May settles weak

US equity indexes ended May on a rather bearish note, sp -18pts (0.7%) at 2705. The two leaders - Trans/R2K, settled -1.5% and -0.8% respectively. VIX settled +3.3% at 15.43. Near term outlook offers Friday capitulation to sp'2671, before resuming upward, as the 2800s still look due.


sp'daily5

VIX'daily3

Summary

US equities opened a little weak, with a morning low of 2707, and then a bounce to 2722. The afternoon saw renewed downside, as the EU issued an announcement on retaliatory tariffs. Minimum target of 2702 was achieved, with secondary target of 2671 very viable before the weekend.

Volatility naturally picked up, with the VIX settling in the mid 15s. If we see the sp'2670s on Friday, that should result in VIX 17/18s.
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Bonus chart: sp' monthly

Despite the bearish end to the month, the sp'500 was net higher by 57pts (2.2%). Note the settlement well above the key 10MA at 2641.
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No sun for the equity bulls into end month

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Wednesday bounce

US equity indexes closed broadly higher, sp +34pts (1.3%) at 2724. The two leaders - Trans/R2K, both settled +1.5%. VIX settled -12.2% at 14.94. Near term outlook offers a cooling wave to at least sp'2702, with secondary target of 2671.


sp'daily5

VIX'daily3

Summary

US equities opened moderately higher, and built significant gains into the afternoon. There was a subtle late afternoon rollover from 2729.

With the equity rebound, volatility was naturally in cooling mode, settling in the upper 14s. Near term outlook offers another cooling wave to at least sp'2702, There is almost equal threat of a marginally lower low to 2671, just under the key 50dma. Regardless, even the latter will do nothing to the m/t outlook, as the 2800s remain due.

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Italian concerns

US equity indexes closed broadly lower, sp -31pts (1.2%) at 2689. The two leaders - Trans/R2K, settled -1.3% and -0.2% respectively. VIX settled +28.7% at 17.02. Near term outlook offers a floor around sp'2671, before resuming broadly upward to the 2800s.


sp'daily5

VIX'daily3

Summary

US equities opened moderately lower, spooked by geo-political chatter, with rapidly rising bond yields in Italy. The market saw an opening reversal, but that bounce was quickly reversed, breaking sig' lower into the afternoon.

Volatility was naturally higher, with the VIX pushing into the upper 18s. Near term outlook offers an equity floor from around sp'2671, before resuming upward into and across June. The 2800s very much remain on the menu.

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Weekend update - US equity indexes

It was a mixed week for US equity indexes, with net weekly changes ranging from +1.58% (Trans) +1.08 (Nasdaq comp'), +0.31 (sp'500), +0.15% (dow), +0.02% (R2K), to -0.65% (nyse comp'). The broader outlook into and across the summer remains bullish.


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

sp'500

The sp' saw a net weekly gain of 8pts (0.31%) to 2721. The settling black-fail weekly candle is very unusual. By default, it leans s/t bearish, the most realistic bearish scenario is for the 2670s, before swinging back upward. The 2800s look valid in June, even as the fed are set to raise rates (June 13th). Big target for late summer/early autumn is the 2950/3047 zone. I see that zone as concrete resistance, and on balance, I will be seeking a very significant retrace from there, arguably on the order of at least 15/20%. 


Nasdaq comp'

The Nasdaq climbed 1.08% to settle at 7433. The March high of 7637 is only another 2.7% higher, and is clearly viable in June. Price momentum is set to turn outright positive with next Tuesday's open. More broadly, the 8000s remain a valid target by late summer.


Dow

The mighty Dow settled +0.15% at 24753, having seen an intra high of 25086. The settling black-fail candle is rare on the bigger weekly charts, and does lean bearish for next week. Rising trend will offer support in the 24000s next week, no price action under 24k can be expected in the near term. The Jan' historic high of 26616 is 7.5% to the upside, and looks within range by Aug/Sept'. Further, keep in mind the next giant Fibonacci extension of 26702.


NYSE comp'

The master index cooled for a second week, -0.65% to 12634. Price momentum should turn positive by mid June, which will offer broader upside across the summer to new historic highs >13637.


