The U.S. market is back in a Confirmed Uptrend. The S&P 500 and Nasdaq rebounded strongly from moving
average support this week, pushing all the way back to new all-time highs. Near-term support is again the rising
10- and 21-DMA (S&P 3,804; Nasdaq: 13,358). Both indices avoided distribution, keeping the count at six and
three, respectively, with one day expiring on the S&P 500 and two on the Nasdaq next week.
Tag: Confirm Uptrend
Market View
The U.S. market remains in a Confirmed Uptrend. The S&P 500 and Nasdaq closed the year at all-time highs
and above all major moving averages with limited distribution. Near-term support remains the rising 10- and
21-DMA (S&P 500: 3,689; Nasdaq: 12,612). The distribution day count stands at four and two, respectively,
with one day expiring on the S&P 500 next week.
Market View
The U.S. market is in a Confirmed Uptrend. The S&P 500 and Nasdaq remain resilient and are holding above their respective 10-DMA despite Monday’s downside reversal. The S&P 500 is less than 1% below resistance at 3,233 and remains in a six-week consolidation. The distribution day count declined this week and currently stands at four days on the S&P 500 and two days on the Nasdaq.
The Health Care, Industrial, and Material sectors outperformed this week, rising more than 4.5%, while long-term leading sectors Technology (-1.7%) and Retail (-1.3%) underperformed. Health Care (XLV) broke out to new highs as 13 of 15 Health Care industry groups, including Research Equipment, Products, and Supplies, within the O’Neil 197 improved in rank over the trailing five sessions. Top-ranked industry groups outperforming this week include Solar, Building Products, Medical Supplies, Building Mobile, Retail Automobile, Medical-Research Equipment, Trucks, Logistics, Leisure Products, and Home Furnishing. 78% of S&P 500 stocks are trading above their respective 50-DMA and 52% are trading above their respective 200-DMA, compared with 62% and 41%, respectively, last week.
Indices remain in a Confirmed Uptrend despite a small but constructive pullback in leaders and slight rotation into laggard groups. Monitor extended leaders closely for additional distribution and continue to focus on new ideas emerging out of sound bases with RS line rising or at new highs.
Market View
The U.S. market is in a Confirmed Uptrend. The S&P 500 held support along its 21-DMA this week before rallying and closing right at resistance along its downward trending channel line. The next level of resistance is 3,233. The Nasdaq continues to constructively trend within a channel, which is rising into 11,000. Near-term support for both indices remains the 10- and 21-DMA. Distribution now stands at five and two days, respectively, with two days expiring on the S&P 500 and one on the Nasdaq next week.
Retail, Consumer Cyclical, and Technology led by a wide margin this week, rising 3–6% each. On Friday, however, we saw the first signs of potential rotation as lagging sectors, including Energy and Financial, rallied at the expense of long-term leading sectors, Technology and Health Care. Positively, the majority of lagging sectors have been able to make higher lows, holding logical support despite severely underperforming Technology. A broadening of leadership will be necessary in order for the S&P 500 to break out of this one-month choppy trading range. Top-ranked industry groups outperforming this week include Solar, Internet, Software, Semiconductors, Internet, Trucks, and Medical Equipment. Friday’s biggest gainers came from lagging industry groups such as Oil & Gas, Airlines, Banks, and Steel. 62% of S&P 500 stocks are trading above their respective 50-DMA and 41% are trading above their respective 200-DMA. This compares with 69% and 42%, respectively, last week.
We continue to recommend a selective approach to increasing risk. Buy fundamentally sound stocks that are setup constructively within bases, trim ideas that have become overly extended from major moving averages, and avoid lagging ideas trading below their respective 50- and 200-DMA.
Market View
The U.S. market remains in a Confirmed Uptrend. The S&P 500 and Nasdaq continue to display resilient action, gapping up Monday and constructively holding gains throughout the week. The S&P 500 is still trading just below 200-DMA resistance, while the Nasdaq is again approaching upper channel line resistance. Distribution stands at four and two days, respectively, with no expiration next week. Support remains the rising 10- and 21-DMA.
Transportation and Consumer Cyclical led all sectors this week while long-term leading sector, Health Care,
lagged, trading relatively flat. All 11 sectors are now above their respective 50-DMA, but just three (Technology, Retail, Health Care) are trading above their respective 200-DMA. Top-ranked industry groups outperforming this week included Database Software, Design Software, Media Software, Semiconductors, Outpatient Care, Payment Processors, and Restaurants. 82% of S&P 500 stocks are trading above their respective 50-DMA, up from 58% last week. 31% are trading above their respective 200-DMA.
We maintain a positive view of the general market. Indices continue to trade above support with limited distribution. Though many ideas have become extended from prior pivot points, multiple new ideas continue to surface each week as the market broadens. Further, we have yet to see concerning technical action among leading names. Continue to selectively increase risk in high quality ideas coming out of constructive bases, while also offensively locking in partial gains in very extended ideas.
Market View
The U.S. market remains in a Confirmed Uptrend. The S&P 500 and Nasdaq staged back-to-back upside reversals to close the week, holding above key support levels and keeping an overall low distribution count. Distribution now stands at three days on the S&P 500 and two on the Nasdaq, with no expiration for two weeks. To remain constructive, we would like to see the S&P 500 and Nasdaq hold above Thursday’s intraday lows at 2,766 and 8,705, respectively.
