The U.S. market remains in a Confirmed Uptrend. The S&P 500 and Nasdaq closed near session lows but remain in an uptrend.
Support is at the 10-DMA followed by the 21-DMA. Distribution stands at three and two days, respectively.
Symbol: SKJ.KR
Global Focus Emerging Long
China’s CSI 300 Index dropped 7.8% last week and was moved to a Downtrend from an Uptrend Under Pressure. It breached its 50- DMA recently and continues to trend below its 200-DMA.
Global Focus Emerging Long
China’s CSI 300 index was closed last week for the National Day holiday. Currently, the index is in a Confirmed Uptrend.
Global Focus Emerging Long
China’s CSI 300 index increased 0.83% w/w. The index continues to remain in a Confirmed Uptrend. It regained its 50-DMA for the first time since January.
Market View
The U.S. market is in a Confirmed Uptrend. The S&P 500 moved back into all-time highs this week, while the
Nasdaq held support at its 50-DMA. The majority of leading ideas also continue to hold individual levels of sup-
port or make new highs, though we have begun to see sector rotation over the past week. Energy, Basic Materi-
al, Consumer Cyclical, and Capital Equipment have come under accumulation, while previously leading sectors,
Technology and Retail, have paused, consolidating sharp gains over the last month. Our recommendation is to
continue holding core positions in high relative strength ideas, while also proactively locking in gains in ideas
that have rallied 20-25% or more above later stage pivot points. We maintain our positive view on the general
market, which will change should we begin to see technical deterioration in leading ideas coupled with addi-
tional distribution in the major averages.
Stocks on our U.S. Focus List: Current Sentiment
Our USFL of 74 ideas lost 1.4% on average this week, underperforming the S&P 500 (+0.8%) and the Nasdaq
(-0.3%).
Actionable Focus List ideas: Activision Blizzard ( ATVI ), Adobe Systems ( ADBE ), Align Technology ( ALGN ), Auto-
desk ( ADSK ), Calavo Growers ( CVGW ), Centennial Resource Dvlp ( CDEV ), Edwards Lifesciences ( EW ), Envestnet
( ENV ), Fidelity Natl Info Svcs ( FIS ), Home Depot ( HD ), Intuit ( INTU ), Nextera Energy ( NEP ), Nomad Foods
( NOMD ), Nvidia ( NVDA ), Old Dominion Freight Line ( ODFL ), Palo Alto Networks ( PANW ), Paypal ( PYP L), PRA
Health Sciences ( PRAH ), Q2 Holding ( QTWO ), Realpage ( RP ), Splunk ( SPLK ), Vertex Pharmaceuticals ( VRTX ),
Zoetis ( ZTS )
USFL ideas weekly earnings line-up:
Thursday: Open: MKC
Sector
Energy ideas within the U.S. Focus List led this week. FANG regained its 50-DMA, while CLR found support at its
200-DMA. NEP continues to trend along its 50-DMA, while CDEV remains technically intact despite pulling back
from its pivot point on Thursday. Payment processors also continue to act well. MA and V continue to make new
highs, while FLT, PYPL, WP, and GPN remain at or near new highs. Conversely, Technology ideas have pulled
back off extended levels. WDAY, GRUB, SPLK, NOW, RNG, QTWO, ADBE, NVDA, and TYL have pulled back to
their respective 50-DMA, while MPWR and GOOGL have broken below that same level of sup-
port. ADSK and ATVI still look strong technically and remain actionable. Retail ideas are also consolidating sharp gains over the past month. WING, LULU, OLLI, and FIVE remain extended, while HD is still trading within
a pivot. AMZN is trading ~7% off highs and testing support at its 50-DMA.
Global Focus Emerging Long
China’s CSI 300 index increased 5.19% w/w, after falling for two consecutive weeks. The index was moved to a Confirmed Uptrend after a successful Rally Attempt. While the index reached the 21- DMA, it continues to face stiff resistance at the 50-DMA.
Market View
The U.S. market is in a Confirmed Uptrend. The S&P 500 held support at its 21-DMA this week while distribution
fell to just two days due to expiration. The Nasdaq held its 50-DMA and currently has five distribution days. Both
indices will lose an additional distribution day next week. Leadership continues to act well, with new ideas also
breaking out from consolidation over the past week. Despite positive price volume action in both the major av-
erages and individual ideas, we recommend reducing risk in stocks that have rallied 20-25% above later stage
pivot points. We will change our current positive view on the market should we begin to see technical deteriora-
tion in leading ideas coupled with additional distribution in the major averages
Stocks on our U.S. Focus List: Current Sentiment
Our USFL of 77 ideas gained 2.1% on average this week, outperforming the S&P 500 (1.2%) and the Nasdaq
(1.4%).
