It was a very mixed week for US equity indexes, with net weekly changes ranging from +0.4% (Dow), -0.1% (sp'500), to -2.5% (Trans). Near term outlook offers a retrace of 1-3%. With the market still regularly breaking new historic highs, the mid term outlook remains strongly bullish.
Lets take our regular look at six of the main US indexes
A new historic high of 2277, but settling the week broadly flat, -1pt @ 2258. Underlying MACD (blue bar histogram) continues to tick higher, as the US market remains super strong.
It is notable that the 10MA is at 2175, and will be around 2200 at year end. On no fair outlook does sustained action <2200 look viable for at least a few months.
Best guess: a relatively minor retrace to around 2230, and then upward into year end, and carrying across into late Jan/early Feb. Next big upside target zone is 2325/50. The 2500s seem viable by June/July, if commodities can rally (CRB >220).. with WTIC oil at least around $60.
Equity bears have nothing to tout unless a monthly close under the monthly 10MA, which will be around 2160/70 in January.
A new historic high of 5486, but settling the week -0.1% at 5437. First soft support is around 5300. Core support remains at the giant psy' level of 5K. The 6000s are a valid target for late spring/early summer 2017.
The mighty Dow climbed for a sixth consecutive week, the best run since Nov'2015. The weekly RSI is in the mid 70s, which could be seen as indicative of a mid/long term breakout, but also short-term overbought. First support is the 19k threshold, which is around 4% lower. The old resistance of 18k is now a very secure mid term floor.
The master index has finally followed the rest of the market, breaking the 2015 high, with a new historic high of 11256. The NYSE comp' settled net lower by a moderate -0.6%. Near term outlook is bearish, with viable cooling to 11000/10900. Next big upside target is the 12k threshold, which seems probable by late spring 2017.
The second market leader saw some significant cooling, with a net weekly decline of -1.7% to 1364. Near term outlook offers 1350/40, before resuming higher into the 1400s in Jan'2017. The 1500s are now a valid target by late spring 2017.
The 'old leader' - Trans, is leading the way lower, with a net weekly decline of -2.5% to 9167. First support is the 9k threshold. Talk of 'tranny 10k' should have already begun in the mainstream. It is notable though that if WTIC oil can claw and hold above the $60 threshold in 2017, the trans will be increasingly restrained, as higher oil/fuel costs will be especially problematic for transportation companies.
All US equity indexes are trading close to historic highs.
The NYSE comp' has finally matched other indexes, and broken above the 2015 high.
There is downside buffer of 5-6% for most indexes, before doing ANY kind of damage to the upward trend that began in Jan/Feb'.
Its Christmas week, and there is indeed not much scheduled.
M - PMI serv'
W - existing home sales, EIA report
T - weekly jobs, durable goods orders, Q3 GDP (rev'2), pers' income/outlays, leading indicators
F - new home sales, consumer sent'.
*Yellen is due to speak (Monday, 1.30pm) at the Univ' of Maryland on the state of the US job market. That will likely garner some media coverage.
**The US equity market will close normally at 4pm on Friday, The following Monday of Dec'26th is CLOSED. Friday Dec'23rd can be expected to see exceptionally subdued price action, probably no more than a few points range.
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Have a good weekend
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