Saturday 25 May 2019

Weekend update - US equity indexes

It was another bearish week for US equity indexes, with net weekly declines ranging from -3.4% (Transports), -2.3% (Nasdaq comp'), -1.4% (R2K), -1.2% (SPX), -0.7% (Dow), to -0.6% (NYSE comp'.

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


The SPX fell for a third consecutive week, seeing a net weekly decline of -33pts (1.2%) to 2826, with a Thursday low of 2805. Underlying macd (blue bar histogram) cycle is set to turn negative at next week's Tuesday open, and threatens further cooling to the 200dma in the 2770s.

Nasdaq comp'

The Nasdaq fell for a third week, settling -179pts (2.3%) to 7637. MACD cycle will turn negative with next week's Tuesday open. Such a bearish cross is a serious problem to the m/t equity bulls, and it leans toward weakness into end month/early June.


The mighty Dow fell for a fifth consecutive week, settling -178pts (0.7%) to 25585. Note the macd cycle, which settled the week with a bearish cross. It leans bearish into end month. Alarm bells if the March/May double floor in the 25200s is taken out.

NYSE comp'

The master index cooled for a third week, settling -76pts (0.6%) to 12581. MACD cycle is set to turn negative with next Tuesday's open. Gundlach will no doubt remain focused on this index.


The second market leader cooled for a third week, settling -21pts (1.4%) to 1514. Weekly price momentum is set to turn negative next week. Note this week's low of 1493 was 1pt below the March low.


The 'old leader' - Transports, lead the way lower this week, settling -354pts (3.4%) to 10137. MACD cycle set to see a bearish cross with next Tuesday's open. Support 10000/9800 zone.


All six of the main US equity indexes settled net lower for the week.

The Transports is leading the way lower, with the NYSE comp' most resilient.

YTD price performance:

The Nasdaq comp' continues to lead, currently +15.1% for the year. The SPX is +12.7%, the R2K +12.3%, and the NYSE comp' +10.6%. The Transports is +10.5%, with the Dow lagging, but still higher by a respectable +9.7%.

Looking ahead 

It will be a short four day trading week, with a light sprinkling of earnings. 


M - -


T - Case-Shiller HPI, FHFA HPI, consumer con'.
W - Richmond Fed'
T - Q2 GDP (print 2), weekly jobs, pending home sales, EIA Pet' & NG reports
F - Pers' income/outlays, Chicago PMI, consumer sent'

*As Friday will be end month, expect some price chop on higher volume.

Final note

The past few weeks haven't been great for equities, with a number of indexes looking likely to settle the month (under my criteria of the monthly 10MA) outright bearish.

Yours truly wants to see the Fed cut rates to have real confidence that the market is close to a key mid/long term top. Even when we do see a rate cut though, the key issue will then be how low will equities be permitted to fall, until Print Central initiate QE4?

Most now accept the printers will be spun up again. The Fed's own research dept' (some years ago) noted it would likely print $2.0-2.5trn under just a moderate recession. These are crazy times, and  things are only going to get ever more crazier.

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Have a good weekend

*the next post on this page will likely appear 5pm EDT on Tuesday, May 28th.