Saturday, 22 November 2014

Weekend update - US weekly indexes

Most US equity indexes saw net weekly gains for the fifth consecutive week, ranging from +1.3% (NYSE Comp') +1.1% (SP'500), to -0.1% (R2K). Near term outlook are for the low sp'2100s, before the next opportunity of a retrace back to the giant sp'2000 threshold.

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


A fifth consecutive net weekly gain for the sp'500, with a weekly gain of a respectable 1.1%.. having hit a new historic high of 2071. It has taken the sp'500 just 28 trading days to ramp 251pts... which makes for a disturbingly powerful gain of 13.8%.

Underlying MACD (blue bar histogram) cycle is positive for the second week, and could easily climb for another 2-3 weeks. The next fib' target is 2138, and that looks pretty easy to hit in Jan/Feb.

Considering the ongoing central bank action, the Oct'15th low of 1820 looks unattainable for a very..... very long time.

Nasdaq Comp'

The tech' gained 0.5% this week, settling at 4712....that is 420pts away from the March'2000 bubble top. That is clearly out of range for this year, but looks set to be hit in spring/early summer 2015.


The mighty Dow continues to push higher, gaining 175pts (1.0%) this week. The 18000s look viable within the next week or two. The next fib' level is 18974, more likely in March/April 2015.

NYSE Comp'

The master index achieved a significant 1.3% weekly gain, settling at 11025. There looks to be upside to the 11300s before year end.


The second market leader broke to 1184 on Friday morning, but cooled, settling the week net lower by -0.1%. Key upside target remains the spring/summer double top of 1212/13. Considering the broader market... the R2K looks set to break >1220, which will be a powerful signal of much greater upside in 2015.


The 'old leader ' Trans, broke a new high of 9128, with a net weekly gain of around 0.3%. The broader up trend continues, and Trans looks set to reach the giant 10k level early next year. The lower oil prices are really helping transportation stocks, and if Oil does continue to slip (my target for Q1 2015 remains $65/60 zone)... then Trans will indeed be trading in the 10000s.


So... a fifth week for the equity bulls, and there is ZERO sign of this market reversing. Only the R2K is a touch weak, but even that index is less than 4% away from breaking new historic highs.

With central banks continuing to attempt to juice asset prices, there is little reason to believe the current hyper-ramp from sp'1820 won't continue.

Right now, the only thing that could derail the rally is some sporadic geo-political event.. which by definition is impossible to predict.

Looking ahead

Next week is a short 3.5 day week...

Mon - PMI service sector
Tue - GDP (first revision), case-shiller HPI, consumer conf'
Wed - Durable goods, weekly jobs, pers' income/outlay, consumer sent', new/pending home sales,

Thursday - US market CLOSED for Thanksgiving
Friday - Chicago PMI data,  EARLY CLOSE at 1pm EST.

Back on Monday :)

Fibonacci nonsense

The powerful upward trend in the US equity market continues. How high might this giant wave from 2009 eventually reach? The market is fast approaching the key 1.618x Fibonacci extrap' of the 2007/09 collapse wave of sp'2138.

Dow, monthly'3b - fib levels

SP, monthly'5b - fib levels


*first, it is again worth noting that the closing monthly candles for October were extremely bullish, with huge spike-floors, and we're certainly seeing some significant follow through.

I can safely say some of you are saying 'ohh noes... look what he is calling for now... THAT is clearly sign of a top'.

Sorry, but no. This is not the first time.. and just because I'm calling for higher levels, doesn't mean it can't happen. Don't over think things!

I myself waved a giant white flag in summer 2013 - as the market failed to break back below the old 2000/2007 double top of the mid sp'1500s. Subsequently, I wasn't short the market from the sp'1500s to the Sept' Alibaba top of 2019.

With the recent sustained price action >sp'1970... once again it has been a time of waving the white flag. There seems ZERO point in attempting swing-trade index shorts.. or VIX longs.. for some months to come.

I realise some of you more adept day-traders out there will remain executing short-side 'scalp' trades.. but.. that is not for me.

About those fib charts

Near term... we are indeed fast approaching the 1.618x fib' level of Dow 18974, and of sp'2138. Both targets look more likely to be hit in Jan/Feb, than this December.

Mid term - considering the increasingly desperate action of the central banks, I am now resigned to much higher levels...

There would seem HIGH probability of a 2.618x fib...  Dow 26702... with Sp'3047

I do sincerely realise a few of you are now getting real moody and may be about to flip to another website, but I would hope most of you will keep an open mind on what might be ahead.

The CBs in 2015/16

What if the US central bank launch QE4, along with the ECB (T-bonds.. not just asset purchases from the banks), along with other central bank actions next year? If the US federal reserve can't restrain itself next spring/summer, and does launch QE4, then we look set for continued.. and perhaps accelerated 'crazy ass' upside.

Armstrong - Dow 43k

As many of you might know, I closely follow Armstrong, and he again recently threw out the scenario of Dow 43k. Having calculated the Fib' levels... we would need a 4.618x to get close to that... of Dow 42158... along with sp'4865.

Seriously... how scary would that be? A true hyper-bubble, to rival the Tulip or South Sea bubbles.

As ever... the above numbers should be taken with some due scepticism, but then sp'2000 seemed like 'crazy talk' back in late 2011.

Goodnight from London

*the weekend update will be on the US weekly indexes

Daily Index Cycle update

US indexes broke a trio of new historic highs, with Dow 17894, SP' 2071, and Trans (9128). With Thanksgiving next week, the US market will likely be able to keep clawing higher.. into the low sp'2100s.





*the Nasdaq' comp.. is at post 2009 highs... it looks a given that it will break the tech bubble high (March 2009) of 5132 next year.

Suffice to say, with new historic highs, it remains an extremely strong market. The 1975/50 zone is fading away, and at best.. it looks like equity bears will be lucky to manage to hit 2000 in the next retrace.

Closing update from Riley

a little more later... on some fibonacci nonsense!