Saturday, 6 June 2015

Weekend update - US monthly indexes

US equities have seen a great deal of chop so far this year, although with new historic highs in some indexes. There is viable upside across the next few weeks, but with an increasing probability of a sig' correction this summer/early autumn, at least down to the psy' level of sp'2000.

Lets take our regular look at six of the US indexes


It was an interesting week in market land, with what appears to be a short term floor of 2085. The upper bol' is offering the 2170/80s this month, although that does seem far more viable in early July. Underlying MACD (blue bar histogram) cycle continues to weaken, and is negative for the fourth consecutive month. First key support is now in the 2050s.. where the 200dma is also lurking.

To be clear, I do NOT see the Oct' 2014 low of 1820 being directly tested, I would imagine the market will hold up around 2K.. or somewhere in the mid 1900s. From there, I am hyper bullish into 2016.

Nasdaq comp'

The Nasdaq is a mere 64pts shy of the March'2000 high of 5132. It is entirely viable that the Nasdaq will finally break a new historic high.. but then roll lower with the rest of the market.


The mighty Dow is holding above the 10MA of 17685, and looks set to re-take the 18k threshold in the near term. The upper bol' is offering the 18400/600 zone across June/July. Only with a monthly close in the 18700s would hopes of a retrace be dropped.

First key support is the 17K threshold. Best case downside this summer/autumn will be the 16500/000 zone. I do not expect any sustained price action under 16K this year... or next.

NYSE comp'

The master index has been largely flat lining since last summer (with a marginal new historic high in May of 11254). There looks to be fair chance of moderate upside into the 11300s, but from there, the broader market will likely begin a sig' retrace. In terms of downside, the NYSE comp' will have strong support in the 10000/9750 zone.


The second market leader remains very close to the April high of 1278. Sustained price action in the 1300s looks difficult until after a sig' market correction. Underlying MACD cycle remains negative,


The 'old leader' has been struggling since last November, but is actually now leading the way higher. There is viable near term upside to 8900/9K, but new historic highs look well out of range... probably for the rest of the year.


The US equity market has unquestionably been a choppy mess so far this year. Indeed, for some indexes - Trans/NYSE comp', its been largely stuck since summer 2014. The market is looking increasingly tired, and a sig' correction of 8-12% looks very viable for the sp'500/Dow. 

Without going over a truck load of numerous economic theories, after the next correction, I am resigned to much higher levels. Primarily due to ongoing QE (we've not forgotten about the ECB or BoJ have we?), corporate buybacks, and low rates (even 2-3% will certainly still count as low).

A break over Dow 20K... and sp'2300 looks more viable in early 2016 than by end year, not least if the market is 'somewhat upset' in the Aug-Oct' time frame.

Looking ahead

A relatively quiet week is ahead, although of course, the 'Greek issue' will rumble on with sporadic news headlines occasionally swaying the market.

M - -
T - wholesale trade
W - EIA oil report, US Treasury budget
T - weekly jobs, retail sales, import/export prices, bus' inventories
F - PPI, consumer sent'

Back at the Monday open :)