It was a bullish week for US equity indexes, with net weekly gains ranging from 3.3% (Trans), 2.1% (Nasdaq comp'), 1.4% (sp'500), to 0.8% (NYSE comp'). Near term outlook offers further upside into June to the 2430/40s. Mid term outlook remains bullish, with the year end target of 2683 on track.
Lets take our regular look at six of the main indexes
sp'500
A net weekly gain of 34pts (1.4%), settling at 2415, with a notable new historic high of 2418. Underlying MACD (blue bar histogram) cycle is starting to tick higher. A bullish MACD cross is due next week, which bodes for the 2420/30s by mid June.
Best guess: upside into mid/late June to the 2430/40s. The 2500s seem a valid target by late September. The year end target of 2683 remains on track.
Equity bears have nothing to tout unless a break of rising trend. As of early June that will be around 2300, and that number is rising by around 25pts a month.
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Nasdaq comp'
The Nasdaq continues to lead the way higher, with a net gain of 2.1% to 6210, and a notable new historic high of 6217. The mid term upward trend is relentless. First soft support is the 6000/5900 zone. Grand support is the giant 5k threshold, and that is a rather huge 19.4% to the downside. The 7000s seem highly probable by year end.
Dow
The mighty Dow climbed 275pts (1.3%), settling at 21080. The intra high of 21112 was just 57pts shy of the late Feb' high. Rising trend will be at the giant psy' level of 20k in early June. By September, that will have risen to 21k. Underlying MACD remains moderately negative. At the current rate, there is the possibility of a bullish cross by mid June, when the fed are set to raise rates. In theory, the Dow has viable cyclical upside across the entire summer. By September, Dow 22k is a very realistic target.
NYSE comp'
The master index saw a net gain of 0.8%, settling at 11631. The intra high of 11666 was 21pts shy of the late Feb' high. A mid term push to the 12000s seems a given by late July/August. A year end close >13k looks a stretch, and will greatly depend on what degree of autumnal retrace/cooling there is.
R2K
The second market leader - R2K, settled +1.1% to 1382. Underlying MACD remains negative, but is showing another attempt to tick back upward. At the current rate, a bullish cross is viable by end June. Upper bollinger is offering the 1410s. Its notable that the width between the upper and lower bollingers hasn't been this tight since summer 2015, just before things fell to pieces (largely China inspired). Equity bulls should be seeking definitive new highs in the R2K no later than the next earnings season of July.
Trans
The 'old leader' - Transports, saw a powerful net weekly gain of 3.3%, settling at 9176. The weekly closing was a borderline settlement above short term downward trend/resistance, that stretches back to the Feb' historic high of 9639. Equity bulls should be seeking the 9700s this summer to give confidence that the broader market remains strong. A grander move to 10k by September is on the menu, with the 11000s viable by year end.
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Summary
All US equity indexes remain within their mid term upward trends from early 2016
The US market is still regularly breaking new historic highs, lead by the Nasdaq comp' and sp'500.
The Transports remains the market laggard, but it should also break new highs this summer.
Most indexes have downside buffer of around 5% before key aspects of support are tested.
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Looking ahead
M - CLOSED
T - Case-Shiller HPI, Pers' income/outlays, consumer conf'
W - Chicago PMI, Pending home sales, Beige book
T - weekly jobs, ADP jobs, prod'/costs, PMI/ISM manu', construction, EIA Pet' & Nat' gas reports
F - monthly jobs, intl' trade
*the only fed officials scheduled are Kaplan and Williams on Wednesday. Broadly, the market is still expecting a June 14th rate hike. An equally important issue is when the fed will start to cut its balance sheet, many now expect that to be announced in Sept.
**as Wednesday is end May, there will be the usual end-month trading issues. Price action should be a little more dynamic, with higher volume than normal.
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