Equity Clock

Stock Market Outlook for August 11, 2020

Job openings finally started to rebound in June: Openings increased by 10.2% to 5.889 million at the end of the second quarter, which is a positive divergence compared to the 2.4% decline that is average for June.

 

 

 

*** 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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NVIDIA Corp. (NASD:NVDA) Seasonal Chart

Griffon Corp. (NYSE:GFF) Seasonal Chart

Schweitzer Mauduit Intl (NYSE:SWM) Seasonal Chart

Champions Oncology, Inc. (NASD:CSBR) Seasonal Chart

Morgan Stanley India Investment Fund (NYSE:IIF) Seasonal Chart

 

 

The Markets

Markets were mixed on Monday as a rotation amongst sectors continued to lead to a push and pull amongst the various segments.  The S&P 500 Index gained around a quarter of one percent, continuing to reach towards the previous high charted in February at 3393.  Support remains firm at rising 20 and 50-day moving averages and momentum indicators have readopted an upside tilt following recent negative divergences.  The relative strength index (RSI) at 69.79 is on the doorstep of reaching overbought territory, as would be indicated by a cross above 70.  The previous peak of 3393 is the obvious level of resistance overhead.

On the economic front, the monthly Job Openings and Labor Turnover Survey (JOLTS) was released during Monday’s session.  The headline print of June’s Survey indicated that openings increased by 9.6% in the month to 5.889 million. Analysts were expecting a decline of 1.5% to 5.288 million. The past few months have been the first time in years that unemployment has surpassed the number of openings. As of June’s employment situation report, there were 17.75 million individuals that were declared unemployed, according to the Bureau of Labor Statistics, providing a ratio of unemployed to openings of 3 to 1. Stripping out the seasonal adjustments, openings actually increased by 10.2% to 5.889 million in June, which is a positive divergence compared to the 2.4% decline that is average for the month. The year-to-date change is down by 3.6% through the first half of the year, which is a distinct shift compared to the 17.1% increase that is average through this timeframe. Job openings have been declining for the past year and the pandemic just gives further reason for employers to ratchet back on future growth plans.  We sent out further insight to subscribers intraday.  Subscribe now.

Sentiment on Monday, as gauged by the put-call ratio, ended bullish at 0.67.  Another overly bullish print, once again emphasizing the complacency that is in the market.

 

 

 

Seasonal charts of companies reporting earnings today:

 

 

S&P 500 Index

 

 

TSE Composite

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