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Equity Clock - Market Outlook for December 20, 2022
The counter-trend moves in the currency market from pivot-points charted in September/October are showing signs of maturing, setting the stage for the resumption of longer-term paths.
*** 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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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.
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Seasonal charts of companies reporting earnings today:
S&P 500 Index
TSE Composite
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