Saturday, 16 December 2017

Weekend update - US equity indexes

It was a broadly bullish week for US equity indexes, with net weekly changes ranging from +1.4% (Nasdaq comp'), +1.3% (Dow), +0.9% (sp'500), +0.6 (R2K), +0.4% (NYSE comp'), to -0.1% (Trans). Near term outlook offers a little chop ahead of the Christmas break. The year end target of 2683 is set to be hit.

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


The sp' climbed for a fourth consecutive week, +24pts (0.9%) to 2675, with a new historic high of 2679.63. Its notable that the sp' has been net higher for 14 of the past 17 weeks.

Best guess: a fair degree of chop into year end, settling somewhere within the 2670/2710 zone. More broadly, sp'2950/3047 is a valid target for late spring/summer 2018. 

Equity bears have nothing to tout unless a bearish monthly close. For me, this would equate to a monthly close under the monthly 10MA, currently at 2495, and rising by around 25pts a month. So, as of June 1'st, my 'line in the sand' will be somewhere within 2600/2650.

Nasdaq comp'

The Nasdaq lead the way higher this week, settling +1.4%, with a new historic high of 6945. The 7000s are clearly due within the near term. The 8000s are a valid target by mid 2018. Note core support - from early 2016, is currently around 5900... a rather long way down!


The mighty Dow climbed a sig' 1.3%, with a new historic high of 24688. The Dow continues to scrape along the upper weekly bollinger. The psy' threshold of 25k is clearly due, whether just before year end, or in January, it really should make little difference. If you believe in sp'3K by mid 2018, that would arguably equate to Dow 26500/27250.

NYSE comp'

The master index settled +0.4% to 12699, with a notable new historic high of 12739. The 13000s are clearly due in early 2018. Core support in mid January will be around 12400.. which looks secure.


The second market leader - R2K, settled +0.6% at 1530. New historic highs (>1559) look viable before year end. More broadly, 'R2K at 2K' is a valid target for late 2018.


The 'old leader' - Trans, was the laggard this week, settling -0.1% at 10393. A yearly close >10k looks a given. The 11000s are due in the spring. The hyper bulls should be seeking 12500/13000 for 2018.


A bullish week for the US equity market, with four indexes (sp, dow, nasdaq comp', nyse comp') breaking new historic highs.

All indexes have at least 3-4% of downside buffer, before core support - from early 2016, would be challenged.

Equity bears have nothing to tout, unless a majority of indexes break and see a monthly close under their respective monthly 10MAs. That does not appear likely for at least another 5-6 months. For those expecting a sig' retrace in 2018, look to the time frame of Aug-Oct'.

sp'daily6 - YTD price performance

With nine trading days left of the year, Nasdaq comp' is currently +28.9%, dow +24.7%, sp' +19.5%, with the R2K trailing, but still a very respectable +12.8%.

Looking ahead 

A light week is ahead. It will be the last full trading week until Jan'8th.

M - Housing market index
T - Housing starts
W - Existing home sales, EIA Pet' report
T - Weekly jobs, Q3 GDP (third est'), Phil'fed, leading indicators
F - Durable goods orders, pers' income/outlays, new home sales, consumer sent'

*As the following Monday is Christmas day, Fri'22nd can be expected to be extremely subdued, closing normally at 4pm.

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Have a good weekend

*the next post on this page will likely appear 6pm EST on Monday.