Stock Market Outlook for August 27, 2024
A regime change in the market is underway as former status quo trades are unwound and as investors express their enthusiasm towards the rate cutting cycle ahead.
*** 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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Genuine Parts Co. (NYSE:GPC) Seasonal Chart
Cathay Bancorp, Inc. (NASD:CATY) Seasonal Chart
Vera Bradley Inc. (NASD:VRA) Seasonal Chart
HDFC Bank Ltd. (NYSE:HDB) Seasonal Chart
iShares S&P U.S. Mid-Cap Index ETF (CAD-Hedged) (TSE:XMH.TO) Seasonal Chart
iShares Currency Hedged MSCI ACWI ex U.S. ETF (AMEX:HAWX) Seasonal Chart
The Markets
Stocks were mixed to start the trading week as traders start to scrutinize the longevity of the recent rebound in the market off of the August lows. The S&P 500 Index ended down by three-tenths of one percent, continuing to show signs of stall within a zone of implied resistance between 5622 and 5658, representing the July 17th downside gap. Hint of a short-term peak developing remains apparent, something that, if confirmed, would raise the risk of an intermediate-term double-top pattern below the all-time high recorded during the summer rally period through the first half of July. 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. Caution in risk assets remains appropriate, particularly while within this period of seasonal volatility and while the fundamental backdrop appears uncertain.
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Today, in our Market Outlook to subscribers, we discuss the following:
- Our weekly chart books update, along with all segments of the market to Accumulate or Avoid
- Other Notes
- A regime change in the market, away from the former growth darlings attributed to the Artificial Intelligence trade
- The rise of the Japanese Yen, derailing the status quo carry trade in the market
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Sentiment on Monday, as gauged by the put-call ratio, ended bullish at 0.91.
Seasonal charts of companies reporting earnings today:
S&P 500 Index
TSE Composite
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