R2K

The second market leader broke a new historic high of 1639, with a fourth consecutive net weekly gain (if fractional) of 0.02% to 1626. Upper bollinger will offer the 1650/60s into early June. The 1700s look a given by late July.


Trans

The 'old leader' Transports, climbed for a third week, +1.58% to 10900. Price momentum will turn outright positive at next Tuesday's open. The weakness in WTIC was clearly partly responsible for the tranny catching some extra upside this week.
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Summary

A mixed week, with four indexes higher, one effectively u/c, and one moderately lower.

All six main indexes remain m/t bullish from early 2016.

Price momentum continues to swing back toward the equity bulls.

The R2K notably broke a new historic high, and it bodes bullish for other indexes into/across the summer.

YTD price performance:

The Nasdaq remains the strongest index, currently +7.7%, the sp'500 +1.8%, with the NYSE comp' -1.4% for the year.
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Looking ahead

-
M - CLOSED
T - Case-Shiller HPI, consumer con'
W - ADP jobs, Q1 GDP (second est'), intl' trade, fed beige book (2pm)
T - Weekly jobs, pers' income/outlays, Chicago PMI, pending home sales, EIA WTIC/NG
F - Monthly jobs, vehicle sales, PMI/ISM manu', construction
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Into the long weekend

US equity indexes closed a little mixed, sp -6pts (0.2%) at 2721. The two leaders - Trans/R2K, settled +0.4% and +0.1% respectively. VIX settled +5.5% at 13.22. Near term outlook still threatens a mini washout to the sp'2670s, before resuming upward into the 2800s.


sp'daily5

VIX'daily3

Summary

US equities opened a little weak, and saw a day comprised almost entirely of minor chop. Prices did lean on the weaker side, as there was an element of 'rats selling into the long weekend'.  

Volatility remained broadly subdued, with the VIX settling moderately higher in the low 13s. Near term outlook still threatens a mini washout to the sp'2670s - which would likely equate to VIX 16/17s, but the 2800s still look due in June, as the bullish train remains on the tracks.
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Bonus chart: Greece, monthly

The Athex is currently net lower by a very powerful -11.9% to 755. We have a break of the m/t rising trend from early 2016. Increasing tensions with neighbouring Turkey are one bearish pressure for what remains the economic basket-case of the EU.
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Bad News Thursday

US equity indexes closed rather mixed, sp -5pts (0.2%) at 2727 (intra low 2707). The two leaders - Trans/R2K, settling +1.2% and u/c respectively. VIX settled -0.4% at 12.53. Near term outlook still threatens a mini washout to the sp'2670s, but that would be dropped on a break >2742.


sp'daily5

VIX'daily3

Summary

US equities opened a little lower, saw an early minor bounce, but then news that Trump cancelled the June summit with North Korea, saw the market spiral lower.

Sad.

However, the bad news only spooked the sp'500 to 2707, with yet another subsequent latter day recovery, to settle -0.2% at 2727. Today was day'9 of a tight trading range of 2742/01. Until we break >2742, I'm still a little suspicious the market might want to washout to the 2670s.

Volatility saw a morning high of 14.24, but then cooled for the rest of the day, even settling fractionally lower in the mid 12s.
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The chop continues

US equity indexes closed a little mixed, sp +8pts (0.3%) at 2733 (intra low 2709). The two leaders - Trans/R2K, settled -0.1% and +0.1% respectively. VIX settled -4.8% at 12.58. Near term outlook threatens a brief washout to the sp'2670s.


sp'daily5

VIX'daily3

Summary

US equities saw yet another day of moderate chop, seeing a low of 2709, but then a latter day recovery to turn fractionally higher. Its notable that today was day eight, within what is a pretty tight trading range of 2742/01.

Volatility naturally jumped in early trading (intra high 14.60), but then cooled into the late afternoon, settling moderately lower in the mid 12s.
 --

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Late afternoon cooling

US equity indexes closed on a rather weak note, sp -8pts (0.3%) at 2724. The two leaders - Trans/R2K, settled -1.1% and -0.7% respectively. Near term outlook offers a little weakness, but nothing sustained under sp'2710. More broadly, the 2800s still look due in June.


sp'daily5

VIX'daily3

Summary

US equities opened a little higher, and battled to 2742. From there... a great deal of micro chop, and leaning distinctly weak in the late afternoon. Yesterday's opening gap of 2725/12 looks set to be fully filled, before the market resumes upward. The R2K notably broke a new historic high for a FIFTH consecutive day, which bodes well for the other indexes into early summer. 

