Equity Clock

Stock Market Outlook for August 13, 2020

The price of oil closed exactly at its 200-day moving average as oil inventories posted a larger than expected drawdown in the past week.

 

 

 

*** 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:

Subscribers – Click on the relevant link to view the full profile. Not a subscriber? Signup here.

International Bancshares Corp. (NASD:IBOC) Seasonal Chart

First Commonwlth Fncl Pa (NYSE:FCF) Seasonal Chart

NBT Bancorp, Inc. (NASD:NBTB) Seasonal Chart

Beazer Homes USA, Inc. (NYSE:BZH) Seasonal Chart

Amerco (NASD:UHAL) Seasonal Chart

TriCo Bancshares (NASD:TCBK) Seasonal Chart

Energy Recovery Inc. (NASD:ERII) Seasonal Chart

Mesabi Trust (NYSE:MSB) Seasonal Chart

Village Super Market, Inc. (NASD:VLGEA) Seasonal Chart

Diamond Hill Investment Group, Inc. (NASD:DHIL) Seasonal Chart

B.Communications Ltd. (NASD:BCOM) Seasonal Chart

Par Pacific Holdings Inc. (NYSE:PARR) Seasonal Chart

Franklin Financial Network Inc. (NYSE:FSB) Seasonal Chart

HomeTrust Bancshares, Inc. (NASD:HTBI) Seasonal Chart

 

 

The Markets

Stocks closed higher on Wednesday, reversing the prior day’s decline, as investors reacted favourably to the news of Joe Biden’s pick of his running mate for Vice President.  The S&P 500 Index gained 1.40%, falling just short of charting a fresh all-time closing high.  It was back on February 19th that the benchmark charted a record close of 3386.15; the benchmark ended Wednesday’s session at 3380.35.   The lack of downside follow-through after Tuesday’s reversal violates the apparent bearish exhaustion setup that threatened a pullback to rising levels of support at 20 and 50-day moving averages.  Investors appear focussed on getting stocks back to their all-time highs, particularly with central banks around the globe continuing to support risk-taking and the recent uptick in economic activity as the number of new cases of coronavirus in the US rolls over.  Resistance at the all-time peak of 3393 is obvious overhead, while support at short-term moving averages are 3% to 6% below present levels.

While Wednesday’s session for stocks was positive, it had a notably defensive tilt.  Consumer Staples, health care, technology, utilities, and REITs posted gains in excess of one percent, while energy, financials, industrials, and materials lagged the broad market return.  The rotation in this market remains persistent, which has allowed investors, whether bullish or bearish, to find opportunities, not matter their bias  We have been monitoring the evolution of the performance of the consumer staples ETF (XLP) versus the consumer discretionary ETF, which had tried to turn higher as of the end of July.  Recently, that ratio has fallen back to the lower limit of its recent range, suggesting a balanced argument to being defensively or cyclically positioned at the present time.  Should this ratio start to rebound again and a defined defensive tilt be realized, equity market weakness would be expected to follow.  For now, we’ll keep watching how the cards are dealt.

On schedule for the Wednesday session, the Energy Information Administration (EIA) released its tally of petroleum inventories for the week just past.    The headline print indicated that oil inventories declined by 4.5 million barrels last week, which is a much larger drawdown than the consensus analyst estimate of a drop of 2.875 million.  Gasoline stockpiles, meanwhile, declined by 722,000 barrels, and distillates declined by 2.3 million barrels.  The result saw the days of supply of oil fall by half of a day to 35.4, while gasoline days of supply ticked lowed by two-tenths to 28.4.  The average days of supply for each at the end of July is 21.9 and 23.5, respectively.  We sent out further insight to subscribers intraday, including how we perceive the seasonal trade in the the energy sector at this time of year.  Subscribe now.

Sentiment on Wednesday, as gauged by the put-call ratio, ended bullish at 0.77.

 

 

Seasonal charts of companies reporting earnings today:

 

 

S&P 500 Index

 

 

TSE Composite

Sponsored By...