With the US dollar and yields on the rise, a derailment compared to the seasonal norm is presented, threatening the intermediate-term rising path of stocks.
*** 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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Super Simple Seasonal Portfolio
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The Markets
Stocks closed sharply lower on Monday amidst escalating geopolitical concerns following Iran’s weekend attack of Israel. The S&P 500 Index ended down by 1.20%, breaking and closing below its 50-day moving average (5114) for the first time since October. Our eyes remain on February’s upside gap between 4983 and 5038 as the next level of support now that the 50-day moving average has been taken out. Below that gap threshold, we can start to consider damage to the intermediate-term (multi-month) trend and potentially the start of a 10%+ correction in the market that is normal and healthy in any given year. Momentum indicators are gradually ceding ground from levels above their middle lines as the characteristics of a bullish intermediate-term trend start to fade. As highlighted in our last report, if there is something bigger brewing for a downside move, the price action over the past week is viewed to be merely the opening draw and there is still plenty of time for the price action to evolve to suggest something sustainably negative. Maintain a positive intermediate-term bias until such point that evidence of resistance overrules levels of support, thereby supporting a path of lower-highs and lower-lows. It would be premature to suggest that this negative path is developing at present, but in any shock event, a certain amount of nimbleness is typically desired.
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Seasonal charts of companies reporting earnings today:
S&P 500 Index
TSE Composite
