This week through Thursday, the Stoxx 600 gained for six consecutive sessions and reached a fresh 10-week high. The pan- European benchmark’s strong performance can be attributed to banking sector, which was the best-performing sector this week, aided by the weakening of the Euro and optimism around the prospects of U.S. tax cuts and an interest rate hike. We moved Spain, Sweden, and Germany to a Confirmed Uptrend this week. Spain had a follow-through day after gaining 1.76%, while Sweden and Germany continued to show strength. We also moved Luxembourg to a Rally Attempt.
Author: Vinaya Kumar
Global Focus Developed Long
Australia’s ASX All-Ordinaries Index increased 0.08% this week. The index is trading 1.05% below its 200-DMA and about 4% off its 52-week high. One distribution day was added this week. The index remains Under Pressure.
Global Focus Emerging Long
Mainland Chinese markets closed flat over last week. The Shanghai index is trading 2% off its 52-week high and 1% above its 50- DMA, while the Shenzhen index is trading 2% above its 50-DMA. Both indices are finding support at their 50-DMAs. One new distribution day was added this week, bringing the total count to five in the last five weeks. We recommend a cautious approach, as the markets are pulling back.
Global Focus Frontier Long
US Focus Long
The U.S. market remains in a Confirmed Uptrend. The S&P 500 and Nasdaq avoided distribution this week despite pulling back just slightly off their all-time highs. The distribution day count is now very low at just two days on the S&P 500 and one on the Nasdaq. We will be looking for the 21-DMA to act as support should the market pullback again next week. The majority of leadership ideas continue to act well, still holding above short-term support levels.
European Focus Long
The Stoxx 600 index remains in a Confirmed Uptrend and, as of Thursday, was up 0.57% on a weekly basis. This was despite relatively quiet trading on Tuesday and Wednesday ahead of the U.S. Federal Reserve’s monetary policy meeting. Countries that showed strength this week (as of Thursday’s closing prices) include Austria (+0.91%), Italy (+1.18%), Portugal (+2%), Denmark (+1.55%), Finland (+0.95%), Norway (+1.99%), and Switzerland (+1.18%). We moved the U.K. to a Rally Attempt this week and upgraded France to a Confirmed Uptrend after it continued to trend above its 100-DMA.
Global Focus Developed Long
Australia’s ASX All-Ordinaries Index decreased 0.27% this week. It is trading 0.8% below its 200-DMA and about 4% off its 52-week high. One distribution day was added this week. The index remains Under Pressure.
Global Focus Emerging Long
Mainland Chinese markets advanced for a sixth consecutive week led by the Shenzhen index. The Shanghai index is trading near 52-week highs and 2% above its 10-WMA. The index continues to trend higher after breaking its resistance level of 3,305 a few weeks ago. Two new distribution days were added this week, bringing the total count to four in the last five weeks. We recommend a cautious approach due to an elevated number of distribution days.
Global Focus Frontier Long
US Focus Long
The U.S. market remains in a Confirmed Uptrend. Distribution fell to three days on the S&P 500 and just two days on the Nasdaq, with an additional day set to expire on both indexes next week. Leadership across multiple sectors continues to act well, with many ideas breaking out and hitting new highs. We remain positive on the general market.
