Saturday 19 May 2018

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


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.


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.


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.


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.


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.

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

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