On Thursday, the Stoxx 600 was up 0.61%. Compared with last Friday’s close, the index was flat through Thursday after two negative days early in the week following news of attacks on Saudi Arabia’s oil production facilities. Today, the index is trading constructively along with other major markets in the region.
Tag: Rally Attempt
European Focus
On Thursday, the Stoxx 600 ended the day 1% above last Friday’s close and is in a Rally Attempt. During the week, we downgraded Denmark to an Uptrend Under Pressure after it breached support at its 50-DMA and upgraded Switzerland to a Confirmed Uptrend after it reclaimed its prior high. Of the 17 indices we cover, ten are in a Confirmed Uptrend, two are in an Uptrend Under Pressure, and five are in a Rally Attempt.
European Focus
On Thursday, the Stoxx 600 was up 0.72%. The week has been very constructive as the index closed negative only on Tuesday. Compared with last Friday’s close, the index was up 1.7% through Thursday. Today, the index is trading constructively along with other major markets in the region.
European Focus
On Thursday, the Stoxx 600 ended the day 1% above last Friday’s close and is in a Rally Attempt. During the week, we moved Italy, Norway, and Sweden to a Confirmed Uptrend. Of the 17 indices we cover, six are in a Confirmed Uptrend, three are in an Uptrend Under Pressure, and eight are in a Rally Attempt.
European Focus
On Thursday, the Stoxx 600 was down 0.4% after renewed recession fears as the 10-year to two-year year yield curve inverted for a second time. However, the index was still up 1.26% compared with last Friday’s close. Today, the index is trading 0.56% higher and has recovered yesterday’s losses.
China A Shares
The CSI 300 rose 2% for the week and we moved the market to Rally Attempt Monday. The index continued consolidating above previous lows of ~3,575, which could serve as support in the near term. The CSI 300 is ~4.6% above its 200-DMA and the 50-DMA may be the next resistance. U.S. President Trump said he would postpone recent 10% tariffs on Chinese imports, boosting sentiment. However, the yield curve inversion between U.S. two-year and ten-year notes for the first time since 2007 led to higher volatility. China’s disappointing July economic data increased concerns. We advise that investors maintain a defensive approach, but leading stocks with strong growth outlooks and solid relative strength deserve more attention.
European Focus
On Thursday, the Stoxx 600 was down 0.33%, with most major sectors registering losses due to increasing trade tensions after China’s retaliation warning against U.S. tariffs. Today, the index was trading positive along with other major markets in the region.
Market View
The U.S. market is in a Rally Attempt. The S&P 500 and Nasdaq have now held above Monday’s low for four
sessions. We are now looking for a follow-through day before shifting the market back into a Confirmed Up-
trend or, conversely, an undercut of Monday’s lows (S&P 500: 2,822; Nasdaq: 7,662) before shifting the market
back into a Downtrend. A follow-through day should feel like an explosive rally, with indices preferably up 1.7%
or more, on heavier volume than the day before. We would recommend a gradual increase in risk should a fol-
low-through day occur next week. Positively, both indices closed off their lows Friday after finding support at their
respective 100-DMA.
Following Monday’s selloff, multiple sectors, including Technology, rallied back strongly to narrowly recapture
their respective 50-DMA. Most, however, continue to chop around that level similar to the major averages. The
majority of leading ideas are doing the same—consolidating around their respective 50-DMA—though a select
few remain very strong, bucking general market weakness and continuing into new highs following better-than-
expected results. ~45% of S&P 500 and Nasdaq 100 stocks are trading above their respective 50-DMA.
China A Shares
The CSI 300 fell 3% for the week on slightly increased volume. We downgraded the market to a Downtrend Tuesday as it gapped down and logged its fifth distribution day after the U.S. designated China a currency manipulator. The CSI 300 has attempted to rally after hitting new lows of ~3,575, but the market is still weak. We will watch for 3,754–3,791 to provide the first level of resistance and 3,856–3,861 to provide the second. Near-term support is at 3,520–3,556 or the 200-DMA (-2.7%). China’s July import and export data were better than expected and MSCI confirmed it will raise A-shares weighting in its benchmark indices as scheduled, boosting sentiment. However, the overall market remains under considerable pressure. The trade war between China and the U.S. has been escalating, and risk aversion has increased significantly. Investors are advised to stay cautious, raising cash if possible or maintaining a defensive approach. Meanwhile, watch leading stocks that have good earnings outlooks and strong relative strength.
US Focus
The U.S. market is in a Rally Attempt. The S&P 500 and Nasdaq have now held above Monday’s low for four sessions. We are now looking for a follow-through day before shifting the market back into a Confirmed Uptrend or, conversely, an undercut of Monday’s lows (S&P 500: 2,822; Nasdaq: 7,662) before shifting the market back into a Downtrend. A follow-through day should feel like an explosive rally, with indices preferably up 1.7% or more, on heavier volume than the day before. We would recommend a gradual increase in risk should a follow-through day occur next week. Positively, both indices closed off their lows Friday after finding support at their respective 100-DMA.
