It was a bullish week for US equity indexes, with net weekly gains ranging from +2.6% (Transports), +0.9% (Nasdaq comp', Dow), +0.8% (R2K), +0.7% (NYSE comp'), to +0.6% (SPX).
Lets take our regular look at six of the main US indexes (monthly candle charts).
The SPX swung from an intra week low of 2892 to 2993, and settling +18pts (0.6%) at 2970. More broadly, price momentum remains fractionally positive, trading above the key 10MA.
Price action has been broadly stuck, as reflected in monstrous technical divergences that stretch back to Jan'2018. I would see things turning decisively bullish >3050, or bearish, with a monthly settlement under the key 10MA (currently at 2881).
The Nasdaq climbed by 74pts (0.9%) to 8057. More broadly, monthly price momentum remains moderately negative, but price is holding above the 10MA.
The mighty Dow climbed 242pts (0.9%) to 26816. More broadly, monthly price momentum remains negative, but price is holding above the key 10MA.
The master index gained 95pts (0.7%) to 12926. Monthly price momentum remains fractionally negative, but price is holding above the key 10MA.
The second market leader gained 11pts (0.8%) to 1511. Monthly price momentum remains deeply negative, with price holding under the 10MA.
The 'old leader' - Transports, lead the way higher this week, +262pts (2.6%) to 10291. Monthly momentum remains deeply negative, with price holding under the 10MA.
All six US equity indexes saw net weekly gains
The Transports lead the way higher, with the SPX lagging.
More broadly, of the six indexes, four are currently trading above their respective monthly 10MA, with the R2K and Transports below.
YTD price performance:
The Nasdaq comp' continues to lead for the year, currently +21.4%. The SPX +18.5%, the Dow +15.0%, and the NYSE comp' +13.6%. The Transports is +12.2%, with the R2K +12.1%.
A very busy week is ahead, as Q3 earnings season begins.
T - JPM, UNH, C, JNJ, GS, WFC, SCHW, UAL IBKR, JBHT
W - BAC, ALLY, ABT, NFLX, IBM, KMI, CSX, AA
T - MS, HON, UNP, TSM, ETFC
F - KO, AXP, SLB,
M -*Columbus day* - Bond market CLOSED.
T - Empire state manu'
W - Retail sales, busin' invent', housing market index, Fed Beige book
T - Weekly jobs, housing starts, phil' fed, indust' prod', EIA Pet' & NG
F - Leading indicators, *OPEX*
Key event: Thurs/Friday - two day EU leaders summit. It will be the last opportunity for the UK and EU to agree on some kind of deal. https://www.bbc.co.uk/news/uk-politics-50025931
Saturday Oct'19th; An exceptionally rare weekend sitting of Parliament. If no deal with the EU can be reached, it is probable the Government will collapse, with an election called for late Nov/early Dec'.
I would assume the EU would quickly offer an extension into end 2019/early 2020, whilst an election is held. Any subsequent government (whether coalition or otherwise) could be expected to eventually offer the public a secondary referendum on whether an (eventual) deal is acceptable. I would expect the UK populace to vote against ANY such deal, and thus... remain within the EU.
Wednesday will see QE4-phase'1 begin. Monthly QE of $60bn is not something to be dismissed lightly. Whilst I don't see rate cuts as helping to stave off a recession, throwing huge amounts of new money into the US capital markets is going to have some effect on juicing asset prices, especially stocks.
Q3 earnings can be expected to come in at least 'reasonable', whilst econ-data is likely to show further weakness. The Oct'30th FOMC will provide rate cut'3, all whilst QE4 will be well underway. Crazy times.
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Have a good weekend
*the next post on this page will likely appear 5pm EDT on Monday.