Equity Clock

Stock Market Outlook for August 7, 2020

The put-call ratio just charted one of the lowest levels in the past two decades, emphasizing investor complacency.

 

 

 

*** 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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Southern Copper Corp. (NYSE:SCCO) Seasonal Chart

Roper Technologies, Inc. (NYSE:ROP) Seasonal Chart

Jack Henry & Associates, Inc. (NASD:JKHY) Seasonal Chart

AMERISAFE, Inc. (NASD:AMSF) Seasonal Chart

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

Mercury Systems Inc. (NASD:MRCY) Seasonal Chart

iShares FactorSelect MSCI USA ETF (AMEX:LRGF) Seasonal Chart

Altria Group Inc. (NYSE:MO) Seasonal Chart

Global Payments, Inc. (NYSE:GPN) Seasonal Chart

J&J Snack Foods Corp. (NASD:JJSF) Seasonal Chart

TransGlobe Energy Corp. (NASD:TGA) Seasonal Chart

 

 

The Markets

Stocks gained on Thursday as anticipation continues to grow that another stimulus bill will be released in the near future.  The S&P 500 Index added just over six-tenths of one percent, moving beyond the downside gap that was opened in February between 3250 and 3325.  Next level of resistance is the obvious one at the all-time high of 3393, which is now just over one percent overhead.  Support remains steady at the rising 20-day moving average and the 50-day moving average remains a solid backstop at 3164.  A move back to this intermediate moving average would represent an approximately 5% decline from present levels, which is a reasonable check-back in any positive trending market.  As highlighted yesterday, it would take a definitive break of some of these rising moving averages in order to warrant a negative bias in the short and intermediate-term.  Momentum indicators are reaching back towards overbought territory, suggesting that the desirable entry point around rising levels of support, such as the moving averages, has past.  The next major catalyst on the horizon is Friday’s non-farm payroll report, which will be released before the opening bell.  Looking for more insight?  Subscribe to our service to receive daily, monthly, and intraday reports covering all aspects of our strategy, including seasonals, fundamentals, and technicals.  In today’s report, we look at what jobless claims have to say about what to expect when payroll data is released on Friday, the activity of the volatility index and what sentiment is saying about the risk-reward in the market, an update of the seasonal trade in natural gas, and a look at construction spending in the US and what the trends have to say about prospects for investment in construction stocks into the fall.  Subscribe now.

Sentiment on Thursday, as gauged by the put-call ratio, ended overly bullish at 0.61.  This is the lowest level since the June 8th, just before the approximately 8% decline, from peak to trough, in the days that followed.

 

 

 

Seasonal charts of companies reporting earnings today:

 

 

S&P 500 Index

 

 

TSE Composite

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