Lets take our monthly look at six of the US indexes
sp'500
September only closed a touch net lower, but with the move down to sp'1906, we now have a bearish MACD cross... and are negative cycle for the time since January 2012. Indeed, as of the Friday close, the sp'500 joins the R2K, Dow, and NYSE Comp' at MARCON 6.
Key rising support from the 2009 low is around 1825. With the recent style of price action, a sustained break below 1900 (after a latter half October bounce) seems likely in November. If a H/S scenario, target zone is 1780/60.
A multi-month down wave - analogous to summer 2011, would offer a fib retrace down to sp'1650.. just 3% or so above the double top of 2000/2007. Right now though, that latter scenario does seem beyond 'the stuff of dreams'.
Nasdaq Comp'
The tech is especially suffering this past week, and is currently down a very significant -4.8%. Next key level is the giant 4k threshold. If that fails (as I expect).. primary target would be around 3500/3400.
Dow
Even the mighty Dow is lower by almost -3% so far this month, and looks set for significantly lower levels this autumn. First key target zone is 15000/14700. A break <14k looks highly unlikely.. no matter how rattled the market might get.
NYSE Comp'
The master index - like the R2K, has a clear break of the rising trend from summer 2012. We've a very significant red candle, the first since May 2012. First target is the 9500/9300 zone. Like the R2K, Dow, and Sp'500... the NYSE Comp' is now MARCON 6.
R2K
The R2K had been stuck all year, with a double top of 1212/1213. With the recent break of the 1080 floor, the R2K is a completely broken index. We've the second consecutive red candle, and the R2K looks headed for the giant 1000 level... if not the low 900s.
Trans
So far this month, the 'old leader' - Transports, is lower by a somewhat severe -6.6% @ 7893. A bearish MACD cross looks a given in November. First target is 7k. Ultimate best downside case for the equity bears is 6k. On no outlook do I see any sustained trading in the 5000s.
Summary
Without question, something new is going on. We have very significant bearish crosses on 4 of the 6 main indexes I regularly highlight. The last time we saw this type of event was in summer 2011.. where the broader market saw a fall of almost 20%.
Most of the mainstream are still only moderately open to even a 10% correction, never mind anything close to summer 2011. How are the cheerleaders going to react if we're in the 1700s by late November? Tears and screaming toward Yellen, demanding QE4?
Certainly, if we do trade into the 1700/1600s.. whether late this year or early 2015, I'd have little doubt the Fed will launch yet another QE program. Maybe they might want to start buying up some of that student debt in the next round?
Looking ahead
There really isn't much in the way of significant data.
Mon - bond market is CLOSED (holiday), but equities open!
Tuesday - clear
Wed' Retail sales, Empire State manu' Fed beige book
Thurs' jobless, indust' prod, phil fed', housing market
Fri' housing starts, consumer sent'... & opex.
There are a few Fed officials to speak on Monday, but mostly Thursday.
*there is QE, Tue' $1bn, Wed' $1bn, Thur' $0.25bn
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back on Monday