Technical Tuesday - May 8, 2018

Cerundolo Investment Research    

Technical Tuesday Update  

Volume 2, Issue 15
May 8, 2018

Download Full Report here


Highlights:

 

US Markets

We continue to have some indices such as the Nasdaq Comp., S&P 500, MDY and Russell 2000 at areas of resistance which look vulnerable to near-term weakness.  The Dow Transports continue to hold up well and recently turned up from a support area while the Dow Utilities has achieved its upside target zone mentioned in prior reports and now looks vulnerable to turning back down.  The SMH bounced off the MFU-3 target outlined in recent weeks and is now back into an area of resistance.  The XLK has formed a “lower double top” which tends to be a negative formation.  We would reduce exposure in these indices that are at resistance. 

European Markets

The CAC 40, Dax and Spain’s IBEX are all into areas of resistance and we remain cautious.  Italy’s FTSE MIB remains very resilient and has closed above the 2015 highs.

 Asian Markets

In Asia, the Nikkei is holding up well above support and has a good chance of moving back towards the recent highs.  China’s Shanghai Composite remains very vulnerable and we expect lower prices from here.

Emerging Markets

We would reduce exposure to the Kospi 100 as the index looks vulnerable to test the multi-year base support which is –7% from here.  Brazil’s Ibovespa is gaining downside momentum as well.

 Commodity Markets

The near-term geopolitical news and recent dollar strength has cause some volatility in WTI, but has not changed the uptrend and target zone of $75—$77.

 Currency Markets

The U.S. Dollar is into a “MOB”, Make or Break resistance band.  We should know very soon if it break higher or reverse from here.  Stay tuned.