Lets take our regular look at six of the main US indexes
sp'500
The sp'500 gained for the third consecutive week, 33pts (1.7%). A new historic high of 1994 was attained. The giant 2000 threshold still looks due in the immediate term.
Underlying MACD (blue bar histogram) cycle is still negative, but is set to turn positive within the next week or two. Certainly, bulls look in full control, with viable upside to the 2030/50 zone by mid September.
By late September, the core primary rising support will be around sp'1950. A break of that would open up a test of the Aug'7th floor of 1904. On any basis, equity bears seeking a multi-month top need to break the 1900 threshold to have any confidence of lower levels into year end.
Nasdaq Comp'
The tech' gained 1.6%, and looks set for the 4600/700s in September. The giant 5000 level looks tough to reach in the remainder of this year, not least if we see some weakness in October.
Dow
The mighty Dow climbed a very impressive 338pts (2.0%) this week, and looks set to break new historic highs within the next week or two. Upper bollinger on the weekly cycle offers 17300/400s in early September.
NYSE Comp'
The master index climbed 1.4% this week, and managed a weekly close above the important 10MA. The 11000s look due next week, with viable upside to the 11300s by late September.
R2K
The second market leader managed a net weekly gain of 1.6%, with the first weekly closing above the 10MA in six weeks. Underlying MACD is still negative, but looks set for a bullish cross in the first week of September. There looks to be upside to 1190/1200, but new highs >1213 look difficult.
Trans
The 'old leader' continues to lead, with a powerful 2.0% net weekly gain. New historic highs look due next week, with viable upside to the 8500/600s in September. A bullish cross is due shortly after Labor day.
Summary
Unquestionably, a strong week for the equity market. Even the laggy R2K managed some reasonable gains. Based on previous cycles since 2011, the bulls should at least see another 2-3 weeks in their favour. Equity bears will probably have their next opportunity of a multi-week down wave in late September.
Looking ahead
There are a few bits and pieces across the week, but nothing particularly significant.
Mon' new home sales
Tue' durable goods orders, housing, consumer confidence
Wed' EIA oil report
Thur' GDP (second reading). A moderate downgrade is likely.
Fri' Pers' income/outlays, Chicago PMI, consumer sentiment. Once the econ-data is out of the way, it will likely be a very quiet day as the following Monday is 'Labor day', when all US markets will be closed.
*there is QE next Tuesday of $2-2.5bn, and $1bn on Wed'.
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Still waiting
I remain extremely cautious. I'm seeing the same underlying upward pressure that we've seen since the key floor in Oct'2011. We've seen a great many geo-political news stories across the past few years, and yes.. many such stories have rattled the market. Yet the declines were all relatively minor.. and very brief.
When will the grand wave from Oct'2011 complete? I see a fair few other chartists out there with broadly similar outlooks. If correct... bears should be seeking a major retrace... at least down to the 38% fib retrace in the mid 1600s.
sp'weekly9
As ever.. one day at a time, but by mid/late September, having waited for more than a year.. I might finally try to short the indexes.
back on Monday :)
