Stock Market Outlook for August 30, 2023
With the normal positivity of equity prices into the Labor Day long weekend, we prefer to stick with those areas of the market that normally perform well at this time of year.
*** 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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BMO Canadian High Dividend Covered Call ETF (TSE:ZWC.TO) Seasonal Chart
SPDR Russell 1000 Yield Focus ETF (AMEX:ONEY) Seasonal Chart
Msc Industrial Direct Co. (NYSE:MSM) Seasonal Chart
WisdomTree U.S. Quality Dividend Growth Fund (NASD:DGRW) Seasonal Chart
Fortress Transportation and Infrastructure Investors LLC (NYSE:FTAI) Seasonal Chart
The Markets
Stocks jumped on Tuesday as yields pulled back and the positivity that is normal during the period surrounding the Labor day holiday plays out according to schedule. The S&P 500 Index closed with a gain of 1.45%, breaking above resistance at the 20 and 50-day moving averages that hover around 4450. The breakout opens the door to a retest of downside gap resistance that was charted at the start of August between 4550 and 4575, an event that fuelled the weakness that was realized through much of this post-summer rally period. MACD has just charted a fresh buy signal following the crossover above its signal line, coinciding with this normal positivity that tends to support stocks around the end of August and beginning of September. Broader (intermediate-term) seasonality still favours volatility/weakness through the months of August and September, overall, and the weakest period of this span is still ahead. Levels down to the June breakout zone at 4200 remain fair game as part of this corrective phase.
Today, in our Market Outlook to subscribers, we discuss the following:
- The rebound of technology industries from levels of rising trendline support
- Sticking with those groups that normally work at this time of year
- Job Openings and Labor Turnover Survey (JOLTS)
- Case-Shiller Home Price Index
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Sentiment on Tuesday, as gauged by the put-call ratio, ended slightly bullish at 0.93.
Seasonal charts of companies reporting earnings today:
S&P 500 Index
TSE Composite
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