Overview
Equities managed a small bounce this week, but despite the major indices being relatively close to previous highs, the majority of sectors are in short-term downtrends and below their 50-day MA. Sentiment has turned more bearish, and breadth showed some improvement.
Whilst it's true to say the S&P is currently just 1.5% off its all time high, it's also only 3.5% above its 200-day, and that all time high was nearly 3 weeks ago now.
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On the daily chart the S&P is in a short-term downtrend, below its 50-day, with lower lows and lower highs in place, but the long-term uptrend remains intact.
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The weekly chart shows the recent break of its 10-week MA, and this week's modest recovery.
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The NASDAQ and NYSE Composite show similar patterns, while the Transports and Russell remain below their 40-wk MA.
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Breadth has been deteriorating since the beginning of the month, but showed some improvement this week.
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Sector Analysis
Utilities are the leading sector, at all time highs.
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Then comes Real Estate at 11-month highs, Technology, and Materials. These are the only sectors above their 20, 50, 200-day MAs.
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They're followed by Financials, Healthcare, Industrials, Consumer Discretionary, and Staples, all of which are in short-term downtrends. Consumer Discretionary and Staples are also now close to their 200-day MAs.
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Energy remains at the bottom, below all its MAs, but off its lows.
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Alpha Capture Portfolio
Our model portfolio gave back the outperformance of the last two weeks, slipping -0.4% vs +0.7% for the S&P. There were two entry signals bringing it up to 7 positions, open risk of 3.1%, and 36% cash.
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Watchlist
Some more names on our list this week, as there was a much-needed improvement in breadth. Although it's sectors like utilities and real estate that are leading, there aren't many names from there that make much appeal to me. Instead we have a lot of technology, healthcare, and consumer-related names making the grade.
Here's a sample from the full list of 25 names:-
$SUPV
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$ILMN
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$IMMU
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$NVDA
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$CGNX
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$PAYC
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$GRUB
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