After a volatile week last week, the Stoxx Europe 600 index is heading for a relatively flat week, with a gain of 0.28% as of Thursday’s close. A Rally Attempt for the index failed on Thursday as it breached July 3’s low. The index continues to trade below its 50-DMA and remains in a Confirmed Downtrend. We moved Norway from a Confirmed Downtrend to a Rally Attempt.
Author: Vinaya Kumar
Global Focus Developed Long
Australia’s ASX All-Ordinaries Index lost 0.3%, continuing to trade in a back-and-forth fashion. The index rose through Thursday but fell 0.9% on Friday, picking up its seventh distribution day in the past five weeks. The index remains Under Pressure, unable to break above 50-DMA resistance (5,814). Support is 0.6% lower at its 200-DMA (5,704).
Global Focus Emerging Long
Mainland Chinese markets continued higher for another consecutive week as both the Shenzhen and Shanghai are trading above their respective 10-WMA. The Shanghai is also trading above the 40-WMA while the Shenzhen is about 2% below it. Next resistance for the Shenzhen could be at the 40-WMA, suggesting more upside in the near-term. Both indices remain in a Confirmed Uptrend with two distribution days each in the trailing five weeks.
Global Focus Frontier Long
US Focus Long
The U.S. market was downgraded to Uptrend Under Pressure Thursday after the Nasdaq closed below its 50-DMA and picked up a sixth distribution day. Leadership ideas across Technology are still basing, though many have undercut short-term support levels and will need more time before they present ideal pivot points. We recommend a more cautious approach, waiting for indexes to firm and for distribution to expire before initiating new positions.
European Focus Long
The Stoxx Europe 600 index showed significant weakness this week and Thursday’s close was heading for a weekly loss of 1.80%. The index gained two distribution days this week and was breaking below support levels after the close on Thursday. We changed its status to Confirmed Downtrend from Uptrend Under Pressure. Thursday’s selloff saw several other status downgrades: Germany, Sweden, Denmark, Finland, and Portugal to Uptrend Under Pressure and France, Spain, Belgium, and the Netherlands to Confirmed Downtrend. Out of 16 indices in developed Europe, only two remain in a Confirmed Uptrend, Ireland and Austria. However, they are also close to their respective support levels.
Global Focus Developed Long
Australia’s ASX All-Ordinaries Index fell 1.7% this week and Australia’s ASX All-Ordinaries Index gained 0.2%, rising to onemonth highs through Thursday before falling 1.6% back below its 10-WMA on Friday. The index remains Under Pressure with five distribution days in the past five weeks. Support is about 1.2% lower at its 40-WMA, while resistance continues to be its 10-WMA (+1.1%).
Global Focus Emerging Long
Mainland Chinese markets gained for the second consecutive week as both the Shenzhen and Shanghai continue to trade above their respective 50-DMA. Both indices remain in a Confirmed Uptrend with low distribution day counts of two each in the trailing five weeks. We continue to view the 50-DMA as a key area of support should markets trade down in the coming weeks, although action since the MSCI inclusion has been mostly positive. The next level of resistance for the Shenzhen could be the 200- DMA which is 4% above current levels.
Global Focus Frontier Long
US Focus Long
The U.S. market remains in a Confirmed Uptrend. The S&P 500 continues to hold above its 21-DMA, while the Nasdaq is holding above its 50-DMA. Distribution remains low, though there will be no expiration for over two weeks. Our U.S. Focus list has risen to 66 ideas, the highest number in over two years as leadership continues to expand.
