The U.S. market is in an Uptrend Under Pressure. The S&P 500 and Nasdaq broke below their respective 50-DMA this week and are now testing support near September lows, followed by the rising 200-DMA (S&P 500: 3,129; Nasdaq: 9,833). We will likely downgrade the market to Downtrend for the first time since the April 2nd follow-through day, should either index close below September lows (S&P 500: 3,209; Nasdaq: 10,519). Should that occur, we will be looking for another follow-through day before advising an increase in risk.
Author: Sandeeep N
European Focus
On Thursday, the Stoxx 600 ended 5.72% below last Friday’s close. Of the 17 indices that we cover, six are in an Uptrend Under Pressure, and 11 in a Downtrend.
Global Focus Developed
Australia’s ASX All Ordinaries Index declined 3.8% this week and is testing support along its 10-WMA. It added four distribution days this week. The index was moved to an Uptrend Under Pressure from a Confirmed Uptrend. It has nine distribution days, with two set to expire next week.
Global Focus Emerging
The CSI 300 fell 0.49% on higher volume. The market remains in an Uptrend Under Pressure with five distribution days. The index gapped lower Monday, trending higher to hit a weekly high Thursday but fell below its 21-DMA and 50-DMA (~4,715, +0.4%) again on Friday. The next support is at the gap (4,640, +1.2%) of October 9.
Global Focus Frontier
Savola Group is a strategic investment holding group in the food and retail sectors across MENAT (Middle East, North Africa, and Turkey region).
China A Shares
The CSI 300 fell 1.53% on lower volume and remains in an Uptrend Under Pressure with four distribution days. The index is still trading above its 50-DMA (~4,715, -0.1%) with resistance at July’s high of ~4,900 (+3.9%). The index opened higher Monday but reversed down, disappointed by Q3 GDP growth of 4.9% y/y, missing estimates of 5.2%. Fixed-asset investment was up 0.8% y/y for the first nine months, slightly lower than consensus. Value-added of industrial output grew 6.9% y/y, and retail sales increased 3.3% y/y for September, both beating estimates and improving from August. The index was dragged down and ended lower this week due to profit-taking in sectors that made large gains so far this year, with Health Care and Technology lagging. Low-valuation sectors Financial and Consumer Cyclical showed relative strength. We expect the index to remain rangebound in the near team before the U.S. presidential election and due to strong resistance at 4,900. We recommend investors be cautious and closely watch the Q3 results coming next week, which could be a major driver for stock performance. Avoid chasing highs.
US Focus
The U.S. market remains in a Confirmed Uptrend. The S&P 500 and Nasdaq held above their respective 50-DMA (S&P 500: 3,408; Nasdaq: 11,305) following a low volume pullback to that level this week. That moving average remains near-term support, while resistance remains 3,550 on the S&P 500 and 11,965 on the Nasdaq. The distribution day count stands at six and three, respectively, with one day expiring on each next week.
European Focus
The Stoxx 600 closed in the red in all four sessions this week. On Thursday, the index closed 1.96% below last Friday’s close.
Global Focus Developed
Australia’s ASX All Ordinaries Index declined 0.2% this week. It is currently trading above all key moving averages. It added two distribution days this week, taking the count to six. One distribution day is set to expire next week.
Global Focus Emerging
The CSI 300 fell 1.53% on lower volume and remains in an Uptrend Under Pressure with four distribution days. The index is still trading above its 50-DMA (~4,715, -0.1%) with resistance at July’s high of ~4,900 (+3.9%).
