August has historically been a flat month for stocks with the S&P 500 Index averaging a decline of 0.1% and only 55% of periods showing positive results.
*** 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 snapped back in the final session of July as the Technology sector bounced from levels of long-term rising trendline support. The S&P 500 Index jumped higher by 1.58%, moving into last week’s open gap resistance between 5508 and 5550 and testing the 20-day moving average from below for the first time since the start of May. A new gap has been opened between 5452 and 5493, providing a point of near-term support as the market benefits from this period of short-term buoyancy surrounding the end of July/start of August. The bounce is being realized around the rising 50-day moving average (5446), a critical level for the path of the intermediate-term trend, which will likely be under threat through the period of volatility for stocks in August, September, and October. Momentum indicators have been testing levels below the mid-points to their spans, starting to lose their characteristics of a bullish trend that had been beneficial to the path of prices since April. Short-term positivity in the market has been expected, but, beyond the start of August, caution in risk assets will likely be prudent.
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Seasonal charts of companies reporting earnings today:
S&P 500 Index
TSE Composite
