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Stock Market Outlook for May 10, 2022

The “sell everything” market has turned its sights on some of this year winners, which had already been showing signs of buying exhaustion in recent weeks.


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*** 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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Automotive Properties REIT (TSE:APR-UN.TO) Seasonal Chart

MFS Government Markets Income Fund (NYSE:MGF) Seasonal Chart

Invesco S&P 500 Momentum ETF (AMEX:SPMO) Seasonal Chart

SPDR Barclays Long Term Corporate Bond ETF (AMEX:SPLB) Seasonal Chart

Vanguard Mega Cap Growth ETF (NYSE:MGK) Seasonal Chart

H & R Block, Inc. (NYSE:HRB) Seasonal Chart

iShares Long-Term Corporate Bond ETF (AMEX:IGLB) Seasonal Chart

iShares Nasdaq Biotechnology ETF (NASD:IBB) Seasonal Chart

American States Water Co. (NYSE:AWR) Seasonal Chart

Intuit, Inc. (NASD:INTU) Seasonal Chart



The Markets

Stocks took another leg lower on Monday as the “sell everything” market turned its sights on some of this year’s winners, such as those in the energy sector.  The S&P 500 Index closed with a loss of 3.20%, continuing to make progress below the neckline to its massive head-and-shoulders topping pattern.  The 3780 target that the topping setup projects would encompass a fairly standard 38.2% retracement of the entire pandemic rally realized between March of 2020 and the fall of last year.  A significant low in the market between present levels and the theoretical projection of the topping setup would be a healthy reset of the froth that had built up in the market over the past couple of years and set the stage for the strength that is expected of stocks through the back half of 2022.  Momentum indicators are still showing characteristics of a bearish trend, unworthy to take a stab at the new 52-week lows in prices, yet, but our projected timeframes of when to ramp up risk are quickly approaching and just about everything that is being trashed today will likely be a screaming buy ahead.  For now, sitting with a large allocation to cash and bonds is very comforting on days like Monday.

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

  • Risk aversion taking a toll on cyclical assets
  • Bonds becoming a defensive allocation again
  • Notable ratings changes in this week’s chart books
  • The breakdown on the chart of the S&P 400 Mid-cap Index
  • Buying exhaustion in energy stocks

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Want to know which areas of the market to buy or sell?  Our Weekly Chart Books have just been updated, providing a clear Accumulate, Avoid, or Neutral rating for currencies, cryptocurrencies, commodities, broad markets, and subsectors/industries of the market.  Subscribers can login and click on the relevant links to access.

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Sentiment on Monday, as gauged by the put-call ratio, ended overly bearish at 1.31.


Seasonal charts of companies reporting earnings today:



S&P 500 Index



TSE Composite

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