Saturday 11 May 2019

Weekend update - US equity indexes

It was a bearish week for US equity indexes, with net weekly declines ranging from -3.2% (Trans), -3.0% (Nasdaq comp'), -2.5% (R2K), -2.2% (SPX), -2.1% (Dow), to -1.9% (NYSE comp').

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


The SPX saw a net weekly decline of -64pts (2.2%) to settle at 2881 (intra low 2825). More broadly, the SPX is still comfortably holding above the monthly key 10MA (2794).

Equity bears need a monthly close <2780s for a 'bearish monthly close'. Right now, that looks overly difficult. Some stocks - such as MSFT, DIS, and F, are all suggestive of at least another 3-4 months of main market upside.

Giant psy'3K is a natural and valid target this summer. The next big Fibonacci extension is 3047. I don't see that being exceeded in the ongoing wave that began late Dec'2018 from 2346, and would instead look for the market to (ideally) get stuck within the 3020/3030s.

Nasdaq comp'

The Nasdaq comp' saw a net weekly decline of -3.0% to 7916. Whilst last week did see a new historic high, this index has some rather problematic technical divergences when seen on a grander perspective.


The mighty Dow saw a net weekly decline of -2.1% to 25942. More broadly, note the macd (blue bar histogram) cycle, which is rolling back lower, and that is a real problem for the m/t equity bulls. Technically, pretty ugly, with a monstrous RSI divergence from Jan'2018.

NYSE comp'

The NYSE comp' - the index favoured by Gundlach, was the most resilient this week, settling -1.9% to 12788. The NYSE is still holding the key 10MA, but there remains a very serious technical divergence, as especially seen on the RSI. As Gundlach himself notes, the Jan'2018 high was followed by a key lower high in Oct'2018, which has not been surpassed in the current rally. The bulls should be increasingly desperate to clear >13261.


The second market leader settled -2.5% for the week to 1572. More broadly, the R2K is just 12pts above the key 10MA. Price momentum remains outright bearish, although is slowly swinging back toward the bulls. A bullish macd cross will not be easy.


The 'old leader' lead the way lower this week, settling -3.2% to 10602. More broadly, the tranny is holding just above the 10MA. Even if the headline indexes (SPX, Nasdaq comp', Dow) can break new historic highs into the summer, the transports will likely struggle, not least if WTIC/fuel prices see another wave higher.


All six of the main US equity indexes were significantly lower for the week.

The Transports lead the way lower, whilst the NYSE comp' was relatively resilient.

More broadly, all six indexes are currently net lower for May, but all are holding above their respective monthly 10MA.

YTD price performance:

The Nasdaq comp' continues to lead, currently +19.3% for the year. The R2K is +16.6%, Transports +15.6%, and the SPX +14.9%. The NYSE comp' is +12.4%, with the Dow lagging, but still net higher by a considerable +11.2%

Looking ahead 


F - DE


M -
T - Import/export prices,
W - Retail sales, empire state, indust' prod', busi' invent', housing market indx. EIA Pet'
T - Weekly jobs, housing starts, phil' fed
F - Consumer sent', leading indi'  *OPEX*

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Have a good weekend

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