It was a bearish week for US equity indexes, with net weekly declines ranging from -6.9% (Transports), -3.6% (NYSE comp'), -2.6% (Dow), -2.3% (SPX), to -1.2% (Nasdaq comp'). Near term outlook offers broad downside into the summer.
Lets take our regular look at five of the main US indexes
The sp'500 saw a net weekly decline of -66pts (2.3%) to 2863. The SPX has become stuck around key price threshold of the 2940/50s. First support is in the low 2700s. Any price action <2700 would merit s/t alarm bells, as it would threaten a fast drop to around 2500. Yours truly has a 'technical necessity' of the mid 2300s.
All five US equity indexes were net lower for the week.
The Transports lead the way lower, with the Nasdaq comp' most resilient.
More broadly, four of the US equity indexes are holding below their respective monthly 10MA, the exception remains the Nasdaq comp'.
A relatively light week is ahead, although there will clearly be a great many Corona related news headlines. Further chatter about US/China trade can be expected.
M - NAT, SE, SOHU, BIDU, IQ, TRVG
T - WMT, HD, KSS, AGN, ARNC, URBN, GRPN
W - TM, SFTBY, LOW, TGT, ADI, RCL, CRZBY, TTWO, EXPE, LB
T - MDT, TJX, HRL, BBY, M, TK, NVDA, ROST, SPLK, A, PANW, HPE, DECK, SVM, ELF
F - BABA, DE, CGC, FL
M - Home builders index
T - Housing starts, Powell (10am) - US Senate banking committee
W - EIA Pet', FOMC mins (2pm)
T - Weekly jobs, PMI manu', serv', comp' flash. existing home sales, leading indi',
Powell (2.30pm), Fed' bal' sheet (4.30pm).
F - -
*As Monday May 25th is CLOSED for memorial day, Friday May 22nd will be skewed ahead of a three day weekend. Expect considerable price chop, volume will likely be thin.
We have nine trading days left of May. As things are, the US equity market should settle net lower by some amount, which will make for another bearish monthly settlement.
For now, the mainstream cheerleaders are (somewhat understandably) still hoping for a V-shaped economic recovery. Yes, there will be a recovery of some degree this summer, but it will likely only negate around half of the collapse wave from March>May.
It should be clear, tens of millions will remain jobless into the autumn, when another bout of mainstream hysteria could be expected to occur. Indeed, the uneducated sheep have been primed to react with outright terror to the next seasonal virus.
I will merely add.... I would consider the period from now until around mid-October, as opportunity to prepare... as YOU see fit.
Further stimulus can be expected, and that of course will be effectively financed by the fed. The mid/long term implications for gold/silver, and the related miners should be clear as crystal. We have an interesting summer ahead.... in the twilight zone.
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Have a good weekend
*the next post on this page will likely appear 5pm EDT on Monday.