Equity Clock

Stock Market Outlook for September 9, 2020

NASDAQ 100 ETF testing intermediate support at its 50-day moving average for the first time in this post-pandemic recovery rally.

 

 

 

*** 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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Agilent Technologies, Inc. (NYSE:A) Seasonal Chart

Companhia Vale do Rio Doce SA (NYSE:VALE) Seasonal Chart

Mastercard (NYSE:MA) Seasonal Chart

LeoNovus Inc. (TSXV:LTV.V) Seasonal Chart

 

 

The Markets

Stocks sold off on Tuesday as the “tech wreck” continued for a third straight session. The S&P 500 Index shed 2.78%, closing firmly below its 20-day moving average, which had supported the benchmark going into the long weekend.  The benchmark continues to hover above its 50-day moving average, a significant level of intermediate support that is currently reading 3305.  Momentum indicators rolled over at the end of last week, triggering sell signals in the process.  Both the Relative Strength Index (RSI) and Stochastics are hovering at the lowest levels since March/April as the bullish characteristics exhibited previously fade.

The technology-heavy NASDAQ 100 ETF (QQQ), which has been the place to be during the equity market rebound from the March low, is testing intermediate support at its 50-day moving average.  The intermediate moving average is an important input to our approach given that it is most representative of the timeframe of a traditional three-month season.  This is the first time in this rebound that the rising 50-day moving average has been tested as support; previous pullbacks have seen buyers step in around the 20-day moving average.  With the 20-day moving average now overhead, we will have to watch for signs of resistance at this previous level of short-term support, which could have negative implications for the intermediate-term trend. 

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On the economic front, a report on vehicle sales in the US was released at the end of last week.  The Bureau of Economic Analysis (BEA) has indicated that total vehicle sales in the US increased by 3.9% in August to a seasonally adjusted annualized rate of 15.6 million.  The result is now 11.4% below last August’s pace of 17.6 million.  Stripping out the seasonal adjustments, Total Vehicle Sales actually increased by 7.1% last month, which is stronger than the 6.1% increase that is average for August.  The year-to-date change is now down 12.8%, which is 18.0% below the seasonal average trend through the first eight months of the year.  We sent out further insight to subscribers intraday, including how you can take advantage within investment portfolios.  Subscribe now. 

Sentiment on Tuesday, as gauged by the put-call ratio, ended bullish at 0.88.

 

 

 

 

Seasonal charts of companies reporting earnings today:

 

 

S&P 500 Index

 

 

TSE Composite

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