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Stock Market Outlook for September 9, 2015

 

Real Time Economic Calendar provided by Investing.com.

 

**NEW** As part of the ongoing process to offer new and up-to-date information regarding seasonal and technical investing, we are adding a section to the daily reports that details the stocks that are entering their period of seasonal strength, based on average historical start dates.   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:

  • No stocks identified for today

 

The Markets

Stocks ended firmly higher on Tuesday, fuelled by strength in markets overseas following the release of global trade data.  The S&P 500 Index closed higher by 2.51%, erasing the loss realized on Friday following the release of August’s employment report.  The large-cap benchmark bounced from short-term support around 1910 and immediately traded to short-term trendline resistance around 1970, a break of which could fuel further momentum towards the upper limit of the range of resistance overhead at 2040.  It remains apparent that nimble traders are continuing to take advantage of short-term opportunities created by the abrupt selloff at the end of August, rotating into Technology, Industrial, and Consumer Discretionary names with hopes that the short-term rebound will continue.  Looking at the daily chart of the S&P 500 Index, although much of the stretched downside condition has been relieved, the benchmark has yet to intersect with its 20 and 50-day moving averages, levels that could perhaps be considered to be neutral ground within the intermediate trend, which has been negative for the past couple of months.  A test of these levels remains probable before another downside attempt in the broad market; whether that means that the averages trend lower to meet up with the price or the price trends higher to meet up with the averages is up for debate.

Technology shares contributed to the strength realized in the broad market ahead of Wednesday’s Apple event, where new iPhones and iPads are expected to be announced.  Shares of Apple are attempting to rebound from a negative intermediate trend going into this product launch, a significant contrast from previous events that have coincided with strength in the stock in anticipation of new offerings.  A “sell on news” scenario has typically followed the September event.  This tendency becomes clearly apparent on the seasonal chart of Apple, where gains are common running into the month of September, followed by a sharp sell-off to follow; September has become the weakest month of the year for shares of Apple, declining by an average of 2.7% over the 30-day period.  With shares performing contrary to the seasonal trend, it raises the question as to whether a “buy on news” event will be triggered.  We will know soon enough as investors and enthusiast tune in to the event today at 1:00pm.

While fans of Apple wait for news of a new tablet, Amazon managed to top  the headlines on Tuesday as the Wall Street Journal reported that the online retailer plans to release a $50 tablet in time for the holiday season.   Shares of Amazon jumped higher by 3.72%, rebounding from support around its rising 50-day moving average.  While Apple shows negative tendencies in the month of September, Amazon has shown significant strength.  September is one of the strongest months of the year for the technology company, gaining an average of 6.3% with a frequency of positive results hitting 76% over the past 17 years.  As consumer spending benefits retailers through October and November, the online buying season tends to start sooner, leading to the rise in many of the internet stocks as early as the late summer.  Amazon continues to show a positive intermediate trend, despite the hit that many momentum stocks realized over recent weeks.  The stock seasonally gains through the end of November before entering the weakest month of the year, December.

Sentiment on Tuesday, as gauged by the put-call ratio, ended bullish at 0.93.  This is the first bullish reading below 1 since mid August.

 

 

 

Seasonal charts of companies reporting earnings today:

 

 

S&P 500 Index

 

 

TSE Composite