Stock Market Outlook for August 27, 2025
Housing data is flashing a coincident signal of the onset of a recession.
*** 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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Renasant Corp. (NYSE:RNST) Seasonal Chart
Investar Holding Corp. (NASD:ISTR) Seasonal Chart
Invesco S&P Ultra Dividend Revenue ETF (AMEX:RDIV) Seasonal Chart
Invesco S&P 500 Revenue ETF (NYSE:RWL) Seasonal Chart
SPDR S&P 500 High Dividend ETF (AMEX:SPYD) Seasonal Chart
The Markets
Traders shook off news pertaining to a shakeup of the Federal Reserve Board and sent stocks higher on Tuesday. The S&P 500 Index ended up by just over four-tenths of one percent, erasing the decline from the prior session and staying within close proximity of the record highs charted in recent weeks just below 6500. The bears are having difficulty sustaining levels below the 20-day moving average (6392), an important hurdle for the short-term trend of prices off of the April lows. Momentum indicators are still 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 New Home Sales and the abnormal decline in the median price of new homes sold
- The elevated level of new homes for sale
- The pullback of home prices and the bifurcation in the change in the value of homes across the regions
- Home building, forestry, and building materials/fixture stocks
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Sentiment on Tuesday, as gauged by the put-call ratio, ended bullish at 0.88.
Seasonal charts of companies reporting earnings today:
S&P 500 Index
TSE Composite
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