Saturday 28 January 2017

Weekend update - US weekly indexes

It was a very bullish week for US equity indexes, with net weekly gains ranging from 2.4% (Trans), 1.0% (sp'500), to 0.8% (NYSE comp'). Near term outlook offers another 1-2% of basic upside. The only issue is when the first correction - since the Nov'/election low of 2083, occurs. The broader outlook remains powerfully bullish, at least to the 2400/500s by late summer.


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

sp'500


A new historic high of 2300, with the sp' net higher by 23pts (1.0%), settling @ 2292. Underlying MACD (blue bar histogram) cycle is still leaning on the downward side, whilst new highs are still being made.

Best guess: a short term top around 2320/30s by mid Feb', and then a retrace of 4-5% into early March. Certainly though, no price action under 2200. The 2400s seem a given by May/June. 

Keep in mind my year end target of 2683, which I recognise could be seen as 'crazy talk', but if we reach the 2500s by late summer, my target will be on track.
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Nasdaq comp'


The Nasdaq continues to lead the broader market higher, and saw a net weekly gain of 1.9%, settling at 5660. Just reflect on this... the Nasdaq has climbed 34% since the Feb'2016 low of 4209. Assuming a minor retrace in Feb/March, at the current rate, we'll see the 6000s by May. Once we're at 6k, its a curious thought that the market could see a 16% washout, and still maintain core support of the 5K threshold.


Dow


The mighty Dow climbed 266pts (1.3%), breaking a new historic high of 20125, settling at 20093. Upper weekly bollinger will be offering the 20600s next week. A valid scenario is that 20k is going to hold as short/mid term support, and if the next retrace will be say... 5%... then we need to first climb to at least 21k, before the next retrace.


NYSE comp'


The master index gained 0.8%, with a new historic high of 11344, settling at 11283. The 12k threshold looks at least 3-4 months away. First support is the 11000/10900 zone, which looks secure into the late summer.


R2K


The second market leader - R2K, climbed by a rather significant 1.4%, settling at 1370. Upper bollinger will be offering the 1440/50s next week... which is a clear 4% higher. The 1500s seem due into the summer. Again, its a curious thought that few (if any) in the mainstream are talking about 'R2K @ 2k', before the current multi-year wave concludes.


Trans


The 'old leader' - Trans, was the leader this week, breaking a new historic high of 9502, settling with a net gain of 2.4% at 9444. Near term outlook is bullish to the 9700/800s. The 10k threshold looks out of range in the current run from early November.
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Summary

All US equity indexes are broadly bullish, and holding near/at historic highs.

The Nasdaq continues to lead the way higher, with the Dow and sp' following. The R2K is a little laggy, but its price structure is a very clear bull flag.

Near term outlook is bullish, with another 1-2% of basic upside, before the next realistic opportunity of a 4-5% retrace.
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Looking ahead

There is an absolute truck load of corp' earnings and econ-data in the week ahead...

notable corp' earnings: Tue': APC, AAPL, XOM, MA. Thurs: AMZN, DB. Fri': HSY, PSX.

M - pers' income/outlays, pending home sales
T - employment costs, case-shiller HPI, Chicago PMI, consumer con'
W - vehicle sales, ADP jobs, PMI/ISM manu', construction, EIA report

**FOMC announcement @ 2pm.There will not be a press' conf.

No one expects a rate hike, least of all yours truly. I remain expecting three rate hikes this year... May, Sept', and Dec'.
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T - weekly jobs, product/costs
F - monthly jobs, PMI/ISM serv', factory orders

*as Tuesday is month end, expect price action to be pretty choppy across the afternoon, not least as the market might be a little twitchy ahead of AAPL earnings.
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Have a good weekend
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*the next post on this page will likely appear Mon' @ 7pm EST.

A subdued end to the week

US equities ended the week on a slightly weak note, sp -2pts @ 2294. The two leaders - Trans/R2K, both settled lower by around -0.3%. VIX settled -0.5% @ 10.58. Near term outlook offers further upside to at least the sp'2320/30s by mid Feb'.


sp'daily5



VIX'daily3



Summary

Despite a great many corp' earnings, and a box of key econ-data, equity price action was subdued across the day. Short term price structure is offering a baby bull flag, with upside to 2305/10 next Mon/Tuesday.

Naturally, the VIX was itself subdued, with an intra low of 10.30, the lowest level since summer 2014.

Goodnight from London
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*the weekend post will appear Sat'12pm EST, and will fully detail the US weekly indexes.