Monday, 16 July 2018

Leaning weak

US equity indexes closed on a weak note, sp -2pts (0.1%) at 2798. The two leaders - Trans/R2K, settled -1.0% and -0.5% respectively. VIX settled +5.3% at 12.83. Near term outlook offers minimum technical necessity of sp'2768.


sp'daily5



VIX'daily3



Summary

The week in equities began with a great deal of micro chop, but clearly leaning on the weaker side, S/t bearish to the sp'2760s, which should equate to VIX 14s. Tuesday should be far more dynamic, not least as we have Powell speaking, whom the market could use as an excuse for sig' downside.
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Saturday, 14 July 2018

Weekend update - US equity indexes

It was a broadly bullish week for US equity indexes, with net weekly changes ranging from +2.3% (Dow), +1.8% (Nasdaq comp'), +1.5% (sp'500), +0.8% (NYSE Comp'), +0.7% (Trans), to -0.4% (R2K). Near term outlook offers brief cooling of around 1%, but then resuming upward.


Lets take our regular look at six of the main US indexes

sp'500


The sp' climbed for a second consecutive week, +41pts (1.5%) settling at 2801, the highest close since early March. Underlying macd (blue bar histogram) cycle ticked higher for a second week, as price momentum is outright bullish. Note the upper bollinger at 2829, and that is now starting to tick upward. The 2900s look technically feasible as early as late August.

Best guess: s/t cooling to the 2760s, but then resuming upward into opex. Once that is out of the way, the market should have a better chance to challenge new historic highs (>2872). Big target zone of 2950/3047 really isn't that far up, and certainly looks viable in Sept'/Oct.
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Nasdaq comp'


Tech saw a sig' net weekly gain of 1.8% at 7825, with a notable new historic high of 7843. Upper bollinger will be offering the 8000s by early August. If sp'2950/3047, that should equate to at least Nas' 8500/8750.


Dow


The mighty Dow climbed for a second week, +2.4% at 25019. Whilst the mainstream are overly focused on the psy' 25k threshold, far more important is that underlying price momentum is set to turn net positive within 1-2 weeks. That does offer a grander run to challenge new historic highs from around mid August onward. It would clearly help if the trade/tariff chatter lessens. Key stocks to watch: CAT, BA, HD, XOM, and INTC.


NYSE comp'


The master index saw a net weekly gain of 0.8% to 12769. Underlying macd cycle is set to turn positive within 1-2 weeks. Price action should see some degree of acceleration >13000.


R2K


The R2K saw a mixed week, breaking a fractional new historic high of 1708.56, but settling -0.4% at 1687. S/t bearish, with support 1650/40s. A push to the 1800s looks realistic by Sept/Oct, assuming we do reach the sp'2950/3047 zone.


Trans


The Transports climbed for a second consecutive week, +0.7% at 10546. Its notable that weekly price momentum continues to weaken. At the current rate, a bullish cross is not viable until at least early August. A key issue remains WTIC/energy prices. Whilst oil is currently in a cooling phase from the $75s, and looks set for the 67/66s next week, the m/t trend remains bullish. Any resumption of the upward trend in energy prices will be a major downward pressure on the transportation stocks. Importantly, that doesn't mean the tranny will be net lower, but it does mean the sector/index will likely be a market laggard.



Summary

Five indexes were net higher for the week, with one net lower.

The Dow - a recent laggard, was notably the strongest index this week, whilst the R2K was the weakest.

The Nasdaq comp' and R2K both broke new historic highs this week, which bodes very well for the rest of the market this summer.

YTD performance:


The Nasdaq is broadly leading the way higher, currently +13.4%, with the R2K +9.9%. The sp'500 is +4.8%, with the Dow +1.2%. The NYSE comp' and Transports are net lower by -0.3% and -0.6% respectively.
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Looking ahead

In addition to an ever increasing number of corp' earnings...

M - Retail sales, empire state, bus' invent'
T - Indust' prod', housing market index.  Powell at Senate,10am
W - Housing starts, Powell at House Fin' serv' commit', 10am, EIA, Beige book
T -  Weekly jobs, phil' fed, leading indicators.
F - *OPEX*
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Thursday, 12 July 2018

Thursday gains

US equity indexes closed broadly higher, sp +24pts (0.9%) at 2798. Nasdaq comp' +1.4% at 7823. The two leaders - Trans/R2K, both settled +0.4%. VIX settled -7.7% at 12.58. Near term outlook still offers a cooling wave to around sp'2760.

sp'daily5



VIX'daily3



Summary
 
US equities opened moderately higher, although the gains were a little shaky. However, the buyers did appear - especially within tech, and the market battled upward into the close. The VIX was naturally very subdued, melting lower to the mid 12s. S/t outlook offers a retrace/cooling wave to the sp'2760s.
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Bonus chart: China, monthly


The Shanghai comp' is well off the lows, currently -0.3% at 2837. A net July gain would be really helpful to those seeking strength in other world markets (including the US). For now though, the m/t trend is still pretty bearish, as we're well under the key 10MA. 
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Open day Friday

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All my intraday posts will be available to non-subscribers, starting with the pre-market brief at 8.30am EDT.

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