Saturday 19 October 2013

Weekend update - US weekly indexes

The US indexes confirmed the spike-floor candles of last week, with some powerfully bullish weekly candles this week. Most indexes climbed 2-3%, even the laggy Dow managed 1%. Mid-term trend remains strongly to the upside, with the sp'1800s now likely in Nov/Dec.

Lets take our regular look at six of the US indexes


The sp' saw good gains of 2.4% this week, breaking decisively above the old 1729 high. This weeks candle confirms the spike-floor from last week, and we're probably going to see at least another 2-3 weeks of upside, although the gains will likely be no more than 0.5-1.25% a week.

Underlying MACD (blue bar histogram) is still negative cycle, but we will see a bullish cross and go positive cycle at the Monday open. The sp'1800s look viable this Nov/Dec. Certainly, even I would not be suggesting sp'2000s this year.

Nasdaq Comp'

The tech' saw powerful gains this week of 3.2%, and the composite is now just 2% shy of the big 4000 level - which was considered 'optimistic' for a yearly close, just a few weeks ago.

The last two weekly candles are a classic example. We have a reversal (hollow red) candle, with a good spike-floor, and this past week is an outright bullish candle. Even more bullish is we've now broken above the rising channel, which goes back to last November.

It should be kept in mind the bubble high for the Nas' comp was 5132 in Mar 2009. So, we've still a good 28% yet to go. Never mind the issue of what the index should be - relative to inflation across 13yrs.


The Dow is still laggy gaining just 1%, but like other indexes, the weekly gains confirmed the spike-floor candle from last week. Equity bulls should be seeking a weekly close in the 15800s to confirm the broader market strength.  If we see the Dow in the 16000s, I have to think that will open the door to the giant 20000 soon as late spring 2014.

I will add, underlying price momentum does remain negative, and this remains the last real piece of 'bearish hope' out there. Considering the wider market though, I think bears should not overly focus on the Dow.

NYSE Comp'

The master index gained 2.3%, and is now just 15pts shy of the big 10k level. No doubt, that will be hit in the coming week or two. Upside to 10300/400 looks likely by early December, and that would equate to sp' in the low 1800s. There is simply nothing bearish here, all indicators are positive.


The R2K saw powerful gains of 2.8%, and now we're already in the 1100s! The 1200s look possible in December. The 900s now look a very long way down, and sub'1000 looks unlikely now for a very long time. A truly scary thought is that perhaps we won't see sub'1000...for some 'years'...if..ever.


The old leader, Transports, closed the week with an exceptionally bullish candle, with gains of 2.7% - confirming the spike-floor candle of last week. The 7000s now look a given within the immediate term.

Underlying MACD cycle is now positive, and with a bullish cross, everything is back to outright bullish. The only issue now is when will the 8000s be hit, late next spring? It won't be easy, but the trend is now two years old, and remains strong.


With the political maniacs concluding their latest little 'game', the market has continued to rally from last Wednesday's low of sp'1646. All the indexes have put in weekly candles that confirm the spike-floor candles from last week.

Only the Dow is weak, but even that has the same type of bullish candles seen in other indexes. When you consider the other world equity markets, the continuing QE, further index gains of 15/20% look very likely by late spring of 2014.

Hyper-bullish outlook..still on track

To my own disgust and disappointment, it would seem the hyper-bullish outlook which I threw out into the blogosphere this spring, is on track. With a 'Santa rally' of some degree, and some 'green shoots of spring', the sp'2000s look viable by next April.

sp'weekly4 - hyper bullish

I'd still guess we'll see a 20% pull back next summer/autumn. Yet, if we're sp'2000, even 20% will only knock the market back down to 1600..and you can bet the Fed would be adding to the QE program.

Lets just say we're at 1600 next autumn..given another 12-18mths, it really isn't hard to envision sp'2500 or so..before the next major collapse wave - ala' 2008/9.

Looking ahead

Monday starts with some housing data. More importantly, Tuesday has the delayed Sept' monthly jobs report. Mr Market is looking for 185k gains, with a static rate of 7.3%. Those are not bold targets, and should be met. Wed/Thursday have more housing data, and the week concludes with Durable Goods Orders and Consumer sentiment. If either of those come in weak, market will have an excuse to sell lower..if only for a few days.

*There is sig' QE pomo of approx' $3bn on Monday and Wednesday.

I endeavour, along with others

The past few weeks have been especially difficult for many. The latest round of bearish hysteria even started to affect me (and I've tried to immune myself against it), was of course just more political gaming, and the market has soared 98pts across just 8 trading days.

