The market remains in a Confirmed Uptrend with a limited number of distribution days. Leadership continues to emerge largely due to positive reactions to earnings. Though the upper channel line was reached on the S&P 500 Friday, market conditions remain favorable for further gains. We are watching for sudden downside rever-sals in the major averages, coupled with failed breakouts in individual ideas. This would be an early indication to turn cautious. Until then, our positive stance on the general market continues.
Author: Raj Gupta
Raj Gupta is Director, Research Analyst.
After joining the firm in 2002 as a research analyst, Raj was appointed senior equity analyst in 2006, and lead senior equity analyst in 2014—largely because of his ability to select outperforming stocks. He acts as an expert in the O’Neil Methodology and contributes to the direction of product and service line development. He recommends securities for addition to or removal from the U.S. Focus List, or USFL, and the associated alerts to clients. During his tenure, he was part of the leadership that developed the Global Focus List, which marked the firm’s successful expansion into international equity recommendations. He is also a lead on the IPO Rewind report and contributes to weekly summaries on the performance of the U.S. market. Much of his expertise is delivered as highly customized service to clients.
RAj earned his Bachelor’s degree in Economics from the University of California, Santa Barbara. He began working at the firm directly out of college, driven by his passion for investing and stocks. An avid soccer player, he built and managed an adult league in the Los Angeles area, in which he still plays. He also enjoys international travel; he and his wife commit to at least one major adventure a year.
Market View
U.S. indices held support this week as distribution fell. Leadership acted well, with multiple ideas breaking higher on positive earnings results. An additional distribution day will expire on the S&P 500 and Nasdaq on Monday, potentially taking the count down to just three days each. This is very positive for the general market, warranting a continued bullish stance. We continue to view the lower channel line on the S&P 500 as well as the 50-DMA as key levels of support.
Market View
U.S. indices broke into all-time highs this week, gapping up Wednesday after consolidating over the last several
weeks. We are looking for the major averages to consolidate at current levels, avoiding distribution while leadership
continues to work itself higher. Distribution currently stands at four days on the S&P 500 and five on the
Nasdaq. One day is set to expire on the S&P next week, while two days will fall off on the Nasdaq.
Market View
The U.S. market remains in a Confirmed Uptrend as the major averages continue to trade constructive-ly. Distribution stands at four days for the S&P 500 and six for the Nasdaq, with one set to fall off the Nasdaq next week. For both indices, support along the 50-DMA continues to rise, as price looks poised to break higher toward resistance along the upper channel line. We remain constructive on the market as long as the indices continue to hold above short-term support levels and distribution stays relatively low.
Market View
The U.S. market remains in a Confirmed Uptrend, aided by a strong rally in the FANG ideas and a further jump
in Financials. Distribution stands at four days for both the S&P 500 and Nasdaq, with one day set to fall off the
S&P next week. Q4 earnings season has begun and will drive market direction over the next several weeks. We
still view the upper channel line on the S&P 500 as resistance, and a sharply rising 50-day moving average as
support.
IPO Rewind
Market View
The U.S. market remains in a Confirmed Uptrend, rallying off support levels to start the new year. Distribution
fell to three days on the S&P 500 and four on the Nasdaq. Our concern now is that no further distribution days
will expire for a few weeks, leading us to believe the count may reach a concerning level heading into Q4 earnings
season. Still, as of today, there has been few signs of weakness across the major averages and leadership
alike. We are looking for the S&P 500 to hold support along its 50-day moving average, while finding resistance
along its upper channel line.
Market View
The U.S. market will remain in a Confirmed Uptrend to close out 2016. The S&P 500 will lose two distribution days next week, while the Nasdaq will lose three. Additionally, sector rotation remains positive as lagging sectors that have depressed the market over the last few years are now leading, while defensives remain weak. Leadership, though pulling back slightly over the last week, continues to hold up well, consolidating in light volume. We remain constructive on the market and will be looking for a bounce off support levels in the coming weeks.
Market View
The U.S. market remains in a Confirmed Uptrend, constructively consolidating recent gains. The S&P 500 is currently finding resistance just below its upper channel line, while support along the 21-day moving average catches up to current prices. With the Nasdaq 100 slightly outperforming the other indices this week, we believe new leadership ideas from growth sectors may begin to emerge, while Banks, Transports, Materials, and Capital Equipment consolidate
Market View
U.S. indices decisively broke into all-time highs this week as leading sectors (Banks, Cap Equipment, Transportation, Materials) were joined by a recovery in Technology, and year-to-date high breakouts in Energy and Cyclicals. Though a pullback is looming, the distribution day count remains low and leadership continues to trade constructively. We view the 21-day moving average as a key short-term level of support on the S&P 500 that should hold given the current strength of the market.
