Price of oil consolidating around declining trendline resistance as stockpiles continue to decline. Real Time Economic Calendar provided by Investing.com. **NEW** As part of the ongoing process to offer new and up-to-date information regarding seasonal and technical investing, we are adding a section to the daily reports that details the stocks that are entering their period of seasonal strength, based on average historical start dates. 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: Hollysys Automation Technologies (NASD:HOLI) Seasonal Chart Comcast Corporation (NASDAQ:CMCSA) Seasonal Chart Cree, Inc. (NASD:CREE) Seasonal Chart EMC Insurance Group Inc. (NASDAQ:EMCI) Seasonal Chart Telefonica S.A. (ADR) (NYSE:TEF) Seasonal Chart The Markets On Wednesday, stocks digested gains from the previous session as investors reacted to comments from President Trump that indicated that he would be willing to force a government shutdown in order to get his way with the US/Mexico border-wall. The S&P 500 Index declined by just over three-tenths of one percent, moving lower following a test of previously broken rising trendline support. A short-term declining trend channel is apparent on the hourly look of the large-cap benchmark. Consumer discretionary stocks were among those that led the decline as the S&P 500 Consumer Discretionary Sector Index pressures horizontal support at 700 directly below. A double-top pattern on the chart presents downside potential towards 670 should support fail to hold. Seasonally, the consumer discretionary sector sees the weakest two months of the year in August and September, declining 60% of the time in each month. With the consumer showing signs of weakening, as reported on recently, pairing long positions with a short allocation to this sector looks enticing, playing the underperforming trend that has dominated since the start of May. DISCRETIONARY Relative to the S&P 500 On schedule for this time of week is the latest petroleum status report from the EIA. The administration reported that oil inventories fell by 3.3 million barrels last week, while stockpiles of gasoline shrank by 1.2 million. The result took another two-tenths of a day of supply out of the oil market, while gasoline days of supply remains unchanged at 23.7. Oil stockpiles are now lower by 3.3% through the middle of August, the largest year-to-date draw through this point in the year since 1995. But offsetting the enthusiasm surrounding the correction in the level of US supply is the continued increase in the level of domestic production, which remains very close to breaking the all time high of 9.6 million barrels a day recorded in the middle of 2015. The 8.6% year-to-date increase in domestic production is the largest increase through this point of the year on record, showing that producers are not backing down, even as the price of the commodity languishes. Should the recent pace of inventory draws continue, it is possible to see another day and a half of supply stripped from the market by the time the summer driving season comes to an end in September. If realized, the decline would leave the market with around 25 days of supply. The average for the end of driving season is 21 days. While still above average, the four days of excess versus the seasonal average would represent a significant improvement from the 11.6 days of above average supply recorded this past spring and perhaps enough to at least calm the chatter surrounding the oil glut that remains firmly intact. The price of oil tacked on just over 1% following the report, continuing to maintain support at the 50-day moving average. Weekly U.S. Days of Supply of Crude Oil excluding SPR (Number of Days) Seasonal Chart As for gasoline, the year-to-date change in stockpiles of the refined commodity remain inline with the seasonal average, down by 2.4%. The result follows a rather sharp uptick in production to the high of the year, perhaps in anticipation of the high demand surrounding travel related to the solar eclipse, which took place this past Monday. Americans are suggested to have travelled far distances in order to capture this rare celestial event. Product supplied saw just a marginal uptick last week, remaining range-bound in this summer period. The high demand driving season peaks with the Labor Day long weekend, after which the level of product supplied tends to fall off rather notably into the fall months. Weekly U.S. Days of Supply of Total Gasoline (Number of Days) Seasonal Chart Turning to the transports, of which the price of energy commodities is a significant influence, the industry recorded a sizeable drawdown on Wednesday as airlines came under pressure. The Dow Jones Transportation Average closed below its long-term rising trendline that has spanned the past 18 months, joining other benchmarks that have recently broken trend. A short-term head-and-shoulders topping pattern projects downside potential towards 8600, or just over 5% below present levels, should price break below the neckline to the negative setup. Seasonally, the industry remains in a period of weakness through to the start of October. $TRAN Relative to the S&P 500 On the economic front, a report on new home sales raised questions as to the strength of the housing market as we progress through the back half of the year. The headline print indicated that sales of new homes declined by 9.4% to a seasonally adjusted annual rate of 571,000. Stripping out the seasonal adjustments, new home sales actually declined by 15.5%, much more than the average contraction for July of 4.3%. The year-to-date change has fallen firmly below average following a strong first half of the year performance that saw gains that were over 8% above average. Sales of new homes is now higher by 25.6% through July, well short of the 34.2% average gain through the middle of summer. Homes sold under construction and completed were clearly the drag on the aggregate result. The weak sales volume did little to impact the median sales price of new homes, which increased by 0.7%, diverging from the average decline for the month of roughly the same margin. Keep in mind that new home sales represent a fairly small segment of the housing market (~10%) and therefore are prone to large fluctuations, such as we are seeing for July. A better read on housing will be provided on Thursday with a report on existing home sales, which have also shown above average gains through the first half of the year. New Home Sales Seasonal Chart Home construction stocks, as gauged by the iShares US Home Construction ETF (ITB), took another leg lower following the economic report, continuing to move below broken trendline support. The industry enters a period of seasonal strength in October. Sentiment on Wednesday, as gauged by the put-call ratio, ended bullish at 0.94. Seasonal charts of companies reporting earnings today: S&P 500 Index TSE Composite