Saturday 16 November 2013

Weekend update - US weekly indexes

US equities continue their grand ramp from the Oct'2011 low of sp'1074. We're now 724pts (67%) higher in just over two years. Near term outlook is bullish, with upside to the sp'1810/30 zone. Broader upside into late spring - to Dow 17k, sp'1950/2100, looks very likely.

Lets take a look at six of the big US indexes


Another 1.5% higher for the sp'500 , and the 1800s look a given next week. Underlying MACD (blue bar histogram) cycle is accelerating to the upside - as it is for all indexes, and there is little reason to believe the market won't claw higher for another week or two.

Next target is the 1810/30 zone, which seems viable before end month. The 1900s do not look likely before year end. Baring a break under the recent low of 1760..and the rising 10MA, the bears have absolutely zero hope in the near term.

Nasdaq Comp'

The tech remains in an accelerating up trend, and is soon to hit the big 4000 level. The March 2000 high of 5132 is still a very considerable way higher. Near term upside to around 4075/4100.


The mighty Dow has met my key target of the 15800s, and the weekly close of 15961 is extremely bullish. 16k is now a given, and arguably, 17k by late spring is also..a given. Having been stuck in a tight range for around six months - which looks like a giant bull flag on the monthly charts, the Dow looks set to battle higher.

NYSE Comp'

The master index is holding the low 10000s, and looks set to break the Oct'2007 high of 10387. Near term upside to 10400/500. By end spring 2014..perhaps 11500/750. Powerfully bullish.


The second market leader remains in the strong up trend from Nov'2012. The 700s now look bizarrely low, and that was just a year ago! Near term upside to 1150/75, with the 1300s viable by late spring. Absolutely nothing bearish here.


The old leader pushed a very significant 2.8% higher this week, and looks set for the 7400/7500s before year end. Upside by end spring 2014, looks to be around 7750/8000. No doubt, continued weak WTIC Oil prices will help boost the profits of all transport stocks for Q4'2013 and Q1' 2014 earnings.


All indexes saw significant gains, and there is unquestionably a strong likelihood for another week or two higher in the current wave. General upside into year end is likely, and a yearly close somewhere in the sp'1800s seems very probable.


The following chart that I originally posted many months ago looks disturbingly on track.


Effectively, equity bears have another 4-6 months to wait until the current multi-month wave completes. Seasonally, this would very much be the norm, with a general rally into the spring, before the first real opportunity of a significant wave lower.

Looking ahead

There is not much due next week. Only Wednesday has anything important, with retail sales, and the FOMC minutes. There are fed officials on the loose across the week, any of which whose comments could easily be used by the market to 'inspire' prices.

*next week is rife with QE-pomo, there are TWO on Monday - totalling $5-6bn, also sig' QE on Tue and Thursday. Bears...beware!

Another week for the bulls

Clearly, almost everyone is now on the 'market to da moon' train. Yes, that in itself is often a contrarian signal, but really, the QE continues. Have we not been through the latter issue enough?  Best guess, further gains into the sp'1810/30 zone this week, before a very slight pull back...1-2%, and general gains into year end.

For the remaining doomer bears out there, primary objective remains (especially for those who can't stomach going long at current levels) to do nothing..and merely be on 'trading account survival mode'.

I'll sure as hell be ready for the next intermediate top (which I'm guessing is spring/summer 2014)...I hope you are too!

back on Monday :)

Commodities remain weak

Whilst equities continue to battle to new historic highs, commodities remain weak. In particular, Oil and Copper - usually good indicators of the broader economy, are very low relative to equities. The CRB/Sp'500 disparity continues to grow.

WTIC Oil, monthly'2

Copper, monthly



It has been another difficult week for the equity bears (not that I've been shorting the indexes) I'll keep this post short.

On one side, weak Oil/Copper prices are normally a bearish sign, has to be said...on the flip side..lower prices help to increase profit margins for the manufacturers, never mind the general retail economy.

With the Fed kicking up the equity market via continued QE, it would seem we'll see a rare instance where Oil and Copper fall (or at least flat line) but with equities continuing to push upward.

Of won't last forever. I remain looking for a key equity intermediate top in spring 2014.

Goodnight from London

next post: late Saturday, on the US weekly indexes.

Daily Index Cycle update

The main indexes closed moderately higher, with the sp +7pts @ 1798. The two leaders - Trans/R2K, closed +0.7% and 0.4% respectively. Near term trend remains bullish, and the current wave looks set to reach somewhere in the sp'1810/30 zone within a week or two.





There is little to add..trend is strongly to the upside...and next week will likely see further gains. The price action/structure in all indexes is very bullish.

a little more later....