Lets take our regular look at the six main US indexes
sp'500
It would seem 1560 was the cycle low, after a decline from 1687. The upper monthly bollinger is still only at 1665, a mere 2% higher, but if the bulls manage to close July in the 1660/70s, then the low 1700s should be viable in August. Underlying MACD cycle is still offering a rollover, but by the end of this month, that looks likely to be merely flat lining.
Nasdaq Comp
The tech' is already up over 2% this month, the 3500s are within easy reach, and the 3600/3700s look viable by August. The bulls should merely be wondering if 4000 is viable this year.
Dow'30
The mighty Dow is similarly looking pretty strong, with key support over 1000 points lower. Bulls look entirely in control, and Dow 16k is viable on the next push higher.
NYSE Comp
The master index suffered worse than any other index in June, hitting the monthly 10MA, but it has put in a spiky-floor candle for June, and looks to be back on the rise. The big target is the Oct'2007 high of 10387, but that's over 1100pts higher (12% or so). That will be difficult to hit this year, even with ongoing QE.
R2K
The Rus'2000 is cruising comfortably higher after briefly threatening to test the big 900 level. The bears embarrassingly only managed to hit the 950s, before the R2K snapped back higher, and the weekly close of 1005 is indeed, a new all time historic high. There is nothing bearish here, and the R2K looks set for the 1100s.
Trans
The old leader has been stuck in a rather tight range since March, and the bulls should consider a break into the 6600s as 'important'. If that is achieved, it should offer the low 7000s later this year.
Summary
So, it would seem sp'1560 is a key cycle low. Whether you want to label the recent downside action as a wave'4 of a giant '3, or even w'1 of initial big'1 down, what is clear is that the bears are..weak.
The fact we didn't even hit the lower bollinger on the weekly charts was a real surprise to me. It makes the recent declines even weaker than the down cycle from Sept-Nov'2012.
Despite the regular 'taper talk', the QE does continue in full, and that is a massive problem to those on the short side.
Near/Mid term outlook
I'm again inclined to post up the following - rather crazy bullish, outlook. Even if you disagree with the micro-count, the bullish style of the market is pretty clear in this rainbow chart. We closed the week with an outright bullish green candle, and that should scare the hell out of the bears, it certainly did me.
sp'weekly4, hyper-bullish outlook
--
In terms of the price outlook into August, I particularly like the following count/outlook...
sp'60min'3 - broad outlook
I am broadly assuming the recent downside action was a 4' (of big 3), and we are now due a 5 UP..into early August. I suppose the 5 could truncate <1687, but with QE, I'd have to guess..no.
I'm looking for a new cycle top somewhere in the 1700s within the first half of August. From there, I'd again be looking for a 6-10 week down cycle, and perhaps next time, it will hit the lower weekly bollinger, but by then, it'll be in the 1550/75 area.
Looking ahead
The main issues due this week are the FOMC minutes and Bernanke speaking, both on Wednesday.
*there is significant mid-sized QE on Tuesday and Wednesday.
--
With the weekly charts now back to at least a short term bullish outlook, I have indeed abandoned my remaining hope of any further downside. I am guessing there will now be broad upside into early August, with the market still very much propped up by continuing QE.
Considering the price action late Friday, it would not surprise me if we gap right into the 1640s at the Monday open. Regardless, I will be looking to take a new index-long position.
As ever, all comments are always appreciated. Good wishes for next week!
back on Monday :)
