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Stock Market Outlook for September 4, 2019


Price of silver pushing through resistance as the seasonal run continues.

 

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:

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Argo Group Intl Holdings, Ltd. (NYSE:ARGO) Seasonal Chart

Argo Group Intl Holdings, Ltd. (NYSE:ARGO) Seasonal Chart

 

 

The Markets

Stocks sold off on Tuesday as investors returned from their summer vacations and reacted to the imposition of the latest round of tariffs by the US and China.  The S&P 500 Index shed almost seven-tenths of one percent, weighed down by industrials, financials, and technology.  The short-term trading range on the large-cap benchmark between 2825 and 2940 remain intact.  Tuesday’s decline closes a gap that was opened closer to the end of last week, providing a zone for investors to shoot off of in attempted to hold above short-term support defined by the lower limit of the trading range.  The zone approximately matches the level of the 20-day moving average, a level that had acted as short-term resistance up until last Thursday; the 50-day, at 2944, will be a tougher nut to crack overhead.

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As stocks sold off, defensive bets got another bid.  The price of gold traded higher by 1.73%, remaining supported by its 20-day moving average.  The same can be seen with the price of silver, which has gone parabolic following the surge higher in recent sessions.  We’ve had a price target of $18 since the start of summer, playing off of the average seasonal pattern and the relative value compared to gold.  The target represented a level just below previous horizontal resistance around $18.70, providing a logical point for the investment to pause.  This hurdle is now in a position to act as support on any retracement attempt.  A retracement/consolidation should be expected to check the rising trend.  Longer-term, a double-bottom low around $13.50 offers a promising backdrop towards a trend of higher-highs and higher-lows, assuming resistance around $21 can be exceeded.  While the average price trend for silver still points higher in the months ahead, strength relative to the equity market and gold tends to wane. 

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Silver Futures (SI) Seasonal Chart
FUTURE_SI1 Relative to the S&P 500FUTURE_SI1 Relative to Gold

On the economic front, a report on construction spending in the US was released during Tuesday’s session. The headline print of July’s report indicates that activity increased by 0.1%, which was weaker than the consensus estimate that called for a 0.3% rise. The year-over-year change now sits at -2.7%. Stripping out the seasonal adjustments, construction spending in the US actually increased by 2.2% in July, which is better than the 1.4% increase that is average for this time of year. The year-to-date change is higher by 24.9%, inline with the average trend through this point in the year.  We sent out further analysis to subscribers, including some stocks to that may provide buying opportunities in September for the period of seasonal strength for industry constituents in the fall.  Subscribe now.

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

Sentiment on Tuesday, as gauged by the put-call ratio, ended bearish at 1.11.

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Seasonal charts of companies reporting earnings today:

AeroVironment, Inc. (AVAV) Seasonal Chart American Eagle Outfitters, Inc. (AEO) Seasonal Chart Copart, Inc. (CPRT) Seasonal Chart Navistar International Corporation (NAV) Seasonal Chart Palo Alto Networks, Inc. (PANW) Seasonal Chart Perceptron, Inc. (PRCP) Seasonal Chart The Descartes Systems Group Inc. (DSGX) Seasonal Chart The Michaels Companies, Inc. (MIK) Seasonal Chart Vera Bradley, Inc. (VRA) Seasonal Chart Verint Systems Inc. (VRNT) Seasonal Chart

 

 

S&P 500 Index

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TSE Composite

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