Stock Market Outlook for March 29, 2023
The potential of a head-and-shoulders bottoming pattern for Chinese internet stocks suggests that the worst for prices in this industry may have past.
*** 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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Forum Energy Technologies, Inc. (NYSE:FET) Seasonal Chart
Veritone, Inc. (NASD:VERI) Seasonal Chart
Light & Wonder Inc. (NASD:LNW) Seasonal Chart
Principal US Small Cap Index ETF (NASD:PSC) Seasonal Chart
BlackLine, Inc. (NASD:BL) Seasonal Chart
Kinsale Capital Group Inc. (NYSE:KNSL) Seasonal Chart
Independent Bank Group Inc. (NASD:IBTX) Seasonal Chart
Thomson Reuters Corp. (NYSE:TRI) Seasonal Chart
Stratasys, Inc. (NASD:SSYS) Seasonal Chart
DCP Midstream, LP (NYSE:DCP) Seasonal Chart
Overstock.com Inc. (NASD:OSTK) Seasonal Chart
Service Corp. (NYSE:SCI) Seasonal Chart
The Markets
Stocks closed mixed on Tuesday as the normal quarter-end mean reversion plays out heading towards the last days of March. The S&P 500 Index ended lower by just less than two-tenths of one percent, remaining in this confluence of major moving average between 3900 to 4000. For the first time since November, the 50-day moving average is showing signs of rolling over, beginning to define an intermediate-term declining trend for stocks and rejoining the 20 and 200-day moving averages that have been negative over the past month. Similarly, momentum indicators are showing signs of struggle below their middle lines, a characteristic of a bearish trend. There appears to be a noticeable lack of strength in the market, which is something that is highly atypical during this normally strong time of year for risk assets. Our primary concern, however, is what will happen to stocks when we get into the seasonally weak phase for the market beyond the first half of April. Normal quarter-end mean reversion may have mitigated much of the weakness that might have materialized without this influence, but the period of weakness for stocks between May and October is directly around the corner.
Today, in our Market Outlook to subscribers, we discuss the following:
- Hourly chart of the large-cap benchmark
- The narrowing of the trade deficit and what it has to say about the strength of the US economy
- The potential for global equities
- The bottoming setup on the chart of Chinese Internet stocks
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Sentiment on Tuesday, as gauged by the put-call ratio, ended bearish at 1.06.
Seasonal charts of companies reporting earnings today:
S&P 500 Index
TSE Composite
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