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Stock Market Outlook for March 10, 2023

The performance of Banks and the surge of Jobless Claims providing a significant warning to the market that the cascading decline in economic fundamentals and corresponding downfall of stocks may be near.

Real Time Economic Calendar provided by Investing.com.

 

 

*** 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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AeroVironment Inc. (NASD:AVAV) Seasonal Chart

AeroVironment Inc. (NASD:AVAV) Seasonal Chart

Globant SA (NYSE:GLOB) Seasonal Chart

Globant SA (NYSE:GLOB) Seasonal Chart

SPDR S&P Oil & Gas Exploration & Production ETF (NYSE:XOP) Seasonal Chart

SPDR S&P Oil & Gas Exploration & Production ETF (NYSE:XOP) Seasonal Chart

SPDR Russell 1000 Momentum Focus ETF (AMEX:ONEO) Seasonal Chart

SPDR Russell 1000 Momentum Focus ETF (AMEX:ONEO) Seasonal Chart

Nuveen ESG Large-Cap Growth ETF (AMEX:NULG) Seasonal Chart

Nuveen ESG Large-Cap Growth ETF (AMEX:NULG) Seasonal Chart

BMO Low Volatility US Equity Hedged to CAD ETF (TSE:ZLH.TO) Seasonal Chart

BMO Low Volatility US Equity Hedged to CAD ETF (TSE:ZLH.TO) Seasonal Chart

Invesco S&P International Developed Quality ETF (AMEX:IDHQ) Seasonal Chart

Invesco S&P International Developed Quality ETF (AMEX:IDHQ) Seasonal Chart

iShares MSCI Germany ETF (NYSE:EWG) Seasonal Chart

iShares MSCI Germany ETF (NYSE:EWG) Seasonal Chart

Sierra Wireless, Inc. (TSE:SW.TO) Seasonal Chart

Sierra Wireless, Inc. (TSE:SW.TO) Seasonal Chart

B&G Foods Inc. (NYSE:BGS) Seasonal Chart

B&G Foods Inc. (NYSE:BGS) Seasonal Chart

Perpetual Energy Inc. (TSE:PMT.TO) Seasonal Chart

Perpetual Energy Inc. (TSE:PMT.TO) Seasonal Chart

 

 

The Markets

Stocks struggled on Thursday as the sharp declines in SVB Financial and Silvergate Capital raised concerns of contagion in the market as the broader financial complex shows signs of struggle.  The S&P 500 Index fell by 1.85%, moving back below the rising 50-day moving average and undercutting the 200-day moving average at 3940.  Short-term resistance remains intact at the declining 20-day moving average at 4030 and the confluence of support at other major moving averages between 3900 and 4000 remains the important line in the sand to keep the rising trajectory off of the October lows intact.  The benchmark finds itself in the narrow span below broken rising trendline support that stems from the October low and declining trendline support that capped the highs of the market over the past year. Further downside pressures below to cause the benchmark to return to a path below the declining level of trendline resistance of the past year would inevitably cause us to flip from our recent Neutral bias of the benchmark and towards a view to Avoid.  Given the positivity that is typically realized seasonally between the middle of March and the end of April, we are trying to hold a certain level of optimism that stocks will realize the gains that are normal over the next six to eight weeks, but we also have to be realistic if the technicals are not supportive of this move.  Concerning signs on the fundamental front (more on that below) certainly does not help with our attempt to maintain optimism over the short-term.  Overall, regardless of what happens over the next month and a half or so, our expectation, according to our forecasted general direction for stocks, is that we will see lower values for the market over the next six months as economic activity continues to degrade and as we enter the weaker time of the year for the market starting in May.  The period surrounding the end of the first quarter/start of the second quarter continues to present the best chance of providing stability to the market before the more defined/sustainable downturn in risk assets (stocks) begins, but, obviously, Thursday’s price action isn’t all that confidence inspiring for the near-term prospects of the market.

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Today, in our Market Outlook to subscribers, we discuss the following:

  • The downfall of bank stocks and the downside target should the breakdown of significant horizontal support become confirmed
  • The break of the relative trend of small-cap stocks as they enter their period of seasonal weakness
  • Weekly Jobless Claims and the health of the labor market
  • A preview of what to expect of Friday’s Non-farm Payroll report
  • All eyes on the US Dollar Index following February’s employment report

Subscribers can look for this report in their inbox or by clicking on the following link and logging in: Market Outlook for March 10

Not signed up yet?  Subscribe now to receive full access to all of the research and analysis that we publish.

Sentiment on Thursday, as gauged by the put-call ratio, ended slightly bearish at 1.04.

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Seasonal charts of companies reporting earnings today:

JinkoSolar Holding Company Limited Seasonal Chart Embraer S.A. Seasonal Chart Buckle, Inc. (The) Seasonal Chart Century Casinos, Inc. Seasonal Chart CSI Compressco LP Seasonal Chart Rand Capital Corporation Seasonal Chart Sunworks, Inc. Seasonal Chart Superior Drilling Products, Inc. Seasonal Chart DallasNews Corporation Seasonal Chart

 

 

S&P 500 Index

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TSE Composite

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