At this rate, we'll be in the mid sp'1800s before October ends. How scary is that? Of course, this market will have micro pull backs, but really..there is very little to hold the market back until spring 2014.

I continue to try to offer something to all of you out there, maybe even my quirky 'MARCON' indicator will become useful at some point. many others...I continue to endeavour.

*as ever, all comments are welcome.

back on Monday

A case of moon madness?

The sp'500 is now 1078pts above the March 2009 low of 666. It has taken over four years to decisively break into new trading territory. Yet, stock multiples are relatively low compared to the bubble/hysteria highs of previous peaks. Just how much higher can this madness go?

Moon Madness for Permabear?


I should first say that I've certainly posted some bold outlooks/scenarios since I began posting in spring 2012. It has been an especially rough time for those on the bearish side. Even if we just reflect back to June 2012, we've seen the market rally from sp'1266 to today's close of 1774 - 508pts across just 16 months.

The following two charts should be taken with a degree of laughter and at least a sprinkling of bearish contempt.




First, I'm resigned to another 2-3 years of 'general' upside. Most out there seem agreed we're going to get a 20% pull back at some point, but equity bears have been persistently calling for that since the sp'1300s last year.

My best guess is we will see such a pull back, but more likely from significantly higher levels, somewhere in the sp'2000/2200 zone, no later than autumn 2014.

Ignore the first chart..and focus on the second 'conservative' outlook

I have to say, the first chart is more of a 'Tulip bubble' outlook, one that I don't honestly think is viable, unless the Fed were to truly go nuts, throwing a few hundred billion a month at the market, if not outright buying stocks to 'support the American economy'.

The second chart though, yes..I do very much favour that kind of outlook. Indeed, I would hope that a fair few chartists out there might have the same kind of 'back test the old double top high' outlook, on the next collapse wave, before the next grand multi-decade economic cycle.

What about that blue line in late 2015?

I'm a follower of Armstrong (if you didn't already know), and based on the past two bubbles of 1995-2000 and 2003-07, I'm also inclined to a business cycle/market peak in late 2015/early 2016.

Sp'2500 is simply not that difficult to reach, if you reflect upon what is happening whilst QE continues. If QE is still ongoing to a large extent in 2015 (QE across all of 2014 is now a given), this market will still be climbing.

Many seem to have already forgotten the recent 70% ramp - across a mere 7 months (late 2012/early 2013), in the Nikkei...

Japan, monthly

*as an aside, if we get a monthly close in the 16000s in the Nikkei, it will break a two decade down trend/resistance, and open the door to the 18000s..and almost as likely..the 20000s. For those who also believe in the sp'2000s next year, Nikkei >16k, is a very important sign to look for.

Don't get overly fixated on price targets..or even time. The point I'm trying to make is to be open to much higher levels. Despite the series of multi-week rallies from the Oct'2011 low of sp'1074, I think many are simply not considering just how high this market could actually go. Even the cheer leaders on clown finance TV aren't yet gunning for sp'2000.

One day at a time

Regardless of anything else, we will of course need to take this market one day at a time. There remain huge macro-economic issues, never mind the huge systemic problems with the banking/currency system that we have. Any of those could sporadically blow up..and take the system down.

Anyway, those were two kooky charts to conclude the week. If anything, I hope they provoked a few thoughts. Laugh all you like, but do you remember 2-3 years ago when the sp' was in the 1000s? Do you remember how anyone talking about new highs >sp'1576 was simply laughed at. It is time to seriously start talking about the sp'2000s...and beyond.

Goodnight from London
*Next main post - late Saturday, on the US weekly indexes

Daily Index Cycle update

The main indexes ended the week in a very bullish manner, with the sp +11pts @ 1744. The two leaders - Trans/R2K, both climbed over 1%, and the Tranny is indeed looking like it has broken out. The Nasdaq is similarly appearing to accelerate, and the 4000s look likely within the next few weeks.



Nasdaq Comp




For the equity bears, this is really just more of the same. A little tease with moderate downside, only to see a major whipsaw back to the upside.

The daily charts certainly look bullish, but they are nothing compared to the bigger weekly/monthly charts which are offering much higher levels into spring 2014. When you take into account the price action/structure seen across the world equity indexes, I have to think there is a very significant likelihood of this market being in the sp'2000s early next year.

a little more later...probably with a chart that will provoke a mixture of horror and hilarity.