Stock Market Outlook for May 24, 2022
Consumer activity seen recovering from their weather induced slump realized in April, which may suggest that it is too late to be a seller of retail and consumer discretionary 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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Notice to readers: Given the Victoria Day holiday on Monday, our next Market Outlook will be released on Tuesday.
The Markets
The roller-coaster ride for stocks continued on Friday as the market shook off significant weakness realized intraday to close mildly higher, maintaining the prior week’s low as a point of support on a closing basis. The S&P 500 Index closed essentially unchanged after reaching down to declining trendline support around 3800 at the lows of the day. While the market remains on edge, the isolated levels of support below this market continue to hold, leaving the levels of resistance overhead to contend with. Momentum indicators remain above the prior week’s low and the ongoing narrowing of the MACD histogram highlights the waning selling pressures that have become apparent over the past week. These remain logical levels for a bounce in the market to progress and we continue to sit with our ramped up equity exposure in our Super Simple Seasonal Portfolio that was enacted at the start of the week. But while we wait for that low in the equity market to become confirmed, we are comforted by our sizeable allocation to long-duration bonds, which are providing a significant offset to the recent losses that have materialized in our equity bucket.
Today, in our Market Outlook to subscribers, we discuss the following:
- Weekly look at the large-cap benchmark and the significant level that is being tested
- The impact of weather on retail sales in the month of April
- Improving mobility trends observed over the past month
- The breakout of the declining trend of gasoline demand
- Consumer discretionary sector ETF back to pre-Covid levels
- Bearish sentiment
and we’ll send this outlook to you.
Sentiment on Friday, as gauged by the put-call ratio, ended bearish at 1.23.
Seasonal charts of companies reporting earnings today:
S&P 500 Index
