Stock Market Outlook for August 15, 2024
The sustainability of the rising intermediate-term trend of stocks is under scrutiny.
*** 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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Gap, Inc. (NYSE:GPS) Seasonal Chart
WW Grainger, Inc. (NYSE:GWW) Seasonal Chart
Moog, Inc. (NYSE:MOG/A) Seasonal Chart
Farmer Brothers Co. (NASD:FARM) Seasonal Chart
Plug Power, Inc. (NASD:PLUG) Seasonal Chart
Collegium Pharmaceutical, Inc. (NASD:COLL) Seasonal Chart
WildBrain Ltd (TSE:WILD.TO) Seasonal Chart
Permian Resources Corporation (NYSE:PR) Seasonal Chart
The Markets
Stocks closed generally higher on Wednesday following the release of the consumer price index for July, which showed a rise inline with the consensus analyst estimate. The S&P 500 Index ended higher by just less than four-tenths of one percent, closing at the 50-day moving average (5455), a variable hurdle that was broken as support a week and a half ago. Scrutiny is now heightened as to whether this average will become a point of resistance to the intermediate-term trend, a revelation that would warrant a more negative shift in portfolio positioning given the sustain selling pressures that would be likely follow. The Relative Strength Index (RSI) has clawed its way back to the mid-point of its range around 50, a rollover from which would start to ingrain characteristics of a bearish trend. The benchmark is at a make-or-break point to its rising intermediate-term trend. The degradation in economic fundamentals in recent months has risked resulting in higher than average volatility through this period of weakness for stocks in August, September, and October, and it remains more likely than not that the adoption of a declining intermediate-term (multi-month) trend will be adopted here, akin to the period of volatility last year at this time. Caution in risk assets remains prudent.
Today, in our Market Outlook to subscribers, we discuss the following:
- Percent of stocks in the S&P 500 Index above their 200-day moving average
- The bear-flag pattern on the Russell 2000 ETF
- US Consumer Price Index (CPI)
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Sentiment on Wednesday, as gauged by the put-call ratio, ended slightly bullish at 0.89.
Seasonal charts of companies reporting earnings today:
S&P 500 Index
TSE Composite
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