Mainland China markets fell for a second consecutive week, led by the Shenzhen, which was down 1.6%. The Shanghai was down 0.86%. The market continues to be in an Uptrend Under Pressure. No new distribution day was added this week, leaving the total at four. Down nearly 2% YTD, the Shenzhen has looked weak this entire year, failing to break its downward trend since December 2016. For the Shanghai, we are looking for the 100-DMA (1% away) to serve as near-term support.
Author: Raghavendra K
Global Focus Frontier Long
US Focus Long
The U.S. market is in a Confirmed Uptrend. Indices, led by the Nasdaq, rallied back into alltime highs despite a rise in distribution. Although the distribution day count increased to six on the Nasdaq and five on the S&P, price action across leadership ideas remains constructive. We will become more cautious if distribution remains elevated as indices/leading stocks fall below key support levels.
European Focus Long
European markets showed considerable weakness this week. We moved the Stoxx 600 to an Uptrend Under Pressure on Monday. As of Thursday’s closing price, the pan-European index was headed toward a weekly loss of almost 1%. Apart from the Stoxx 600, 11 of 16 European indices were downgraded this week.
Global Focus Developed Long
Australia’s ASX All-Ordinaries Index fell 1.1% this week. The index is trading 3.2% above its 40-WMA and 2% off its 52-week high. It is in a Confirmed Uptrend.
Global Focus Emerging Long
Mainland China markets advanced this week, led by the Shenzhen index, which increased 3.2%. At a 52-week high, the Shanghai index continues to trade more constructively than the Shenzhen index. The indices are holding above their respective 10- and 40- WMAs. The market continues to be in an Uptrend Under Pressure. No new distribution day was added this week, leaving the total count at five.
Global Focus Frontier Long
US Focus Long
The U.S. market is in a Confirmed Uptrend. Though distribution rose this week to two and five days on the S&P 500 and Nasdaq, respectively, each index continues to hold short-term support at the 21-DMA. Leadership also remains healthy with 80% of the U.S. Focus List still trading above the 50-DMA and 60% within 5% of a new high. We will become more cautious should we see a further rise in distribution that takes the major averages below their respective 21-DMAs.
European Focus Long
The Stoxx 600 recorded two distribution days this week and as of Thursday’s closing price was down 1.51%. This significant loss is mainly due to Thursday’s 1.11% decline. The index is now close to its 10-WMA, where it is expected to find support. This week through Thursday, 15 out of 16 European indices recorded at least one distribution day. Four indices recorded two distribution days: the U.K., Switzerland, Italy, and Denmark. Belgium recorded three distribution days this week, while Austria was the only market that avoided recording any distribution days
Global Focus Developed Long
Australia’s ASX All-Ordinaries Index increased 1.20% this week. The index is trading 5.0% above its 40-WMA and is at 52-week highs. It is in a Confirmed Uptrend.
