Saturday, 7 April 2018

Weekend update - US equity indexes

It was a bearish week for US equity indexes, with net weekly declines ranging from -2.4% (Trans), -2.1% (Nasdaq comp'), -1.4% (sp'500), -1.0% (R2K), -0.8% (NYSE comp'), to -0.7% (Dow). Near term outlook offers another 5% lower, before resuming upward into early summer.

Lets take our regular look at six of the main US indexes (monthly charts)


The sp' saw a net weekly decline of -36pts (1.4%) to 2604. More broadly, the sp' is lower for a third consecutive month, currently 10pts under the key 10MA. Underlying MACD (blue bar histogram) on the giant monthly chart is ticking lower for a third month, and will be due a bearish cross in May, unless the market can settle April well above current levels.

Nasdaq comp'

The Nasdaq settled lower for the third week of four, -2.1% at 6915. The tech' is currently lower for a third consecutive month, but still above the key 10MA. A bearish macd cross will be a threat at the May 1st open, unless April settles higher than current levels.


The Dow was the most resilient index this week, settling -0.7% at 23932. The Dow is the only index that has broken the Feb' low (if fractionally and briefly). Like most other indexes, the Dow is currently lower for a third month. A bearish macd cross will be due in May/June. Note the 20MA in the 21800s.

NYSE comp'

The master index settled the week -0.8% at 12349, and like other indexes, is currently lower for a third month.


The second market leader - R2K, settled lower for a third week of four, -1.0% at 1513. Keep in mind the Feb' low of 1436, which is still a considerable 5.1% lower. A bearish MACD cross is viable in the immediate term.


The 'old leader' - Trans, was hit pretty hard this week, settling -2.4% at 10146.A bearish macd cross is due in May/June.


All six of the US indexes saw net weekly declines, lead lower by the Transports (2.4%), whilst the Dow (0.7%) held up relatively well.

The Dow is so far the only index to break below the Feb' low.

Further weakness of around 5% does seem very probable, and is most likely next week, ahead of the first batch of key earnings.

For now, I still see the Jan' high as some kind of intermediate top. Considering the econ-data and earnings, a renewed push to the sp'2950/3047 zone still seems probable in the months ahead.

YTD price performance

Its been a mixed year so far, with the sp' having swung from a new historic high of 2872 to currently net lower by -2.6%. The Nasdaq is holding up best, currently +0.2%, whilst the Trans is -4.4%.

Looking ahead

The first big earnings for Q1 are set to appear, with the financials of C, JPM, and WFC.

M -
W - CPI, EIA, FOMC mins, T-budget
T - Weekly jobs, import/export prices
F - Consumer sent.

*there are a handful of fed officials on the loose, notably Rosengren and Bullard on Friday. However, I believe the market will be far more focused on further tariff news, presidential tweets, and earnings.

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Have a good weekend

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