Concerns pertaining to the fundamental prospects of China warrants scrutiny of all seasonal trades that rely on strength stemming from this region into the Chinese New Year.
*** 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 pushed higher to start the week, continuing to wade through the traditional tax-loss selling period unhindered as investors await some of the key economic datapoints to be released this week. The S&P 500 Index closed higher by just less than four-tenths of one percent, moving beyond resistance at 4600 and charting a new high to the year. The benchmark finds itself back in overbought territory with the Relative Strength Index (RSI) above 70. The MACD sell signal triggered last week has failed to amount to much of a negative skew for stocks, thus far, and now the histogram for this indicator is narrowing to the upside. The perception right now is that there is a chase for exposure among portfolio managers that have been light in their equity holdings this year, perhaps mitigating the negativity that is typically realized of the tax-loss selling period that spans the first half of December. But as we cautioned investors on earlier this month, the highly rotational nature of the market through December suggests that we cannot dismiss a digestive phase, yet. This is merely short-term caution and we continue to tailor our portfolio according to a more intermediate (seasonal) view across asset classes. Levels of support below broad equity and bond market benchmarks remain plentiful, supporting the intermediate-term path of each heading through the end of the year. The prospects for stocks through the start of next year is more questionable, however.
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Seasonal charts of companies reporting earnings today:
S&P 500 Index
TSE Composite
