Stock Market Outlook for December 8, 2022
*** 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 EAFE Index ETF (CAD-Hedged) (TSE:XIN.TO) Seasonal Chart
ProShares UltraShort Financials (NYSE:SKF) Seasonal Chart
SPDR MSCI Emerging Markets Quality Mix ETF (AMEX:QEMM) Seasonal Chart
iShares North American Natural Resources ETF (NYSE:IGE) Seasonal Chart
iShares Europe ETF (NYSE:IEV) Seasonal Chart
WisdomTree International MidCap Dividend Fund (NYSE:DIM) Seasonal Chart
ProShares Ultra Silver (NYSE:AGQ) Seasonal Chart
iShares Core S&P/TSX Capped Composite Index ETF (TSE:XIC.TO) Seasonal Chart
Wajax Corp. (TSE:WJX.TO) Seasonal Chart
ShawCor Ltd. (TSE:SCL.TO) Seasonal Chart
Amerigo Resources Ltd. (TSE:ARG.TO) Seasonal Chart
Aecon Group Inc. (TSE:ARE.TO) Seasonal Chart
Toronto-Dominion Bank (TSE:TD.TO) Seasonal Chart
Hess Corp. (NYSE:HES) Seasonal Chart
Nutrien Ltd. (NYSE:NTR) Seasonal Chart
The Markets
Stocks closed marginally lower on Wednesday as investors continue to book profits following the latest rally and execute tax-loss selling trades before portfolio managers step out for holidays in a couple of week’s time. The S&P 500 Index closed lower by just less than two-tenths of one percent, remaining below declining trendline resistance that was tested at the end of last week. A confluence of support around the 100 and 150-moving averages just above horizontal support at 3900 is the test, providing a make-or-break point to the recent short-term trend of higher-highs and higher-lows off of the October bottom. Below the horizontal barrier, support at the the rising 50-day moving average at 3830 is the objective. Momentum indicators triggered sell signals during Tuesday’s session with MACD crossing below its signal line and the relative strength index falling below rising trendline support stemming from the oversold low set in September. The market is likely in the midst of another short-term topping process, but, with the Santa Claus rally period directly ahead, the more appropriate time to readopt a bearish bias of the market is likely around the start of the new year. Seasonally, the first half of December tends to see stocks struggle before they gain a footing for the last half of the month, often associated with the notorious Santa Claus rally period.
Today, in our Market Outlook to subscribers, we discuss the following:
- The outperformance in the bond market
- The best period, historically, to be aggressive in bonds and when we are looking to make the reallocation
- US petroleum inventories and the upcoming seasonal trade in energy stocks and the commodities
- Investor sentiment
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Sentiment on Wednesday, as gauged by the put-call ratio, ended overly bearish at 1.23.
Seasonal charts of companies reporting earnings today:
S&P 500 Index
TSE Composite
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