Technical Tuesday - October 2, 2018

publication date: Oct 2, 2018

Cerundolo Investment Research    

Technical Tuesday Update  

Volume 2, Issue 33
October 2, 2018

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Highlights:

US Markets

  • Both the Nasdaq Composite and the S&P 500 are holding up well on an intermediate-term basis, but the S&P continues to find resistance for the last three weeks at the Make or Break (MOB) bands.  The Russell 2000 and MDY have lost upside momentum and are likely to test their 40-wk. averages in the days to come.  The long-term trends for these indices remain in bullish.  Last week, the S&P 500 Growth relative to Value ratio hit a MFU-4 target which is likely to give a pause to the growth outperformance.  Energy stocks are heating up.  The absolute and relative trends in the XLE and  iShares Global Energy ETF (IXC) have improved.

European Markets

  • The DAX and CAC are both back up into an area of resistance and a place to reduce exposure.  Spain’s IBEX remains in a strong well defined downtrend and Italy’s FTSE MIB remains very vulnerable to a significant leg lower as momentum continues to weaken.  We remain cautious these markets.

Asian Markets

  • Japan’s Nikkei is back at the 24500 area we have been looking for.  We are on alert for a break to the upside to calculate the next target areas.  After bouncing from its initial target, the Hang Seng appears ready to roll back over as downside momentum expands.

Emerging Markets

  • China’s Shanghai Composite is bouncing from its initial target and we would be selling this rally.  The Kospi 100 has rallied back into major resistance and a sell right here.

Commodity Markets

  • WTI Crude Oil has achieved our target range of $75 -$77 and would remain long and buy any short-term weakness.  We do have longer term targets not yet triggered.  Natural Gas and Heating oil are also getting close to their respective targets.

Currency Markets

 

  • The U.S. Dollar and EURO remain boxed in trading ranges.  The Dollar Yen has achieved its initial target at 114.4 and would take some off.