The U.S. market remains in a Confirmed Uptrend. The S&P 500 and Nasdaq consolidated gains this week, trading relatively flat, but remaining above all major moving averages. The 21-DMA (S&P 500: 3,079; Nasdaq: 8,423) remains a primary level of near-term support. The distribution day count is low at two days each.
Tag: Confirmed Uptrend
European Focus
On Thursday, the Stoxx 600 was down 0.4%, witnessing the fourth down day in a row this week. Compared with last Friday’s close, the index was down 0.94% until Thursday. Today, the index is upbeat and looks to pare some of the losses incurred in the week.
Market View
U.S. Market
The U.S. market remains in a Confirmed Uptrend. The S&P 500 and Nasdaq gapped up and sustained strength
throughout the session as both indices are poised to trend higher. Short-term support is at the rising 21-DMA
(S&P 500: 3,054; Nasdaq: 8,339).
Nine of 11 sectors are trading at or above their respective 50-DMA, led by Technology (5.7%), Basic Material
(+5.6%), Transportation (+5.4%), and Capital Equipment (+5.2%) over the trailing four weeks, while Consumer
Staple (+0.5%) and Utility (-2.4%) are lagging. We continue to see a gradual improvement in the base consolidation of growth-oriented sectors/groups. Standout industry groups include Semiconductors (
), Security
(
), and Medical Equipment (
).
We continue to recommend increasing risk
China A Shares
The CSI 300 dropped 2.4% for the week on lower volume and remains in a Confirmed Uptrend with three distribution days. Disappointing economic and financial data released this week significantly subdued market confidence, and five consecutive sessions of below-average volume indicate very cautious sentiment. However, we have not seen a large-scale selloff, so we recommend a wait-and-see approach. The China-U.S. trade deal still remains uncertain. We expect the index to continue consolidating around 3,820–4,000. The CSI 300 lost 50-DMA support, with the next support at the 100-DMA (~3,850) and the next resistance at the gap above ~3,970. We will be watching to see if the Chinese government introduces more policies to boost the domestic economy. Investors are advised to stay patient and focus on ideas that have recently broken out with strong fundamentals. Avoid chasing highs.
US Focus
The U.S. market remains in a Confirmed Uptrend. The S&P 500 and Nasdaq gapped up and sustained strength throughout the session as both indices are poised to trend higher. Short-term support is at the rising 21-DMA (S&P 500: 3,054; Nasdaq: 8,339).
European Focus
On Thursday, the Stoxx 600 ended the day 0.25% below last Friday’s close and is in a Confirmed Uptrend. During the week, we downgraded Spain to an Uptrend Under Pressure after it slipped below its 50-DMA. Of the 17 indices we cover, 15 are in a Confirmed Uptrend, one is in an Uptrend Under Pressure, and one is 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 display constructive
technical action, consolidating near all-time highs with just one distribution day each. Support along the 21- and
50-DMA continues to rise toward current prices.
China A Shares
The CSI 300 rose 0.5% for the week on increased volume and remains in a Confirmed Uptrend with three distribution days. The market is in a weak rally, boosted by a surprising rate cut to mediumterm lending facilities and new signs of progress on the Sino-U.S. trade deal. The CSI 300 tested the high of its previous rally (~4,000) but retreated due to uncertainty surrounding the tariff rollback. Recent disappointing economic data also deflated market confidence. Unless a significant catalyst emerges, we expect the index to continue consolidating around consistent resistance at 4,000. We hope it holds above Monday’s gap (~3,964), which serves as immediate support. The next strong support is at the 50-DMA. We remain cautiously optimistic. Investors are advised to stay patient and focus on selecting stocks that have recently broken out with strong fundamentals. Keep an eye on key economic and financial data to be released next week, including October CPI/PPI, industrial value added, and fixed asset investment growth
US Focus
The U.S. market remains in a Confirmed Uptrend. The S&P 500 and Nasdaq continue to display constructive technical action, consolidating near all-time highs with just one distribution day each. Support along the 21- and 50-DMA continues to rise toward current prices.
European Focus
On Thursday, the Stoxx 600 was up 0.37% for the fifth consecutive day. Compared with last Friday’s close, the index was up 1.8% through Thursday. Today, the index was trading slightly lower than yesterday’s close.
