 50-day moving average continues to be seen as a logical point to sell into, reducing equity exposure, so long as the negative intermediate path of lower-lows and lower-highs persists. Ultimately, the large-cap benchmark is expected to remain within its broadening declining range into the end of the year with the upper limit of the span just below 4200 and the lower limit now hovering around 3300.
Today, in our Market Outlook to subscribers, we discuss the following:
- The important range that treasury yields have reached
- Bond yields providing competition for equities
- US Existing Home Sales
- Philadelphia Fed Index
- Weekly Jobless Claims and the health of the labor market
Subscribers can look for this report in their inbox or by clicking on the following link and logging in: Market Outlook for October 21
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Sentiment on Thursday, as gauged by the put-call ratio, ended bearish at 1.05.
Seasonal charts of companies reporting earnings today:
S&P 500 Index
TSE Composite
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