Looking for opportunities in recent laggards as market breadth expands.
*** 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 started the week off on a positive note following news that the US Treasury would have to raise less funds than expected to finance its obligations through the quarters ahead. The news sent treasury yields firmly lower and equity prices firmly higher, resulting in a gain for the S&P 500 Index of just over three-quarters of one percent. The large-cap benchmark continues to become increasingly overbought with the Relative Strength Index (RSI) now above 75, a level that is higher than the overbought extreme that was charted in the back half of July. While the overbought extreme could easily exhaust near-term buying demand, characteristics of a bullish trend are still firmly entrenched with momentum indicators above their middle lines and moving averages each rising alongside one another. Short-term support can continue to be pegged at the rising 20-day moving average (4794). Investor focus is increasingly turning to the psychologically important 5000 level, a hurdle that is likely to act as a magnet until achieved, so long as the conversation of new all-time highs in equity prices remains positive. That big round number could easily be achieved in the next couple of weeks and the technicals are suggesting that we could get there through a rotation of market exposure, away from the former growth darlings and towards a broader spectrum of exposure. More on that below.
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Seasonal charts of companies reporting earnings today:
S&P 500 Index
TSE Composite
