Today marks the average start to the best six months of the year timeframe for the equity market.
*** 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 faded early gains on Friday and closed marginally below the flatline as traders show their reluctance to stretch out on the risk spectrum while uncertainty overhangs the election outcome. The S&P 500 Index closed down by just three basis points (0.03%), pinning itself to short term support at the rising 20-day moving average (5790). In recent days, the benchmark has shown a cap at 5870, resulting in an ultra-short-term topping pattern that projects a downside target of 5745. Despite the recent stall, this market is showing greater evidence of support than resistance over an intermediate-term timeframe, presenting characteristics of a bullish trend. What is concerning to the prevailing path is the waning of upside momentum, something that we have seen more evidence of with another MACD sell signal in the past couple of days; the momentum indicator has shown a negative divergence versus price through the current calendar year, highlighting the fading enthusiasm towards the risk profile that equities encompass. The risk-reward, broadly, remains unattractive. We continue to like the groups that are on our growing list of Accumulate candidates, but there are certainly segments of the market to Avoid. With the start of the best six months of the year for stocks slated to get underway, there is a need from a seasonal perspective to ramp up risk exposure at some point.
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Seasonal charts of companies reporting earnings today:
S&P 500 Index
TSE Composite
