Equity Clock

Stock Market Outlook for August 12, 2020

Dark index at the lowest level since March, expressing the waning interest in stocks at present levels.

 

 

 

*** 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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Texas Capital Bancshares, Inc. (NASD:TCBI) Seasonal Chart

Alpha Pro Tech, Ltd. (AMEX:APT) Seasonal Chart

Partner Communications Co. Ltd. (NASD:PTNR) Seasonal Chart

 

 

The Markets

Stocks sold off in a classic reversal Tuesday fashion as investors booked profits in some of the former market leaders.  The S&P 500 Index shed eight-tenths of once percent, clawing back the prior day’s gain.  The session charted an outside reversal candlestick whereby the difference between the open and close encompassed that of the previous day’s range, typically a pattern that indicates market exhaustion.  The reversal was realized right around resistance presented by the all-time high at 3393, a logical place for investors to question the height of the rebound from the market low.  Support at rising 20 and 50-day moving averages are now 1.8% and 4.5% below present levels.  The benchmark had reached overbought levels earlier in the session with the Relative Strength Index surpassing 70, but this hurdle was unable to be maintained.  Momentum indicators are showing early signs of rolling over as the strength of the current upside gyration fades.  Downside follow-through in the days ahead could place a notable bearish mark on the upward trend of the benchmark from the March low, precisely at a time when escalating equity market volatility is the norm.  Looking for more insight?  In our report to subscribers today we highlight the technical status of gold and silver and at what level to look to re-accumulate, the influence of the dollar on stocks and commodities at present levels, a view of the tech heavy Nasdaq composite and our overall sector rating.  Subscribe now.

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According to the dark index, interest in stocks at these elevated levels has been waning for a few weeks.  On Tuesday, the dark index posted its lowest level since March, a suggestion that the large players are no longer supporting the market.  We’ll be monitoring how the emerging instability plays out across the assets classes, but we are in the period of the year that is notorious for volatility.  Tread lightly.

Sentiment on Tuesday, as gauged by the put-call ratio, ended bullish at 0.70.

 

 

 

Seasonal charts of companies reporting earnings today:

 

 

S&P 500 Index

 

 

TSE Composite

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