Technical Tuesday - May 1, 2018

publication date: May 1, 2018

Cerundolo Investment Research    

Technical Tuesday Update  

Volume 2, Issue 14
May 1, 2018

Download Full Report here


Highlights:

 

US Markets

  • Not much has changed for the U.S. indices as we see more failing rallies than not.  As you will see in the following pages, the S&P 500, Nasdaq Comp., MDY and Russell 2000 have these reversals in place and we expect more weakness from here.  The Dow Utilities have rallied as expected and into a zone of resistance.  We believe the big picture for the SMH is bearish and the XLK has also reversed from a tactical area based on the daily chart, but here too, this looks ominous for more weakness and we would be trimming names in two sectors.

 

European Markets

  • The CAC has been a surprise with recent strength bringing the index to the January highs. We will be monitoring this area for a potential reversal as we had in 2015, or a breakout.  The DAX and Spain’s IBEX are in zones of resistance.  Italy’s MIB remains the strongest market as it hovers around the highs of 2015.

 Asian Markets

  • Japan remains very firm and we see near-term strength.  China’s Shanghai Composite remains in a very vulnerable condition and we would be a seller.

Emerging Markets

  • The Ibovespa remains in a sideways range and appears to be distributing under its MFU-3 target of 88515.  We would be trimming here.

 Commodity Markets

  • The intermediate-term trend for Crude Oil remains favorable, but we have a tactical trade for those with a short-term time frame.  Gold has weakened into an area of support that needs to hold.

 Currency Markets

  • The U.S. Dollar has rallied above it’s intermediate-term down channel and we see short-term strength to the 93.65 area.  The GBP is testing important support right here and the EURO is now testing its 40-wk. avg.