Saturday, 27 August 2016

Weekend update - US weekly indexes

It was a choppy and mixed week for US equity indexes, with net weekly changes ranging from +0.1% (R2K), -0.7% (sp'500, NYSE comp'), to -1.3% (Trans). Near term outlook is for further broad upside of at least another 2-3%. The bulls are likely safe until at least the opex of Sept'16th.

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


With a three day run of daily declines, the sp' saw a net weekly decline of -14pts (0.7%), settling at 2169. Its notable that the market did challenge the recent historic high of 2193, and saw a clear rejection.

Underlying MACD (blue bar histogram) cycle ticked lower for a third consecutive week, although is still another 2-3 weeks from turning negative cycle.

Rising trend - linking the Feb' and June lows, will be in the 2130s by mid October. Unless equity bears can break under 2134, the 2100 threshold, and see a close under the monthly 10MA (2060/70s in Sept/Oct)... there still isn't any reason to get overly concerned about some kind of autumnal crash.

Nasdaq comp'

After eight weeks of consecutive gains, the tech' finally saw a decline... but just -0.4%, settling @ 5218. However, its notable the Nasdaq did attain a new historic high of 5275. First big support is the 5000/4950 zone. As things are, a monthly close - whether Aug/Sept', in the 5300s still looks probable, and that should be enough to awaken the mainstream to the notion that the 6000s will be a valid target by late spring 2017.


The mighty Dow settled -0.8% @ 18395. The 18k threshold remains powerful support, and frankly, that should hold in the months ahead. The upper weekly bollinger is in the 18800s, price action >19k looks viable in the latter half of September.

NYSE comp'

The master index settled -0.7% @ 10749. The 11k threshold remains next upside target. Things only get bearish on a break <10500.


The second market leader - R2K, was the anomaly this week, with a fractional gain of 0.1%, settling @ 1238. Its notable that the R2K hit a new multi-year high of 1251, which is just 45pts shy of the 2015 historic high.


The 'old leader' - Transports, remains the market laggard, settling -1.3% @ 7824. The 8k threshold is strong resistance. Things only get bearish if <7600. Alarm bells should sound this autumn if <7k, but that does look unlikely.


A mixed week for US equities.

Despite the chop/weakness, the Nasdaq still managed a new historic high, with the R2K continuing to close in on breaking the June 2015 high of 1296.

Equity bulls have a basic safety-buffer zone of around 2% - such as the breakout level of sp'2134.

Things only turn provisionally bearish if core rising trend is broken, and more so, the June lows - such as sp'1991.

Looking ahead

M - pers' income/outlays
T - case-shiller HPI, consumer con'
W - ADP jobs, Chicago PMI, pending home sales, EIA report
T - weekly jobs, prod/costs, PMI/ISM manu', construction
F - monthly jobs, intl' trade, factory orders

*there are a number of fed officials speaking Wed-Friday.

**Friday will see normal trading hours, however its important to keep in mind the following Monday (Sept'5th) is closed for the 'Labor day' holiday. So... price action is likely to become quickly subdued once the jobs/econ-data has been released.

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As ever, your comments - whether bullish or bearish, are welcome.

Have a good weekend

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