The U.S. market remains in an Uptrend Under Pressure. The S&P 500 and Nasdaq closed the week on a strong note, rallying sharply off price support and now set to face resistance at their respective 50-DMA (S&P 500: 3,351; Nasdaq: 11,025). Distribution remains elevated at seven and six days, respectively, with one day expiring on the Nasdaq next Wednesday.
Author: Sandeeep N
European Focus
The market saw heavy distribution this week. On Thursday, the Stoxx 600 closed 3.5% below last Friday’s close.
Global Focus Developed
Australia’s ASX All Ordinaries Index gained 1.4% this week. It gained above its 21-DMA but continues to trade below its 50- and 200-DMA. The index registered one distribution day this week. We shifted the index to an Uptrend Under Pressure from a Confirmed Uptrend on Monday. It has six distribution days.
Global Focus Emerging
The CSI 300 fell 3.53% on lower volume and remains in an Uptrend Under Pressure with six distribution days. The 50-DMA (4,698, +2.8%) and 21-DMA (4,694, +2.7%) converged and are acting as resistance. Next support is at 100-DMA (4,424, -3.2%).
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 rose 2.37% on lower volume and remains in an Uptrend Under Pressure with six distribution days. The index retook its 50-DMA (4,707, -0.6%) and 21-DMA (4,721, -0.3%) Friday, with resistance at August highs (~4,900, +3.4%). Positive August economic data lent support to the market. Social retail increased 0.5% y/y, versus a 1.1% drop in July. Industrial profit was up 5.6% y/y, higher than expectations and July’s reading. From January to August, fix asset investment fell 0.3% y/y while real estate investment rose 4.6% y/y, both beating the previous month’s figures. A strong yuan attracted northbound trading via the HK-China Stock Connect, with a net inflow of RMB 10.8B this week. STAR 50 got approval to launch ETFs September 22, which are expected to draw fresh funds to the market. Sectors benefiting from the economic recovery such as Consumer Cyclical and Basic Material led while previous leaders Consumer Staple and Health Care were still in correction. Our conviction increases as the CSI bounced above key support on heavy volume. Companies are releasing Q3 earnings forecasts and we recommend investors focus on ideas with sound fundamental and technical profiles.
US Focus
The U.S. market remains in an Uptrend Under Pressure. The S&P 500 and Nasdaq are both now trading slightly below their respective 50-DMA with six distribution days each. One distribution day will expire on the Nasdaq next Wednesday. The S&P 500 is trading ~7% off highs with the next level of support at ~3,233, while the Nasdaq is trading ~11% off highs with near-term support at ~10,700 before ~10,200. Both indices are being dragged lower by big cap tech as the majority of other leading ideas continue to base constructively.
European Focus
On Thursday, the Stoxx 600 ended 0.89% above last Friday’s close. Of the 17 indices that we cover, five are in a Confirmed Uptrend, 10 are in an Uptrend Under Pressure and two are in a Rally Attempt.
Global Focus Developed
Australia’s ASX All Ordinaries Index gained 0.3% on below average volume this week and closed below its 50- and 200-DMA. The index registered one distribution day this week and one day is set to expire next week. It is in a Confirmed Uptrend with six distribution days.
Global Focus Emerging
The CSI 300 rose 2.37% on lower volume and remains in an Uptrend Under Pressure with six distribution days. The index retook its 50-DMA (4,707, -0.6%) and 21-DMA (4,721, -0.3%) Friday, with resistance at August highs (~4,900, +3.4%).
