Weekend Review and Watchlist

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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Posted to Alpha Capture on Aug 26, 2017 — 11:08 PM

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