The market status remains Uptrend Under Pressure. Distribution remains relatively low on both the S&P and Nasdaq, however, no days will expire next week. Further, the S&P 500 and Nasdaq are now both trading below their respective 50-DMAAs for the first time since the election. Leadership, for the most part, has held in well, though multiple ideas have pulled back into their respective bases after breaking out over the last few weeks. This warrents a caution approach until we see support come back into the market. We will be looking for 2300, or the 100-DMA, to new act as support on the S&P 500.
Author: Shuvajit Mukherjee
European Focus Long
Geopolitical concerns dominated news this week, sending European markets down 0.6% on average. Four Scandinavian countries – Denmark (+1.7%), Finland (+0.7%), Norway (+0.6%), and Sweden (+0.2%) – gained, while all other markets were flat or decreased. The major markets of France, Germany, and Italy underperformed, declining 1.2%, 0.9%, and 2.6%, respectively; the U.K. fell 0.3%. All four markets remain in Confirmed Uptrend.
Global Focus Developed Long
Australia’s ASX All-Ordinaries Index gained 0.4% through Thursday, breaking above an April 2015 peak to its highest level since 2008. However, it did pull back to below the breakout on Thursday. The first level of support is 0.4% lower at its 21 day moving average, while its 50- day moving average is 1.7% lower.
Global Focus Emerging Long
Mainland Chinese markets continued their consolidation above moving averages through Thursday, with both the Shenzhen and Shanghai falling less than 1%. The Shanghai continues to be the stronger of the two markets this year, trading 1% off 52-week highs, versus 6% for the Shenzhen. The market is in a Confirmed Uptrend with four distribution days for each index.
Global Focus Frontier Long
Economic Summary
Q4 GDP growth revised upward.
In Q4 2016, the U.S. GDP grew 2.1% y/y, against the consensus estimate of 2%. The Q4 GDP expanded as
compared to the previous estimate released by the Bureau of Economic Analysis. The growth in consumer
spending, which accounts for more than two-thirds of the U.S. economic activity, was by far the biggest
anchor in the fourth quarter.
US Focus Long
The market status remains in an Uptrend Under Pressure. The S&P 500 and Nasdaq retraced last week’s sell-off, bouncing directly off their respective 50-DMAs for the first time since the election. Still, each index remains just below resistance levels (S&P 500: 2390; Nasdaq: 5928) that will need to be cleared before we shift the market back into a Confirmed Uptrend. With distribution falling and leadership continuing to act well, this is likely to occur early next week
European Focus Long
Q1 ended on a very strong note with the European markets advancing 1.3% on average for the final week. Every market rose
except for Norway (-0.7%) and the U.K. (-0.2%), and Austria was flat. Portugal was the standout performer for the week,
gaining 6.8% as it saw a follow-through day and was moved into a Confirmed Uptrend. France (+2%) and Germany (+2.1) also
gained more than 2%. The strength of the markets is impressive and, combined with the major countries performing well, this rally looks to have legs to run further.
Global Focus Developed Long
Australia’s ASX All-Ordinaries Index gained 1.9% this week, breaking out of a 13-week consolidation and into 52-week
highs. It pulled back a bit to end the week, picking up its second distribution day in five weeks, but remains above prior highs and in a Confirmed Uptrend.
Global Focus Emerging Long
Mainland Chinese markets fell significantly this week moving to Under Pressure. Both the Shenzhen and Shanghai are now testing support at their 10-week moving averages. Distribution has risen to four in just two weeks since the market was put in a Confirmed Uptrend.
