Equity Clock: Stock Market Outlook

We have updated our Seasonality Chart (presented at the end of this report) and made significant changes, including updating the beginning-and-end dates for the periods of seasonality strength, and adding a further ten industry sectors. We remain cautious towards the market and recommend defensive positions. Given the recent strong upward movements in stock prices, we would welcome over the summer months a lengthy consolidation period or a meaningful, but healthy, pull-back. [more]

After the large number of indexes/sectors that entered strong seasonality periods last October, subsequent months have been quite quiet, particularly January and February from a positive seasonality stand-point. However, March is very active, so we will gear up then. January was brutal for many sectors, particularly Information Technology, conversely, Energy in Canada had a sterling January. [more]

Despite historical evidence of market weakness and, equally, despite market indexes being at or near all-time highs, it is difficult to fight the tape and embrace the well-recognized, widely-followed adage “Sell in May, and Go Away”. However, investors should be very cautious at this point in the cycle. [more]