This is an emerging risk-off market.

Stock Market Outlook for August 2, 2024

This is an emerging risk-off market.

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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Parker Hannifin Corp. (NYSE:PH) Seasonal Chart

Best Buy Co, Inc. (NYSE:BBY) Seasonal Chart

Alphabet Inc. (NASD:GOOGL) Seasonal Chart

Africa Oil Corp. (TSE:AOI.TO) Seasonal Chart

Ritchie Bros. Auctioneers Inc. (TSE:RBA.TO) Seasonal Chart

Acnb (NASD:ACNB) Seasonal Chart

Cass Commercial Corp. (NASD:CASS) Seasonal Chart

iShares S&P Global Industrials Index ETF (CAD-Hedged) (TSE:XGI.TO) Seasonal Chart

ALPS Sector Dividend Dogs ETF (AMEX:SDOG) Seasonal Chart

Everest Group, Ltd. (NYSE:EG) Seasonal Chart

The Markets

Stocks sold off hard on Thursday following a string of weak economic data, fuelling a dramatic push into risk-off plays as the period of volatility for stocks gets set to stretch its legs. The S&P 500 Index fell by 1.37%, offsetting much of the prior session’s jump and closing the gap that was opened on Wednesday between 5452 and 5493, a zone that was poised to act as support to the near-term elevation in equity markets surrounding month-end. A sharp rejection from short-term resistance at the 20-day moving average (5537) can be seen as pressure is once again placed on intermediate support around the 50-day moving average (5448). Short-term horizontal support can be pegged at 5400, a break of which would have a calculated downside target of 272 points below the fixed level, or to 5128. After curling above the middle line in the previous session, the Relative Strength Index (RSI) can be seen pushing back below the mid-point to its span as characteristics of a bullish trend continue to be lost. As we have been emphasizing, defensive assets and volatility hedges are certainly preferred at this time of year.

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

Metrics of risk sentiment rolling over and/or breaking down

The change we are making in the Super Simple Seasonal Portfolio

Weekly Jobless Claims and the health of the labor market

A look ahead to the Nonfarm Payroll report for July

Natural Gas

US Construction Spending and the investment implications from the results

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Sentiment on Thursday, as gauged by the put-call ratio, ended around neutral at 0.93.

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 in the report archive.

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