The U.S. market remains in an Uptrend Under Pressure. Distribution on the Nasdaq remains elevated at seven days. The index still has an A/D Rating of E and price continues to hit resistance around its 50-DMA and a newly formed downward trending channel line. Additionally, the U.S. Focus List count has fallen from 68 to 60 names over the past three weeks, with ~30% of the current list trading below their 50-DMAs. Going forward, we will be looking for distribution to subside and for price/volume action to improve on both the major averages and leadership ideas alike. We maintain our cautious stance on the general market.
Symbol: GRUB
US Focus Long
The U.S. market remains in an Uptrend Under Pressure. The S&P 500 and Nasdaq each picked up an additional distribution day this week and closed back below their respective 50-DMAs on Thursday. Distribution on the Nasdaq has now reached seven days with no expiration next week. We are now looking for the major averages to find support at their respective 100-DMAs, about 1% below current levels. We continue to recommend a cautious approach, avoiding new buys in extended ideas (third-/fourth-stage bases) and reducing position sizes in ideas that have been living beneath their 50-DMAs.
US Focus Long
The U.S. market has been downgraded to an Uptrend Under Pressure. On Thursday, the Nasdaq closed below its 50-DMA, picking up its sixth distribution day in 11 sessions. By comparison, when we downgraded the market on June 29, the Nasdaq had six distribution days in 18 sessions. We recommend a cautious approach as multiple leading ideas are now trading below their respective 50-DMAs, and no distribution will expire for over three weeks.
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.
Market View
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.
Stocks on our U.S. Focus List—Current Sentiment
Our USFL of 68 ideas (one net addition) lost 0.4% on average this week, underperforming the S&P 500 (0%) and the Nasdaq (-0.2%).
By Sector
Chinese Internet Retail ideas continued to move higher despite the pullback in AMZN. BZUN, JD, and BABA all made new highs on the week. AMZN found support at its 50-DMA post earnings. Energy also rallied this week, with our sole recommendation, NEP, making new highs after reporting Q2 results this week. Conversely, Data Storage names, WDC and MU, closed below their respective 50-DMAs. Health Care also pulled back with multiple Medical Products ideas gapping down post earnings. IART and NUVA were both removed from the U.S. Focus List. ALGN, on the other hand, posted another stellar quarter, gapping up into all-time highs.
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.
Market View
The U.S. market has been moved back into a Confirmed Uptrend. Though volume continues to come in below average, the S&P 500 closed at a new all-time high and the Nasdaq closed above resistance at 6303. The ac-tion of leadership remains strong, with multiple ideas forming the right side of their respective bases or even breaking out into new highs. Q2 earnings season has begun and will drive market direction over the next sever-al weeks.
Stocks on our U.S. Focus List—Current Sentiment
Our USFL of 66 ideas gained 2.3% on average this week, outperforming the S&P 500 (1.4%) and in-line with the Nasdaq (2.6%).
By Sector
Technology ideas across the USFL outperformed this week. Internet-Content led as FB gapped up into all-time highs. WB, GRUB, and GOOGL all regained their respective 50-DMAs. Chinese Retail-Internet also outper-formed. BZUN and BABA moved further into all-time highs, while JD bounced off its 50-DMA. Conversely, the Banks all pulled back after multiple earnings were released Friday morning. All four USFL Banks (CFG, FRC, MS, WAL) remain above their respective 50-DMAs and technically still intact.
US Focus Long
The U.S. market has been moved back into a Confirmed Uptrend. Though volume continues to come in below average, the S&P 500 closed at a new all-time high and the Nasdaq closed above resistance at 6303. The action of leadership remains strong, with multiple ideas forming the right side of their respective bases or even breaking out into new highs. Q2 earnings season has begun and will drive market direction over the next several weeks.
US Focus Long
The U.S. market remains in an Uptrend Under Pressure. Distribution stands at four and seven days on the S&P 500 and Nasdaq, respectively. One day will expire on the S&P 500 and two on the Nasdaq next week. The Nasdaq continues to show concerning technical action, now living beneath its 50-DMA for six straight sessions. In order to get more constructive, we will need a sustained close above this level of resistance as distribution falls to a less concerning level. Until then, we maintain our cautious stance on the general market.
Market View
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 rec-ommend a more cautious approach, waiting for indexes to firm and for distribution to expire before initiating new positions.
Stocks on our U.S. Focus List—Current Sentiment
Our USFL of 64 ideas (including two removals) lost 2.4% on average this week, underperforming the S&P 500 (-0.6%) and the Nasdaq (-2%).
By Sector
Financial ideas led this week aided by a rally in the Banks. FRC, MS, and WAL are all back above their respec-tive 50-DMAs, while CFG is trading just below that level. The Technology sector closed back below its 50-DMA resulting in a further decline across multiple U.S. Focus List ideas. WB, MCHP, AVGO, QTWO, GOOGL, and CRM are all basing below their respective 50-DMAs. TYL, SSNC, MDSO, ADBE, and RHT continue to show con-structive action, trading above support with A/D Ratings of B+ or better.
