Stock Market Outlook for August 23, 2024
The outside reversal candlestick in the technology sector on Thursday threatens a short-term peak and an intermediate-term topping pattern as volatility starts ramping up again.
*** 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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WisdomTree SmallCap Earnings Fund (NYSE:EES) Seasonal Chart
Vanguard U.S. Value Factor ETF (AMEX:VFVA) Seasonal Chart
Oppenheimer Russell 1000 Dynamic Multifactor ETF (AMEX:OMFL) Seasonal Chart
Invesco S&P SmallCap Materials ETF (NASD:PSCM) Seasonal Chart
Invesco S&P 500 Revenue ETF (NYSE:RWL) Seasonal Chart
SPDR S&P Bank ETF (NYSE:KBE) Seasonal Chart
Ryder System, Inc. (NYSE:R) Seasonal Chart
American Airlines Group Inc. (NASD:AAL) Seasonal Chart
General Motors Co. (NYSE:GM) Seasonal Chart
Kemper Corp. (NYSE:KMPR) Seasonal Chart
Gran Tierra Energy Inc. (TSE:GTE.TO) Seasonal Chart
Alaska Air Group, Inc. (NYSE:ALK) Seasonal Chart
Albemarle Corp. (NYSE:ALB) Seasonal Chart
Hibbett Sports Inc. (NASD:HIBB) Seasonal Chart
Sterling Infrastructure, Inc. (NASD:STRL) Seasonal Chart
iShares Currency Hedged MSCI Japan ETF (AMEX:HEWJ) Seasonal Chart
iShares U.S. Consumer Services ETF (NYSE:IYC) Seasonal Chart
The Markets
Stocks pulled back on Thursday as traders braced for the impact that could result from Fed Chair Jerome Powell’s comments at Jackson Hole on Friday. The S&P 500 Index ended down by nine-tenths of one percent, charting a bearish engulfing candlestick of the prior session’s move. The candlestick pattern expresses upside exhaustion of the recent rebound from the August lows, but it will be the catalyst of Friday’s Jackson Hole event that will be the final tell of whether this reflux rally following the recent volatility spike is complete. If confirmed as a short-term high, it would start to reveal a double-top pattern around the summer rally highs charted in July at 5669 and suggest the conclusion of the rising intermediate-term trend that has been under threat during this period of traditional volatility through August, September, and October. The gaps that were charted on the way down from the July 16th peak in the benchmark have all been filled, including the July 17th zone of implied resistance between 5622 and 5658. It is within this span that the high to Thursday’s outside reversal candlestick was charted. Again, Jerome Powell will present the catalyst to either cement a peak or unleash the fuel to break the barrier overhead. Either way, caution in risk assets remains appropriate, particularly while within this period of seasonal volatility and while the fundamental backdrop appears uncertain. Short-term momentum indicators have rolled over and the MACD histogram on the daily chart is no longer on the rise, threatening to result in a bearish divergence with respect to this momentum indicator ahead as the bullish intermediate-term (multi-month) trend loses its grip.
Today, in our Market Outlook to subscribers, we discuss the following:
- The bearish engulfing candlestick on the chart of the Technology sector ETF and the bearish intermediate-term implications that could result
- The evolution of the rising intermediate-term path of the Volatility Index (VIX)
- US Existing Home Sales
- Weekly Jobless Claims and the strength of the labor market
- The seasonal trade in Natural gas, along with the technical and fundamental backdrops
Subscribers can look for this report in their inbox or by clicking on the following link and logging in: Market Outlook for August 23
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Sentiment on Thursday, as gauged by the put-call ratio, ended slightly bullish at 0.92.
Seasonal charts of companies reporting earnings today:
- No Significant Earnings Expected for Today
S&P 500 Index
TSE Composite
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