In this high inflation backdrop and as we prepare for the risk of a recession ahead, the goal is to tailor portfolios towards those areas that have pricing power.

*** 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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James Hardie Industries NV (NYSE:JHX) Seasonal Chart

Franklin FTSE Taiwan ETF (AMEX:FLTW) Seasonal Chart

Zedge, Inc. (AMEX:ZDGE) Seasonal Chart

iShares Dow Jones U.S. ETF (NYSE:IYY) Seasonal Chart

Burlington Stores, Inc. (NYSE:BURL) Seasonal Chart

Keycorp (NYSE:KEY) Seasonal Chart

Hawaiian Holdings, Inc. (NASD:HA) Seasonal Chart

T. Rowe Price Associates, Inc. (NASD:TROW) Seasonal Chart

3M Co. (NYSE:MMM) Seasonal Chart

 

Super Simple Seasonal Portfolio

 

The Markets

Stocks closed lower on Thursday as rate concerns re-emerged following a hotter than expected CPI report for September and weak treasury bond auction that sent yields back towards recent highs.  The S&P 500 Index closed with a loss of six-tenths of one percent, showing initial reaction to resistance round the 50-day moving average at 4407.  The variable hurdle aligns with the downside gap at 4400 that was charted a few weeks ago.  The juncture of the two creates a formidable threat to the near-term trend as the benchmark attempts to maintain its intermediate-term footing above the horizontal band of support between 4100 and 4200.  Earnings season is directly ahead and there is a tendency to see a reversion to the mean around the dissemination of these results as investors neutralize bets given the erratic trading that can result immediately following the release of results.  While the intermediate-term risk-reward remains favourable so long as the band of support below remains intact, we may have to accept a sluggish trading environment in the near-term while investors digest the earnings reports and gauge the direction of both yields and the dollar.

 

 

 

Seasonal charts of companies reporting earnings today:

 

S&P 500 Index

 

TSE Composite