The abnormal rise in New Home Sales for July hints that the housing market has entered a new phase, one where looser conditions entices activity.
*** 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 got a boost on Friday following a speech from Fed Chair Jerome Powell, who indicated that “the time has come for policy to adjust.” The S&P 500 Index recorded a gain of 1.15%, erasing all of the prior session’s decline that produced an outside reversal candlestick and raised concerns of upside exhaustion to the rebound rally off of the August lows. The benchmark is back testing a zone of implied resistance between 5622 and 5658, which is the July 17th gap down that laid the breadcrumbs towards the volatility spike that was realized a few weeks ago. Hint of a short-term peak developing remains apparent, something that, if confirmed, would raise the risk of an intermediate-term double-top pattern below the all-time high recorded during the summer rally period through the first half of July. Short-term momentum indicators have rolled over and the MACD histogram on the daily chart is no longer on the rise, threatening to result in a bearish divergence with respect to this momentum indicator ahead as the bullish intermediate-term (multi-month) trend loses its grip. Caution in risk assets remains appropriate, particularly while within this period of seasonal volatility and while the fundamental backdrop appears uncertain.
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Seasonal charts of companies reporting earnings today:
S&P 500 Index
TSE Composite
