14-Day RSI of the S&P 500 Index presently the most overbought since December of 1996. 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: The Bank of Nova Scotia (TSE:BNS) Seasonal Chart Starbucks Corporation (NASDAQ:SBUX) Seasonal Chart SunTrust Banks, Inc. (NYSE:STI) Seasonal Chart Macy’s, Inc. (NYSE:M) Seasonal Chart The Markets And the trend continues with major equity benchmarks in the US notching another set of all-time highs. The Dow Jones Industrial Average, S&P 500 Index, and Nasdaq Composite charted gains of around half of one percent, moving increasingly into overbought territory. The S&P 500 Index is now 8.77% above long-term support at its 200-day moving average, the widest margin above this variable level of support since January of 2014, just before a brief 5% correction into the month that followed. The 14-day Relative Strength Index (RSI) at 80.41 is the highest since December of 1996. Despite these stretched conditions, further gains remain possible. Recall that the upside technical target based on the breakout from significant resistance around 2100 is toward 2400, representing the magnitude of the previous trading range that spanned the past few years. That calculated target is now a mere 35-points away, presenting limited upside potential for new funds just entering this market The risk-reward ratio is clearly skewed towards the risk side of the spectrum. Investors may be becoming cognizant of the elevated downside risks. Defensive sectors (Consumer Staples, REITs, and Utilities) topped the leaderboard during Tuesday’s session, each adding at least one percent on the day. When these sectors lead the market higher, it is a sign of risk aversion as investors rotate toward lower beta areas of the market in order to protect portfolios during periods of uncertainty. The S&P 500 Consumer Staples Sector Index is quickly approaching resistance at its all-time high of 574.63. The Utilities and REIT benchmarks are attempting to move above resistance at their 200-day moving averages, also representing the necklines to reverse head-and-shoulders patterns. While interest rates typically climb between now and the end of April, interest rate sensitive sectors, such as utilities and REITs, have historically performed quite well in March and April. The breakout and the bullish setup provides an intriguing setup for the period of seasonal strength ahead, as long as interest rates remain below their mid-December highs. The yield on the 10-year treasury bond continues to hold within a triangle pattern, remaining steady in recent months despite the rise in stocks. STAPLES Relative to the S&P 500 UTILITIES Relative to the S&P 500 ^RMZ Relative to the S&P 500 Sentiment on Tuesday, as gauged by the put-call ratio, ended bullish at 0.82. Seasonal charts of companies reporting earnings today: S&P 500 Index TSE Composite