Volatility was naturally subdued, and despite late afternoon equity cooling, the VIX only settled a little higher in the low 13s.
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Bonus chart: Germany, monthly

The DAX is currently net higher for May by a very significant 4.4% at 13169. New historic highs look due into early summer. Price structure is a clear five waves from the March 2009 low.
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Starting positive

US equity indexes closed broadly higher, sp +20pts (0.7%) at 2733. The two leaders - Trans/R2K, settled +1.3% and +0.6% respectively. VIX settled -2.5% at 13.08. Near term outlook offers further upside to the sp'2750s, with the 2800s due in early  June.


sp'daily5

VIX'daily3

Summary

US equities opened moderately higher, helped by lower concerns about a trade war. The R2K notably broke a new historic high for a fourth consecutive day. S/t price structure of a bull flag in the sp'500 has been provisionally confirmed, and will be fully confirmed with a break above last Monday's high of 2742. A broader run into the 2800s is likely now underway.
 
Volatility was naturally subdued, with the VIX melting into the low 13s. The key 20 threshold looks out of range for some considerable time. 
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Bonus chart: France, monthly

The French equity market is very representative of other European markets. The CAC is currently +2.1% at 5637. Soft target is the June 2007 high of 6168. That does look within range by late summer.
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Weekend update - US equity indexes

It was a mixed week for US equity indexes, with net weekly changes ranging from +1.2% (R2K), +0.2% (Trans), -0.3 (nyse comp'), -0.5% (sp'500, Dow), to -0.7% (nasdaq comp'). Near term outlook offers a touch of weakness, but broad upside across the summer.


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

sp'500

A mixed week for the sp'500, seeing a high of 2742, but then choppy cooling to 2701, and settling -0.5% at 2712. Underlying macd (blue bar histogram) cycle ticked higher for a sixth week. At the current rate, we'll see a bullish cross Tues' May 29th. The 2800s look very viable within June. Q2 earnings should be fine, and offer new historic highs (>2872) as early as late July. Big target of 2950/3047 looks viable from early September onward.


Nasdaq comp'

The tech saw a moderate net weekly decline of -0.7%, settling at 7354. Underlying price momentum continues to swing back toward the bulls, at the current rate, a bullish cross will be due Tue' May 29th.


Dow

The mighty Dow saw a moderate net weekly decline of -0.5% to 24715, but did break a new multi-week high of 24994. At the current rate, we'll see a bullish macd cross in 2-3 weeks. New historic highs look rather probable, although I'd agree, there will be threat of a double top, whilst some indexes could still break new historic highs.


NYSE comp'

The master index saw a net weekly decline of -0.3% to 12717. However, like other indexes, underlying price momentum continues to swing back toward the equity bulls. A broader push to new historic highs (>13637) looks probable.


R2K

The R2K is leading the main market upward, settling +1.2% at 1626, having broken a new historic high of 1630. Note the underlying MACD cycle has turned positive for the first time since early February. In theory, 3-4 months of upside is viable, which would take us into September.


Trans

The 'old leader' - Transports climbed for a second week, if only by 0.2% to 10730. There is rather stiff resistance within the 10800s, but a breakout appears probable by mid June. Underlying price momentum is set to turn outright positive within 1-2 weeks.
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Summary

Two indexes were net higher, with four net lower for the week.

The R2K broke a new historic high, and it bodes well for the rest of the market into/across the summer.

Considering sustained WTIC >$70, the transports is performing better than expected, and it also bodes well for the main market.
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Looking ahead

M -
T - Richmond Fed'
W - New home sales, EIA, FOMC mins (2pm)
T - Weekly jobs, FHFA house price index, existing home sales
F - Durable goods orders, consumer sent'

*there are a few fed officials on the loose, but lately, they are of less importance. Mr Market is fully assuming a June 13th rate hike, as the QT program continues to increase.

**As Monday May 28th is CLOSED for Memorial day, Fri' May 25th will likely be very subdued.
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Have a good weekend
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*the next post on this page will likely appear 6pm EDT on Monday.