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.
Author: Raghavendra K
Global Focus Frontier Long
US Focus Long
The U.S. market is in a Confirmed Uptrend. Indices tacked on small gains this week and continue to trend higher along their 21-DMAs as distribution remains low. Earnings season has been strong for the USFL with the majority of ideas reporting better-than-expected results. We remain positive on the general market as we head into the final weeks of earnings season.
European Focus Long
After recording two distribution days last week, the Stoxx 600 rebounded this week and, as of Thursday’s closing price, was up 0.38% on a weekly basis. This week, after hitting its highest level for the second half of 2017, the index pulled back on Thursday but avoided recording any additional distribution days. The total distribution day count remains at five, one of which will fall off due to time by the end of next week.
Global Focus Developed Long
Australia’s ASX All-Ordinaries Index increased 1.02% this week. It is trading 3.27% above its 200-DMA and is at 52-week highs. The index is in a Confirmed Uptrend.
Global Focus Emerging Long
Mainland Chinese markets declined this week. Both the Shanghai and Shenzhen indices were down between 1% and 3%. The indices are holding above their respective 100-DMAs.The Shenzhen fell 2.35% this week and breached its 50-DMA. We changed the market status to Under Pressure due to an elevated number of distribution days in the last five weeks.
Global Focus Frontier Long
US Focus Long
The U.S. market remains in an Uptrend Under Pressure. The S&P 500 and Nasdaq each picked up an additional distribution day this week and closed back below their respective 50-DMAs on Thursday. Distribution on the Nasdaq has now reached seven days with no expiration next week. We are now looking for the major averages to find support at their respective 100-DMAs, about 1% below current levels. We continue to recommend a cautious approach, avoiding new buys in extended ideas (third-/fourth-stage bases) and reducing position sizes in ideas that have been living beneath their 50-DMAs.
European Focus Long
European markets could not hold on the positive price momentum they saw in the first half of the week, with losses mounting in the last two trading days, in step with the U.S. market. However, this is not surprising since the early-week rally came on the back of relatively low trading volume. We moved the Stoxx 600 to a Rally Attempt on Wednesday but moved it back to a Confirmed Downtrend after Friday’s close.
Global Focus Developed Long
Australia’s ASX All-Ordinaries Index surged 0.96% this week. It is trading 1% above its 50-DMA and 3% below 52-week highs. The index remains Under Pressure.
