Saturday 13 February 2016

Weekend update - US weekly indexes

It was another bearish week for US equities, with net weekly changes ranging from -1.7% (NYSE comp'), -0.8% (sp'500), to +1.5% (Transports). Near term outlook offers a continued bounce into the sp'1900s, before powerful downside in March. A mini crash wave looks due, at least to the 1750/25 zone.

Lets take our regular look at six of the US indexes


The sp'500 closed net lower for the second consecutive week, -15pts (0.8%) at 1864, but that was a rather powerful 54pts above the Thursday 2.30pm low. Notably, since the Nov'2015 high of sp'2116, the sp' has seen 8 weekly declines from 15 weeks.

This week's candle is offering a spike floor, with a marginal lower low of 1810. First upside is the weekly 10MA, which next week will be around 1930.

Underlying MACD (blue bar histogram) cycle ticked lower for a second consecutive week. At the current rate, even if the market went straight up, it will take at least four weeks to see a bullish cross.

Best guess: bounce upside to the 1920/30 zone - where the 50dma will be lurking into end month, a little chop... and then more powerful downside from mid March into April. 

The sp'1750/25 zone looks a rather easy target, things will get real tricky in the 1625/1575 zone.

Unless equity bears can attain a monthly close <1600 (<1500 to be decisive), any talk of equity targets <1K, remain in the realm of fantasy land.

Nasdaq comp'

The tech' saw a moderate net weekly decline of -0.6% @ 4337. First bounce target are the 4600s. Sustained action >4700 looks very difficult. In terms of spring downside, first target is 4K, then 3000/2750.


The mighty Dow saw a Thursday low of 15503, but settled the week -231pts (1.4%) @ 15973. Further bounce upside to 16400/500 looks due. From there... first downside target is the 14200/000 zone, and then 13400. Sustained action <13K looks very difficult.

NYSE comp'

The master index continues to broadly decline, with a net weekly fall of -1.7%, settling @ 9229. The broader downside target is around 8K.


The second market leader - R2K, broke a new multi-year low of 943, but settling -13pts (1.4%) at 971. There is viable near term upside to the 1040/50 zone. Broader downside remains the 875/850 zone.


The 'old leader' managed a fourth consecutive net weekly gain, +1.5% @ 7048. It is notable that the Tranny has now climbed almost 10% since the Jan'20th low of 6403. There appears to be further near term upside to the 7200/300 zone. Broader downside to the 5500/5000 zone looks very probable. Best downside case is around 4500, and that would make for a clear 50% crash from the Nov'2014 high.


Despite ending on a very positive note, it was another bearish week for the US equity market, with most indexes breaking new multi-year lows.

The weekly candles for all indexes are highly suggestive of a near term bounce into end month. However, keeping the bigger monthly cycles in mind, much lower levels look due in March/April.

Looking ahead

It will be a shortened week, but there are a few bits and pieces of note.

M - CLOSED, although notably, China will re-open, after an entire week off.
T - Empire state, housing market
W - housing starts, PPI, indust' prod', FOMC minutes
T - weekly jobs, phil' fed, leading indicators, EIA report
F - CPI,   *OPEX*

*there will be a sprinkling of Fed officials, notably Bullard, AH on Wednesday.

Back on Tuesday...................   unless Elaine was right

Valentine's day... bummer

Despite ending on a positive note, it was another bearish week for US equities, with the sp'500 seeing a net weekly decline of -15pts (0.8%) @ 1864. However, such things are likely of no importance, as... "according to my source, the end of the world will be on February 14th in the year 2016".

Elaine met a man (or Alien) at the Piranhas holiday inn.



Goodnight from London

*the weekend post will be on the US weekly indexes.

Daily Index Cycle update

US equities closed a bearish week on a very positive note, sp +35pts @ 1864. The two leaders - Trans/R2K, settled higher by 2.4% and 1.9% respectively. Near term outlook offers further upside to the sp'1920/30 zone.. where the 50dma will soon be lurking.




Suffice to add, a rather bullish end to the week, but broadly... its unquestionably just part of another short term bounce. The only issue is how high.. and for how long.

Best guess... sp'1920/30 zone.. before end month. Its possible we'll then see a few weeks of chop within a 2-4% range... before first opportunity to break <1800 in mid March.

a little more later...