Technical Tuesday - August 28, 2018

Cerundolo Investment Research    

Technical Tuesday Update  

Volume 2, Issue 29
August 28, 2018

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US Markets

  • Upside momentum continues to expand in a positive manner for the U.S. market. The Nasdaq Composite and Russell 2000 are close to the upper end of their regression trend channels which typically offers a pause phase.  With the long-term trends firmly in place, we would look at pullbacks as a buy.  The MDY appears to have a long runway ahead as the index trades well above its MFU-3 target zone.  The S&P 500 is on the verge of confirming the start of another leg up to a MFU-4 target of 3180.  The Transport continue to look very good and on track for higher prices.  Healthcare remains one of our most favored sectors globally.  We have included our custom equal weighted index of U.S. Pharma, med tech and biotech which continues to look very bullish.

European Markets

  • The DAX and CAC remain in a sideways range and continue to look to be distributive.  Both Italy’s FTSE MIB and Spain’s IBEX remain very weak.

Asian Markets

  • Japan’s Nikkei continues to hold up well and remains our favored Non-U.S. market.

Emerging Markets

  • China’s Shanghai Composite has achieved our initial downside target and we expect a pause.  The Kospi 100 has rallied from the MFU-2 target into an area of resistance.  We believe more downside is likely.

Commodity Markets

  • WTI Crude Oil remains in its upward sloping channel while gold is at a key zone of resistance.

Currency Markets

  • Mixed picture with the DXY and EURO as both are back into trading ranges.  We are on the sidelines with the GBP as it achieved its downside target.