Saturday 22 February 2014

Weekend update - US weekly indexes

US indexes were mixed, after a somewhat choppy week, with net weekly changes in a range between -0.3% (Dow) to +1.3% (R2K). The broader outlook remains bullish into the next FOMC of March'19, with an upside target zone of sp'1880/1920.

Lets take our regular look at six of the US indexes


The sp' was fractionally lower on the week, but importantly, did manage to put in a second weekly close above the 10MA - now at 1821. The lower bol' is set to jump to the 1740s at the start of next week, and any hope of breaking the recent 1737 low is no longer viable.

Indeed, even if we put in a key peak around the time of the next FOMC, I do not expect the market to have any chance of breaking <1700 in the first main wave lower.

Nasdaq Comp'

The tech' saw moderate gains of almost 0.5% this week, the third consecutive weekly gain. Most notable, the Nasdaq has already broken a new post 2009 high, and looks set for the 4300/4400s in March.


The mighty Dow slipped a little, with a net weekly loss of 0.3%. The weekly candle is a somewhat indecisive doji candle. Underlying momentum remains negative, and there is a somewhat clear H/S scenario viable - which also applies to most of the other indexes.

There is key rising support in the 15500s, whilst the upper bollinger is offering upside to the 16600/700s in early March. 17k looks to be an increasingly 'difficult' target in March.

NYSE Comp'

The master index saw a minor gain of 0.2%, and this was the third consecutive weekly gain. Underlying momentum is still negative, but we're set to go positive MACD (blue bar histogram) cycle in the first week of March.


The second market leader was the strongest index this week, with somewhat sig' gains of 1.3%. We're set to break into the 1200s in March.  The 1300s do not look possible until late 2014 - assuming a major summer retracement back to the low 1000s.


The old leader only managed an essentially flat close this week. However, after the two day decline of Tue/Wed, the tranny closed the week arguably strong. The weekly candle was the fourth consecutive candle with a spike-floor. This certainly bodes more to the upside, as we move into March.


So, it was a bit of a mixed week in market land. Certainly, the bears have again failed to knock the market significantly lower, and with the Nasdaq breaking new highs, and the two leaders - Trans/R2K, both looking set to break new highs in March, the outlook has to remain bullish.

Looking ahead

There are a few bits and pieces due in the coming week. The first major data points are case-shiller HPI and consumer confidence on Tuesday. Thursday will see Durable Goods Orders and weekly jobs data.

Yellen is due to speak to the Senate on Thursday (having been recently postponed). That will no doubt get major attention, and if last time is any clue, Yellen might be talking for 4-6 hours.

The week concludes with GDP (second reading), Chicago PMI, consumer sent' and homes data.

*there is sig' QE-pomo: Mon', Tue', and Thursday....bears beware!

Not long to go now

Chart sp'weekly'8 has been (disturbingly) correct since last summer.

I am very much looking forward to seeing whether we do indeed put in a key intermediate'3 top this spring. From there, equity bears should have their first opportunity - since summer 2011, to smack this market lower, at least by 10%, if not double. However, regardless of any summer/autumn declines, I still expect much higher levels in 2015

back on Monday :)

True Permabear

A second year is now complete for this little corner of the financial blogosphere.

4921 posts across two years (on this blog, not counting the other three!)...and I'm still going.

I will again note my thanks to two of the leading chart linking sites...

Were it not for those two sites, I'd not have kept this going, especially in those first few months.

There are other sites of course, and I appreciate all those who have commented in the past two years, whether via disqus or email.

Let the third year...begin! first chart of my third year....lets make it a bearish one (what else would it be?) ;)

sp'weekly7c, H/S scenario

This remains a particularly attractive scenario for the spring. Could it really be this? Certainly, there is an opportunity, with QE-taper'3 seemingly coming at the FOMC of March'19, and then taper'4...(FOMC of April'30).

Most are now agreed, we're due a significant correction. Considering the giant ramp from Oct'2011, I can't see it being just 10%. I'll be looking for 15/20% this summer. Primary target zone is 1625/1575 or so.

That would make for a pretty exciting few months, and should equate to a VIX at least in the 30s.

As for the 'True Permabear'

It relates to a TV series I have been watching this week. It is probably one of the best mini-series I've ever seen. If you like a slow and moody show in the late evening, with quality story telling, then go seek out 'True Detective' (HBO network). I should also note, 'Black Sails' (Starz network) is pretty good too, if pirates be your thing...arrrr!

Goodnight from London
*The weekend post will be on the US weekly indexes

Daily Index Cycle update

US indexes closed the shortened week with rather typical opex minor chop, sp -3pts @ 1836. The two leaders - Trans/R2K, settled +0.8% and +0.2% respectively. The broader outlook remains bullish into mid/late March, with target upside of sp'1880/1920.





A pretty quiet week. Even the weakness seen across Wednesday afternoon wasn't particularly significant.

With the bigger weekly/monthly charts still broadly bullish, there looks to be at least a further few more weeks to the upside.

a little more later..on what is another milestone for yours truly..