Saturday, 28 December 2013

Weekend update - US weekly indexes

The US equity indexes saw follow through from the post QE-taper ramp. Most indexes gained between 1.0% and 1.5%. There looks to be at least another 2-3 weeks of upside, and by mid January, the sp' could be somewhere in the 1875/1900 zone.

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


The sp' climbed 1.3%, and this was important follow through from last weeks post QE-taper ramp. There is easy upside to the 1860/70s in early January, and the 1900s will be viable by late January. Arguably, the ultimate issue is whether we'll see sp'2000s before the next multi-month top. Right now, 2000s look just about viable in April/May, but it won't be easy.

Nasdaq Comp'

Tech also gained 1.3%, and is comfortably holding the 4100s. I've now little doubt the tech bubble high of March 2000 of 5131 will be tested, not in 2014..but in 2015. What will be interesting is how far down will the next multi-month wave go. Right now, the 3000 threshold looks a bold downside objective for summer/autumn 2014.


The mighty Dow climbed another 257pts (1.6%) this week, and is now well into the mid 16000s. The old trading range of spring/summer 2013 in the 14750-15750 zone is now fading far below. Dow looks set to hit 17000/500 by late spring. A move down to the 14000s would be the 'best bear case' in second half of 2014.

NYSE Comp'

The master index is just 34pts (0.3%) away from the Oct'2007 high of 10387. That looks set to be broken next week, and it will mark a key moment for the US market recovery from the March'2009 low of 4181. The 11000s look viable by the spring.


*ignore the spurious data/spike to 1213, which should have been removed by the exchanges.

The second leading index climbed 1.3%, and looks set for the 1200s in January. The only issue is whether the 1300s are going to be hit before the current 2.2yr cycle concludes.


The old leader - Transports, gained almost 1.0% this week, and is comfortably holding the 7300s. The 7500/7700 zone looks reasonably easy upside into the late spring. The only issue is whether 8000 will be viable before the next intermediate turn. I'd guess Trans will fail to break 8k in the current wave.


So, the market saw follow through from the QE-taper ramp. There looks to be at least another week, if not 2-3 weeks of further upside before the current wave completes, and then some 'moderate' downside, probably no more than 5-7%.

Looking ahead

Next week will again be a somewhat shortened one, with the market closed on New Years Day - Wednesday.

There is the Chicago PMI on Tuesday, but other than that, it looks to be a pretty quiet week. However, most notable, there are no less than four Fed officials speaking next Friday, including the Bernanke on the 'changing Fed'. 

*the next QE-pomo schedule will be issued this Monday @ 3pm. There might be sig' QE on Tuesday or later in the week.

back on Monday :)