Saturday 29 October 2016

Weekend update - US weekly indexes

With the week ending on an 'FBI inspired' bearish note, US equity indexes settled with net weekly changes ranging from -2.5% (R2K), -0.7% (sp'500), to +0.1% (Dow). The market looks vulnerable across the first half of November, with probable downside of 2-3% for most indexes.

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


The sp' saw a moderate net weekly decline of -14pts (0.7%), settling @ 2126. Underlying MACD (blue bar histogram) ticked lower for a twelfth consecutive week. There looks to be 2-3 weeks of further viable downside.

Best guess: downside to 2080/70, but no sustained action under the 200dma (2070s). Renewed upside, with a November close at least >2150. 

Equity bears still can't get confident unless a break below the lower weekly bollinger, currently in the 2060s.

Nasdaq comp'

The Nasdaq declined by -1.3%, settling @ 5190. The weekly candle was of the bearish engulfing type, and that does bode bearish for the near term. First big support is the giant psy' level of 5K. Things only turn broadly bearish with some daily closes <4900.


The mighty Dow was resilient this week, managing a fractional net gain of 0.1%, settling @ 18161. The 18k threshold remains very important. A brief fall to the 17600/500s looks viable. The real issue is whether November closes above or below 18k.

NYSE comp'

The master index settled -0.9% @ 10446, the lowest close since early July. There is viable downside to around 10300. Things only turn broadly bearish with a weekly close under 10k.


The second market leader - R2K, was leading the way lower this week, with a very significant net weekly decline of -2.5% @ 1187. With the loss of the 1200 threshold, the door is wide open to next support in the 1160/40 zone. Alarm bells only sound if <1120.


The 'old leader' - Transports, saw another week of moderate chop, settling -0.1% @ 8018. Indeed, the 8k threshold - once resistance, is tending to be new support. There is viable downside to the 7700/600 zone. Things only turn bearish on a break of rising support, which as of mid November, will be around 7600.


Most US equity indexes continue to lean weak from the Aug/Sept' highs.

There looks to be around 2-3% of viable downside for all indexes, with a multi-week cycle low no later than mid November.

The mid/long term outlook only turns bearish with sustained action <sp'2050, Nasdaq comp' <5K, Dow <17500, NYSE comp' <10k, R2K <1120, and Trans <7600.

Looking ahead

A busy week is ahead, with more corp' earnings, but also a wheel barrow of key econ-data.

M - Pers' income/outlays, Chicago PMI
T - PMI/ISM manu', construction
W - ADP jobs, EIA report

*FOMC announcement (2pm). The market does not expect any change in policy, but the press release will probably overtly hint at a Dec' rate rise. There will NOT be a press conf'.

T - weekly jobs, product'/costs, PMI/ISM serv', factory orders
F - monthly jobs, intl' trade. 

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Regardless, I wish you a good weekend

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

Spooked by the Feds

US equity indexes closed moderately mixed, sp -6pts @ 2126 (intra low 2119). The two leaders - Trans/R2K, settled u/c and -0.2% respectively. VIX settled +5.4% @ 16.19. Near term outlook offers threat of upside on Mon/Tuesday, but broadly to 2080 in early November.




Well, today sure wasn't dull.

We saw a micro opening washout to sp'2127, with a rather clear spike floor. The market soon battled upward to the low sp'2140s. Things churned in the 12pm hour..... and the rest of the day looked set for slow crawl.. leaning to the upside.

... but then news that the FBI are set to look into the Hillary emails again really rocked the market. Indeed, the 1pm price action was the most bearish in some months.

With the market seeing a signficant downward swing of 1%, the VIX naturally exploded into the 17s. Despite cooling a little, the weekly close in the 16s is notable. The key 20 threshold looks a relatively easy target, certainly no later than mid November.

US.. relative to rest of the world

Spain, monthly

I'll merely highlight Spain, as its a reasonable reflection of many other world markets. With just one trading day left of the month, the IBEX is set for a very sig' net monthly gain of almost 5%. There is open air to at least 10k, which is another 8% higher.

Were it not for the election, the US market would probably be pushing to new historic highs, with Dow 19k. The point is... once the election is out of the way, the US market should be able to resume higher.

For now... no alarm bells unless a daily close in the sp'2050s or lower.

Goodnight from London

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