Saturday, 19 July 2014

Weekend update - US weekly indexes

Despite a few geo-political concerns this week, the US equity indexes continued their broad climb, with net weekly changes ranging from +1.6% (Transports) to -0.7% (Rus'2000). Near term outlook is for the sp'1990/2000s before end July.

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


Despite the big Thursday fall of -23pts, the sp'500 still managed a net weekly gain of 10pts, and on Friday, came within just 0.3% of breaking a new historic high (>1985). Near term outlook is bullish, and the 1990/2000s are viable next week. By mid August, the sp'2040/50 zone will be viable.

Equity bears have nothing to tout, until we see a weekly closing under the 10MA, which will jump to the 1950s next week. Underlying MACD (blue bar histogram) ticked lower for a second week, but price momentum remains very much in favour to the bulls.

Nasdaq Comp'

The tech' gained 0.4% this week, and put in a rather bullish spike floor candle, having held the price cluster zone of the mid 4300s. There looks to be very valid upside all the way into September, probably to the 4700s.


The mighty Dow gained 0.9% this week, having broken a new historic high of 17151. There is absolutely nothing bearish for this index. Price action remains very gradual, but consistently to the upside. The 18000s look viable in late Sept/early Oct.

NYSE Comp'

The master index gained around 0.5%, and importantly, held the weekly 10MA. There looks to be easy upside to the 11200s by mid August.


The second market leader had some real problems this week, swinging from 1169 to 1131. Having managed Friday gains of 1.6%, the R2K saw net weekly declines of a moderate -0.7%. The 1130/20s are now key support.. and rising each week.

It will be important for the broader market to see the R2K make a series of net weekly gains into August. Most important...a new high >1213. That seems viable by mid August.

Equity bears have nothing to tout unless they can break under the key floor of 1080. Those who believe the sp'2100s are viable, should be open to the R2K in the 1300s, but that will likely be a good 6-9 months away.


The old leader was the strongest index this week, climbing a significant 1.6%. The 8500s look viable next week, and that is another 2% higher. The current rate of increase is 250pts a month, and thus the 9000s will be viable late Sept/early Oct.


Most notable this week, new historic highs in the Dow and Transports. On the flip side, the R2K was very weak for a second consecutive week, but did recover much of the losses with the Friday gains.

We have some interesting spike floor weekly candles, and price action remains much the same. With the VIX having been knocked back to the 12s - and seemingly headed for single digit levels eventually, equity bulls have little to be concerned about for the rest of the summer.

Looking ahead

Next week will be largely about earnings as another truck load of companies report for Q2.

In terms of econ-data, there is CPI and existing home sales data on Tuesday. Thursday will see jobless claims and new home sales. The week will conclude with Durable goods orders.

*there is sig' QE - Wed' $2bn, Thur' $3bn... bears... beware!

back on Monday :)


Video from Gordon T Long, with Rubino on the issue of financial repression.

As ever, for those interested in the macro picture.. this is good viewing.