Saturday 7 September 2019

Weekend update - US equity indexes

It was a bullish week for US equity indexes, with net weekly gains ranging from +1.8% (SPX, Nasdaq comp'), +1.7% (Trans), +1.5% (Dow, NYSE comp'), to +0.7% (R2K).

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


The SPX saw a Tuesday low of 2891, but rebounded to a net weekly gain of 52pts (1.8%) at 2978. More broadly, I would note monthly price momentum has turned fractionally positive. Note the 10MA, some 143pts below current levels.

Nasdaq comp'

Tech saw a net weekly gain of 140pts (1.8%) to 8103. More broadly, monthly price momentum remains negative.


The mighty Dow rebounded, with a net weekly gain of 394pts (1.5%). More broadly, monthly price momentum remains negative. Note the key 10MA at 25824.

NYSE comp'

The master index gained 196pts (1.5%) to 12933. Despite the gain, monthly price momentum remains negative. Note the monstrous technical/cyclical divergences from Jan'2018.


The second market leader is still struggling, settling +10pts (0.7%) to 1505. More broadly, price momentum remains deeply negative, with the R2K currently under the key 10MA of 1516.


The 'old leader' - Transports, saw a net weekly gain of 175pts (1.7%) to 10302. Monthly price momentum remains deeply negative, although the tranny is back above the key 10MA.


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

The SPX and Nasdaq comp' lead the way higher, whilst the R2K lagged.

Of the six indexes, only the R2K is currently under the key monthly 10MA.

YTD price performance:

The Nasdaq comp' remains the leader, currently net higher for 2019 by 22.1%. The SPX is +18.8%, the Dow +14.9%, and the NYSE comp' +13.7%. The Transports is +12.3%, with the R2K lagging, but still higher by a considerable +11.6%.

Looking ahead

Earnings: GME, RH (Tues' AH), KR (early Thurs'), AVGO (Thurs' AH).

M - Consumer credit
T -
W - PPI, Wholesale trade, EIA Pet' report
T - CPI, weekly jobs

*ECB: a rate cut of -10bps to -0.50% can be expected. Draghi will also be highly inclined to threaten renewed QE, although it would seem Lagarde will be the one to officially spool up the printers before year end.

F - Retail sales, import/export prices, busi' invent', consumer sent'.

Final note

As summer fades, price action should become more dynamic within the US equity market. Either the market is going to break new historic highs (at least in a few indexes), or we're going to rollover and unravel into the autumn.

The bond market and Gold & Silver prices are both warning of underlying global capital market unrest. We've an array of geo-political problems, not least BREXIT, China/HK, US/Iran and India/Pakistan, any of which might result in a 'financial shock' this autumn.

Meanwhile, the US Fed are clearly going to cut rates Sept'18th, and on balance, I also expect cuts Oct'30th and Dec'11th. Those who think rate cuts are going to help stave off a recession need to go stare at the following for a good hour...

... or perhaps just call up one of the financials - such as Bank of America, and ask them if lower rates are going to help their net profit margins. Ohh, and yes, I am expecting the US to follow the EU and Japan down the path of negative rates. If you think that is going to help, I'd suggest you also give Deutsche Bank a call.

In any case, the next few months are going to require extra popcorn, or whatever you might prefer.

A late summer evening in the London metropolis

Somewhere is the crashed Indian lander of Chandrayaan 2
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Have a good weekend
**the next post on this page will likely appear 5pm EDT on Monday.