Equity Clock

Stock Market Outlook for August 11, 2021

While the equity market shifts in an abnormal manner for this time of year, it is the abnormal rise in respiratory illnesses that has us concerned.

 

 

 

*** 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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Best Buy Co, Inc. (NYSE:BBY) Seasonal Chart

Rambus, Inc. (NASD:RMBS) Seasonal Chart

iShares U.S. Technology ETF (NYSE:IYW) Seasonal Chart

 

 

The Markets

Stocks closed generally higher on Tuesday as the rotation back to core-cyclical segments of the market continues following the recent string of stronger than expected economic data and the passage of the infrastructure bill in the Senate.  The S&P 500 Index added just a tenth of one percent, led by energy, financials, industrials, and materials.  Technology was the laggard as the growth trade shows signs of near-term exhaustion.  The large-cap benchmark remains supported by its 20 and 50-day moving averages at 4388 and 4316, respectively, however, with this push/pull between value and growth sectors, the broad market gauge is showing signs of indecision.  The doji candlestick recorded during the session is one sign; the negative divergence with respect to RSI and MACD is another. Given that technology represents the largest sector in the market, the rotation away from the growth segment is acting as a significant drag, but the price action is still showing that investors are finding opportunities below the surface, conducive to mitigating the volatility that is average for this time of year.

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

• Broad market benchmarks breaking out of multi-month trading ranges
• Waning momentum in the technology sector
• COVID cases in the US surpassing the level seen at the end of last year and the abnormal rise in the respiratory illnesses at this time of year
• Job Openings and Labor Turnover
• The strength in manufacturing openings and ways to obtain a foothold in core-cyclical bets during the off-season for this part of the market

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Sentiment on Tuesday, as gauged by the put-call ratio, ended bullish at 0.72.

 

 

Seasonal charts of companies reporting earnings today:

 

 

S&P 500 Index

 

 

TSE Composite

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