The U.S. market remains in a Confirmed Uptrend. Distribution fell to three days on the S&P 500 and just two days on the Nasdaq, with an additional day set to expire on both indexes next week. Leadership across multiple sectors continues to act well, with many ideas breaking out and hitting new highs. We remain positive on the general market.
Tag: Confirmed Uptrend
US Focus Long
The U.S. market remains in an Uptrend Under Pressure. The S&P 500 and Nasdaq are now testing all-time highs after regaining their respective 50-DMAs earlier in the week. We will be looking for each to break into new highs in strong volume next week before shifting the market back into a Confirmed Uptrend.
European Focus Long
After poor start to the week, the European benchmark Stoxx 600 index recovered in the second half of the trading week, ending with a weekly gain of approximately 0.7%. Most European indices followed a similar pattern, with gains Wednesday through Friday offsetting losses on Monday and Tuesday. We made a number of status changes this week: The Stoxx 600, France, Germany, the Netherlands, Portugal, Spain, Finland, and Sweden were moved to a Rally Attempt. We also moved Denmark to a Confirmed Uptrend.
Global Sector Commentary
Twenty-three developed markets rose 0.8% on average and 12 are in a Confirmed Uptrend, the 55th week with a majority. Twenty-three emerging markets rose 1.4% on average and 19 markets are in a Confirmed Uptrend, the 36th week with a majority. Hong Kong led developed markets with a 3.0% gain, closing at 52-week highs. Most of Europe bounced, but a majority of markets remain in a Downtrend. These include France, Germany, and Sweden. The U.S., U.K., Japan, and Australia are among seven markets that are Under Pressure. China was shifted back into a Confirmed Uptrend following a Friday follow-through day for the Shenzhen. Markets in a Confirmed Uptrend, near 52-week highs, and with less than four distribution days include Brazil, South Africa, Taiwan, Thailand, and Turkey. India and Mexico are among a handful of markets with at least 5 distribution days.
Markets Bounce but Pressure Remains
Twenty-three developed markets rose 0.4% on average and 15 are in a Confirmed Uptrend, the 54th week with a majority. Twenty-three emerging markets rose 0.6% on average and 18 markets are in a Confirmed Uptrend, the 35th week with a majority.
Global Markets Shaken but not Broken
The Russell Global Index was down just over 1% for the week. While not a huge loss,it was the biggest of the year, sending the index down to 10-WMA support. Twenty-three developed markets fell 1.9% on average and 13 are in a Confirmed Uptrend, the 53rd week with a majority. Twenty-three emerging markets fell 0.8% on average and 19 markets are in a Confirmed Uptrend, the 34th week with a majority.
The Long Rally Continues
Twenty-three developed markets fell 0.9% on average and 14 are in a Confirmed Uptrend, the 52nd week with a majority. Twenty-three emerging markets gained 0.5% on average and 20 markets are in a Confirmed Uptrend, the 33rd week with a majority.
US Focus Long
The U.S. market remains in a Confirmed Uptrend. Distribution on the S&P 500 fell to zero, while the Nasdaq remains at four days. Both indexes continue to hold above support along their respective 21-DMAs, trading sideways now for three straight weeks. The majority of leadership is also holding above short-term support levels, despite mostly negative reactions to Q2 earnings. Our positive stance will remain until we see technical deterioration occur in a larger number of leading ideas and the major averages alike.
Market View
The U.S. market remains in a Confirmed Uptrend. The S&P 500 and Nasdaq continue to trade above short-term support levels with relatively low distribution days counts. Two distribution days are set to fall off on each index next week. We will be looking for individual ideas to continue trading above support along key moving averages and for the S&P 500 and Nasdaq to avoid a clustering of distribution over the next several days.
Stocks on our U.S. Focus List—Current Sentiment
Our USFL of 68 ideas (one net addition) lost 0.4% on average this week, underperforming the S&P 500 (0%) and the Nasdaq (-0.2%).
By Sector
Chinese Internet Retail ideas continued to move higher despite the pullback in AMZN. BZUN, JD, and BABA all made new highs on the week. AMZN found support at its 50-DMA post earnings. Energy also rallied this week, with our sole recommendation, NEP, making new highs after reporting Q2 results this week. Conversely, Data Storage names, WDC and MU, closed below their respective 50-DMAs. Health Care also pulled back with multiple Medical Products ideas gapping down post earnings. IART and NUVA were both removed from the U.S. Focus List. ALGN, on the other hand, posted another stellar quarter, gapping up into all-time highs.
US Focus Long
The U.S. market remains in a Confirmed Uptrend. The S&P 500 and Nasdaq continue to trade above short-term support levels with relatively low distribution days counts. Two distribution days are set to fall off on each index next week. We will be looking for individual ideas to continue trading above support along key moving averages and for the S&P 500 and Nasdaq to avoid a clustering of distribution over the next several days.
