The U.S. market remains in a Confirmed Uptrend. The S&P 500 and Nasdaq remain at all-time highs, continu-
ing to hold trend above all major moving averages despite relatively flat trade on the week. Near-term support
remains the 10- and 21-DMA. The upper channel line on the S&P 500 is now rising toward 4,500. The distribu-
tion day count stands at four and three, respectively, with no expiration next week.
XLV jumped over 2% last week, outperforming strong gains from the S&P 500 and remaining at new highs.
Megacap bellweathers ( DHR, EW, ISRG, LLY, ZTS ) are hitting higher highs and driving the ETF higher.
Bioproduction/tools remain the leading sub-sector.
Continue to focus on high quality ideas ideally from leading/improving groups that are emerging on the right
side of bases in heavy volume
The U.S. market remains in a Confirmed Uptrend. The S&P 500 and Nasdaq rallied sharply for a second
straight week, pushing further into all-time highs. Both indices have begun a new trend higher after breaking out
last week. The S&P 500 is trading ~1.5% below its upper channel line, which is now rising above 4,400. We
continue to view near-term support along the rising 10- and 21-DMA for both indices. The distribution day count
remains low at two and four, respectively, with one day expiring on the Nasdaq next week.
XLV gained 1.6% last week moving back to all-time highs. Though the sector is flat versus the S&P 500 over the last month, action has been constructive. Leading groups (Hospitals, Managed Care, Tools, CRO’s) held near-term levels of support, while growth-oriented groups (Med Devices, Genomics) continue to improve. Drugs (Pharma, Biotech) are being led by a select few stocks, while the vast majority are still lagging within the sector.
The U.S. market remains in a Confirmed Uptrend. The S&P 500 shook out briefly below its 50-DMA last week
only to push right back into new all-time highs this week. The Nasdaq, which has been leading over the last few
weeks, broke out from a 19-week consolidation into new all-time highs. We continue to view the rising 21-DMA
as a key level of near-term support. The distribution day count has declined to a reasonable three and four days,
respectively, with one additional day set to expire on the S&P 500 next week.
XLV lost 65 bps last week but held up much better than the broader market. Its RS line is now rising over the
last two weeks, with alpha of over 3% vs the S&P 500.
Medical Tools, Devices and Services have come back under accumulation, while Managed Care, Hospitals,
and Outpatient Care have come under distribution. We recommend buying high quality growth ideas from
improving industry groups that are breaking out from constructive consolidation into new highs
The U.S. market remains in a Confirmed Uptrend. The S&P 500 pulled back to close slightly below its 50-DMA
as market breadth narrowed, while the Nasdaq traded relatively flat for the week, holding just below all-time
high resistance of 14,211. Price support below the 50-DMA on the S&P 500 is 4,056, which may coincide with
the rising 100-DMA. The distribution day count stands at six and five, respectively, with three expiring on the S&P
500 and one on the Nasdaq next week.
XLV rebounded sharply last week following BIIB’s FDA approval. The sector jumped back into new highs led by Biotech,
however, is still flat versus the S&P 500 over the last two weeks.
The sector has recently compressed similar to the broader market, with value-oriented groups pulling back, while growth oriented groups rally. Last week, there was notable strength in longer-term lagging groups (Biotech, Pharma, Equipment)and weakness in leading groups (Managed Care, Hospitals).
Despite last week’s action, value-oriented ideas are not broken, they are basing. They may simply need time before they
come back under accumulation again. Growth-oriented ideas are setting up, but the majority have yet to breakout and
begin a new trend. Continue to focus on the technical setups we highlight as we believe these ideas have the ability to
trend into higher highs should the market and sector remain intact
The U.S. market has shifted back to a Confirmed Uptrend. The S&P 500 is again trading at all-time highs, while
the Nasdaq is trading within 1% of all-time resistance at 14,211. Near-term support remains the rising 21- and
50-DMA, respectively. The distribution day count stands at six and three, respectively, with two expiring on the
S&P 500 and one on the Nasdaq next week. Each index has only added one distribution day in the last three
weeks.
Key points from this report:
