Saturday, 19 April 2014

Weekend update - US weekly indexes

It turned out to be another cruel tease to the equity bears, with weakness across much of Mon/Tuesday, only for the market to break decisively higher on Wednesday. With most indexes seeing net weekly gains of around 2.4%, the market appears to have started yet another multi-week up cycle.


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

sp'500


The sp' put in a very important weekly gain of 2.7%, and is back within the price cluster zone of the 1870/60s. A weekly close in the 1880/90s will be important by mid May, which will then open up a new index highs. There is a reasonable case to be made for general upside to the 1925/50 zone, before this new up wave is complete.

Underlying MACD (blue bar histogram) cycle is starting to tick higher, and could easily do so for 4-6 weeks. Barring a break under the 10MA of 1852, equity bears no longer have any hope of mid-term downside.


Nasdaq Comp'


The tech rallied 2.4%, and especially notable was the spike-floor weekly candle. It bodes for at least a few more weeks of upside. First target are the mid 4200s, that is another 3% higher.


Dow


The mighty Dow also rallied 2.4% this week, and is now set for a charge to take out the recent high of 16631. The 16700/800s should be viable by early May, and 17k looks just about possible by late May/early June.


NYSE Comp'


The master index climbed 2.45%, and attained the highest EVER weekly close at 10532. I still find it difficult to believe the 11000s are viable in the current multi-month up wave - from Oct'2011. Regardless, the near term trend is bullish.


R2K


The R2K gained 2.4%, and like the Nasdaq, put in a very bullish spike-floor candle this week. There is near term upside to the 1180/1200 zone. It will be difficult to break the recent high of 1212. We have a possible neckline in the 1070s. A break of that would open up the 1000 threshold, if not the 900s.


Trans


The old leader gained a powerful 3.7% this week, with the highest weekly close..EVER. The 7700/800s look viable within a few weeks. The only issue is whether 8k is going to be hit by late May/early June. Underlying MACD cycle has ticked higher, and we're set to get a bullish cross within 1-2 weeks - certainly, by end month.


Summary

So... despite the weakness across Mon-Tuesday, the market has broken back upward. Indeed, we have a few indexes with new historic weekly closes, and that has to be an especially bullish sign into end month and much of May.

The weekly spike-floor candles for the R2K and the Nasdaq are strongly supportive that the current rally in the headline indexes (sp, Dow) will hold, and that we will see new historic highs.


Looking ahead

The week starts with leading indicators on Monday. Tue/Wed will see housing data and PMI manu' Thursday has Durable Goods Orders and the usual weekly jobless. Friday will conclude with PMI services, and consumer sentiment.

Overall, nothing particularly significant is due, and as far as I know, there are no Fed officials on the loose.

*there is sig' QE-pomo: Mon' $3-4bn, Wed' $2bn or so.
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Looking to jump aboard the bull train

Once we return from the Easter break, I'll be seeking to pick up a long-index position, if only for a few weeks. Certainly, the hourly MACD cycle is rolling over, and it'd be particularly enticing to be long from the 1850/45 zone late Monday/early Tuesday.

Considering the weekly closing candles - especially the R2K/Nasdaq, the market looks set for further upside. The notion of 'sell in May', looks unusually off the agenda this year. If that is the case, it would no doubt get the bulls even more confident, which might make for a much better re-short, somewhere in the sp'1925/50 zone.

As ever, comments are welcome, and I do hope your weekend was a restful one!

back on Monday :)

Late night musings

Equity bulls saw a 49pt swing to the upside, from the Monday low of sp'1815. The closing weekly candle was an especially bullish one, and bodes for at least a further 2-3 weeks of gains. Ironically, the 'sell in May' crowd will likely be on radio silent this May, with likely upside to the sp'1925/50 zone.


sp'weekly8


Summary

The above chart is a very disappointing one. I did indeed have reasonable hope we're break the 1800 threshold, with a brief drop to the 1770/60 zone, before the next bounce. Yet..1814 is all the bears got, and after some chop across Mon-Tue, Wednesday was a very decisive close

The underlying MACD (green bar histogram) cycle is now ticking higher, and we closed the week with a very bullish green candle on the weekly 'rainbow' chart. It is actually pretty unusual to see a green candle immediately after a red candle, but then, we did swing 49pts from the low.

I'm now resigned to at least 2-3 further upward weeks, perhaps 5, and that will get us to the end of May/early June. I do still have hopes of a multi-month decline this year, but clearly, the immediate trend is back to the upside.


