Key Points

  • The S&P 500 Retakes the 40-Week Moving Average
  • Small Caps Hit a Resistance Point
  • The NASDAQ 100 Moves into a Neutral Stance
  • Ten Year Note Remains in Freefall
  • Global Dow Sets Its Sights on the January Highs

U.S. Equities

The S&P 500 closed higher for a second consecutive week and reclaimed the 40-week moving average in the process. The index is now set to do battle with resistance in the 4,500 – 4,550 zone. Breaking above this mark could tilt the advantage in favor of the bulls and set the stage for an attack on the January highs.

The 14-week RSI is moving higher after regaining the 40-level in the prior week.

The S&P Small Cap 600 ticked down on the week after meeting resistance at the 40-week moving average. The index is above the 10-week moving average, keeping the trend neutral for now. Support remains near 1,220; retaking the 40-week moving average would put the bulls in control of the trend.

Relative to the S&P 500, Small Caps have moved into a neutral position after losing ground to the S&P 500 for a second consecutive week.

The NASDAQ 100 Index was higher last week, building on the strength that was exhibited in the prior week. Thus far, the two-week rally has served to put the index into a neutral position, between the 10 and 40-week moving averages. The 13,000-14,000 area serves as a support zone, but it will take a break from the 15,500 level to make the case that the bulls are taking control.

The relative trend also improved last week but still has work to do before a high conviction bullish case can be made.

U.S. Fixed Income

The 10-Year Note remains under intense pressure, extending its decline below the 10 and 40-week moving averages. Support comes into play in the $118-$120 zone.

The yield has made a powerful move to the upside and now appears to have running room toward 3%.

Global Equities

The Global Dow moved higher for a second week in a row to reclaim the 10 and 40-week moving averages. Above 4,000, there is scope for a run to the January highs.

The relative trend remains below resistance. Until there is a clean break from the current consolidation, it is hard to make a case for outperformance on the part of Global stocks vs. their U.S. peers.

Take-Aways

Risk assets were mostly higher for a second consecutive week. The highlights were the S&P 500 and the Global Dow breaking above the 40-week moving averages, opening the door for them to attack their January highs. Small Caps were a disappointment and have given up some of the relative strength that they fought so hard to gain in the prior month of trading. The 10-Year Note remains in freefall, with room for the lows seen in 2018.

Disclosure: This information is prepared for general information only and should not be considered as individual investment advice nor as a solicitation to buy or offer to sell any securities. This material does not constitute any representation as to the suitability or appropriateness of any investment advisory program or security. Please visit our FULL DISCLOSURE page.