Saturday 6 June 2020

Weekend update - US equity indexes

It was a powerfully bullish week for US equity indexes, with net weekly gains ranging from +10.1% (Transports), +7.1% (NYSE comp'), +6.8% (Dow), +4.9% (SPX), to +3.4% (Nasdaq comp').


Lets take our regular look at five of the main US indexes (monthly candle charts).

sp'500



Nasdaq comp'



Dow



NYSE comp'



Trans





Summary

All five US equity indexes settled net higher for the week.

The Transports is leading the way higher, with the Nasdaq trailing.

The Nasdaq comp' broke a new historic high.

All five indexes have re-taken their respective monthly 10MA.



Looking ahead

A pretty light week is ahead, with just a handful of notable earnings, and a few pieces of econ-data. Whilst there will be an FOMC, there will clearly be no change in policy.

Earnings:

M - SFIX
T - TIF, CHWY, GME, FIVE, AMC
W - GES, RRGB
T - ADBE, LULU, PVH
F -
-

Econ-data:

M -
T - JOLTS, wholesale inventories
W - CPI, EIA Pet', US T-budget

FOMC announcement 2pm, with a press conf' at 2.30pm.

T - Weekly jobs, PPI, Fed bal' sheet (4.30pm)
F - Import/export prices, consumer sent'
-

The Longest Day (1962)

Final note

May saw the SPX and Nasdaq comp' settle back above their respective monthly 10MA. Under my criteria, that made for a bullish monthly settlement, and changed the m/t trend back to bullish. This past week has seen other indexes follow.

A multi-week retrace is due, and whilst we might break back under sp'3K at some point, I do not expect any bearish monthly settlement (under the 10MA). Any cooling wave/retrace is thus to be seen as such. I hope that is (as Wonka might say)... clear as crystal!

Strawberry full moon
I can understand if some saw Friday's equity gains as a case of moon-madness, but the employment data was a distinct improvement. A massive economic recovery is underway, with the Fed activity preventing any mid/upper tier corporate bankruptcies. By year end, perhaps half of the -40% collapse in GDP will have been recovered. That will still make for a broken society and economy into 2021.

With further QE and zero rates, I will merely re-iterate, I see long gold and the related miners, as the most straight forward trade into 2021. Be careful out there... in the twilight zone.


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Have a good weekend
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