On Thursday, the Stoxx 600 ended 1.1% below last Friday’s close. Of the 17 indices we cover, eight are in a Confirmed Uptrend, one in a Rally Attempt, and six in an Uptrend Under Pressure. Denmark is in a Correction. Europe and Sweden were downgraded to an Uptrend Under Pressure.
Tag: Confirmed Uptrend
European Focus
On Thursday, the Stoxx 600 ended 0.1% below last Friday’s close.Of the 17 indices we cover, 11 are in a Confirmed Uptrend, two in a Rally Attempt, and four in an Uptrend Under Pressure. Germany wasdowngraded to an Uptrend Under Pressure.
Market View
The U.S. market is back in a Confirmed Uptrend. Indices were under selling pressure to start the new year, however, the S&P 500 found support slightly above its 50-DMA (4,674). The Nasdaq broke below its 50- and 100-DMA after declining ~4% for the week and is testing December lows (14,860) followed by its rising 200-DMA (14,681). The distribution day count is at seven and three, respectively, with no days set to expire next week.
US Focus
The U.S. market is back in a Confirmed Uptrend. Indices were under selling pressure to start the new year however the S&P 500 found support slightly above its 50-DMA (4,674). The Nasdaq broke below its 50-and-100-DMAs after declining ~4% for the week and is testing December lows (14,860) followed by its rising 200-DMA (14,681). The distribution day count is at seven and three respectively with no days set to expire next week.
European Focus
On Thursday, the Stoxx 600 ended 1.0% above last Friday’s close and remains in a Confirmed Uptrend with three distribution days. Of the 17 indices we cover, 12 are in a Confirmed Uptrend, one in a Rally Attempt, and the remaining four in an Uptrend Under Pressure.
Market View
The U.S. market is back in a Confirmed Uptrend. The S&P 500 rallied back to all-time highs on December 27, and
while it failed to make further progress, it remains above the prior high of 4,743. Below that support is the rising 21-DMA
(4,703). The Nasdaq held a recent retake of the 50-DMA, but it is facing resistance at the midpoint of its nine-week
consolidation (~15,800) and is about 3% below all-time highs. Indices finished the year with 27% and 21% gains,
respectively. The S&P 500 picked up two consecutive distribution days to end the week and now has seven. The Nasdaq
lost one this week and has four. One expires on each index early next week.
US Focus
The U.S. market is back in a Confirmed Uptrend. The S&P 500 rallied back to all-time highs on 12/27/2021, and while it failed to make further progress, it remains above the prior high of 4,743. Below that support is the rising 21-DMA (4,703). The Nasdaq held a recent retake of the 50-DMA, it is facing resistance at the midpoint of its 9-week consolidation (~15,800) and is about 3% below alltime highs. Indices finished the year with 27% and 21% gains, respectively. The S&P 500 picked two consecutive distribution days to end the week and now has seven. The Nasdaq lost one this week and has four. One expires on each index early next week.
European Focus
On Wednesday, the Stoxx 600 ended 1.19% above last Friday’s close. Of the 17 indices we cover, six are in a Confirmed Uptrend, two in a Rally Attempt, and the remaining nine in an Uptrend Under Pressure. Spain was upgraded from a Rally Attempt to a Confirmed Uptrend after gaining 1.3% on high trading volume.
China A Shares
The CSI 300 retreated 1.99% on lower and above average volume and remains in a Confirmed Uptrend with three distribution days. The index came off highs and lost its 200-DMA (~5,025, +1.4%), with next resistance at recent high around ~5,100 (2.9%) and support at the 100-DMA (~4,906, -1.0%). Persistent COVID concerns and fresh jitters about China-U.S. relations outweighed the policy boost from a key economic meeting. Investors parsed better-than-expected industrial output (+3.8% y/y, consensus 3.7%) and social retail sales (+3.9% y/y, consensus 3.6%) and below-estimates fixed-asset investment (+5.2% y/y, consensus 5.3%) in November. Electrical and power companies led gains on a positive outlook from expectations of rising investments in a shift to clean energy. Coal and steel stocks rebounded following bottoming hopes. Long-term leaders like auto, EV battery, and semiconductors led losses. CRO companies were rattled by rumors of U.S. bans. Consumer stocks, mainly liquor and home appliances, retreated from the recent rally fueled by price hikes and eased real estate policy, respectively. The boost from policy support waned. We prefer staying patient and monitoring if the index can find upward momentum. Investors should avoid chasing highs and adopt a disciplined and selective approach amid the volatile market with strong sector rotation.
China A Shares
The CSI 300 advanced 3.14%, with volume rising to greater than average, a high since mid- September. The market was shifted to Confirmed Uptrend after the index broke above key resistance at ~5,000 and retook its 200-DMA on good volume. The distribution day count fell to three from six. Next resistance is around early July highs (~5,200, +2.9%) and support is at the 100-DMA (~4,911, -2.8%). Sentiment was boosted by the central bank’s reserve requirement ratio cut and positive policy signals from a key political meeting. Investors parsed stronger-thanexpected trade, softer yet still above-consensus factory gate inflation, and improving but belowestimate financial data in November. Real estate-related sectors like building material, furnishing, and home appliance rebounded after authority vowed to support the sector’s healthy development. Financial stocks outperformed on the reserve ratio cut. Food and beverage stocks led following expectations of support for consumer consumption to back up domestic demand. Long-term leaders like auto, EV battery, defense, and semiconductor stocks retreated. Our conviction has increased on improved strength in the market and stronger appetite following expectations of increased policy support in the key economic work conference to be held this month. Investors should adopt a disciplined and selective approach amid high volatility.
