Saturday, 19 April 2014

Weekend update - US weekly indexes

It turned out to be another cruel tease to the equity bears, with weakness across much of Mon/Tuesday, only for the market to break decisively higher on Wednesday. With most indexes seeing net weekly gains of around 2.4%, the market appears to have started yet another multi-week up cycle.

Lets take our regular look at six of the main US indexes


The sp' put in a very important weekly gain of 2.7%, and is back within the price cluster zone of the 1870/60s. A weekly close in the 1880/90s will be important by mid May, which will then open up a new index highs. There is a reasonable case to be made for general upside to the 1925/50 zone, before this new up wave is complete.

Underlying MACD (blue bar histogram) cycle is starting to tick higher, and could easily do so for 4-6 weeks. Barring a break under the 10MA of 1852, equity bears no longer have any hope of mid-term downside.

Nasdaq Comp'

The tech rallied 2.4%, and especially notable was the spike-floor weekly candle. It bodes for at least a few more weeks of upside. First target are the mid 4200s, that is another 3% higher.


The mighty Dow also rallied 2.4% this week, and is now set for a charge to take out the recent high of 16631. The 16700/800s should be viable by early May, and 17k looks just about possible by late May/early June.

NYSE Comp'

The master index climbed 2.45%, and attained the highest EVER weekly close at 10532. I still find it difficult to believe the 11000s are viable in the current multi-month up wave - from Oct'2011. Regardless, the near term trend is bullish.


The R2K gained 2.4%, and like the Nasdaq, put in a very bullish spike-floor candle this week. There is near term upside to the 1180/1200 zone. It will be difficult to break the recent high of 1212. We have a possible neckline in the 1070s. A break of that would open up the 1000 threshold, if not the 900s.


The old leader gained a powerful 3.7% this week, with the highest weekly close..EVER. The 7700/800s look viable within a few weeks. The only issue is whether 8k is going to be hit by late May/early June. Underlying MACD cycle has ticked higher, and we're set to get a bullish cross within 1-2 weeks - certainly, by end month.


So... despite the weakness across Mon-Tuesday, the market has broken back upward. Indeed, we have a few indexes with new historic weekly closes, and that has to be an especially bullish sign into end month and much of May.

The weekly spike-floor candles for the R2K and the Nasdaq are strongly supportive that the current rally in the headline indexes (sp, Dow) will hold, and that we will see new historic highs.

Looking ahead

The week starts with leading indicators on Monday. Tue/Wed will see housing data and PMI manu' Thursday has Durable Goods Orders and the usual weekly jobless. Friday will conclude with PMI services, and consumer sentiment.

Overall, nothing particularly significant is due, and as far as I know, there are no Fed officials on the loose.

*there is sig' QE-pomo: Mon' $3-4bn, Wed' $2bn or so.

Looking to jump aboard the bull train

Once we return from the Easter break, I'll be seeking to pick up a long-index position, if only for a few weeks. Certainly, the hourly MACD cycle is rolling over, and it'd be particularly enticing to be long from the 1850/45 zone late Monday/early Tuesday.

Considering the weekly closing candles - especially the R2K/Nasdaq, the market looks set for further upside. The notion of 'sell in May', looks unusually off the agenda this year. If that is the case, it would no doubt get the bulls even more confident, which might make for a much better re-short, somewhere in the sp'1925/50 zone.

As ever, comments are welcome, and I do hope your weekend was a restful one!

back on Monday :)