In markets that are showing greater signs of resistance than support, seeking the opposite is typically prudent.
*** 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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Super Simple Seasonal Portfolio
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The Markets
Stocks plunged on Friday as investors assessed Fed Chair Jerome Powell’s view of the path of monetary policy. The S&P 500 Index shed 3.37%, turning lower from gap resistance charted earlier this week between 4195 and 4218 and closing back below horizontal support at 4170. The downfall from this short-term hurdle continues the path of digestion from the summer rally that began in June, a retracement that is seen likely to test the rising 50-day moving average in the weeks ahead. That hurdle now sits at 3996. Momentum indicators continue to point lower, rolling over from some of the most overbought levels since November. Still, momentum indicators have shed their characteristics of a bearish trend that had remained persistent through the first half of the year and the suggestion remains that the intermediate path of the market has shifted positive, until proven otherwise. Keep in mind, levels down to around the 50-day moving average and even the June low at 3636 are fair game, which could cause some concern in the near-term. We have not just sat on our hands during this period, but rather took off risk in the Super Simple Seasonal Portfolio a week ago in order to mitigate the threat that this suspected near-term retracement would impose. Our desire is to still look for that higher significant low above the June bottom to ramp up risk again.
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Seasonal charts of companies reporting earnings today:
S&P 500 Index
TSE Composite
