The Treasury Yield Curve is attempting another push towards normalization, threatening to impose a headwind against equity prices ahead.
*** 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:
Subscribers Click on the relevant link to view the full profile. Not a subscriber? Signup here.
Super Simple Seasonal Portfolio
This content is exclusive to subscribers of EquityClock.com. Please Log In or Subscribe to proceed.
The Markets
Stocks snapped back from early week losses on Friday as end-of month positioning alleviates the selling pressures that have coincided with the start of the period of volatility for the equity market. The S&P 500 Index closed with a gain of 1.11%, moving back above its 50-day moving average (5436). A couple of gaps remain open overhead, including Wednesday’s downside open between 5508 and 5550, adding multiple layers of resistance overhead that have capped the now past summer rally period. For the period surrounding the last few days of July and the first few sessions of August, there is typically a slight elevation in equity prices that is normal as the market takes a breather from the start of the period of volatility that ramps up in a more significant way in August, September, and October and this is what can be assumed to be playing out now. But the short-term downside gaps from the past couple of weeks are bound to be tough nuts to crack as seasonal tendencies increasingly lean negative and as the fundamental backdrop in the economy degrades. Defensive assets and volatility hedges are certainly preferred at this time of year. At the start of the period of volatility for stocks, covered call strategies can be your friend to replicate benchmark holdings (eg. S&P 500 Index) and provide yield to portfolios, while buffering against the erratic trading. The optimal holding period of the Global X S&P 500 Covered Call ETF (XYLD) starts today (July 29th), resulting in an average return of around half of one percent above the S&P 500 Total Return Index through to the 18th of October, encompassing the period of volatility for stocks.
This content is exclusive to subscribers of EquityClock.com. Please Log In or Subscribe to proceed.
Seasonal charts of companies reporting earnings today:
S&P 500 Index
TSE Composite
