Saturday 15 September 2018

Weekend update - US equity indexes

It was a bullish week for US equity indexes, with net weekly gains ranging from +1.9% (Trans), +1.3% (Nasdaq comp'), +1.1% (sp'500, nyse comp'), +0.9% (Dow), to +0.5% (R2K). Near term outlook offers new historic highs.

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


The sp' saw a net weekly gain of 33pts (1.1%), settling at 2904. Whilst early next week might well see a brief foray back into the 2880s, the 2920/30s do look viable, with the 2940/50s by end month.

Nasdaq comp'

The Nasdaq saw a net weekly gain of 1.3% to 8010. Note the 10MA at 7881, currently overlapped by rising trend from the April low.


The mighty Dow gained 0.9% to 26154. New historic highs (>26616) are just 1.8% higher. Any price action above the key fib' of 26702 (>26800s to be decisive) will offer far higher levels in 2019, to 33/34k.

NYSE comp'

The master index saw a net weekly gain of 1.1% to settle at 13050, the highest weekly close since late January. It bodes well for the main market into the autumn.


The second market leader - R2K, was the laggard this week, higher by a moderate 0.5% to 1721. The 1800s look due by mid/late November. R2K @ 2K looks due by mid 2019.


The 'old leader' - Transports, was the leader this week, settling +1.9% at 11570, having broken a new historic high of 11623. If WTIC does break new multi-year highs (>$75.27) - as seems probable, the transports will be pressured, although that does not mean the sector/index will be net lower in the weeks/months ahead.


All six of the main US equity indexes saw net weekly gains

The Transports and Nasdaq lead the way, with the Dow and R2K lagging.

The Transports broke a new historic high, on 4 of 5 days.

The m/t trend is unquestionably bullish, as the market is battling against 'offshore concerns', such as Turkey. Trade/tariffs remain a key issue, but a US agreement with Canada and China look highly probable.

The US midterms will be a brief issue in early November, but once that is out of the way, the market will have a clear run into year end. Original target of sp'3245 looks just about within range.

YTD performance:

The Nasdaq continues to lead the way, currently net higher for the year by a powerful 16.0%, with the R2K +12.1%. The sp'500 is +8.6%, with the Dow +5.8% and the NYSE comp' +1.9%. Its notable that the Transports has been catching up since late June, currently +9.0%.

Looking ahead 

Key earnings: FedEx (FDX), Oracle (ORCL) Mon', Micron Tech' (MU), Thurs' in AH.

M - Empire State manu'
T - Housing market
W - Housing starts, EIA Pet' report
T - Weekly jobs, Phil' fed, existing home sales, leading indicators.

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Have a good weekend

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