Equity Clock

Stock Market Outlook for July 17, 2020

The average summer rally period for stocks concludes today: The S&P 500 Index has gained 6.86% over the past 14 days, which makes this the fourth best summer rally in the past 70 years.

 

 

 

*** 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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Eldorado Gold Corp. (TSE:ELD.TO) Seasonal Chart

Rogers Corp. (NYSE:ROG) Seasonal Chart

RPM Intl, Inc. (NYSE:RPM) Seasonal Chart

National Grid Group (NYSE:NGG) Seasonal Chart

A. H. Belo Corp. (NYSE:AHC) Seasonal Chart

 

 

The Markets

Stocks closed slightly lower on Thursday as investors digested the gains from previous sessions.  The S&P 500 Index closed down by around a third of one percent, weighed down, once again, by weakness in  the technology sector.  The benchmark remains supported by short-term support at the 20-day moving average, as well as horizontal support at 3130.  Resistance around 3235 is proving to be an inconvenience to investors and a break below short-term support would start to confirm a double-top pattern.  Momentum indicators remain on a buy signal following last week’s MACD crossover, but the lack of any significant expansion in MACD or RSI does raise concerns.  Seasonally, today marks the average peak to the summer rally period and it has been one for the record books.  The S&P 500 Index has gained 6.86% over the past 14 days, which makes this the fourth best summer rally in the past 70 years.  On average, the large-cap benchmark has gained 1.3% over the almost three week span that begins on June 27th.  We set up subscribers for this average tendency and suggested a 100% allocation to stocks over this timeframe.  Interested in participating in our process?  Subscribe now.

On the economic front, a report on retail sales in the US was released before Thursday’s opening bell.  The headline print of June’s report indicated that retail activity increased by 7.5% last month, which was stronger than the 5.2% increase that was expected by analysts. Less gas and autos, the increase was equally impressive, up 6.7%, which is stronger than the 5.0% increase that was forecasted by analysts. Stripping out the adjustments, retail sales actually increased by 3.7% versus the month prior. This is the strongest June increase that we have on record, far surpassing the 2.9% decline that is average for this time of year. The year-to-date change is now hovering 3.2% above the seasonal average trend. Astoundingly, despite the tremendous adversity and economic metrics on the business side of the economy that are akin to a depression, retail sales are currently showing the strongest first half of the year performance on record. We sent out further insight to subscribers intraday.  Subscribe now.

Sentiment on Thursday, as gauged by the put-call ratio, ended bullish at 0.72.  This follows Wednesday’s reading of 0.63, which was the lowest level since June 8th, just before the over 8% decline in the S&P 500 Index, from peak to trough, that followed in the days thereafter.

 

 

 

 

Seasonal charts of companies reporting earnings today:

 

 

S&P 500 Index

 

 

TSE Composite

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