Stock Market Outlook for January 25, 2023
*** 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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Altair Engineering, Inc. (NASD:ALTR) Seasonal Chart
Aon Corp. (NYSE:AON) Seasonal Chart
Idex Corp. (NYSE:IEX) Seasonal Chart
Greenbrier Cos, Inc. (NYSE:GBX) Seasonal Chart
Invesco DB Oil Fund (NYSE:DBO) Seasonal Chart
Invesco S&P 500 Low Volatility ETF (NYSE:SPLV) Seasonal Chart
The Markets
Stocks closed little changed on Tuesday as investors held the tape steady ahead of the onslaught of earnings reports expected in the days ahead. The S&P 500 Index closed down by less than a tenth of one percent, maintaining levels above the 200-day moving average and holding marginally above declining trendline resistance that had capped the market over the past year. Momentum indicators continue to narrow around their middle lines, providing a rather neutral look for domestic equities. Major moving averages continue to converge around 3900 and bullish crossovers have started to be revealed as they no longer show the parallel declining paths of the past year. It was back in April that bearish crossovers derailed the market from the rising tracks that had been supported it previous and today we are starting to see the opposite. Traditionally, bullish and bearish crossovers since the last major recession in 2008/09 have typically led to very poor entry and exit levels, suggesting that the only time to believe in the signals that major moving crossovers present is during of ahead of economic recessions. For now, despite consecutive closes above the highest of the moving averages around the 200-day moving average, this cloud of moving averages that spans between 3865 and 3965 could still be argued as resistance until definitive liftoff from this zone (ideally above resistance at 4100) is realized, thereby giving merit to the argument that the trend of the market has shifted from negative to positive. In the interim, a neutral view of domestic equities is the appropriate stance.
Today, in our Market Outlook to subscribers, we discuss the following:
- Sentiment and positioning
- The inverted yield curve
- The decline of the Economic Surprise Index
- High yield and junk bond yield spreads
Subscribers can look for this report in their inbox or by clicking on the following link and logging in: Market Outlook for January 25
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Sentiment on Tuesday, as gauged by the put-call ratio, ended slightly bearish at 1.03.
Seasonal charts of companies reporting earnings today:
S&P 500 Index
TSE Composite
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