Strong data out of Canada results in a jump in the Canadian dollar. 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: Gallagher Arthur J & Co. (NYSE:AJG) Seasonal Chart American Electric Power Company, Inc. (NYSE:AEP) Seasonal Chart Varian Medical Systems, Inc. (NYSE:VAR) Seasonal Chart Air Canada (TSE:AC) Seasonal Chart Northwest Bancshares, Inc. (NASD:NWBI) Seasonal Chart Marlin Business Services Corp. (NASD:MRLN) Seasonal Chart The Markets Stocks closed mildly lower on Friday as investors continue to digest the competing forces of strong fundamentals combined with the threat of a growing trade war. The S&P 500 Index ended lower by just less than a tenth of one percent, trading back to the flat-line on the week. The doji candlestick charted on the weekly look at the large-cap benchmark suggests indecision around these multi-month highs as investors try to determine how to position given the headline risks that dominate the news flow. The 20-week moving average is starting to curl higher following the multi-month trend of stagnant price action and momentum indicators remain in bullish territory, suggesting the longer-term pressures remain to the upside, barring any shocks to the contrary. Seasonally, the period between now and the beginning of October is the most volatile time of year, leading to erratic trading activity that often leads investors to trim back on their cyclical exposure. One indicator that we look to for signs of market stability is the percent of stocks trading above 200-day moving averages on the S&P 500 Index. As we have profiled in the past, when the indicator falls below 62.5%, erratic trading activity typically follows. The premise being that as more stocks lose this significant level of long-term support, the power to keep the benchmark supported is degraded. This has certainly been the case this past winter and spring as stocks remained in a rut. The indicator has since moved above 65%, suggesting that investors are starting to firm up on levels of support. Keep in mind that the indicator rebounded above the 62.5% hurdle in June and stocks subsequently traded back to levels support in the weeks that followed. Bottom line is that the market is still on the mend and while things are gradually shifting positive, support beneath the market is not as strong as what it has been, such as through much of last year. On the economic front, Statscan released reports on CPI and Retail Sales before the opening bell. First off, the Consumer Price Index (CPI) showed an increase of 0.1% in June, inline with the consensus analyst estimate and matching the average change for the month. For the first half of the year overall, CPI is higher by 2.1%, three-tenths of a percent above the seasonal average trend. Higher fuel prices is an obvious culprit for the strength in the aggregate tally, but excluding the more volatile elements of food and energy, the increase through the first half of the year is running six-tenths of one percent above the seasonal norm. Consumers are indicated to be paying more for a wide variety of items, including transportation, health/personal care items, alcoholic beverages, recreation, clothing, and appliances. The tit-for-tat tariff war will make things worse for many of these categories in future periods. Mortgage interest costs continue stand out, up 3.5% through the first half of the year. This is the second largest increase through the first half in two decades, lagging just slightly behind the 3.9% increase seen in the first half of 2008. If there is one suggestion of relief in sight for prices it is that seasonally aggregate CPI tends to peak in the month of September as the price of a number of goods, including gasoline, fall through the last quarter of the year. For a more detailed look at the trends, the charts can be accessed via the database at https://charts.equityclock.com/canada-consumer-price-index-cpi. On the retail front, consumers in Canada were out spending in May, driving the headline change in retail sales higher by 2.0% month-over-month. The consensus analyst estimate was for a gain of 0.7%. Stripping out the seasonal adjustments, sales were actually higher by 16.8% in the month, much higher than the 9.5% increase that is average for the month. The result puts the year-to-date change 9.8% above the seasonal average trend, the best performance in the 27 years of data that we have on record. A surge in buying of autos, gasoline, and building/garden materials led the gains for the month. Surprisingly, one of the few categories to show a below average year-to-date change is gasoline stations, which is trending 2.2% below the seasonal norm. The above average rise in the price that consumers are paying for gasoline is failing to lift the sales tally for the category, suggesting the issue is volumes. Seasonally, sales at gasoline stations peak in July and August as summer driving “fuels” purchases. Overall, this was a strong report pertaining to the consumer in Canada, easing some concerns that the Canadian economy is being negatively impacted by initiatives being implemented in the US. Seasonally, retail sales tend to decline into the fall as big ticket purchases and spring projects are set aside for summer fun. For a complete breakdown of the results, the charts can be accessed via the chart database at https://charts.equityclock.com/canada-retail-trade-sales. The Canadian dollar reacted sharply the to the strong results,trading higher by over 1% compared to its US counterpart. The 20-day moving average of the currency is starting to curl higher for the first time since April, suggesting a positive short-term trend; 50 and 200-day averages continue to point firmly lower, indicating negative long and intermediate-term trends remain intact. Seasonally, the Canadian currency tends to gyrate through the month of August as the price gains for energy commodities level off. Sentiment on Friday, as gauged by the put-call ratio, ended close to neutral at 0.98. This has been par for the course, investors holding a neutral bias as the bulls and bears battle for control. Sectors and Industries entering their period of seasonal strength: UTILITIES Relative to the S&P 500 Seasonal charts of companies reporting earnings today: S&P 500 Index TSE Composite