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Technical Seasonalities

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of re-occurring strength among individual equities in the market using methodologies

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author of TimingTheMarkets.com.

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Equity Clock: Seasonality Analysis September 3, 2015

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Stock Market Outlook for Thursday, September 3, 2015

HEADLINE: Airlines showing signs of “taking off” as out-performance versus market remains apparent.

The Markets

Stocks bounced higher on Wednesday, erasing the majority of the losses recorded in the session prior as investors pare negative equity bets ahead of Friday’s employment report. In addition, investors may be taking comfort in the fact that the markets in

China are closed for the next couple of days, limiting the negative pressures stemming from this area of the world.

The S&P 500 Index closed higher by 1.83%, ending just points away from its 10-day moving average. Short-term resistance is apparent at 1990, representing the highs charted during the last few days of August. Looking at the hourly chart of the large-cap

benchmark, a higher-low is becoming apparent, which is being confirmed by hourly momentum indicators showing the same. A break above short-term resistance at 1990

could lead to a test of the now-broken level of support at 2040. On the daily chart, however, momentum indicators remain in bearish territory and the

range of resistance between 1970 and 2040 will likely require a catalyst to crack. Nimble traders may continue to find opportunities to make short-term gains, but

intermediate investors could continue to struggle.

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S&P 500 One-Month Chart

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S&P 500 Seven-Month Chart

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Within the market, a slow shift away from risk aversion is becoming apparent. Leading into the abrupt market selloff at the end of August, Utilities, Consumer Staples, and Health Care had been out-performing the market as investors became defensive in

portfolio allocations. Now, Industrials, Technology, and Consumer Discretionary stocks are becoming market

leaders, showing strength as investors snap up beaten down names. Even the riskier Russell 2000 Small Cap Index, which would be expected to lead to the

downside during a period of risk aversion, is showing recent signs of outperformance versus the market.

As investors take on greater risk in equity positions, they are more willing to support prices from further declines.

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Industrials ETF

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Technology ETF

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Consumer Discretionary ETF

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Russell 2000 Index

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The bright spot during Wednesday’s session was in the Airline industry. Stocks rose well over 3% as investors bet that the lower price of energy commodities will support the industry into the holiday travel season.

Many of the stocks in this space have positive technical profiles, supported by relative strength, a trend of higher-highs and higher-lows, and bullish momentum. Seasonally,

the general period of strength for the industry starts around the beginning of October, however, some constituents can start sooner. Strength runs through November and into December, peaking anywhere between the Thanksgiving and Christmas holidays in

the USA.

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Ryanair

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Alaska Air

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American Airlines

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Hawaiian Airlines

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JetBlue Airways

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Southwest Airlines

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Delta Airlines

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United Continental

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On the economic front, a report on Factory Orders provided another data-point for investors to mull over ahead of September’s FOMC meeting. The headline print indicated that Factory Orders rose by a seasonally adjusted 0.4% in July, missing

estimates calling for an increase of 0.9%. Stripping out seasonal adjustments, orders fell by 8.3%, which is less than the July

average decline of 11.0%. The year-to-date change through the first seven months of the year now sits at –3.8%, above the 20-year average of –4.8%.

The depreciated value of commodities continues to have a negative impact on the non-durable portion of the report, particularly as it pertains to petroleum and coal products.

Seasonally, orders rebound from the July low through the month of September as manufacturers ramp up production for the fourth quarter.

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Put-Call Ratio Sentiment on Wednesday, as gauged by the put-call ratio, ended bearish at 1.31.

While the trend of the ratio continues to point higher, suggesting caution and bearishness amongst investors, the average true range (ATR) of the ratio is showing

signs of coming down, suggesting investors are becoming less erratic in the options market, possibly even becoming comfortable with portfolio allocations. A decrease in volatility can often be conducive to equity accumulation amongst investors.

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Seasonal Charts

A. Sectors and Industries Entering Period of Seasonal Strength Today

Natural Gas Futures (NG) Seasonal Chart

B. Stocks Entering Period of Seasonal Strength Today

None.

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C. Seasonal Charts of Companies Reporting Earnings Today

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S&P 500 Index

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TSE Composite

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Special Free Services Available through www.equityclock.com Equityclock.com is offering free access to a data base showing seasonal studies on

individual stocks and sectors. The data base holds seasonality studies on over 1000 big and moderate cap securities and indices. Notice that most of the seasonality charts have been updated recently.

To login, simply go to http://www.equityclock.com/charts/

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BW: Information on Equity Clock is provided below.

Equity Clock

Equity Clock is a division of the Tech Talk Financial Network, a market analysis

company that provides technical, fundamental, and seasonality analysis on a daily

basis via TimingTheMarkets.com and EquityClock.com.

Equity Clock’s mission is to identify periods of reoccurring strength among

individual equities in the market using methodologies presented by some of the top

Equity Clock Stock Market Outlook

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analysts in the industry, including that of Don Vialoux, author of

TimingTheMarkets.com.

Feel free to use any of the content or seasonality studies (charts, timelines, or

otherwise) presented as long as a link-back to this site at EquityClock.com is

provided.

For further information on indicators used in reports presented on this site, please

visit our reference page.

Equity Clock Website:www.equityclock.com

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