Stock Market Outlook for August 12, 2024
The weakest July change on record for Canadian Retail employment suggests that the consumer has cashed out.
*** 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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CACI Intl, Inc. (NYSE:CACI) Seasonal Chart
Shoe Carnival, Inc. (NASD:SCVL) Seasonal Chart
Vail Resorts, Inc. (NYSE:MTN) Seasonal Chart
SP Plus Corp. (NASD:SP) Seasonal Chart
Orange (NYSE:ORAN) Seasonal Chart
Masimo Corp. (NASD:MASI) Seasonal Chart
WisdomTree India Earnings Fund (NYSE:EPI) Seasonal Chart
Marriott International, Inc. (NASD:MAR) Seasonal Chart
ebix.com, Inc. (NASD:EBIX) Seasonal Chart
iShares India Index ETF (TSE:XID.TO) Seasonal Chart
Biohaven Ltd. (NYSE:BHVN) Seasonal Chart
Mativ Holdings Inc. (NYSE:MATV) Seasonal Chart
The Markets
Stocks closed marginally higher to end the week as investors attempted to shake off the unease that ballooned on Monday amidst the unwind of the yen carry trade. The S&P 500 Index closed higher by just less than half of one percent, continuing to place pressure on the 100-day moving average (5312), which was cracked as a point of support to start the week. Resistance at the 20-day moving average (5442) was confirmed on August 1st, thereby defining a negative short-term path, but our focus in our seasonal approach is whether or not resistance at some of the more intermediate-term moving averages, such as the 50 or 100-day, act as a cap to the current rebound attempt. A test of the 50-day moving average (5446) has yet to be achieved and cannot be ruled out before the next pronounced downleg is revealed. A market that is showing greater evidence of resistance than support over an intermediate-term timeframe warrants avoiding and we may be close to confirming this negative trajectory that aligns with a traditional seasonal mandate. The major level is the April lows around 4960, a break of which 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:
- Weekly look at the large-cap benchmark
- Growth trade (technology) starting to crack and core-cyclical sectors carving out short to intermediate-term topping patterns
- The enticement of core-defense
- Canada Labour Force Survey and the investment implications within
- The significant rise in Canadian unemployment
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Sentiment on Friday, as gauged by the put-call ratio, ended close to neutral at 0.97.
Seasonal charts of companies reporting earnings today:
S&P 500 Index
TSE Composite
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