Saturday 11 November 2017

Weekend update - US monthly indexes

It was a bearish week for US equity indexes, with net weekly declines ranging from -0.2% (sp'500, nasdaq comp'), -1.3% (R2K), to -2.6% (Trans). Near term outlook offers renewed upside to the sp'2600s by Thanksgiving. The year end target of 2683 will be just about technically within range.

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


Despite a net weekly decline of -0.2%, the sp' is currently net higher for an 8th month, with a new historic high of 2597. Underlying MACD (blue bar histogram) cycle is just flat lining on the high side, showing no sign of a downward swing. The key 10MA stands at 2456. Rising trend from early 2016 is around the 2470s.

Best guess: near term upside to the 2600s by Thanksgiving. The original year end target of 2683 is just about technically viable. More broadly, 3K is a valid target by mid 2018, not least if commodities can break upward (CRB >197s).

Equity bears have nothing to tout unless a bearish monthly close, which (to me) would constitute a settlement under the key 10MA. Keep in mind, the 10MA is rising around 35pts a month, so from Dec'1st onward, it'll be around 2490.. possibly even the 2500 threshold.

Nasdaq comp'

The tech remains broadly super strong, having seen a new hist' high of 6795. The 7000s are clearly viable before year end. The 8000s are a valid target for late spring/summer 2018. Recent earnings from most tech stocks have come in fine, with some (such as INTC, MU, NVDA) outright superb. The 'comp @ 10k' is a valid target for 2019, although I realise most will be laughably dismissive of it.


The mighty Dow remains broadly strong, with a recent historic high of 23602. The key 10MA is currently in the 21700s, and will be around 22000 from Dec'1st onward. A year end close in the 24000s is very much within range. Things are arguably only bearish with a monthly close <21500, and that sure doesn't look likely.

NYSE comp'

The 'master index' saw a net weekly decline of -0.4%, holding just a little shy of the Oct' historic high of 12415. Near term outlook offers renewed upside to the 12500s. Upper monthly bollinger will offer the 12700s 'on a stretch' by year end. 13k looks out of range until at least early 2018.


The R2K settled lower for the 4th week of the past 5, -1.3% at 1475. However, broadly, the R2K is super strong. Another push upward is due, not least if financials climb into year end on 'higher rate hopes in 2018'. Only bearish if <1425.


The 'old leader' - Trans, saw a very sig' net weekly decline of -2.6%. Underlying MACD cycle ticked lower for a second week. At the current rate, a bearish cross will be due by early December. However, considering earnings and econ-data, the broadly super strong main market, the tranny should resume upward. A 2017 settlement >10k is very much within range.


Net weekly declines for all US indexes, but its highly notable that the sp', dow, and nasdaq comp' still broke new historic highs.

Most indexes have around 4-5% of downside buffer, before the core upward trend from early 2016 would be challenged.

Equity bears have nothing to tout unless the majority of indexes see a monthly close under their respective 10MAs.

Looking ahead

Notable earnings: JD (Mon'), HD (Tues') CSCO (Wed'), WMT (Thurs'), FL (Fri')

M - US T-budget
W - CPI, retail sales, empire state, bus' invent' EIA Pet' report
T - Weekly jobs, phil' fed, import/export prices, indust' prod, housing market index
F - Housing starts  *OPEX*

*there are a few fed officials on the loose, notably: Bullard (Tues), Evans, (Wed' in London), Mester (Thurs)

**As Friday will be opex, expect a lot of price chop with increasing vol' into the weekend.

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Have a good weekend

*the next post on this page will likely appear 6pm EST on Monday.