Actionable Focus List ideas: Activision Blizzard ( ATVI ), Align Technology ( ALGN ), Autodesk ( ADSK ), Calavo
Growers ( CVGW ), Centennial Resource Dvlp ( CDEV ), Chefs’ Warehouse ( CHEF ), Envestnet ( ENV ), Fidelity Natl
Info Svcs ( FIS ), Home Depot ( HD ), Intuit ( INTU ), Nextera Energy ( NEP ), Nvidia ( NVDA ), Old Dominion Freight
Line ( ODFL ), Palo Alto Networks ( PANW ), Paypal ( PYPL ), PRA Health Sciences ( PRAH ), Q2 Holding ( QTWO ),
Realpage ( RP ), Servicenow ( NOW ), Splunk ( SPLK ), SVB Financial ( SIVB ), Vertex Pharmaceuticals ( VRTX ), Zoetis
( ZTS )
Sector
Technology ideas within the U.S. Focus List led this week. Nineteen of 30 ideas hit a new high, including ATVI,
ADBE, AMD, BL, CRM, GRUB, MTCH, PAYC, RP, and TEAM. Though AMD, PAYC, and TEAM are now well ex-
tended from moving average support, ATVI and RP just turned actionable after breaking out this week. Energy
ideas also rallied, led by new addition CDEV which is breaking out from a 17-week cup. CLR and FANG are still
looking to regain their respective 50-DMA as they build new bases. Though Banks remain under pressure, Pay-
ment Processors within Financial continue to show positive technical action. GPN, MA, PYPL, SQ, V, and WP are
all trading at or near new highs. Conversely, though Retail remains a long-term leading sector, multiple ideas
on the U.S. Focus List have begun to consolidate after big gains over the last several weeks. FIVE, LULU, OLLI,
and WING are consolidating at highs, while HOME continues to decline and is now trading below its 200-DMA.
Global Focus Emerging Long
China’s CSI 300 was down again this week after falling 1.08% last week. The index was moved to a Downtrend from an Uptrend Under Pressure. Due to renewed trade war fears, the index faces stiff resistance at the 50- DMA.
Market View
Market Overview
The U.S. market is in a Confirmed Uptrend. The S&P 500 and Nasdaq pulled back off highs during the first
week of September and continue to digest strong gains from August. Increasing distribution has caused the
Nasdaq to break slightly below its 21-DMA, while the S&P 500 is testing this moving average. The rising 50-
DMA is the next level of support for both indices. The majority of growth ideas have pull back off highs and/or are consolidating above key support levels. Despite the rise in distribution, leadership remains intact. We maintain a bullish outlook as long as indices and leading stocks exhibit constructive price action and hold above key support levels.
Stocks on our U.S. Focus List: Current Sentiment
Our USFL of 77 ideas lost 1.4% on average this week, underperforming the S&P 500 (-1.1%) and outperforming
the Nasdaq (-2.6%).
By Sector
Retail ideas were up 3% on average this week, led by FIVE, which gapped up +13% on earnings. OLLI also re-
ported better-than-expected earnings and continues to trend higher. WING remains a leader in the restaurant group, while HD is actionable from a flat base consolidation. Within Staples, MKC is quietly trending higher as CVGW is emerging from cup-with-high handle after positive earnings results. A majority of Technology ideas pulled back or are consolidating, however PSTG and BL broke out into new highs and are extended. QTWO isbreaking out from flat base consolidation and remains actionable. Health Care lagged significantly, down 1.5% on average, however most ideas, including IDXX and ALGN, have either pulled back into support or continue to consolidate.
Global Sector Commentary
Key points:
- Global indices EFA and EEM at new 52-weekly closing lows. Stoxx 600 better but mainly driven by lack of currency translation (Stoxx 600 in local currencies, EFA/EEM in U.S. dollars).
- U.S. much better still on three bases: 1) All major indices above 50-DMA and within 1-3% of highs, 2) Focus List count still healthy at 74, versus 90 for all other global markets combined, and 3) actionable list is still healthy.
