Treasury prices and defensive sectors moving below trendline support as the risk-off trade unwinds. Real Time Economic Calendar provided by Investing.com. *** 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: Subscribers – Click on the relevant link to view the full profile. Not a subscriber? Signup here. Nicholas Financial, Inc. (NASD:NICK) Seasonal Chart Sensata Technologies Holding N. V. (NYSE:ST) Seasonal Chart Amneal Pharmaceuticals, Inc. (NYSE:AMRX) Seasonal Chart Aviat Networks Inc. (NASD:AVNW) Seasonal Chart Middlefield Banc Corp. (NASD:MBCN) Seasonal Chart Chuy’s Holdings Inc. (NASD:CHUY) Seasonal Chart Capital Sr Living Corp. (NYSE:CSU) Seasonal Chart Teva Pharmaceutical Industries Ltd. (NYSE:TEVA) Seasonal Chart Technical Communications Corp. (NASD:TCCO) Seasonal Chart Stifel Financial Corp. (NYSE:SF) Seasonal Chart Fortune Brands Home & Security, Inc. (NYSE:FBHS) Seasonal Chart Endo Pharmaceuticals Holdings, Inc. (NASD:ENDP) Seasonal Chart HD Supply Holdings, Inc. (NASD:HDS) Seasonal Chart The Markets Stocks pushed higher on Thursday as news that trade tariffs between the US and China would be rolled back reignited investor enthusiasm. The S&P 500 Index closed higher by just less than three-tenths of one percent, achieving a new record closing high. Despite the positive result, the benchmark ended well off of the high of the session as defensive sectors, such as utilities, REITs, and consumer staples, came under pressure amidst the exodus from defense to risk. The Utilities ETF (XLU) was lower by 1.35%, maintaining a trend of underperformance versus the market that has been in place since the start of October. This is quite the shift compared to the same period last year when investors shied away from risk and ploughed into the defensive bet, resulting in a divergence compared to seasonal norms. Historically, the utilities sector has underperformed the market, on average, between the start of October through to early December as investors adopt a bullish bias going into the end of year consumer and business spending period. A bout of mean reversion then carries the sector into the new year. The strain in the defensive, often interest rate sensitive, sectors during Thursday’s session stemmed from the surge in yields in a continuation of the unwind of the strength in bond prices. The iShares 7-10 year treasury bond ETF was lower by eight-tenths of one percent; the 20+ year treasury bond ETF (TLT) was lower by 1.81%. Both broke levels of support presented by the September lows, confirming trends of lower-highs and lower-lows. This is a shift from the trend of higher-highs and higher-lows that has dominated the past year amidst concerns pertaining to the economy. The 20 and 50-day moving averages have been moving lower ever since the end of the period of seasonal strength for bonds at the beginning of October. Next hurdle for the two bond ETFs is their respective 200-day moving averages ($107.84 for IEF, $130.39 for TLT). We have been noting the parabolic trend in bond prices (and yields) to subscribers of our service for some time, suggesting that an unwind was inevitable, likely coinciding with the risk-on shift in equity markets. Given the significance of the inflows to risk-off trades over the past year, the unwind could still have room to go. Seasonally, investors tend to be cyclically focussed through the end of the year. While the gains in stocks and the strength in cyclical sectors is certainly comforting, investor sentiment again fell into complacent territory on Thursday, according to the put-call ratio. The level of puts compared with calls fell to 0.66. Levels this low have, in recent history, coincided with significant equity market peaks. Seasonal charts of companies reporting earnings today: S&P 500 Index TSE Composite