August has historically been a flat month for stocks with the S&P 500 Index averaging a decline of 0.1% with only 55% of periods showing positive results.

Stock Market Outlook for August 1, 2024

August has historically been a flat month for stocks with the S&P 500 Index averaging a decline of 0.1% with only 55% of periods showing positive results.

Real Time Economic Calendar provided by Investing.com.

*** 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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Polo Ralph Lauren Corp. (NYSE:RL) Seasonal Chart

Vector Group Ltd. (NYSE:VGR) Seasonal Chart

Blackrock, Inc. (NYSE:BLK) Seasonal Chart

National Grid Group (NYSE:NGG) Seasonal Chart

Tilly’s Inc. (NYSE:TLYS) Seasonal Chart

Aurora Cannabis Inc. (NASD:ACB) Seasonal Chart

The Markets

Stocks snapped back in the final session of July as the Technology sector bounced from levels of long-term rising trendline support. The S&P 500 Index jumped higher by 1.58%, moving into last week’s open gap resistance between 5508 and 5550 and testing the 20-day moving average from below for the first time since the start of May. A new gap has been opened between 5452 and 5493, providing a point of near-term support as the market benefits from this period of short-term buoyancy surrounding the end of July/start of August. The bounce is being realized around the rising 50-day moving average (5446), a critical level for the path of the intermediate-term trend, which will likely be under threat through the period of volatility for stocks in August, September, and October. Momentum indicators have been testing levels below the mid-points to their spans, starting to lose their characteristics of a bullish trend that had been beneficial to the path of prices since April. Short-term positivity in the market has been expected, but, beyond the start of August, caution in risk assets will likely be prudent.

Today, in our Market Outlook to subscribers, we discuss the following:

The bounce in the Technology sector from long-term rising trendline support

Monthly look at the large-cap benchmark

Tendency for stocks during the month of August

Securities that have gained or lost in every August over their trading histories

Canada Gross Domestic Product (GDP)

Test of significant support for the Canadian Dollar

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For the month ahead, August is a rather flat month for the S&P 500 Index in this last full month of the summer season. Over the past two decades, the large-cap benchmark has averaged a loss of 0.1% in this eighth month of the year, which is one of the weakest returns on the calendar, primarily lagging only September’s 0.7% average drawdown. Positive Augusts still outnumber negative ones with a gain frequency of 55%. Returns have ranged from a loss of 6.3% in August of 2015 to a gain of 7.0% in August of 2020. We provide greater insight on the setup and what to look for in the month ahead in our just released Market Outlook for August.

Just released…

Our monthly report for August is out, providing you with everything that you need to know to navigate the market through the month(s) ahead.

Highlights in this report include:

Equity market tendencies in the month of August

On the lookout for signs of complacency ahead of the normal period of volatility for stocks

The change in margin debt at the point of excess

Bonds

Trading the period of seasonal volatility ahead

Gold

High beta versus low volatility

The decline of liquidity available to the market

Growth (technology) trade looking vulnerable to a retracement back to levels of rising support

The changing fundamentals behind the Artificial Intelligence trade suggesting a shift of exposure may be appropriate

Defense stocks still in a position to defend portfolios this summer

Natural Gas

Commodity market adopting a more defensive posture

Record setting June decline in Retail Sales

Retailer inventories on the rise

Downfall of consumer demand peeling back inflationary pressures

Weakest June change in US Existing Home Sales on record

Our list of all segments of the market to either Accumulate or Avoid, along with relevant ETFs

Positioning for the months ahead

Sector Reviews and Ratings

Stocks that have Frequently Gained in the Month of August

Notable Stocks and ETFs Entering their Period of Strength in August

Subscribers can look for this 105-page report in their inbox and, soon, in the report archive.

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With the new month upon us and as we celebrate the release of our monthly report for August, today we release our screen of all of the stocks that have gained in every August over their trading history. While we at Equity Clock focus on a three-pronged approach (seasonal, technical, and fundamental analysis) to gain exposure to areas of the market that typically perform well over intermediate (2 to 6 months) timeframes, we know that stocks that have a 100% frequency of success for a particular month is generally of interest to those pursuing a seasonal investment strategy. Below are the results:

And how about those securities that have never gained in this eighth month of the year, here they are:

*Note: None of the results highlighted above have the 20 years of data that we like to see in order to accurately gauge the annual recurring, seasonal influences impacting an investment, therefore the reliability of the results should be questioned. We present the above list as an example of how our downloadable spreadsheet available to yearly subscribers can be filtered.

Sentiment on Wednesday, as gauged by the put-call ratio, ended neutral at 0.99.