Equity Clock

Stock Market Outlook for August 26, 2020

Investors are letting their guard down, sending treasury bond prices lower.

 

 

 

*** 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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Vodafone Group Public Limited Company (NASD:VOD) Seasonal Chart

Sterling Construction Co. Inc. (NASD:STRL) Seasonal Chart

Corby Spirit and Wine Ltd. (TSE:CSW/A.TO) Seasonal Chart

China Automotive Systems Inc. (NASD:CAAS) Seasonal Chart

Phoenix New Media Ltd. (NYSE:FENG) Seasonal Chart

Revance Therapeutics Inc. (NASD:RVNC) Seasonal Chart

 

 

The Markets

Stocks gained on Tuesday as investors continue to push major benchmarks to new record highs.  The S&P 500 Index added just over a third of one percent, continuing to move past psychological resistance at 3400.  The benchmark is becoming increasingly overbought with the relative strength index (RSI) now at 73.53.  Major moving averages remain in positions of support at 20, 50, and 200-day moving averages.  The shorter-term 20-day moving average has yet to show evidence of converging on the more intermediate 50-day, a scenario that would suggest waning momentum on a daily scale.  Volume continues to wane from the pandemic surge in activity seen in March, suggesting the excitement around present levels is absent.  However, the lofty state has yet to deter the next marginal buyer from buying into equity allocations.  The days ahead will likely see some rotation amongst sectors as investors reallocate holdings ahead of the end of the month.  The month-end phenomenon has much more of an impact at quarter-ends, but it can be a force to be reckoned with intra-quarter, as well.

Sentiment on Tuesday, as gauged by the put-call ratio, ended bullish at 0.62.  This is one of the lowest levels of the past 15 years, once again emphasizing that complacency in the market remains elevated.

 

 

Seasonal charts of companies reporting earnings today:

 

 

S&P 500 Index

 

 

TSE Composite

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