The U.S. market remains in a Confirmed Uptrend. The S&P 500 and Nasdaq built on last week’s strong gains, moving further into all-time highs this week. Near-term support remains the rising 10- and 21-DMA (S&P 500: 3,848; Nasdaq: 13,610). The distribution day count remains relatively low at five and two, respectively, with one day expiring on the S&P 500 next week.
Tag: Confirmed Uptrend
European Focus
On Thursday, the Stoxx 600 ended 0.44% above last Friday’s close. Of the 17 indices that we cover, four are in a Confirmed Uptrend and 13 in an Uptrend Under Pressure. This week, we shifted Italy to a Confirmed Uptrend as it reached a new high.
US Focus
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.
European Focus
On Thursday, the Stoxx 600 ended 3.46% above last Friday’s close. Of the 17 indices that we cover, three are in a Confirmed Uptrend and 14 in an Uptrend Under Pressure. This week, we shifted Sweden and Belgium to a Confirmed Uptrend as it reached a new high. Switzerland and the Netherlands were downgraded to an Uptrend Under Pressure after breaching its 21-DMA.
China A Shares
The CSI 300 fell 3.91% on lower but still above average volume and was shifted to an Uptrend Under Pressure; the number of distribution days increased to six. The index made a new high at 5,656 on Monday but trended lower and breached its 21-DMA (5,466, +2.1%). It faces immediate support at the 50-DMA (5,193, -3.0%). China’s primary short-term money rates surged to their highest level since the pandemic began a year ago, as the People’s Bank of China withdrew ~RMB 560B in public operations in the first four trading days this week. December industrial profits rose 20.1% y/y, growing for the eighth straight month and higher than the previous 15.5% y/y. All sectors fell this week, with defense, semiconductor, health care, photovoltaic, and EV stocks lagging. Capital has been flowing out of leading sectors. Market sentiment was dented by worries of tight liquidity conditions. We recommend a cautious approach in the near term given the loss of support of the 21-DMA. We advise investors to avoid any significant increase in risk exposure until indices stabilize and focus on quality ideas breaking out of proper bases.
China A Shares
The CSI 300 rose 2.05% on lower but still above average volume and remains in a Confirmed Uptrend with five distribution days. The index trended higher throughout the week after last week’s pullback. It faces immediate resistance at highs of 5,645 (+1.3%). Q4 GDP rose 6.5% y/y, beating estimates of 6.2% and Q3’s 4.9%. Property investment, fixed asset investment, and value-added industry were all stronger than last month. Social retail rose 4.6% y/y in December, weaker than expectations (5.4%) and November’s reading (5.0%). One- and five-year LPR remained stable at 3.85% and 4.65%, respectively, for nine consecutive months. China’s central bank injected a net RMB 278B via reverse repo operations Wednesday, boosting market sentiment. Health Care is still leading due to the resurgence of COVID-19 cases. Nucleic acid test demand is rising rapidly. EV and photovoltaic themes also saw relative strength. Leading names gained momentum again after some correction. We expect the index to stay range-bound before breaking above previous highs of 5,645. We advise investors to stay disciplined in the recent volatile market and focus on quality stocks breaking out of proper bases.
Market View
The U.S. market remains in a Confirmed Uptrend. The S&P 500 and Nasdaq moved back into all-time highs this
week and are again trading near the upper end of their respective channels. Near-term support remains the ris-
ing 21-DMA (S&P 500: 3,776; Nasdaq: 13,045). The distribution day count stands at five and three, respec-
tively, with one day set to expire on each next week.
US Focus
The U.S. market remains in a Confirmed Uptrend. The S&P 500 and Nasdaq moved back into all-time highs this week and are again trading near the upper end of their respective channels. Near-term support remains the rising 21-DMA (S&P 500: 3,776; Nasdaq: 13,045). The distribution day count stands at four and three, respectively, with one day set to expire on each next week.
European Focus
On Thursday, the Stoxx 600 ended 0.75% above last Friday’s close. Of the 17 indices that we cover, 13 are in a Confirmed Uptrend and four in an Uptrend Under Pressure.
Market View
The U.S. market remains in a Confirmed Uptrend. The S&P 500 and Nasdaq pulled back off all-time highs this
week, consolidating sharp gains over the last several weeks. Both indices held above their respective 21-DMA
(S&P 500: 3,747; Nasdaq: 12,860), however, the S&P 500 picked up back-to-back distribution days to close the
week. The distribution day count now stands at five and three, respectively, with one day expiring on the S&P
500 next week.
