Stock Market Outlook for August 10, 2023
A regime change in the market is well underway, away from the much beloved Growth trade through the first half of the year and towards Value.
*** 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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United Rentals, Inc. (NYSE:URI) Seasonal Chart
Cullen Frost Bankers Inc. (NYSE:CFR) Seasonal Chart
CACI Intl, Inc. (NYSE:CACI) Seasonal Chart
Shoe Carnival, Inc. (NASD:SCVL) Seasonal Chart
Vail Resorts, Inc. (NYSE:MTN) Seasonal Chart
The Markets
Stocks closed generally lower on Wednesday, continuing to realize the weight of the rollover of technology sector stocks as investors rotate to other opportunities, such as energy and core defensives (staples, utilities, REITs, health care). The S&P 500 Index shed seven-tenths of one percent, closing near the low of the day as investors look forward to the CPI report for July slated to be released on Thursday. The benchmark remains below previous support, now implied resistance, at the 20-day moving average at 4535 as it eyes the next major moving average at the 50-day (4427) to support the recent correction during this normal period of volatility/weakness for the equity market. Momentum indicators are pointed lower, not yet providing indication that the trend of buying demand that has elevated the intermediate-term trend from the October lows is set to resume imminently. Remember, levels down to the June breakout point at 4200 are fair game as part of this correction, allowing the rising intermediate-term path of higher-highs and higher-lows to remain intact. For now, this remains a growth/technology fuelled correction and investors are still finding places to rotate to, helping to mitigate some of sustained rise in volatility that is normal through the month of August, at least so far.
Today, in our Market Outlook to subscribers, we discuss the following:
- The regime change and risk aversion that is becoming apparent in the market
- US Wholesale Sales and Inventories
- US Petroleum Status, the price of Oil, and the Energy Sector
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Sentiment on Wednesday, as gauged by the put-call ratio, ended slightly bullish at 0.93.
Seasonal charts of companies reporting earnings today:
S&P 500 Index
TSE Composite
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