Stock Market Outlook for December 20, 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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SPDR S&P 1000 ETF (AMEX:SPMD) Seasonal Chart
Nuveen Muni Value Fd, Inc. (NYSE:NUV) Seasonal Chart
Eaton Vance Municipal, Inc. (NYSE:EVN) Seasonal Chart
MFS High Income Municipal Fund (NYSE:CXE) Seasonal Chart
Invesco China Technology ETF (NYSE:CQQQ) Seasonal Chart
FirstAsset Canadian Convertible Bond ETF (TSE:CXF.TO) Seasonal Chart
Granite Real Estate Trust (NYSE:GRP/U) Seasonal Chart
Global Ship Lease, Inc. (NYSE:GSL) Seasonal Chart
Canadian Utilities Ltd. (TSE:CU.TO) Seasonal Chart
Corning, Inc. (NYSE:GLW) Seasonal Chart
GoldMining, Inc (TSE:GOLD.TO) Seasonal Chart
Corby Spirit and Wine Limited (TSE:CSW/B.TO) Seasonal Chart
Brookfield Infrastructure Partners L.P. (NYSE:BIP) Seasonal Chart
The Markets
Stocks continued to struggle coming into the new week as the technical degradation that followed the FOMC announcement last week persisted. The S&P 500 Index closed down on the session by nine-tenths of one percent, charting a definitive break below the rising 50-day moving average at 3867. Momentum indicators remain on sell signals following the bearish cross that was triggered with respect to MACD on December 5th and the MACD histogram continues to expand negatively. The 20-day moving average, which has been pointing higher since October, is now showing a negative slope, indicative of the direction of the short-term trend that is upon us. The upside gap that was charted in November between 3770 and 3860 continues to be filled and we continue to look to this zone as the basis of support for the Santa Claus rally period ahead. The technical backdrop of the market certainly appears threatening and the downturn in recent days may be the start of the next substantial leg lower in the market, but we would be unable to adopt the bearish bias that the technicals suggest so long as we are in this end of year seasonal strength pattern that still has a high likelihood of supporting stocks through the weeks ahead. We continue to look for the more appropriate opportunity, aligning with the three prongs to our approach (technicals, fundamentals, and seasonals), to become more conservative in portfolio positioning, something that is likely to be seen around the start of the new year.
Today, in our Market Outlook to subscribers, we discuss the following:
- The price action of Copper as its period of seasonal strength gets underway
- The Accumulate rating that was warranted for this Consumer Discretionary industry
- Maturing trends in the currency market
- How to play cryptocurrencies under the current technical and seasonal backdrop
- Our list of all segments of the market to Accumulate (buy) and those to Avoid (sell/short)
Subscribers can look for this report in their inbox or by clicking on the following link and logging in: Market Outlook for December 20
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Sentiment on Monday, 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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