Saturday 29 December 2018

Weekend update - US equity indexes

It was a very mixed week for US equity indexes, swinging from powerful declines, to settle with very significant net weekly gains, ranging from +4.0% (Nasdaq comp'), +3.5% (R2K), +2.9% (spx), +2.7% (Dow), +2.6% (Trans), to +2.3% (NYSE comp'). Near term outlook offers a continued bounce, but the m/t trend remains outright bearish.

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


The spx broke a new multi-year low of 2346, which was notably from around the 200wma. For the week, a net gain of 69pts (2.9%) to settle at 2485. Despite the recovery, price momentum continues to weaken, and remains at levels not seen since the height of the financial crisis in Oct'2008.

Note the key 10MA at 2642. Its very possible the bulls could manage further upside to the low/mid 2600s, but that should prove to be massive resistance, before resuming lower. A H/S formation is highly suggestive that 2346 is NOT a key floor. A more natural floor would be the 2250/40s, with the 61.8% fib' retrace (of the 2016>2018 rally) at 2242.

Nasdaq comp'

The Nasdaq broke a new low for the year of 6190, but settled +251pts (4.0%) at 6584. The weekly settlement is effectively at the old support floor. Its entirely possible this is enough of a bounce, with further downside to giant psy'5k. The more bullish could seek s/t upside to around 7k, but even that won't be enough to dent the broader downward trend from the August high of 8133. 


The mighty Dow swung from a low of 21712, to settle +617pts (2.7%) to 23062. Much like the Nasdaq comp', the weekly settlement was around the old floor. Next big support is the 20400/000 zone.

NYSE comp'

The master index swung from 10723, to settle +254pts (2.3%) to 11290. Note the old floor of 12k, with next support of the 10300/000 zone.


The R2K broke a new cycle low of 1266, the lowest level since Nov'2016, but settled +45pts (3.5%) to 1337. Note the 200wma, which the R2K settled under for a second week. Whilst some in the mainstream are touting the 200wma as holding for the spx, the R2K, NYSE comp', and Trans have already broken and repeatedly settled under it. 


The 'old leader' - Transports, swung from 8636 (the lowest level since mid Nov'2016), but settled +234pts (2.6%) to 9109. Note the old floor/key price threshold of the 9700s. Its possible we'll bounce to around there, before resuming lower.


All six US equity indexes saw significant net weekly gains.

All six US equity indexes broke new multi-year lows.

The Nasdaq and R2K are leading the way back upward, with the Trans and NYSE comp' lagging.

The NYSE comp', R2K, and Transports, have seen almost all of the post-election Trump gains eroded.

YTD price performance:

The Nasdaq comp' remains the most resilient index for the year, currently -4.6%. The Dow is -6.7%, with the spx -7.0%. The NYSE comp' is -11.8%, the R2K -12.9%, with the Transports -14.2%.

Looking ahead

It will be a short four day trading week.

M - *normal closing at 4.00pm EST*
W - PMI manu'
T - Vehicle sales, ADP jobs, weekly jobs, ISM manu', construction
F - Monthly jobs, PMI serv', EIA Pet' & NG reports

*As Monday is New Years Eve, increased volume can be expected, especially in the late afternoon. The s/t cyclical setup favours the equity bears into year end, whilst the bigger daily cycle offers a positive start to 2019 on Wed' Jan'2nd.

**Fed chair Powell will be speaking Friday morning, with other panelists of Yellen and Bernanke. Mr Market will most definitely be listening. Its possible the event will be televised on the various financial networks.

If you value my work on Blogger and Twitter, subscribe to me.
For details and the latest offers:

Have a good weekend

*the next post on this page will likely appear 5pm EST on New Years Eve.