Saturday, 20 August 2016

Weekend update - US weekly indexes

It was a mixed week for US equity indexes, with net weekly changes ranging from +1.6% (Transports), +0.6% (R2K), u/c (sp'500), to -0.1% (Dow). Near term outlook offers further chop, but eventual upside into the sp'2200s. More broadly, its a case of whether the market can battle through Sept/Oct' without falling back under the breakout levels.

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


Effectively, a flat close on the week, settling at 2183. However, there was a notable new historic high of 2193, a mere 0.3% shy of the 2200s. Underlying MACD (blue bar histogram) ticked lower for a second week.

The breakout level of 2134 is now going to act as powerful support, and we also have the key 10MA lurking around the 2140s.

Best guess: upside to the 2225/50 zone by mid/late September. Any multi-week down cycle from late Sept-mid Oct' will likely be choppy, and not break <2134. A year end close in the 2275/2325 zone looks very feasible.

Equity bears have nothing to tout unless a break <2134, and more so... rising trend, which in early October will be around 2120.

Nasdaq comp'

An eighth consecutive net weekly gain for the tech - the best run since spring 2010, having broken a new historic high of 5271. Core support is the 5000/4950 zone. The upper weekly bollinger will soon be offering the 5300s. Any monthly close - whether Aug/Sept/Oct in the 5300s will provisionally open the door to the 6000s by late spring 2017. Things only turn decisively bearish on any close <4900, and frankly, that looks extremely unlikely any time soon.


The mighty Dow was the weakest index this week, settling net lower by -29pts (0.1%) to 18552. However, like the sp' and Nasdaq, the Dow also broke a new historic high of 18668. The 18k threshold is core support. By early Oct' rising support will be around 18200. Any price action >19k should clarify further upside to the giant psy' level of 20k.

NYSE comp'

The master index reflected the broader market, settling +0.1% @ 10829. The upper weekly bollinger will be offering 11k by early September. A break above the May 2015 high of 11254 looks within range for Oct/Nov. Core support is the 10500/000 zone.


The second market leader - R2K, saw a moderate net weekly gain of 0.6%, settling at 1236 - 60pts (5%) below the June 2015 high. A new historic high looks out of range until October. A year end close in the mid 1300s looks probable.


The 'old leader' - Trans, saw a sig' net weekly gain of 1.6%, settling at 7930. 8k remains strong resistance, but looks set to be broken.. and held above... by early September. From there, the 8300/400s. Even if the main market can remain broadly intact across the tricky Sept-Oct trading period, it will likely take the Transports another 5-6 months to challenge the Nov'2014 high of 9310.


A week of choppy price action, but with notable new historic highs for the sp'500, dow, and nasdaq.

The two leaders - Trans/R2K, are highly suggestive of further upside into end month...and probably into mid/late September.

Unless equity bears can break back under the key breakout levels - such as sp'2134, Nasdaq 5K, Dow 18K, R2K 1200, there is little to be bearish about.

Looking ahead

M -
T - New home sales, Richmond Fed
W - PMI manu', Existing home sales, EIA report
T - Durable goods orders, weekly jobs
F - Q2 GDP (rev'1), intl' trade, PMI serv', consumer sent.

*There will be a Monetary policy symposium at Jackson Hole in Wyoming. That will span across Thurs-Friday, with Yellen set to speak Fri' 11am.

Support the bear

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Have a good weekend

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