Stock Market Outlook for August 8, 2024
Data continues to confirm that the economy is within decline.
*** 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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Mawson Gold Limited (TSE:MAW.TO) Seasonal Chart
Reviva Pharmaceuticals Holdings Inc. (NASD:RVPH) Seasonal Chart
Reinsurance Group of America (NYSE:RGA) Seasonal Chart
Invesco S&P 500 BuyWrite ETF (NYSE:PBP) Seasonal Chart
United States Copper Fund (AMEX:CPER) Seasonal Chart
iShares Core S&P/TSX Composite High Dividend Index ETF (TSE:XEI.TO) Seasonal Chart
Saga Communications, Inc. (NASD:SGA) Seasonal Chart
The Markets
Stocks reversed early gains on Wednesday as the rally attempt following recent pronounced weakness sputters. The S&P 500 Index closed with a loss of just over three-quarters of one percent, remaining capped below Monday’s downside gap and the 100-day moving average around 5308. A test of the now declining 50-day moving average (5445) has yet to be achieved and cannot be ruled out before the next pronounced downleg is revealed. The intermediate-term trend, which is of greatest importance to us in our seasonal approach, is under threat, giving the edge to further weakness through the period of volatility for stocks that spans the third quarter. MACD on the daily chart has fallen to the lowest level since October of 2022, the month that started the recent intermediate-term bull market run; gradually, the adoption of characteristics of a bearish trend can be seen. Levels around the April lows (~4960) warrant heightened scrutiny given that a break of this zone would confirm the end to the path of higher-highs and higher-lows that has been intact for the past 21 months. As we have been emphasizing, defensive assets and volatility hedges are certainly preferred at this time of year (see our list of Accumulate candidates that are showing price action conducive to adding to portfolios).
Today, in our Market Outlook to subscribers, we discuss the following:
- US Vehicle Sales
- US Petroleum Demand and Supply, along with our view of stocks in the energy sector
- US International Trade in Goods
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Sentiment on Wednesday, as gauged by the put-call ratio, ended bearish at 1.06.
Seasonal charts of companies reporting earnings today:
S&P 500 Index
TSE Composite
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