On Thursday, the Stoxx 600 ended the day 2% above last Friday’s close and remained in a Confirmed Uptrend. Of the 17 indices we cover, 13 are in a Confirmed Uptrend, three are in an Uptrend Under Pressure, and one in a Rally Attempt.
Tag: Confirmed Uptrend
Market View
U.S. Market
The U.S. market is in a Confirmed Uptrend. The S&P 500 and Nasdaq remain near all-time highs and above all
major moving average support, despite Friday’s pullback. Distribution now stands at three days each after multiple days expired this week.
Nine of 11 sectors, 101 of 197 industry groups, and 62% of S&P 500 stocks are trading above their respective
50-DMA. This is up from just four of 11 sectors, 75 of 197 industry groups, and 46% of S&P 500 stocks last
week. Despite choppy action across leading groups this week, all held support and remain technically intact.
Technology and Health Care led, rising ~4% each, while Energy and Utility lagged, trading relatively flat over
the week. Top performing industry groups included Telecom (TMUS), Semiconductors (ASML), Wholesale Drugs
(CAH), Trucks (ODFL), and Solar (ENPH). The worst performing industry groups included Toys (HAS), Mining
(KL), and Oil & Gas (SU).
Market View
U.S. Market
The U.S. market remains in a Confirmed Uptrend. The S&P 500 and Nasdaq staged downside reversals Friday,
closing at their respective 10-DMA. Distribution rose on the Nasdaq to three days, matching the S&P 500. We
are now looking for indices to find support at their respective 21-DMA (S&P 500: 3,271; Nasdaq: 9,179) should
weakness persist early next week. We will likely shift the market status to Uptrend Under Pressure should this
level break as the next level of support is the 50-DMA, which is 3–5% below current levels.
Breadth is beginning to narrow. Nine of 11 sectors, 155 of 197 industry groups, and 64% of S&P 500 stocks are
trading above their respective 50-DMA. This is down from all 11 sectors, 173 of 197 industry groups, and 82%
of S&P 500 stocks last week. Energy and Basic Material remain the two weakest sectors, while extended sectors
such as Technology and Heath Care staged downside reversals off all-time highs to close the week.
US Focus
The U.S. market remains in a Confirmed Uptrend. The S&P 500 and Nasdaq staged downside reversals Friday, closing at their respective 10-DMA. Distribution rose to four and three days, respectively. We are now looking for indices to find support at their respective 21-DMA (S&P 500: 3,271; Nasdaq: 9,179) should weakness persist early next week. We will likely shift the market status to Uptrend Under Pressure should this level break as the next level of support is the 50-DMA, which is 3-5% below current levels.
European Focus
On Thursday, the Stoxx 600 ended the day 1.07% below last Friday’s close and remained in a Confirmed Uptrend. Of the 17 indices we cover, 14 are in a Confirmed Uptrend, two are in an Uptrend Under Pressure, and one in a Rally Attempt.
Market View
U.S. Market
The U.S. market remains in a Confirmed Uptrend. The S&P 500 and Nasdaq continue to trend into higher highs
with just two distribution days each. Near-term support remains the sharply rising 10- and 21-DMA.
All 11 sectors, 173 of 197 industry groups, and 82% of S&P 500 stocks are trading above their respective 50-
DMA. Technology is now trading ~17% above its 200-DMA, the largest spread in the last decade. Health Care
is trading ~13% above its 200-DMA, the largest spread since 2015. While these two sectors have been trending
higher for the last few months, Utility, Transportation, and Consumer Staple just broke to new highs this week.
Leading industry groups over the past week include Wholesale Drugs ( MCK ), Transportation Logistics ( XPO ), Mobile Homes ( THO ), Building Products/Services ( IBP ), Home Builders ( PHM ), Semiconductors ( QCOM ), and Utilities ( SO ).
China A Shares
The CSI 300 declined 0.2% for the week on lower volume, ending a six-week gaining streak. The market remains in a Confirmed Uptrend with four distribution days. The index has been consolidating after hitting 52-week highs, remaining constructive. We continue to be positive on the general market. A phase-one trade deal between the U.S. and China was signed, easing tensions but still leaving major problems unsolved. China’s GDP grew 6.1% y/y in 2019, the weakest growth in nearly 30 years. More stimulus is expected to boost sluggish demand. Immediate support is at ~4,100 then at ~4,000. We expect the CSI 300 to continue consolidating around 4,200, with strong resistance at ~4,400. Investors are advised to focus on quality ideas with strong expectations approaching earnings season and select those emerging from solid bases or strongly rallying from key support levels.
US Focus
The U.S. market remains in a Confirmed Uptrend. The S&P 500 and Nasdaq continue to trend into higher highs with just two distribution days each. Near-term support remains the sharply rising 10- and 21-DMA.
European Focus
On Thursday, the Stoxx 600 closed 0.22% higher and is up 0.33% from last Friday’s close. Today, the Stoxx 600 is gaining 0.79% following better-than-expected GDP data from China. It followed a trade deal with the U.S. earlier this week.
Market View
U.S. Market
The U.S. market remains in a Confirmed Uptrend. The S&P 500 and Nasdaq staged downside reversals Friday
but continue to hold trend with a low number of distribution days. Near-term support remains the rising 10- and
21-DMA. Distribution stands at three days on the S&P 500 and two on the Nasdaq, with one day expiring on
each Tuesday.
Ten of 11 sectors, 152 of 197 industry groups, and 73% of S&P 500 stocks are trading above their respective
50-DMA. Leading industry groups over the past week include Software ( CRM ), Internet ( GOOGL ), Medical
Equipment ( ISRG ), Managed Care ( UNH ), Aerospace/Defense ( CAE ), and Payment Processors ( GPN ). Lagging
industry groups over the past week include Transportation Equip Mfg ( TRN ), Oil & Gas ( NBL ), Mining ( AG ), and
Discount Retail ( OLLI ).
