O’Neil Market View

U.S. Market
The U.S. market remains in a Confirmed Uptrend. The S&P 500 and the Nasdaq declined ~2% this week and
breached their respective 10-DMA (5,838, 18,794). The next level of support for both indices is near their converging 100-
and 200-DMA (5,773, 18,413). The distribution day count on the S&P 500 and the Nasdaq increased to three and two,
respectively.

O’Neil Health Care Weekly

Sector Thoughts

XLV hit new 52-wk lows last Wednesday before rallying to close up 31bps on the week. The range of support is between $127.35 to $130, with near-term resistance still at the falling 21-DMA ($135.11; +1.5%). Though the sector is again trading near long-term support, its RS line is now hitting its lowest levels since this ETF launched 25 years ago. We continue to recommend an underweight sector positioning. 

O’Neil Market View

U.S. Market

 

The U.S. market remains in a Confirmed Uptrend. This week, the S&P 500 gained ~5%, while the Nasdaq was up ~7%, both retaking resistance at 100-DMA and 200-DMA. Support is at their 200-DMA (5,760/18,359) with only one distribution day on the S&P 500.

 

To close the week, all sectors except for Health Care are back above their 50-DMA. Over the last five sessions, Consumer Cyclical, Technology, and Transportation rose over 7% apiece, Energy, Capital Equipment, Financial, and Retail rose 3-5%. Consumer Staple, Utility, Health Care, and Basic Material lagged but still managed gains

O’Neil Health Care Weekly

XLV declined 4.2% last week unable to close above falling 21-DMA ($137) resistance. The next level of support is YTD lows at
$129.66. Its RS line is back to testing lows, still warranting an underweight sector positioning.

O’Neil Market View

The U.S. market remains in a Confirmed Uptrend. The S&P 500 and Nasdaq are consolidating above 50-DMA support ( 5,556, 17,378) with only one distribution day on the S&P 500. Both indices are trading 1–2% below the next level of resistance at their 200-DMA (5,748, 18,315).

 

Over the trailing five sessions, Consumer Cyclical (+1.7%) outperformed followed by Energy and Basic Material rising 1% while most other sectors were relatively flat. Health Care (-4.4%) underperformed significantly followed by Consumer Staples falling 1%

O’Neil Health Care Weekly

XLV closed relatively flat last week, gaining 35bps and now sitting directly on its 21-DMA ($138.49). Should this level break, the next
level of support is ~$136, followed by ~$132. Near-term resistance above remains the falling 50-DMA ($142.62). Overall, XLV’s RS
line continues to decline, warranting an underweight sector positioning.

Market View

The U.S. market is in a Confirmed Uptrend. The S&P 500 and Nasdaq jumped 2–3% this week and regained their respective 50-DMAs (5,583; 17,493 ) along with an improvement in quality ideas setting up. The next level of resistance is at the 200-DMA (5,746; 18,317).

O’Neil Health Care Weekly

XLV staged an upside weekly reversal, closing up 1.9% and just below 21-DMA ($138.39) resistance. The next level above is the
rolling 50-DMA ($143.34). Despite the rally, its RS line made a lower low as XLV underperformed post Tuesday’s follow-through day
(FTD). We now recommend an equal- to -underweight sector positioning.

O’Neil Market View

U.S. Market

 

The U.S. market is in a Confirmed Uptrend. On Tuesday April 22, the S&P 500 and the Nasdaq staged follow-through days (FTDs) on the 11th day off April 9 lows. We shifted indices back into a Confirmed Uptrend for the first time since February 27. Indices rose 4.6% and 6.7%, respectively, for the week. Each also managed to close above their 21-DMA (5,415; 16,855), which will now act as immediate support. Indices are attempting to retake March lows and then may face resistance near their declining 50-DMA (5,636; 17,734)

O’Neil Health Care Weekly

XLV declined 1% last week, still trading below all moving averages including key near-term resistance at the 21-DMA ($139.84). The
next level of support is ~$131, before YTD lows of $129.66. Despite pulling back, its RS line has yet to make a lower low, still
warranting an equal-weight sector positioning.