Saturday 20 August 2016

Weekend update - US weekly indexes

It was a mixed week for US equity indexes, with net weekly changes ranging from +1.6% (Transports), +0.6% (R2K), u/c (sp'500), to -0.1% (Dow). Near term outlook offers further chop, but eventual upside into the sp'2200s. More broadly, its a case of whether the market can battle through Sept/Oct' without falling back under the breakout levels.

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


Effectively, a flat close on the week, settling at 2183. However, there was a notable new historic high of 2193, a mere 0.3% shy of the 2200s. Underlying MACD (blue bar histogram) ticked lower for a second week.

The breakout level of 2134 is now going to act as powerful support, and we also have the key 10MA lurking around the 2140s.

Best guess: upside to the 2225/50 zone by mid/late September. Any multi-week down cycle from late Sept-mid Oct' will likely be choppy, and not break <2134. A year end close in the 2275/2325 zone looks very feasible.

Equity bears have nothing to tout unless a break <2134, and more so... rising trend, which in early October will be around 2120.

Nasdaq comp'

An eighth consecutive net weekly gain for the tech - the best run since spring 2010, having broken a new historic high of 5271. Core support is the 5000/4950 zone. The upper weekly bollinger will soon be offering the 5300s. Any monthly close - whether Aug/Sept/Oct in the 5300s will provisionally open the door to the 6000s by late spring 2017. Things only turn decisively bearish on any close <4900, and frankly, that looks extremely unlikely any time soon.


The mighty Dow was the weakest index this week, settling net lower by -29pts (0.1%) to 18552. However, like the sp' and Nasdaq, the Dow also broke a new historic high of 18668. The 18k threshold is core support. By early Oct' rising support will be around 18200. Any price action >19k should clarify further upside to the giant psy' level of 20k.

NYSE comp'

The master index reflected the broader market, settling +0.1% @ 10829. The upper weekly bollinger will be offering 11k by early September. A break above the May 2015 high of 11254 looks within range for Oct/Nov. Core support is the 10500/000 zone.


The second market leader - R2K, saw a moderate net weekly gain of 0.6%, settling at 1236 - 60pts (5%) below the June 2015 high. A new historic high looks out of range until October. A year end close in the mid 1300s looks probable.


The 'old leader' - Trans, saw a sig' net weekly gain of 1.6%, settling at 7930. 8k remains strong resistance, but looks set to be broken.. and held above... by early September. From there, the 8300/400s. Even if the main market can remain broadly intact across the tricky Sept-Oct trading period, it will likely take the Transports another 5-6 months to challenge the Nov'2014 high of 9310.


A week of choppy price action, but with notable new historic highs for the sp'500, dow, and nasdaq.

The two leaders - Trans/R2K, are highly suggestive of further upside into end month...and probably into mid/late September.

Unless equity bears can break back under the key breakout levels - such as sp'2134, Nasdaq 5K, Dow 18K, R2K 1200, there is little to be bearish about.

Looking ahead

M -
T - New home sales, Richmond Fed
W - PMI manu', Existing home sales, EIA report
T - Durable goods orders, weekly jobs
F - Q2 GDP (rev'1), intl' trade, PMI serv', consumer sent.

*There will be a Monetary policy symposium at Jackson Hole in Wyoming. That will span across Thurs-Friday, with Yellen set to speak Fri' 11am.

Support the bear

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Have a good weekend

*the next post on this page will appear Monday @ 7pm EST

Underlying upside

US equity indexes closed moderately mixed, sp -3pts @ 2183. The two leaders - Trans/R2K, settled +0.1% and u/c respectively. VIX settled -0.8% @ 11.34. Near term outlook offers a little chop ahead of next Friday's Jackson Hole event, but broadly, the 2200s still look due.




Opening moderate weakness... but as usual... the market saw some degree of latter day recovery.

VIX remains very subdued, and it still seems probable we'll eventually see single digit VIX - for the first time since Feb' 2007.

Update from Mr R.



As things are, Aug' looks set to close bullish, with a sixth consecutive monthly green candle. Underlying MACD (green bar histogram) cycle is now positive, and could easily continue ticking higher all the way into spring 2017.

What should be clear, this market has very powerful underlying upside. There remain an increasing number of huge societal/economic problems, but hey... when hasn't that been the case on this third rock from the sun?

Goodnight from London

*the weekend post will appear Sat' 12pm, and will detail the US weekly indexes.