The U.S. market remains in an Uptrend Under Pressure. The S&P 500 and Nasdaq gapped up for a third straight session and are now trading within a range of resistance dating back to October 2018. The S&P 500 briefly cleared above the 2,800 to 2,815 (November 2018 high) level before closing mid-range on the session, while the Nasdaq cleared above 7,670 (October 2018 high) before also closing mid-range on the session.
Symbol: LPTY.HK
WON Global View
The U.S. market is in an Uptrend Under Pressure. The S&P 500 and Nasdaq are consolidating below the March 4 intraday high (S&P 500: 2,816; Nasdaq: 7,643) with six and five distribution days, respectively. One distribution day expires on each index at the close Thursday.
APAC Weekly Summary
Key Points:
Several major markets pulled back on Friday, led by a drawdown in the China A‐shares market.
Despite this, China’s markets remain constructive. The CSI 300 is in consolidation and holding above support
(~3,600), with a low distribution day count ( two ).
We moved India back to a Confirmed Uptrend from an Uptrend Under Pressure. The Sensex is trading at year highs
again.
Japan triggered a follow‐through day (day 50 of a Rally Attempt) but volume was below average despite being
greater then the previous day. We remain skeptical due to the rarity of late follow‐through days and other factors.
Monthly volume is declining and breakouts are still historically low.
In Japan Sector Rotation, it is much of the same from a month ago but there is noticeable short‐term rotation in
Health Care, Technology, and Staples.
Highlighted Focus List Idea: Lasertec ( LASE.JP; 6920:JP ). It is extended but look for an opportunity to add to
positions at new highs.
WON Global View
The U.S. market is in an Uptrend Under Pressure. The S&P 500 and Nasdaq bounced back +1.5% and 2%, respectively, regaining their 200-DMAs, after last week’s heavy sell-off. Large cap technology primarily led the move higher. We would like to see price action hold and consolidate above the 200-DMA for a few sessions before moving the market back to a Confirmed Uptrend.
WON Global View
The U.S. market is in an Uptrend Under Pressure. The S&P500 and Nasdaq broke below support at their respective 200-DMA after picking up three distribution days last week. The clustering of selling pressure has increased the distribution day count to six and five on the S&P 500 and Nasdaq, respectively, with the rising 50-DMA as the next level of support. Although indices are pulling back, the market was due for a pause after a strong rally off December lows.
Market View
U.S. indices entered the week overbought in the short term after a +18% rebound by the S&P 500 from its
December 24, 2018 low. While the strong start to 2019 is a precedent for better long-term gains, the
magnitude of the rally from the December 24 low, combined with the peaking breadth as measured by the
number of NYSE stocks above their 30-week moving average, suggest market pullback is likely.
The market-leading Russell 2000 is already down roughly 5% from its recent peak at 1,602. Using past
historical examples, a downward leg of 5–8% from the recent peak closing price of 2,803 on March 1 would be
normal for the S&P 500.
Presently, Wall Street consensus is for earnings growth to trough in Q1 at -3% for the S&P 500, and recover
sequentially for the rest of the year, according to FactSet. Improvement after the March earnings quarter is
probably necessary if stocks are to have a major move higher from here.
If the market does have another substantial up leg, we expect breadth to be narrower than it was in the move
from December 24, 2018 to March 1, 2019, on both a sector and individual stock level. The number of U.S.
breakouts are back to a more normal level for the first time in five months after being well below
average. Additionally, our U.S. Focus List is back up to 52 names, a typical number of recommendations for
us. However, given the strength of the recent rally, some stocks are extended, and we would encourage investors
to trim those positions.
WON Global View
The U.S. market has been moved to an Uptrend Under Pressure. The S&P 500 and Nasdaq closed below their respective 200-DMA,
each picking up a fourth distribution day in the last six sessions. There is no clear level of support above the sharply rising 50-DMA (S&P
500: 2,666 (-3.1%); Nasdaq: 7,159 (-3.7%)).
Global Focus Developed
Australia’s ASX All Ordinaries Index rose 0.21% this week,
adding one distribution day. It remains in a Confirmed Uptrend
with a total distribution day count of one
WON Global View
The U.S. market is in a Confirmed Uptrend.The S&P 500 and Nasdaq pulled back for a third straight session yesterday and now look poised to test their respective 200-DMA (S&P 500: 2,750; Nasdaq: 7,479). Both indices picked up their third distribution day in the last five sessions.
Global Markets Overview
Key points from the report:
- U.S. indices are overbought in the short term, strong precedence for longer-term gains.
- Earnings trough in Q1? Recovering in latter part of year?
- U.S. sectors are broadly positive, expecting more divergence going forward.
- At the stock level, breadth likely at a peak/volatility at trough.
- Number of U.S. breakouts back above normal level for first time in five months.
- Number of U.S. of favored growth stock ideas back at a normal level.
- Some top picks extended, but rotation occurring and still actionable names.
- Global index likely to pause after 10 weeks of gains.
- 80% of markets in Uptrend.
- Favored 2018 markets, including Brazil, India, now lagging.
- Big recoveries in Europe and large emerging markets like China, Hong Kong, South Korea.
- Number of global stock breakouts back to a normal level.
- Number of favored stocks (Focus List ideas) up sharply year-to-date.
- Wider breadth of stocks to buy, especially from Europe and China/Hong Kong.
