Saturday 8 September 2018

Weekend update - US equity indexes

It was a broadly bearish week for US equity indexes, with net weekly changes ranging from -2.5% (Nasdaq comp'), -1.6% (R2K), -1.0% (sp'500), -0.8% (NYSE comp'), -0.2% (Dow), to +0.4% (Trans). The m/t bullish trends from early 2016 remain intact.

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


The sp' saw a net weekly decline of -29pts (1.0%) to 2871. The m/t trend from early 2016 remains comfortably bullish. Note the monthly 10MA at 2751, with rising trend (from Feb'2016) currently around 2700. The upper bollinger is offering the 2940/50s in the near term, with giant psy'3K viable by around mid October.

Any weekly closes above the key fib' of 3047 - by mid November, will offer a late year hyper ramp to original target of 3245. I accept that is a long way up (374pts, 13.0%), but we've almost four full months of the year to get there.

Nasdaq comp'

It was a rough week in tech land, with the Nasdaq comp' net lower by a very significant -207pts (2.5%) to 7902. Note the 10MA at 7435, which is overlapped by rising trend. No concerns unless a monthly close <7400, which is a clear 6% lower.


The mighty Dow was resilient this week, settling lower by just -0.2% to 25916. Note underlying macd (blue bar histogram) cycle, which remains fractionally positive. No concerns unless a monthly close under the key 10MA, currently around 25k, which also intersects rising trend from early 2016. Any price action >26800 would be decisive, and offer far higher levels, and strongly suggest the sp'500 will follow with a break >3047.

NYSE comp'

The master index settled the week -0.8% to 12911. The key 10MA is nearby, just 2% lower in the 12700s. Its notable that price momentum remains negative (if only fractionally) for a fourth consecutive month.


The R2K settled -1.6% at 1713. New historic highs are only 1.7% higher, with the upper bollinger offering 1740/50s. The 1800s appear viable in late Oct'/early November.


The old leader - Transports, was very resilient this week, managing a moderate net gain of 43pts (0.4%) to 11347. Weakness in WTIC (net weekly decline -2.9% to the $67s) clearly helped prop up the tranny. Any renewed upside in WTIC - as seems very probable, will be a drag on transportation stocks, but if the broader market does climb into year end, the transports should be net higher... if a sector/index laggard.


Five indexes were net lower, with one net higher.

The Trans and Dow were resilient this week, whilst the Nasdaq comp' and R2K were both significantly lower.

All six US equity indexes are maintaining m/t bullish trends from early 2016. The sp'500 has downside buffer of around 5%.

US econ-data and corp' earnings continue to come in broadly fine. Q3 earnings should be good, and help to offset any trade or election concerns. Indeed, once the the US mid-terms (Nov'6th) are out of the way, regardless of the result, the market will be far more able to ramp.

Right now, the only concerns are offshore, especially within the German and Chinese market/economy. Those equity bulls seeking upside into year end, and across much (if not all of 2019) should be seeking a discernible floor/turn in both of these key markets within the near term.

Looking ahead

Earnings: Kroger (KR), Thurs'

M - Consumer credit
T - Wholesale trade
W - PPI, EIA Pet' report, Fed Beige book
T - CPI, Weekly jobs, US t-budget
F - Retail sales, import/export prices, indust' prod', busin' invent', consumer sent'.

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Have a good weekend

*the next post on this page will likely appear 5pm EST on Monday.