Walker inspired R2K doom

I do keep an eye on what Ron Walker - see Chartpatterntrader , is saying, not least in the videos he posts. Something he mentioned the other day did catch my attention.

It was the notion that the R2K - and probably the Nasdaq, might put in a H/S formation, whilst the sp/dow, break new highs.

R2K, weekly'2 - H/S


It is an interesting scenario, but one that would obviously get dropped on any move much above 1200. As I often note, the R2K is the second leading market index (Trans, remains the first in my view), and it was notable that the R2K not only hit the 200 day MA, but also hit the lower weekly bollinger - a target I often drone on about.

So, I will keep the above scenario in mind for May/early June. Perhaps R2K 1180/1200 would equate to sp'1925/50 or so, within the next 3-5 weeks.

As ever, an open mind on all of this..is always a good idea.
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Communism is alive and well

I have certainly been on Schiff's case in recent months - not least for his incessant 'dollar doom' mantra, but the following is one interview where I am waving the flag for him.



As ever, the problem with communism is that it is never satisfied with a certain level of control. Hartman sure doesn't know his history, or he'd sure as hell not talk like that. In the grander outlook, I just have to wonder whether the USA doesn't indeed have to become the USSA, before the next grand cycle can begin.

Goodnight from London
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*the weekend post will be on the US weekly indexes

Friday, 18 April 2014

Bits and Pieces for Good Friday

With the world's most twisted and rigged casino closed for Good Friday, its time to use the opportunity to have a look at a few random things.


Trans, monthly


The recent equity weakness is hardly noticeable on the Tranny. Even though the MACD (blue bar histogram) cycle is ticking lower for the fourth consecutive month, prices are still rising. The rising 10MA, in the low 7000s is key support. Until the bears can get a monthly closing under 7K, there is little reason to get overly excited.


VIX, monthly


What has probably bemused many of the permabears across the last two years is the low VIX. 2012 saw a high of 27, whilst the 2013 high was a mere 21. The bears can at least tout that we have already seen 21s this past January, so there is a hope that we'll at least break into the upper 20s at some point this year.

Perhaps most notable, are the super tight bollinger bands on the monthly VIX chart. It is very much the price action seen from 2004 to 2007. My concern is that we will see another year of this low VIX before the next economic cycle concludes.


USD, monthly'2


King dollar remains.. King, despite what some of the doomers might wish to believe. Yes, we're stuck in a very tight trading range, and if we go much below 79.00, then the door is open all the way to the 70.00s - the ultimate support line.

As it is, the underlying MACD (green bar histogram) looks prone to a big move to the upside. The cycle looks pretty floored to me. If there was a turn, it'd likely take 2-3 months to become clear.

Without question, I am bullish USD. I just can't take other currencies like the Euro..or worse..the Japanese Yen seriously. Both of those look set to implode - or at least devalued via printing, before the USD.

All those equity doomers seeking sp'1500..or lower, are going to need USD >85.


CRB vs sp'500, weekly


The gap between the CRB and SP'500 is finally closing. I suppose its possible - at least for those who are suggesting equities are near a multi-year top, that the current commodity rise is similar to that seen in mid'2007. Using that analogy, equities max out in 3-6 months, and commodities reach a peak in mid 2015. I could certainly be open to that scenario.

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Video updates

First, from Mr Walker, what is surely the weekend update...



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A little chatter from Mr Hunter



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more later (probably)..in the evening

Just another minor retrace

The big reversal at sp'1897 now seems a long time ago. Yet, more than anything this week, it was again the case that the down wave was only a minor one, flooring at sp'1814. With a net weekly gain of 2.7%, the sp'500 is comfortably above the recent low of 1814.


sp'weekly


Summary

The above chart is a stark disappointment to me. Even though (for once) I didn't get nailed on the market rebound (I bailed like a maniac at sp'1816 on Tuesday at 3.10pm or so), I'm still disheartened though, that another down wave just didn't meet expectations.

We've not seen a 10% decline in the headline indexes since the key floor in Oct'2011. One is coming, and I sure pray it is this summer!


Permabear on the air?

I am thinking of doing audio/video postings at some point.... gods help us all! I am already overloaded by my regular postings, but maybe I'll find some time this weekend, at least for an audio posting.

I also have ideas to maybe arrange an online chat/ Google hangout..or something like that. I've many ideas, I'll try to make some progress in the weeks ahead.

Goodnight from London
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A few videos...

First... Mr Permabull...


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Part'2, Gordon T Long



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