Saturday, 22 March 2014

Weekend update - US weekly indexes

US indexes rebounded, with net weekly gains ranging from 0.5% (Transports), to 1.5% (Dow). The broader weekly trend remains to the upside, although the market is pushing against upper bollinger band resistance. The sp'1900s are now viable in early April.

Lets take a look at six of the main US indexes


The sp' saw net gains of almost 1.4%. Most notable this week, was the fractional new high of 1883.97 on Friday.  Underlying MACD (blue bar histogram) remains negative, as it has since mid January. Other indicators are moderately bearish, despite the new highs.

Equity bears need to break the weekly 10MA, now at 1832. Bulls have strong trend support around 1775, and by end April, that will be the low 1800s.

Nasdaq Comp'

The tech was somewhat weak this week - as it especially was on Friday, with a net gain of just 0.7%. The broader trend remains to the upside though, and April will offer the 4400s. However, underlying MACD cycle remains negative, and there are some interesting divergences for those looking!


The mighty Dow gained 237pts (1.5%) this week, but remains 286pts below the high of late December. Underlying MACD is still negative, but ticked higher, and there is the threat of a bullish cross next week. Best case bullish upside looks to be 16700/800 in April, with the 17000s still looking out of range this spring.

NYSE Comp'

The master index gained around 1% this week, but underlying price momentum is a touch bearish. Equity bears need a weekly close <10260 (the 10MA) to offer any hope of a new multi-week down cycle.


The Rus'2000 index gained 1%, but is looking tired. The R2K remains very close to the upper weekly bol' and at best, might see 1225/50 in April/early May. The 1300s look well out of range for some months.


The old leader was the weakest this week - an interesting opposite to the more bullish Dow, gaining just 0.5%. Price momentum remains a little weak, but bears can't get excited until a weekly close <7300s.


So, weekly gains for all the indexes, although not exactly spectacular in size, not least with the Friday reversal. Yes, there is a touch of weakness, yes, there are some interesting bearish divergences, but the primary trend remains to the upside.

Considering the broader trend - and with continuing QE (although reducing), it'd seem we're more likely to push higher into April, than a near term significant rollover - as in <1830.

Looking ahead

Most notable next week, Wed' Durable Goods orders, with GDP (final reading Q4) due on Thursday. Friday concludes with personal income/outlays and consumer sentiment.

*there is sig' QE-pomo: Wed' $2-3bn, Thurs' $4-5bn, bears...beware!

An interesting week

For yours truly, it was an important week, with my first short-index trades since last summer. Across the week, I made moderate net gains, so I can't complain, not least since the US indexes managed net weekly gains.

I'm still hoping the market will see a multi-month rollover this spring/summer, but this week was again a reminder of just how swiftly the market can claw back the declines. I remain short the market via the ETF of SDS, and if the price action looks okay next week, I'll look to pick up another SPY put block for more short-term trading purposes.

There remains a huge simmering pot of global economic and geo-political issues, not least of which is the Ukraine. That issue is far from settled, although my attention is more on Asia. China is continuing to push its boundaries, and I'd be mindful of China/Japan in the months ahead.

back on Monday :)