Saturday 28 June 2014

Weekend update - US weekly indexes

It was a week of minor chop for the US equity market, with net weekly changes ranging from -0.6% (Dow) to +0.7% (Nasdaq Comp'). The broader upward trend continues, with further upside of 2-3% likely in July.

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


The sp'500 closed fractionally lower on the week. Next week, the weekly upper bollinger will jump into the 1970s, and the 1970s seem likely to be hit in the first half of July. By mid/late July, upper trend resistance will be in the 2000/2025 zone.

First (rising trend) support will be around 1875 next week, and that certainly looks out of range of the bears until late July. Underlying MACD (blue bar histogram) is on the upper end of its cycle, and will likely begin a new multi-week down cycle in no more than 3-5 weeks.

Nasdaq Comp'

The tech' gained 0.7%, and is decisively above the March highs. There looks to be further upside to the 4500/4600s in July.. which is a mere 10% shy from the historic high of the 5100s - the tech bubble high of spring 2000.


The mighty Dow slipped -0.6% this week, but is holding above the rather important 16600/500 zone. There will be viable upside to the 17200/300s by mid July. The Feb' low of 15340 should be a key initial objective for those who believe the market is due a multi-month wave lower this summer/autumn.

NYSE Comp'

The master index slipped -0.4%, but the broader upward trend remains fully intact. There looks to be fair upside to the 11200/300s in July.


The R2K is still lagging a little, gaining 0.1% this week, but looks set to take out the March high of 1212 in July. There looks to be upside to the 1230/50 zone.


The old leader slipped -0.4% this week, but the broader upward trend from late 2012 remains intact. There looks to be upside to the 8400/600 zone by mid July.


There is little to add on what was a relatively quiet week. All indexes are holding their primary upward trend. Most notable, the Nasdaq has broken above the March highs, with the R2K set to follow in July.

Still a moderate hope of something special

The market is a mere 8pts from historic highs, and there is little doubt we'll be trading somewhat higher in July. The 1970/80s seem an easy target. Whether we'll briefly surpass the giant 2000 threshold... difficult to say.


The above chart is effectively untouched from last summer... and here we are.. in my target zone for this giant wave from Oct'2011. I know I'm not the only one with that kind of inter'4 wave outlook.

Looking ahead

The week begins with Chicago PMI and some housing data. Tue' has PMI and ISM manu' data.

Wed' has ADP jobs and factory orders. However, probably more important, Yellen is talking at an IMF conference on monetary policy. That will likely receive some sig' media/market attention.

The short week concludes with the monthly jobs data on Thursday, along with PMI and ISM service sector data.

US equity markets will see an early close, Thursday 1pm.. and will reopen Monday July'7.

*the next QE-pomo schedule will be released Mon' Jun'30 at 3pm.

Looking to a key turn in mid July

It was almost a full year ago that I threw in the towel on the bigger 'doomer bear scenario', and since then, we've pushed higher from 1560 to 1960 - a full 400pts. Pretty incredible, and I am indeed not surprised.

At some point the giant wave from Oct'2011 - when sp' was a mere 1074, is going to conclude. A year ago, I was seeking a target high in the 1950/2050 zone. There are a fair few reasons why mid July would make for a natural turn. Certainly the weekly index cycles will be maxed out within another 2-4 weeks, so.. lets see where we are in late July/early August. If Q2 GDP disappoints the market (under 1% growth?), I'd be dismayed if we don't at least fall back under sp'1900.

back on Monday :)

Early summer doldrums

It was a relatively quiet week for the US equity market, with the sp' seeing a fractional net weekly decline of -1.9pts (-0.1%). Next week looks to be even quieter, since it is a 3.5 'holiday' trading week. Market outlook is for renewed upside into the week of July'14-18.



*after all the minor chop..the weekly 'rainbow' candle turned back to green late Friday afternoon. Eleven consecutive green candles... since the key low of sp'1814..which is now a significant 146pts lower (7%)

Something for the late summer/autumn

The following is a 'best bear case' scenario, and assumes Dow 17100/300 zone in mid July..and then a multi-month down wave.


A major retracement of the Oct'2011 wave would make for a great down wave for the bears, but even more so... a great place to get long for 2015. I'm still largely resigned to 'general' upside into late 2015/early 2016.

Well, it was a relatively quiet week, and I think that will suffice for this week.

Have a good weekend...

... and goodnight from London

*the weekend update will be on the US weekly indexes

Daily Index Cycle update

US indexes closed the week moderately higher, sp +3pts @ 1960. The two leaders - Trans/R2K, settled higher by 0.3% and 0.7% respectively. There remains minor opportunity for a down wave to sp'1940, before new historic highs in July.





The broader trend remains very much to the upside. I'm still somewhat suspicious that the market will see a minor test of the sp'1940 level early next Mon/Tuesday, but really, that is a mere 1% lower.

Certainly, there seems absolutely zero chance of the big 1900 threshold being broken in the near term... even by end July seems doubtful.

a little more later...