Health Care, Retail, and Technology held up well this week, while lagging sectors such as Utility, Capital Equipment, and Transportation sharply declined by 4–6% each. Despite the pullback, eight of 11 sectors remain above their respective 50-DMA. Top ranked industry groups outperforming this week include Mining, Managed Care, Medical Equipment, Biotech, Enterprise Software, Software Security, Gaming Software, Internet, Discount Retail, and Beverages. 127 of 197 industry groups and 58% of S&P 500 stocks are trading above their respective 50-DMA.
We maintain a positive view of the general market. Indices remain above key levels of support with limited distribution. Most importantly, leadership is very strong with multiple ideas hitting higher highs despite the pullback in the major averages. Continue to selectively increase risk in fundamentally sound ideas coming out of constructive bases or rebounding off logical levels of support.
Market View
U.S. Market
The U.S. market is in a Confirmed Uptrend. The S&P 500 and Nasdaq are trading at all-time highs after clearing above multiple levels of resistance throughout the week. On Friday, the S&P 500 cleared above longer-term
resistance along its weekly upper channel line. Going forward, we will be looking for indices to consolidate
gains constructively, avoiding any big pick up in distribution, while support along the 21- and 50-DMA catches
up to current prices.
Seven of 11 O’Neil sectors are now trading 2% or move above their respective 50-DMA, led by Health Care,
Technology, and Capital Equipment. Defensive sectors, Utility and Consumer Staple, as well as Energy, continue
to lag all, trading flat to down over the last week. Industry groups under significant accumulation this week include Biotech, Medical Products/Equipment, Semiconductors, and Electronic Products. 71% of S&P 500 stocks
are trading above their respective 50-DMA, up from 68% last week.
Market View
Market Overview
The U.S. market is in a Confirmed Uptrend. Indices are at all-time highs. Distribution is low with only three days on the S&P 500 and Nasdaq, with one day expiring on each index next week. Leadership remains constructive, with multiple groups and stocks breaking out into new highs. We maintain a positive outlook on the market and recommend buying or adding high quality stocks emerging from sound bases.
Stocks on our U.S. Focus List: Current Sentiment
Our USFL of 77 ideas gained 4% on average this week, outperforming the S&P 500 (+0.9%) and the Nasdaq (+1.7%).
By Sector
U.S Focus List ideas across Technology and Retail contributed to the significant outperformance this week. Technology led due to massive earnings gap ups in ADSK, VEEV, and PSTG. ANET jumped more than 12% on news of being added to the S&P 500. BL and NVDA are emerging from a consolidation and are actionable. In Retail, OLLI, FIVE, and LULU broke into new highs. LULU (8/30) and OLLI (9/5) report earnings soon. BABA was an outlier in Retail; the stock hit resistance and reversed lower on in-line earnings results. Although Financial ideas were relatively flat, payment processors, led by V, MA, and SQ, continue to trade at or near new highs. Energy and Transportation ideas were among the weakest, as they consolidated in sideways fashion for the week.
Market View
Market Overview
The U.S. market is in a Confirmed Uptrend. The S&P 500 and Nasdaq held support along their respective 50-
DMA this week. Distribution remains relatively low at four days on the S&P 500 and three on the Nasdaq, with
one day expiring on the S&P 500 next week. Leadership remains mixed. There are a select few ideas that continue
to trade at or near highs, however the majority remain rangebound, consolidating over the last several
weeks. To remain positive, we need to see the 50-DMA continue to hold as near-term support over the next few
sessions.
Stocks on our U.S. Focus List: Current Sentiment
Our USFL of 70 ideas lost 0.4% on average this week, underperforming the S&P 500 (+0.6%) and the Nasdaq
(-0.3%).
By Sector
Retail ideas on the U.S. Focus List led this week. WING advanced into higher highs following its earnings
breakout two weeks ago. FIVE and LULU are moving back toward new highs after finding support at their respective
50-DMA, while OLLI found support at its 100-DMA as it builds the right side of a new base. Technology
ideas traded in mixed fashion. PAYC, TEAM, and RNG remain extended, while new additions ALRM and WDAY
broke out into new highs this week. This, while other ideas, including ATVI, ADBE, and NOW, consolidate below
their respective 50-DMA. Energy remains under pressure following a big pullback on Wednesday. FANG broke
its 200-DMA on heavy volume, while CLR continues to consolidate ~10% off highs.
Market View
Market Overview
The U.S. market is in a Confirmed Uptrend. Despite the pullback on Friday, the majority of growth ideas held up well, with multiple recent IPOs also breaking out into new highs. Further, small-cap indices, including the S&P 600 and Russell 2000, also held up well relative to the other major averages, indicating a further rotation into U.S.-based ideas. Overall, despite choppy market conditions, we maintain our positive view as the major averages remain above moving average support with a low number of distribution days.
Stocks on our U.S. Focus List: Current Sentiment
Our USFL of 69 ideas gained 1.1% on average this week, outperforming the S&P 500 (-0.2%) and the Nasdaq
(+0.3%).
By Sector
Software ideas on the U.S. Focus List led this week. RNG, TEAM, VEEV, and PAYC are all trading at or near new highs, while RP, NOW, TYL, and ADSK all regained their respective 50-DMA. Retail names also rallied, led by AMZN which continues to make new highs, as well as FIVE and LULU, which both found support around their respective 50-DMA. Conversely, with the exception of WP and SQ, the majority of Financial ideas lagged this
week, including WAL, ZION, TCBI, and SCHW, which are all testing the low end of long-term support.
