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Stock Market Outlook for September 11, 2018

Transportation average breaking out as seasonal weakness in Oil allows stocks in the sector to drive ahead.

 

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:

AngioDynamics Inc. (NASD:ANGO) Seasonal Chart

AngioDynamics Inc. (NASD:ANGO) Seasonal Chart

SpartanNash Company (NASD:SPTN) Seasonal Chart

SpartanNash Company (NASD:SPTN) Seasonal Chart

Western New England Bancorp, Inc. (NASD:WNEB) Seasonal Chart

Western New England Bancorp, Inc. (NASD:WNEB) Seasonal Chart

South Jersey Inds, Inc. (NYSE:SJI) Seasonal Chart

South Jersey Inds, Inc. (NYSE:SJI) Seasonal Chart

Federated National Holding Co. (NASD:FNHC) Seasonal Chart

Federated National Holding Co. (NASD:FNHC) Seasonal Chart

RCM Technologies, Inc. (NASD:RCMT) Seasonal Chart

RCM Technologies, Inc. (NASD:RCMT) Seasonal Chart

Griffon Corp. (NYSE:GFF) Seasonal Chart

Griffon Corp. (NYSE:GFF) Seasonal Chart

Sierra Wireless, Inc. (TSE:SW) Seasonal Chart

Sierra Wireless, Inc. (TSE:SW) Seasonal Chart

 

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The Markets

Stocks were generally mixed on Monday with the S&P 500 Index and Nasdaq closing marginally higher while the the Dow Jones Industrial Average closed in the red.  Investors were drawn to industrials and utilities while booking profits in financials and health care.  Within the broader industrial sector, transportation stocks were on a roll, pushing the Dow Jones Transportation Average above resistance at 11,423 to a new all-time high.  Strength amongst trucking, courier, and airline stocks were factors.  These moves are being realized at the end of the summer driving season when the price of oil typically drifts lower, thereby leading to gains in the stocks that derive their largest input cost from the price of the energy commodity.  The price of oil continues to show signs of developing our previously forecasted trading range between $62 and $75, an outcome that could alleviate the negative pressures that transportation companies have realized through the first half of the year as the price of oil grinded higher.

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Dow Jones Transportation Average Seasonality

$TRAN Relative to the S&P 500

Monthly Seasonal Dow Jones Transportation Average

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Flipping to economic data released last week, vehicle sales for the month of August were released.  The headline print indicated that total vehicle sales declined by 1.2% in the month to a seasonally adjusted annual rate of 17.0 million.  Stripping out the seasonal adjustments, total vehicle sales actually increased by 8.0%, almost double the average gain for the summer month of 4.8%.  The year-to-date change is now 14.6% below the seasonal average trend, a gap that has widened since the end of the first quarter.   Weak domestic and foreign auto sales have weighed.  Typically at this time auto sales run around the highest levels of the year as consumers take advantage of discounted prices of new cars and trucks as dealers seek to liquidate current model year inventories.  However, with the price of new vehicles yet to realize the typical summer decline, consumers have held off purchases.  We’ll obtain greater insight as to the state of prices paid by the consumer and their activity with reports on CPI and retail sales to be released later this week.  Vehicle sales are a significant influence on aggregate retail sales.  Seasonally, auto sales tend to decline going into the last quarter of the year, although in recent years the decline has been subdued as consumers take advantage of the end-of-year specials. 

Total Vehicle Sales Seasonal Chart

Monthly Total Vehicle Sales Data

Total Vehicle Sales Seasonal Chart

Motor Vehicle Retail Sales: Domestic Autos Seasonal Chart Motor Vehicle Retail Sales: Domestic Light Weight Trucks Seasonal Chart Motor Vehicle Retail Sales: Heavy Weight Trucks Seasonal Chart Motor Vehicle Retail Sales: Foreign Autos Seasonal Chart Motor Vehicle Retail Sales: Foreign Light Weight Trucks Seasonal Chart

http://charts.equityclock.com/seasonal_charts/economic_data/CUUR0000SETA01_seasonal_chart.PNG

Sentiment on Monday, as gauged by the put-call ratio, ended bearish at 1.15.  Earlier in the session the ratio hit a high of 1.35, which is one of the highest levels of the year.  The high put-call ratio is indication of investor caution, resulting in portfolio hedges being enacted in order to mitigate equity market weakness and volatility.  Seasonally, the last half of September is the weakest period of the whole year, warranting caution over this timeframe.

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Seasonal charts of companies reporting earnings today:

Farmer Brothers Company (FARM) Seasonal Chart Francesca's Holdings Corporation (FRAN) Seasonal Chart Peak Resorts, Inc. (SKIS) Seasonal Chart Streamline Health Solutions, Inc. (STRM) Seasonal Chart

 

 

S&P 500 Index

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TSE Composite

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