Saturday 28 September 2013

Weekend update - US weekly indexes

The US equity indexes generally saw moderate declines of around 0.8-1.4%. The two exceptions were the Nasdaq and R2K, which both saw fractional gains. The broader mid-term trend remains clearly to the upside.

Lets take a look at six of the main US indexes


The sp' fell a moderate 1.1%, and that only took it back to the lows of FOMC week. First key support is the weekly 10MA of 1678 - which is where the 50 day MA is also lurking.

Baring a few daily closes in the 1670s..or lower, equity bears face the broader mid-term trend, which remains starkly to the upside. However you choose to count the waves from the key Oct'2011 low, the trend sure isn't down. Again ,its notable that in the two more recent pull backs, neither hit the lower weekly bollinger. This remains a very strong market.

In terms of upside, the 1800s are viable as early as late October, but far more likely in Nov/Dec. A yearly close in the 1900s is not impossible, but will be difficult - not least if there is another sporadic pull back of 5-7% - which does seem likely before the year concludes.

Nasdaq Comp'

The Nasdaq actually managed fractional gains of 0.2% this week (hey bears, are you listening?). The 3800s look likely within the next week or two..and the big 4000 level remains an obvious psy' level target before the year concludes.


The mighty Dow remains particularly weak, and slipped 1.25% this week. Interestingly, despite the declines, the Dow still managed to hold the 10MA..a mere 3pts below at 15255. First key support are the 14700s, - equiv' to sp'1627.

For those bears who are seeking major declines this autumn, the big support/trend to break - as of October, will be in the 14500s. That seems difficult to achieve. On the flip side, first upside target are the 15700s, and then the big 16k level.

Frankly, if I see a few consecutive weekly closes in the 16000s..I will consider 17k an easy target...and then the big 20k by late spring 2014. 

NYSE Comp'

The master index slipped 0.9%, if the main market can resume upward in October, the big 10k is the obvious target.


Despite general weakness in the market, the R2K closed fractionally higher. The R2K remains in its accelerated up trend - since last November. Upside target for Q4 is 1150/1200, which seems viable.


The old leader was especially weak, slipping 1.4%, but is comfortably above the 10MA, and the 7000s really aren't that far away. Despite the declines, underlying MACD cycle ticked higher, although there is no bullish cross yet.


So..a week where the market saw moderate declines, although certainly it is important to note the fractional gains in both the Nasdaq and the R2K.

Without question, the broader mid-term trend remains to the upside. To say simply outright doomer-bear denial.

Primary trend remains bullish (at least for a while)

Despite a moderate decline of just over 1%, the sp' closed the week with a green candle on the 'rainbow' chart. There really isn't anything bearish here.

sp'weekly4- hyper-bullish outlook

My best guess is that we still have a major wave higher to play out before ANY chance of 'significant' downside. Considering the usual 'santa rally', and then the 'green shoots of spring' rally...this wave could just keep on pushing higher for another six months.

Worse case for the April/May 2014, the sp' is in the 2000/2200s...and even a 20% pull back will only bring the market back down to the 1800/1700s..before the final hyper-ramp phase across into 2015/16.

Looking ahead

Things are a little uncertain, due to the possible US Govt. (limited/temporary) shutdown. From what I gather, any US (Govt' based) econ-data releases - including the big Friday jobs data, would likely be delayed..

*there is no sig' QE on Monday, the POMO schedule for October will be released Mon'3pm.

*I remain long the indexes from a week ago, am underwater, but considering the price action of the last week, I'm not overly concerned.

I will probably be back on Monday

Moderate weekly declines for the bears

US equities closed the week on a moderately bearish note, with the sp' managing to hold the 1690s. Across the week, the sp' declined around -1.1%, which is clearly nothing for the doomer bears to get overly excited about. Broader mid-term trend remains outright bullish.

sp'weekly2 - rainbow, 2yr

sp'daily3 - fib retrace levels


Clearly, a week for the bears, although the declines aren't significant, and this could easily just be a very minor retrace, before the next wave higher.

It should be noted though, with the break <1691, the door is open to a further moderate wave lower to the 1680/75 zone, where the 50% fib retrace is, along with the 50 day MA.

So, at worse, bulls look vulnerable to a further 1% lower, before renewed upside in October. Considering the style of price action this past week, i just can't see the bears managing any daily closes in the 1670s, never mind taking out the recent key low of 1627.

For the moment, the mid-term trend remains outright bullish. For those who are seeking much lower levels, first target should be a break below the weekly 10MA...into the mid 1670s.

If the market can close in the 1670s next Friday, then I'll be open to a much more bearish outlook this autumn, but really, I find that hard to believe considering the ongoing QE.

Goodnight from London
*next main post, late Saturday, which will be covering - in more detail, the US weekly indexes.

Daily Index Cycle update

The main indexes closed moderately weak, with the sp -7pts @ 1691. The two leaders - Trans/R2K, slipped -0.6% and -0.4% respectively. Near term remains weak, but the recent seven trading days could easily be a bull flag, with target upside in October to the 1750/75 zone.





The market closed the week in a relatively quiet state, despite a closing hour appearance by the US President. The market is obviously looking for a resolution to the potential Govt. shutdown.

The primary trends remain to the upside, and based on the past few years of trading action, I have to assume the market will simply break back upward to the upside some time next week.

Lets be clear, the bears have seen the sp' decline for 6 of the last 7 trading days, and that has only achieved a decline from 1729 to 1691...a mere 2.3% or so.

That is simply not good enough, and once the bulls do manage to turn the market back upward, they'll be more than capable of breaking new index highs.

a little more wrap up the week