Technical Tuesday - February 13, 2018

publication date: Feb 13, 2018

Cerundolo Investment Research    

Technical Tuesday Update  

Volume 2, Issue 6
February 13, 2018

Download PDF Version here


Items of Interest:

After reviewing a number of key global indices, we remain convinced that further testing of the recent low is needed before we recycle back to a bullish phase. Negative Money Flow Units have formed in most of the indices reviewed which calls for an undercut of the recent low.

The next month or so will be challenging for most, but this is an environment where we thrive and our work can help you navigate through the ripples and waves.

As we mentioned in last week’s Technical Tuesday, “we are cautious across equity markets as most indices have either achieved upside target zones or have reversed hard from trend channel resistance.”  There are a number of indices that have formed either daily or weekly “Bearish” Money Flow Units as well as going negative on our daily CRTrender model.  The expectation is for the weekly model to go negative very soon, so remain cautious at this time.  We will be vigilant in identifying a favorable buying opportunity, but given the sharp decline off recent highs, we don’t see this happening short-term from here. 

 

US Markets

  • The following indices have declined to their initial support zones we mentioned last week: Nasdaq Composite, S&P 500, MDY, Russell 2000, Dow Transports and SMH.  We expect the current rally to fail and another leg down to unfold.  The Dow Utilities has formed a bearish weekly Money Flow Unit and just recently hit its first target, more weakness expected.

European Markets

  • The CAC, DAX and Spain's IBEX have formed bearish Money Flow Units and have canceled their upside targets.  Italy’s FTSE MIB is on the cusp of forming a bearish MFU, key support indicated on the chart.  Be cautious here.

Asian Markets

Emerging Markets

  • Brazil’s Bovespa has started to pullback from its long-term MFU-4 target of 86160 and on its way to test its 2-year uptrend.

    Commodity Markets

    • Gold recently tested support which held. Crude has pulled back hard from its target of $67.  A test of $55 is key going forward. 

    Currency Market

    • We believe there is another leg down in the U.S. dollar.  A weekly close below 90 opens the downside to 85.  The Euro has potential for a move up to 1.316.  We need a weekly close above 1.25 for that leg up to start.  There will be a currency report later this week.  Please let us know if you are interested in receiving it.

     

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