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.
Symbol: GRUB
Market View
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.
Stocks on our U.S. Focus List: Current Sentiment
Our USFL of 66 ideas (including four net additions) gained 2.9% on average this week, outperforming the S&P 500 (0.2%) and the Nasdaq (1.8%).
By Sector
Health Care ideas led this week aided by a first stage breakout in the IBB. Biotech ideas VRTX and REGN ex-tended their gains before pulling back on Friday. New ideas, BIVV and CELG, are holding their pivot points and remain actionable. RGEN, a play on the secular growth of biologic drugs, broke above $40 resistance and is now testing all-time highs. A handful of Technology ideas were boosted by quality earnings reports. RHT and ADBE both broke into new highs. NTES also bounced off its 50-DMA and moved back into all-time highs. Our few Consumer Cyclical ideas also fared well. PLNT continues to trend higher and new addition, MGM, is also trending higher with support from its 50-DMA. The Banks, on the other hand, are reversing course. MS and FRC continue to hold above their respective 50-DMAs, but CFG and WAL have quickly given up that level of support.
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.
Daily Market Intelligence
Daily Market Intelligence
Daily Market Intelligence
Daily Market Intelligence
Market View
The market reversed off record highs this week, hit by a slew of negative reactions to both good and bad earn-ings results. Multiple leadership ideas pulled right back into their bases, erasing progress that was made last week. Even more concerning is that a few ideas severely gapped down, breaking their charts entirely. Though the market is up this year, there has been a recurrence of one or two good weeks followed by a sell-off. We rec-ommend sticking to strong relative strength ideas trading above support levels, while lightening up on ideas forming new bases and trading below their respective 10-week moving averages. The market is again under pressure, with five distribution days on the S&P 500 and six on the NASDAQ.
US Focus Long
U.S. indices came under heavy distribution on Friday as concerns (economic growth,
FX, energy prices, etc.) heightened, with multiple global indices near multiyear highs.
Nonetheless, the S&P 500 continues to trade in a range (2040 -2120) that has been in place
for two months. This range will be further tested next week, as earnings season intensifies and
companies provide more insight into the concerns mentioned previously. The condition of the
U.S. market remains under pressure as distribution day count remains elevated (6).
US Focus Long
The market retraced the strong move higher last week, as volatility continues to persist. The
NASDAQ and S&P 500 are now retesting support levels around their respective 10-week
moving averages, while also picking up additional distribution days. Leadership ideas pulled
back with the market, but continue to show constructive action. With volatility likely to
continue going forward, holding these fundamentally strong names as long as they stay above
price and key moving average support remains the best approach. We have left the market in a
confirmed uptrend, as it continues to bounce higher right around these levels.
