The U.S. market has been downgraded to a Downtrend. The S&P 500 and Nasdaq closed below their respective 50-DMA (S&P 500: 4,010; Nasdaq: 11,993), which will now act as immediate near-term resistance. The next level of support is ~3,900 and 11,600, respectively, before June lows. We will now be looking for another follow-through day before upgrading the market status.
Author: Vidhya M
Won Global View
The U.S. market remains in an Uptrend Under Pressure. The S&P 500 and Nasdaq pulled back to their 50-DMA support (S&P 500:4,003; Nasdaq: 11,971) on lower volume (d/d). Indices closed near session lows after weak attempts to bounce higher intra-day. The distribution day count stands at three and four, respectively.
Won Europe Today
We released European Weekly Summary yesterday.Click here to access the report. Key points from the report include:
- The Stoxx 600 was shifted to an Uptrend Under Pressure after breaching its 100-DMA with a high distribution day count. Last week, European majors fell the most since early June due to the Fed’s Hawkish commentary to continue raising interest rates to combat inflation and the soaring energy prices.
- Majors breached below the key support levels in which they were consolidating in the past few weeks post the July rally. This sets up indices for a further down leg, back to their earlier resistance levels, which are likely to act as support going forward.
- Energy was the only sector in the green last week. Defensive sectors held up while all other sectors closed in the red.
Won Global View
The U.S. market remains in an Uptrend Under Pressure. The S&P 500 and Nasdaq fell for a second straight week, still pulling back from their 200-DMA resistance and now approaching the rising 50-DMA (S&P 500: 3,996; Nasdaq: 11,943). The market status will be downgraded to a Downtrend should indices close below this key level of support. The distribution day count stands at four and five, respectively, with one day expiring on each index today.
Won Europe Today
On Friday,
- European markets had a weak session owing to hawkish commentaries from central banks across Europe and the U.S. Many indices recorded a distribution day and broke below their key support levels on higher volume. We recommend that investors be very cautious while adding any new risk.
- The Stoxx 600 broke below its 100-DMA on high volume, recording its fifth distribution day. The index has been shifted to an Uptrend Under Pressure. Most sectors closed in the red, with Technology leading the rout.
- Among other major indices, France’s CAC recorded its seventh distribution day and broke below its 100-DMA. It has also been shifted to an Uptrend Under Pressure. Germany’s DAX has been shifted to a Downtrend after the index broke below all its support levels. The U.K.’s FTSE 100 recorded its second distribution day and broke below its 21-DMA.
- All the 17 indices that we track in Europe closed in negative territory with eight recording a distribution day. Austria, Germany, and Switzerland were shifted to a Downtrend, while the Stoxx 600, France, Ireland, Sweden, and Italy were shifted to an Uptrend Under Pressure.
- Actionable names in the Focus List include Ox2 (OX2.SE; OX2:SS), Edp Renovaveis (EDPR.PT;
EDPR:PL), Edenred (EDEN.FR; EDEN:FP), Lvmh (LVMH.FR; MC:FP), Relx (REL.GB; REL:LN), Wolters Kluwer (WSG.NL; WKL:NA), Compass Group (CPG.GB; CPG:LN), Neoen (NEOP.FR; NEOEN:FP), Ipsos (IPS.FR; IPS:FP), Rwe (Xet) (RWEX.DE; RWE:GR), and Solaria Energia Y Medio Ambiente (SEM.ES; SLR:SM).
Won Global View
The U.S. market remains in an Uptrend Under Pressure. The S&P 500 and Nasdaq rallied sharply yesterday, regaining their respective 21-DMA (S&P 500: 4,156; Nasdaq: 12,531). Overall, indices remain in consolidation with primary 200-DMA resistance falling toward current prices, as 50-DMA support rises. The distribution day count decreased to three and four, respectively, with one day expiring on each next week.
Won Europe Today
We released our Weekly Global Laggards Report today. Click here to access the report. The stocks highlighted in this report are laggards relative to their own domestic markets. We recommend that they be underweighted as they may be vulnerable to further downside risk and underperformance. European names highlighted this week include Epiroc (EPIA.SE; EPIA:SS), Telefonica (TEF.ES; TEF:SM), Accor (AC.FR; AC:FP), Whitbread (WTB.GB; WTB:LN), Orsted (DEN.DK; ORSTED:DC), Baloise Holding (BALN.CH; BALN:SW), and Next (NXT.GB; NXT:LN).
Won Europe Today
Yesterday,
- European markets gained ahead of the Fed Chair’s comments on the monetary policy at the central bank’s annual economic symposium. Minneapolis Fed President Neel Kashkari maintained a hawkish tone while reiterating the Fed’s focus to bring price pressures under control through monetary tightening. We recommend a selective approach to adding risk. Focus on high relative strength ideas that are part of leading and/or improving industry groups.
- The Stoxx 600 edged 16bps higher while continuing to form the right side of a stage-one 34-week consolidation. It is testing support at its 100-DMA and is 12% below the pivot. The sectoral performance was mixed. Technology, Health Care, and Travel led the rally, gaining 81bps, 91bps, and 31bps, respectively. Oil, Mining, and Banking were among the laggards, declining 94bps, 178bps, and 66bps, respectively. Among other major indices, France’s CAC and Germany’s DAX closed in the green, gaining 39bps and 20bps, respectively, while the U.K.’s FTSE closed in the red, losing 22bps. While the DAX is testing support at its declining 50-DMA, the CAC is testing support at its 100-DMA, and the FTSE is trading above all its key support levels, supported by its rising 100-DMA.
- Among the 17 indices we track in Europe, 12 closed in the green, while the remaining five closed in the red. With no change in market condition, nine indices continue to trade in a Confirmed Uptrend, five in an Uptrend Under Pressure, two in a Rally Attempt, and one in a Downtrend. With Portugal recording a distribution day, the average distribution day count currently stands at 3.9.
- Actionable names in the Focus List include Compass Group (CPG.GB; CPG:LN), Edenred (EDEN.FR; EDEN:FP), EDP Renovaveis (EDPR.PT; EDPR:PL), Ipsos (IPS.FR; IPS:FP), Lvmh (LVMH.FR; MC:FP), Neoen (NEOP.FR; NEOEN:FP), Ox2 (OX2.SE; OX2:SS), Relx (REL.GB; REL:LN), Rwe (RWEX.DE; RWE:GR), Solaria Energia (SEM.ES; SLR:SM), and Wolters Kluwer (WSG.NL; WKL:NA).
Won Global View
The U.S. market remains in an Uptrend Under Pressure. The S&P 500 and Nasdaq posted small gains on below average volume but continue to consolidate above their declining 100-DMA support (S&P 500: 4,082; Nasdaq: 12,171). The distribution day count remains at three and five, respectively, with one day expiring on the Nasdaq after the close.
Won Global View
The U.S. market is in an Uptrend Under Pressure. The S&P 500 and Nasdaq traded relatively flat in lower volume, still sitting above declining 100-DMA (S&P 500: 4,086; Nasdaq: 12,190) support. The distribution day count remains at three and five, respectively, with one day expiring on the Nasdaq tomorrow.
