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Stock Market Outlook for September 11, 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 recorded another volatile session as investors continue to position portfolios ahead of next week’s widely anticipated FOMC meeting.  Bond prices ticked marginally lower, trading into neutral territory around rising 20 and 50-day moving averages.  Looking at the 30-year treasury note, price continues to hover around the upper limit of the long-term trading range; while upside appears to be capped around $165, price could fall around 14% to around $132 and still maintain the longer-term trend of higher-highs and higher-lows.  While around one month is left in the seasonal trade for the fixed income asset, the uncertainty of next week’s event leaves seasonal investors with a dilemma as to whether they should cut the trade early or hope for the best as the Fed determines the appropriate circumstance to raise rates.

Turning to the hourly chart of the S&P 500 Index,the benchmark remains supported by a short-term rising trendline, presently trading around 1940; resistance remains apparent around 1990.  At this point, the catalyst of next week’s FOMC decision could fuel a break in either direction, leaving investors on edge until the move occurs.  However, regardless of the direction of the short-term move, the appearance of a bear flag pattern on the daily chart of the large cap index continues to present a downside bias over the intermediate-term as equities reset following the past few years of substantial gains.  Seasonal tendencies for the broad market remain negative over the next few weeks.

While the FOMC mulls over recent economic data, the latest piece of the puzzle was presented on Thursday morning.  Wholesale trade data for July showed that sales declined by 0.3% and inventories declined by 0.1%, missing the consensus analyst estimate.  Stripping out seasonal adjustments, inventories actually gained by 0.1%, while sales turned sharply lower by 3.8%; average change for the month is +0.9% and –2.7%, respectively.  The year-to-date change in wholesale sales continues to hover nearly 8% below average, trending in negative territory on the year.  Much of the strain is the result of depressed commodity prices, impacting not only the materials sold, but also the equipment used to produce them.  If the fed is looking to increase rates to calm a growing economy, the impact of the higher dollar and lower commodity prices have already taken a bite out of economic activity.

Meanwhile, while on the topic of commodity prices, the price of Oil, Gasoline, and Natural Gas jumped on Thursday, despite the EIA reporting a build in inventories for each.  As a result, the days of supply of Oil and Gas jumped; Oil moved from 27.3 days to 27.8 and Gasoline moved from 22.5 to 23 days as the summer demand cools.   This is the first time since May that the days of supply of gasoline has been above average as of the time of the report; average days of supply of gasoline for the start of September is 22.8 days.  September typically marks the low point of the year for supply of oil and gas; generally, production outpaces demand between now and the first quarter of the new year. 

Sentiment on Thursday, as gauged by the put-call ratio, ended bearish at 1.19.

 

 

 

 

Seasonal charts of companies reporting earnings today:

 

 

S&P 500 Index

 

 

TSE Composite