The U.S. market remains in a Confirmed Uptrend to close out 2017. The S&P 500 and Nasdaq closed the year near all-time highs with little to no distribution. Eight of 11 O’Neil sectors closed the year less than 1% off all-time highs, not including Energy, which rallied nearly 5% over the last four weeks. Though most Technology ideas remain in consolidation, multiple leadership ideas across other sectors continue to act well heading into the New Year. The U.S. Focus List stands at 74 ideas, just off three-and-a-half year highs. We maintain our positive view until we see a pickup in distribution that leads to deteriorating technical action in leading ideas and the major averages alike.
Author: Raghavendra B D
European Focus Long
As of Thursday this week, the iShares DJ Stoxx 600 lost 0.19% and, in the process, breached its 200-DMA. The index has been heading in no particular direction, as there is a lack of market-moving news and events amidst the holiday season. With three distribution days, the Stoxx 600 remains in an Uptrend Under Pressure. Italy was moved to a Rally Attempt from a Downtrend.
Global Focus Developed Long
Australia’s ASX All-Ordinaries Index ended the week flat. The index is trading 4.91% above its 40-WMA and at a 52-week high. It is in a Confirmed Uptrend.
Global Focus Emerging Long
Mainland Chinese markets closed mixed this week. The Shanghai index
gained 0.31% while the Shenzen index fell 0.12%. The market continues
to be Under Pressure. Two new distribution days were added this week,
taking the total to seven for the Shenzhen. The Shanghai index seems to
have found support near its 200-DMA (~3,264), which it has not broken
since June. For the Shenzhen, 1,845 should act as the next immediate
support level. We recommend a cautious approach; avoid any fresh
buying until market conditions improve.
Global Focus Frontier Long
US Focus Long
The U.S. market remains in a Confirmed Uptrend. Several distribution days have expired as rotation into new leadership continues. Energy and Basic Material broke into two-month highs this week, while seven other sectors remain at or near new highs. We maintain our positive view until we see further technical deterioration in leading ideas and the major averages alike. The S&P 500 and Nasdaq are still trading ~3% above their respective 50- DMAs.
European Focus Long
As of Thursday this week, the iShares DJ Stoxx 600 gained 0.65% but reversed slightly as it opened lower in early trading on Friday. The pan-European benchmark index is trading sideways to its flattening 200-DMA. It has been heading in no particular direction as there is a lack of market-moving news amidst the holiday season. With three distribution days, the Stoxx 600 remains in an Uptrend Under Pressure.
Global Focus Developed Long
Australia’s ASX All-Ordinaries Index gained 1.32% this week. The index is trading 4.86% above its 40-WMA at a 52-week high. It is in a Confirmed Uptrend.
Global Focus Emerging Long
Mainland China markets gained this week, led by the Shanghai Index, which increased 0.95%. The market continues to be in an Uptrend Under Pressure. Two distribution days dropped off and one new distribution day was added this week, taking the total count to five for the Shenzhen. The Shanghai Index seems to have found support near its 200-DMA (~3,262), which it has not breached since June. For the Shenzhen, 1,845 should act as the next immediate support level. We recommend a cautious approach; avoid fresh buying until market conditions improve.
