Saturday, 6 August 2016

Weekend update - US monthly indexes

July saw the fifth consecutive net monthly gain for some US equity indexes. August has already seen a new historic high of sp'2182, with the Nasdaq comp' set to break the July 2015 high of 5231. The US market looks set for broad upside into spring 2017.

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


The Friday close of 2182.87 made for a new historic high. As things are, it would seem the sp' will manage another net monthly gain for August, if not also September.

Underlying MACD (blue bar histogram) continues to tick higher, currently at -0.048. That makes for MARCON 6. By end August.. or certainly the Sept 1st open, MARCON 7 - a 100% bullish market, will be due.

Best guess: further upside to the 2225/50 zone... with one or two multi-week down cycles between early Sept' and year end.  More broadly, the 2350/2450 zone is viable by late spring 2017.

Unless the market is trading back under the monthly 10MA (currently in the 2060s), and more so, the June low (1991), equity bears can't be hopeful of anything.

Nasdaq comp'

Friday saw a new cycle high of 5227 - a mere 4pts (0.1%) shy of the July 2015 high. An August close in the 5300s is now within range. Any monthly close in the 5300s would clarify that the 6000s are a viable target by next spring.


The Dow settled the week at 18543, around 0.5% below the July high. The 18800s are now viable by late August, and 19k in early September. Underlying MACD cycle is now moderately positive - for the first time since Dec'2014. Equity bears face the problem that 18K will be strong support on any multi-week down cycle. The Jan'2016 low of 15450 is now over 3000pts lower.

NYSE comp'

The master index is pushing for the 11K threshold, and ultimately.. the May 2015 high of 11254. A year end close in the 11600/800 zone looks probable. Outlook is bullish, unless a break under the June low of 9918.


The second market leader - R2K, is continuing to play catch-up to the headline indexes (sp/dow/nasdaq), settling the week at 1231 - which is around 5% below the June 2015 high of 1296. Underlying MACD is now positive cycle for the first time since June 2014. The 1300s look due within 1-3 months.


The 'old leader' - Trans, continues to struggle. First resistance is the 8K threshold. By late autumn/early winter, secondary resistance will be the 8300/500 zone. A year end close >9k looks out of range... not least if Oil prices break back above $50.. which would be inherently bearish for transports.


All US indexes continue to battle broadly upward from their Jan/Feb' lows

The sp'500 and Dow have broken their 2015 historic highs, with the Nasdaq set to follow.

A further 5-7% upside by year end is a realistic target, offering sp'2300s, Dow 19500, and Nasdaq 5500s.

Looking ahead

There are a few more earnings to appear - notably Disney (Tuesday, AH), but other than that... a relatively quiet week.

M -
T - Product'/costs, wholesale trade
W - EIA report, US T-budget
T - weekly jobs, import/export prices
F - retail sales, PPI, business invent', consumer sent'

*no fed officials are scheduled to appear.

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Have a good weekend

*the next post on this page will appear Monday at 7pm EST