Technical Tuesday - October 9, 2018

publication date: Oct 10, 2018

Cerundolo Investment Research    

Technical Tuesday Update  

Volume 2, Issue 34
October 9, 2018

Download Full Report here


Highlights:

US Markets

  • Thus far, the S&P 500 has held up best among the major U.S. indices.  Momentum has weakened considerably for the Nasdaq Composite, Russell 2000 and the MDY.  Each of these indices are at their intermediate to long-term channel support areas.  After hitting the MFU-4 target, the S&P 500 Growth relative to Value ratio continues to be in a weak position favoring Value.  The U.S. Consumer Discretionary ETF (XLY) is approaching a key support zone that needs to hold.  The Global ETF (RXI) has broken both its absolute and relative uptrends.

European Markets

  • The CAC, DAX and Italy’s FTSE MIB are all on the cusp of breaking their initial target area and headed lower.  Spain’s IBEX remains the weakest link of the mix.

Asian Markets

  • Japan’s Nikkei has pulled back near-term, but continues to have a very favorable long-term pattern.  The Hang Seng is about to break below its initial MFU-2 target and very likely to start another leg lower.

Emerging Markets

  • China’s Shanghai Composite had a short lived bounce from our initial target level and now back down.  We believe the odds remain high that the index will have another significant leg down.  India’s Nifty 50 is down13% from our initial cautionary note and in a zone for a bounce.  We are very cautious the Singapore Straits Times Index which is about to start another leg lower.  The Kospi 100 has started it’s next leg down, another avoid.

Commodity Markets

  • The uptrend in WTI Crude Oil remains intact.  Nat Gas has achieved its target and we would take profits.  Heating Oil has a bit more to go before we would consider taking profit.

Currency Markets

  • The U.S. Dollar and Euro remain boxed in there respective trading ranges.  We would be adding to the GBP in here and taking profit in the Dollar Yen as it has achieved its target of 114.4.