Please enable javascript in your browser to view this site!

Ongoing Divergence between US and Europe with most of Europe down 2%+ for the week

Fractional downside for US futures this morning, while most of Europe is down around 1% and has fallen over 2% for the week, with Italy's Equity index down more than 4%-  Important to note that most of these European indices remain in Bear markets from peaks made last year with the exception of the FTSE and DAX but the EUROSTOXX50 is still down more than 22% from peaks made last April-  The US Dollar is bouncing a bit this morning with Dollar higher vs Yen, Euro and Treasury yields are also higher, so commodities like Crude and Gold are both lower this am, Gold by 1%.  As Aug expiration comes to a close, the month has played out a lot of more positive than most had expected, but does go in line with Election year tendencies, as this year tends to see the NASDAQ have its best month of the year during Election years-  This week could go down as the 8th straight week higher with higher highs and higher closes, so important to note that while things might feel very range-bound, indices certainly still have a bullish trend and are inching higher, (In the US), while most of Europe is choppy to "down"-  For the S&P trend, prices will remain bullish unless/until 2167 is breached, so have to use dips to buy , with targets over 2210 by end of August, but do expect this market will become much more selective in the next couple weeks, with Defensive stocks showing some signs of reaching support which could allow these sectors to bounce-  Gainers for today:  GEO, CXW, RH, AMAT, JONE, FL, DE, ROST,  while on the downside- HL, X, AKS, REN, EL, EMR, DVA-  Let me know if you have any questions and/or have a great weekend

 

This overlay above details the SPX (white) along with Italy's equity market (yellow) which very much remains in a bear market after peaking last April with much of the world-  For now, there has been little to no signs of US joining suit with Europe, nor with some of Europe's "weaker links" like Italy, Greece, and Spain" starting to turn meaningfully higher-  This relationship is worth keeping an eye on.. and in this case, Italy was used for effect, being one of the weaker

 

Some wobbling of late in the NASDAQ 100, shown as QQQ above, with a combination of 2 different Demark "Sells" on daily charts which have lined up-  For now, this uptrend is intact, but under 116.28, we would have a warning of a possible downturn, with prices down under last week's lows-  Momentum has started to turn back lower on daily charts, which makes sense given the flattening after this large rally-  But no real signs of weakness just yet-  Stocks like FB, AAPL, MSFT, GOOGL would be vulnerable if QQQ starts any kind of larger retracement-  Given that these signals are largely absent in other indices, the pullback likely would prove minor, for now.