It was a rough week for the European markets, with the Stoxx 600 down 1.69% on a weekly basis at Thursday’s close and heading toward further losses on Friday. We moved the index back to a Confirmed Downtrend on Thursday. We also moved Ireland and Sweden to a Confirmed Downtrend and Portugal to a Rally Attempt. We may also be moving Austria to an Uptrend Under Pressure after the close today.
Author: Vinaya Kumar
Global Focus Developed Long
Australia’s ASX All-Ordinaries Index declined 0.52% this week. Today it plunged 1.15%, breaching its 50-DMA and marking its fifth distribution day. It is trading about 4.5% below 52-week highs and remains Under Pressure.
Global Focus Emerging Long
Mainland Chinese markets fell for a second consecutive week. The benchmark indices lost nearly 1.6% on Friday due to growing geopolitical tensions. The Shenzhen index is finding resistance at the 100-DMA (~1,891), while the Shanghai is holding above the 100-DMA (~3,202). The Shenzhen has continued to look weak this year, failing to break its downward trend since December 2016, down nearly 6% YTD. Near-term support could be 3% lower from current levels or 1,784. Both indices remain in a Rally Attempt.
Global Focus Frontier Long
US Focus Long
The U.S. market remains in a Confirmed Uptrend. Distribution on the S&P 500 fell to zero, while the Nasdaq remains at four days. Both indexes continue to hold above support along their respective 21-DMAs, trading sideways now for three straight weeks. The majority of leadership is also holding above short-term support levels, despite mostly negative reactions to Q2 earnings. Our positive stance will remain until we see technical deterioration occur in a larger number of leading ideas and the major averages alike.
European Focus Long
The Stoxx Europe 600 index continues to look weak, with losses on Thursday and Friday negating the positive momentum seen on Tuesday and Wednesday. The index was largely driven by corporate earnings announcements for Q2 2017, as the bulk of corporate earnings for the June quarter were announced this week. We moved the Stoxx 600 index to a Rally Attempt this week but reversed it back to a Confirmed Downtrend following Friday’s weakness. We also moved Finland to a Confirmed Downtrend from the earlier Under Pressure. Ireland and Spain were moved to a Rally Attempt.
Global Focus Developed Long
Australia’s ASX All-Ordinaries Index fell 0.3%, continuing to consolidate about 3% below 52-week highs. The index was up for the bulk of the week but fell 1.3% on Friday, failing to hold a retake of its 50-DMA. The index remains in an Uptrend Under Pressure and has five distribution days in the past five weeks. We will continue watching the 50-DMA closely as the stock has failed to hold the level three times after breaking above it.
Global Focus Emerging Long
Mainland Chinese markets were mixed this week with the Shenzhen underperforming the Shanghai. The Shanghai finished up 0.3%, while the Shenzhen fell 0.5%. The Shenzhen is finding resistance at the 100- DMA (~1,899), while the Shanghai is holding above the 100-DMA (~3,186). The Shenzhen continues to look weak this year, failing to break its downward trend since December 2016. Both indices remain in a Rally Attempt.
Global Focus Frontier Long
US Focus Long
The U.S. market remains in a Confirmed Uptrend. The S&P 500 and Nasdaq continue to trade above short-term support levels with relatively low distribution days counts. Two distribution days are set to fall off on each index next week. We will be looking for individual ideas to continue trading above support along key moving averages and for the S&P 500 and Nasdaq to avoid a clustering of distribution over the next several days.
