Saturday 21 June 2014

Weekend update - US weekly indexes

US indexes climbed this week, with net weekly gains ranging from 1.0% (Dow) to 2.2% (R2K). The outlook is bullish into mid July, but from there, a multi-week down cycle looks highly probable. The only issue is whether it is just 4-6% lower.. or somewhat more.

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


The sp' climbed a very important 1.4% this week, breaking a new historic high of 1963. The media is understandably now getting increasingly obsessed over the giant psychological threshold of 2000. Whether that occurs in the next few weeks..or later this year... is difficult to say. What is clear, the primary trend remains strongly to the upside.

There is strong rising trend support in the 1850s, and that will have risen to 1900 by late July. Equity bears should be aiming for a July monthly close somewhere under 1900 to offer the first hope of a late summer/early autumn upset.

Nasdaq Comp'

The tech gained 1.3% this week, and fractionally broke (by a single point) the March high of 4371. There looks to be upside to the 4500/4600s by mid July. Underlying MACD (blue bar histogram) cycle ticked higher for the eighth consecutive week, and there is potential for a further 2-4 weeks of upside.


The mighty Dow gained 1% this week, although is still 22pts shy of the next key level of 17k. However, the 17000s do look set to be hit, whether late June.. or mid July. Key rising support by end July will be in the 16700s. On any basis, equity bears should be seeking a July monthly closing under 16500 or so.

NYSE Comp'

The master index is now in the 11000s..a new historic high. There looks to be a further 200/300pts of upside into mid July.. at which point even this index should start to roll over.


The second market leader gained an impressive 2.2% this week, and looks set to break above the March high of 1212. There looks to be viable upside in July to the 1225/50 zone.


The 'old leader' gained 2% this week, but interestingly, did not break last weeks high. There looks to be further upside to the 8400/8500s by mid July. 


So.. we have new historic highs for the sp'500 and NYSE Comp', with the Nasdaq breaking a post 2009 high. The Dow, R2K, and Trans', all look set to follow with new highs into July.

Late summer/autumnal upset?

The ultimate question is whether we just keep on climbing all the way into next year.. or whether we see some form of sharp (but brief) down wave. Something on the order of 15/20% would sure make for one hell of a 'shake out'.


The above chart is from last summer, and it is somewhat disturbing to see that we are now in the original target zone of 1950/2050. I continue to have some hope that this scenario was indeed the correct one all along, but as ever.. 'hope' is not a trading strategy. Equity bears should be aiming for a July monthly close under 1900, before they can start dreaming of much lower levels.

Looking ahead

There are a fair few data points next week. However, Wednesday will be the most important day, with Durable Goods orders, and the final reading for Q1 GDP. Market is expecting a further downward revision from -1.0%.. to somewhere in the -1.5/-2.0% range.

*there is sig' QE-pomo: Monday $1-2bn, Wed' $2-3bn

back on Monday :)

Yet another week for the bull maniacs

It was another positive week for the US equity market, with the sp'500 seeing a net weekly gain of 26pts (1.4%). The broad trend remains strongly bullish, although there is moderate chance of a minor down wave of 2-3% in the remainder of the month.



So...another trading week comes to a close.

There is a great deal of chatter about whether we'll get stuck around the sp'1960s...70s.. or even the 1990/2010 zone, but I think its mostly not that important.

What is important is recognising that the primary trend is indeed still to the upside, and with the July'4 weekend soon... I'm resigned to further gains into mid July.

The monthly charts turn... green

With the move into the sp'1960s, the monthly 'rainbow' charts have turned green for the first time since last December.

sp'monthly'3, rainbow

I realise some will not consider it that important, but for me, its a strong reminder of what remains powerful underlying strength.

Gains and losses

For yours truly it was a very mixed week. I had a good exit on an index-long, but I've been battered by a continued decline in WFM. I suppose there is reasonable opportunity for that one to turn around into July, but for now, it remains a major disappointment.

Not so much the 'Polar Bear', as perhaps the 'SS WFM'...

For me, the week ended in the above manner, I suppose it could be worse.

*full story on the 'polar bear'.. @ NBC Sandiego

As ever.. its never easy, and I live to fight another week.

Sincerely.. have a good weekend everyone.

Goodnight from London

*the weekend update will be on the US weekly indexes

Daily Index Cycle update

US equities ended the day on a positive note, sp +3pts @ 1962. The two leaders - Trans/R2K, settled higher by 0.2% and 0.4% respectively. Near term outlook remains moderately bullish, into the sp'1970s, but there remains reasonable chance of a sub'4 wave...of 2-3%.





Well, it was yet another week for the equity bulls, and it is pretty notable to see the sp'500 leading the way higher. The giant psychological level of 2000 is now just 2% away, although I'm still suspicious that it won't that will not be hit this summer...or even this year.

Regardless, I'm still expecting marginally higher levels by mid July.

Closing update from Riley

a little more later.