The U.S. market remains in a Confirmed Uptrend. The S&P 500 and Nasdaq staged a downside reversal after fading off early session gains. Near-term support on the S&P 500 is at the 100-DMA (4,116), followed by the rising 10-DMA (4,093), while the first level of support on the Nasdaq is at the sharply rising 10-DMA (12,389). The distribution day count stands at five and three, respectively.
Author: Vidhya M
Won Europe Today
We released our European Weekly Summary yesterday. Click here to access the report. Key points from it include:
- European majors closed the week marginally in the red after two weeks of strong gains. The better-than-expected U.S. jobs data revived the possibility of a steep rate-hike by the Fed to curtail inflation, weighing on the markets. This came a day after the Bank of England raised interest rates by the most in 27 years. The majors are taking a pause and finding supply after their rally last month.
- The majors had taken out the first leg of their overhead resistance in late July and are currently seeing some consolidation/pull back. We want the majors to hold previous resistance levels and move to their long-term moving averages to see a structural change. There are many supply-zone levels that need to be taken out and held going forward.
- Sectoral momentum was Rotation Chartnued to lag their short-term momentum (over four weeks).
Won Global View
The U.S. market remains in a Confirmed Uptrend. The S&P 500 traded relatively flat last week, consolidating sharp July gains constructively above all near-term moving averages. This index still faces resistance at 4,177 or June highs. The Nasdaq traded higher for a third straight week with now no clear resistance until a falling 200-DMA (13,570). The sharply rising 10- and 21-DMA (S&P 500: 4,015; Nasdaq: 12,039) will act as near-term support for both indices. The distribution day count stands at five and three, respectively, with no expiration this week. However, three days will expire on the S&P 500 next week.
Won Europe Today
On Friday,
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European markets closed lower on Friday following a strong U.S. jobs report. The Bureau of Labor Statistics reported that non-farm payrolls grew 528K in July, well above street estimates of 258K, while unemployment rate fell to 3.5%. Markets had expected the Fed to adopt a friendlier dovish approach going forward. However, since the FOMC meeting, the Fed Governors have been adopting a more hawkish tone and signaling sharper hikes to combat inflation. With the latest data coming out the U.S., investors in Europe expect interest rates in the U.S to peak above the current estimates of 3.45%. Hence, we recommend that investors take a cautious, incremental approach to adding risk. Focus on high relative strength ideas that are part of leading and/or improving industry groups.
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The Stoxx 600 declined 76bps while forming the right side of a stage-one 31-week consolidation. It is testing resistance at its 200-DMA and is 11% below the pivot. Performance across sectors was mixed. Banks, Mining, and Oil gained 89bps, 114bps, and 62bps, respectively, while Technology, Health Care, and Auto declined 220bps, 76bps, and 29bps, respectively. Among other major indices, France’s CAC, Germany’s DAX, and the U.K.’s FTSE closed in the red, declining 63bps, 65bps, and 11bps, respectively. While the DAX is testing resistance at its declining 100-DMA, the CAC is trading between its 100-DMA and 200-DMA, supported by its 100-DMA. The FTSE is trading above all its key support levels, supported by its rising 100-DMA.
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Among the 17 indices we track in Europe, all closed in the red, barring Norway, Portugal, and Spain. With Belgium shifted to a Downtrend, 12 indices are currently in a Confirmed Uptrend, two in an Uptrend Under Pressure, two in a Rally Attempt, and one in a Downtrend. With Ireland recording a distribution day, the average distribution day count currently stands at 2.8.
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Actionable names in the Focus List are Compass Group (CPG.GB; CPG LN), EDP Renovaveis (EDPR.PT; EDPR PL), Ipsos (IPS.FR; IPS:FP), Lvmh (LVMH.FR; MC:FP), Neoen (NEOP.FR; NEOEN:FP), Man Group (EMG.GB; EMG:LN), Relx (REL.GB; REL:LN), Solaria Energia (SEM.ES; SLR SM), and Wolters Kluwer (WSG.NL; WKL NA).
