Author: Neeraj Khanna
US Focus Long
The U.S. market condition was upgraded to a Confirmed Uptrend. Strong price action across
multiple indices and sectors has led to a reemergence of breadth in leadership ideas. All riskon
sectors are showing strength over the short-term (trailing four weeks), led by Transports,
Capital Equipment, and Financials. Looking ahead, we would like to see the S&P 500 and
Nasdaq break through resistance and into all-time highs, joining the Russell 2000 and Dow
Jones Industrial Average indices
European Focus Long
Following last week’s strong move higher, European markets inched
up 0.2% on average, as large declines in Belgium (-1.9%) and Italy
(-2.8%) hurt performance. Several markets, including Denmark
(+1.5%), Netherlands (+1.2%), Norway (+1.1%), Portugal (+1%),
Sweden (+1.7%) and Ireland (+1.5%), posted strong weeks,
gaining more than 1%. Overall, nine of the 16 markets advanced,
while Germany was flat.
Global Focus Developed Long
Australia’s ASX All-Ordinaries Index lost 0.4% this week,
pausing after strong gains in the prior week. It is now wedged
above its 40-week moving average but below its 10-week moving
average. The index is in a Rally Attempt awaiting a follow-through
day.
Global Focus Emerging Long
Mainland Chinese markets traded mixed this week with the
Shenzhen up 0.15% and the Shanghai down 0.1%. Indices took
a pause after rising for consecutive weeks but continue to trade
positively. Both have trended above key moving averages for
several weeks, with above average volume, which is encouraging.
We continue to wait for a surge in volume on a weekly basis that
would provide more conviction in a prolonged change in trend, but
acknowledge markets could drift higher in the short-term. Markets
remain in a Confirmed Uptrend with three and five distribution
days for the Shanghai and Shenzhen, respectively.
