Lets take our regular look at six of the US indexes
sp'500
The sp' saw a very significant decline of -2.6%, the biggest net weekly fall since May 2012. The recent high of 1850 is now a clear 60pts higher, and with the break <1815 - where the 50 day MA was lurking, the market looks set for a further week or two of downside.
There is very strong multiple support around 1750, and frankly, I don't see the market going below there in the current wave.
Nasdaq Comp'
The tech slipped -1.6%, but still holds within the accelerated up trend. There is reasonable chance of downside to the big 4000 level within 1-2 weeks. Baring a key multi-month top already being put in, I'd expect the Nasdaq to stabilise there.
Dow
The mighty Dow fell a very significant -3.5% this week, and the weekly candle sure bodes for further downside into February. Next key support is the 15700/500 zone - where the 200 day MA also lurks. By end of next week, the lower weekly bol' will be around 15300. Were the market to fall that low...that would really change the bigger picture.
NYSE Comp'
The master index fell a significant -3.0%, and looks set to lose the big 10k next week. Primary support is around 9800/700, which is a good 3% or so lower.
R2K
The second market leader lost -2.1% this week. The weekly close is a borderline break of the huge up wave that extends all the way back to Nov'2012..so this is a pretty huge issue. All things considered, I'd expect further downside, to around 1100/1075 in the next 1-2 weeks.
Trans
The tranny slipped -2.3% this week. However, this is masked by the fact that whilst the main market slipped on Thursday, the Trans actually managed a historic new high of 7591. The Friday decline itself was a very powerful -4.1%. Next key support is around the big 7000 level, that is 3-4% lower.
Summary
Unquestionably, it was a week for the bears, with the biggest two day decline since May'2012. This market sure is quirky though. The new historic high in the Transports ranks as a truly weird occurrence, whilst the broader market was very weak on Thursday. That issue has been negated though, with the very big Friday drop.
Considering the weekly close, there looks to be a further 3-4% downside for most indexes across the next week or two. Many other chartists/analysts are also now touting the sp'1760/50s as a key level where the big-money buyers will likely pile back in.
The bigger outlook
The following remains my best guess. Baring a hit of the lower weekly bollinger in the current wave, I will hold to the original outlook of further broad upside into the late spring.
sp'weekly4
Looking ahead
Next week will be a busy one. Monday begins with home sales.
Tuesday will see Durable Goods Orders. Later, 9pm EST, the US president will make the annual 'state of the union' address, always a pretty major TV event.
Wednesday will be the highlight of the week, with the latest FOMC announcement. From what I gather, there will not be an afternoon press conference. The first Yellen press' conf' is due at the subsequent FOMC of March 19th.
Thursday will see the first estimate for Q4 GDP.
Friday concludes with an array of econ-data, inc' Chicago PMI, and consumer sentiment.
*there is sig' QE, Tuesday $2-3bn, Friday, $4-5bn.
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A dynamic week ahead
With the first red candle on the 'rainbow' (elder impulse) weekly charts, the week sure did end with a bearish bang. The week ahead will most likely be equally as dynamic. No doubt, at some point we're going to see some very strong up waves. As ever, the only issue is whether the bounces put in a lower high...and right now, that would be my guess. A back test of the old broken floor of sp'1815 would be pretty normal, before further downside to 1780/60 by mid February.
back on Monday :)