Won Global View
The U.S. market remains in a Confirmed Uptrend. The S&P 500 traded relatively flat while the Nasdaq inched higher, both holding above near-term moving average support and continuing to show resilient action. The S&P 500 still faces resistance at 4,177, while the Nasdaq has no clear resistance until the falling 200-DMA (13,582). The distribution day count now stands at five and three, respectively.
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 Aena Sme (AENA.ES; AENA:SM), Repsol (REP.ES; REP:SM), Carrefour (CRFR.FR; CA:FP), and Telefonica (TEF.ES; TEF:SM).
Won Global View
The U.S. market remains in a Confirmed Uptrend. The S&P 500 and Nasdaq accelerated higher while trading above 100-DMA support (S&P 500: 4,118; Nasdaq: 12,331). The S&P 500 is approaching price resistance at ~4,177, which coincides with June highs, while the Nasdaq broke through ~12,555 price resistance. The distribution day count stands at six and four on the S&P 500 and Nasdaq, respectively, with one day expiring on each after the close.
Won Europe Today
Yesterday,
- European markets closed in the green after trimming intraday losses. We recommend a selective approach to adding risk. Focus on high relative strength ideas that are part of leading and/or improving industry.
- The Stoxx 600 ended 0.5% higher on above average volume and currently sits 11% off highs. The index continues to hold above its 50-DMA and is taking support at its 100-DMA. Next resistance is at 445 levels (1.6% above), followed by its 200-DMA (2.9% above). The support for the index remains at its 100-DMA (0.9% below), followed by its 50-DMA (3.7% below) and at ~400 (8.7% below). Technology, Insurance, and Banking stocks outperformed, while Health Care, Utilities, and Telecom stocks underperformed.
- Among major indices, France’s CAC is trading above its 50- and 100-DMA. Germany’s DAX is trading above its 50-DMA and below its 100-DMA. Both the indices are still below their 200-DMA. The U.K.’s FTSE is trading above all its key moving averages.
- Among the 17 indices we cover, most closed in the green. Ireland led the advance, up 1.8%. Three indices are in an Uptrend Under Pressure, two are in a Rally Attempt, and 12 are in a Confirmed Uptrend.
- Actionable names in the Focus List include Lvmh (LVMH.FR; MC:FP), Compass Group (CPG.GB; CPG:LN), Neoen (NEOP.FR; NEOEN:FP), and Ipsos (IPS.FR; IPS:FP).
Won Global View
The U.S. market remains in a Confirmed Uptrend. The S&P 500 and Nasdaq pulled back for a second straight session, still consolidating sharp two-week gains around their respective 100 DMA. The S&P 500 still faces resistance at June highs of 4,177, while the Nasdaq has resistance at ~12,555. Near-term support remains the rising 10- and 21-DMA (S&P 500: 3,971; Nasdaq: 11,827). The distribution day count now stands at six and four, respectively, with one day expiring on each tomorrow.
Won Europe Today
Yesterday,
- European markets closed marginally in the red after trimming intraday losses. Some near-term consolidation is expected after a strong rally in the last few weeks. 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 ended 0.3% lower on above average volume and currently sits 11% off highs. The index continues to hold above its 50-DMA and is finding support at its 100-DMA. The next resistance is at 440 levels (1% above) and its 200-DMA (3.4% above). The support for the index remains at its 100-DMA (0.4% below), 50-DMA (3.2% below), followed by ~400 levels (8.2% below).
- Financial services, consumer product, and technology shares underperformed while energy and automakers outperformed.
- Among major indices, France’s CAC is trading above its 21- and 50-DMA, while Germany’s DAX is trading above its 50-DMA and below its 100-DMA. Both indices are still below their 200-DMA. The U.K.’s FTSE is trading above all key moving averages.
- Among the 17 indices we cover, most closed in the red. Finland led the decline, down 1.4%. Three indices are in an Uptrend Under Pressure, two are in a Rally Attempt, and 12 are in a Confirmed Uptrend.
- Actionable names in the Focus List include Lvmh (LVMH.FR; MC:FP), Compass Group (CPG.GB; CPG:LN), Neoen (NEOP.FR; NEOEN:FP), and Ipsos (IPS.FR; IPS:FP).
