Stock Market Outlook for August 22, 2025
Data on existing home sales suggests that the wealth effect that elevated consumer activity for the past few years has been turned off.
*** 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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Goldman Sachs ActiveBeta Japan Equity ETF (AMEX:GSJY) Seasonal Chart
Harvest US Bank Leaders Income ETF (TSE:HUBL.TO) Seasonal Chart
Franklin FTSE India ETF (AMEX:FLIN) Seasonal Chart
Walmart Inc. (NYSE:WMT) Seasonal Chart
iShares MSCI Global Agriculture Producers ETF (AMEX:VEGI) Seasonal Chart
iShares MSCI India ETF (AMEX:INDA) Seasonal Chart
Superior Group of Companies, Inc. (NASD:SGC) Seasonal Chart
Heico Corp. (NYSE:HEI) Seasonal Chart
CNO Financial Group Inc. (NYSE:CNO) Seasonal Chart
Cabot Corp. (NYSE:CBT) Seasonal Chart
The Markets
The digestion of equity prices continues as traders book profits in the high momentum technology sector. The S&P 500 Index ended down by four-tenths of one percent, slipping below the 6400 level that has been suspected to act as a cap before the third quarter volatility takes hold. The 20-day moving average (6381) has been violated, once again degrading the level of short-term support that has elevated prices off of their April lows. Momentum indicators are showing negative divergences versus price where lower-highs below July’s overbought extremes have been charted for RSI and MACD. The result gives strong evidence of buying exhaustion, once again lending itself to the onset of a digestion of prices aligning with the period of volatility for the equity market. As has been emphasized, this is the time to be on your toes given the well known volatile period that this time of year is notorious for. As equity markets destabilize from their summer strength, looking for opportunities to peel back risk in portfolios has become appropriate in order to mitigate the erratic moves that impacts stocks in the final months of the third quarter (August/September). The strategy remains to avoid being aggressive in risk (stocks) in the near-term, but take advantage of any volatility shocks (should they materialize) to increase the risk profile of portfolios ahead of the best six months of the year for stocks that gets underway in October. Our list of candidates in the market that are worthy to Accumulate or Avoid continues to be dialed in appropriately, keeping investors tuned into those segments of the market that are working according to our three-pronged approach incorporating seasonal, technical, and fundamental analysis.
Today, in our Market Outlook to subscribers, we discuss the following:
- US Existing Home Sales and the end of the wealth effect from the past few years
- Manufacturer sentiment
- Weekly Jobless Claims and the health of the labor market
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Sentiment on Thursday, as gauged by the put-call ratio, ended close to neutral at 0.93.
Seasonal charts of companies reporting earnings today:
S&P 500 Index
TSE Composite
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