Uncertainty regarding U.S. policies sent European markets lower for the first time in four weeks. On average, markets were down 0.6% as only three – Portugal (+1.4%), Spain (+0.7%), and Italy (+0.4) – closed higher. However, the key markets of France and Germany declined only slightly, falling 0.2% each. The U.K. fared slightly worse, losing 1.2%. Distribution days accumulated throughout the week, raising the average to 3.9 for the countries in a Confirmed Uptrend. Denmark was shifted to a Downtrend from Under Pressure during the week.
Author: Vinaya Kumar
Global Focus Developed Long
Australia’s ASX All-Ordinaries Index lost 0.8% this week. The index broke sharply under its 10-week moving average on Wednesday before retaking the level to end the week. We shifted the market to Under Pressure after the key moving average break and, while we were encouraged by the bounce, we will monitor the index closely over the coming days.
Global Focus Emerging Long
Mainland Chinese markets continue to hold above key 10-week moving averages. Despite a second distribution day recorded on Wednesday, both the Shenzhen and Shanghai remain constructive and in a Confirmed Uptrend.
Global Focus Frontier Long
US Focus Long
The market remains in a Confirmed Uptrend, avoiding distribution throughout the week. The S&P 500 and Nasdaq continue to trade off short-term support along the 21-DMA and are now testing prior highs. Leading ideas continue to act well, with many moving higher off areas of support. Our positive stance on the general market will remain until we see a change of character in the major averages and leadership ideas.
European Focus Long
Positive results from the Dutch elections and European central banks maintaining their status quo helped extend gains for a third consecutive week, with indices advancing 0.9% on average. Portugal (-0.3%) and Sweden (-0.2%) were the only markets to close lower, while six markets, including Italy (+2.2%), Spain (+2.1%), Germany (+1%), and the U.K. (+1%), gained more than 1%. Italy was moved into a Confirmed Uptrend from Under Pressure and Portugal was changed to a Downtrend from Under Pressure.
Global Focus Developed Long
Australia’s ASX All-Ordinaries Index gained 0.5% this week, bouncing slightly higher from 50-day moving average support for a second week. The index did not pick up any additional distribution days but still has four in the past five weeks. It will lose one at the end of next week. Resistance is about 0.8% higher at AUD 5,880.
Global Focus Emerging Long
Mainland Chinese markets were moved into a Confirmed Uptrend on Thursday as the Shanghai broke through year highs with other APAC markets. This year the Shanghai has fared better than the Shenzhen, correcting only 7% from November 2016’s peak to January’s trough, compared to the Shenzhen’s 15%correction. The Shanghai is also trading much closer to 52-week highs, 2% below vs. 5% for the Shenzhen. The markets pulled back on Friday, logging their first distribution day.
Global Focus Frontier Long
US Focus Long
The market remains in a Confirmed Uptrend, with three distribution days on the S&P 500 and Nasdaq. The total count remains low, though no distribution days will expire for over two weeks. The S&P 500 and Nasdaq are each holding support along their respective 21-DMAs as leadership ideas continue to surface. Removals from the list were largely isolated to one group. Therefore, we remain positive on the general market as long as these short-term levels of support continue to hold, and distribution remains under control.
