Saturday, 18 November 2017

Weekend update - US weekly indexes

It was a rather mixed week for US equity indexes, with net weekly changes ranging from +1.2% (R2K), -0.1% (sp'500), to -0.3% (Dow). Near term outlook offers a little chop, but leaning upward into the 2600s. The original year end target of 2683 will be a stretch.


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

sp'500


The sp' settled fractionally net lower for a second consecutive week, -3pts at 2578. There is a clear break of soft rising trend that stretches back to the Aug' low of 2417. The Wed' low of 2557 does look rather secure though, and considering broader market price action and structure, a push into the 2600s looks possible as early as next week.

Best guess: a little weakness next Monday, but then a push into the 2600s, certainly by end month. By year end, the market has a fair chance of trading within the 2650/700 zone. That will clearly need almost everything to go right, with a rate hike, and oil sustainably around/above $60.

Equity bears have nothing to tout unless a bearish monthly close, which to me, would equate to a monthly close under the monthly 10MA (currently at 2456). That number is set to jump by 35pts at the Dec'1st open. So, unless 2017 settles under 2490 or so, the m/t bullish trend can be said to remain intact.
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Nasdaq comp'


The tech saw a net weekly gain of 0.5%, and with a notable new historic high of 6806. Upper weekly bollinger will be offering the 6900s before end month. The 7000s are due in December, with the 8000s a valid target for late spring 2018. Broadly, Q3 earnings were unquestionably good, and in some cases (MU, INTC, CSCO) outright superb. There is little reason to expect the current m/t trend not to hold for some considerable time to come.


Dow


The mighty Dow was the laggard this week, settling -0.3% at 23358, but that is still very close to recent hist' highs. Indeed, the upper weekly bollinger will be offering the 24000s in December. Underlying MACD (blue bar histogram) cycle ticked lower for a second week, but its arguably just cooling like August or March. Note the weekly 10MA that has held since April. No price action <23k can be expected for the remainder of the year.


NYSE comp'


The 'master' index settled net lower for the third week of four, -0.2% at 12302. Things would arguably only turn bearish if <12k, and that looks very unlikely before year end. Upper bollinger will be offering the 12600s before end November. The 13000s look a stretch by year end.


R2K


The second market leader - R2K, was the leader this week, with a net gain of 1.2% to 1492. There was an intra week low of 1454, which is around a rather important price threshold, that stretches back to July. With the Thurs-Friday rebound, the bulls can be looking for new hist' highs (>1514) into early December.


Trans


The 'old leader' - Trans, settled lower for a fourth consecutive week, -0.2% at 9483. The tranny has seen a clear initial failure to break and hold the giant 10k threshold. Despite the bearish run, things really only turn bearish <9300, and considering the broader collective of indexes, that looks unlikely. Arguably, its now merely a case of whether the tranny settles the year a little above.... or below 10k. I'm leaning on the former.
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Summary

A mixed week for US equity indexes, with minor weakness in the Dow and Trans, but a sig' gain in the R2K.

The US market is still regularly generating new highs, with this week seeing a new hist' high in the Nasdaq comp'.

Most indexes have 3-5% of downside buffer before the m/t bullish trend from early 2016 would be challenged.
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Looking ahead

It will be a very light 3.5 day trading week.

Earnings: INTU (Mon'), LOW (Tues'), DE (Wed')

M - Leading indicators
T - Existing home sales
W - Durable goods orders, weekly jobs, consumer sent', EIA Pet', FOMC mins (2pm)

T - CLOSED for Thanksgiving
F - EARLY CLOSING at 1pm EST.
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Have a good weekend
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*the next post on this page will likely appear 6pm EST on Monday.

Friday, 17 November 2017

Choppy opex weakness

US equity indexes closed rather mixed, sp -6pts at 2578. The two leaders - Trans/R2K, settled -1.1% and +0.4% respectively. VIX settled -2.8% at 11.43. Near term outlook offers a little weakness to around 2572. More broadly, the 2600s are due, whether before or shortly after Thanksgiving, it should make no difference to most.


sp'daily5



VIX'daily3



Summary

US equities opened in minor chop mode, and leaned on the weaker side into the late afternoon.

Despite equities leaning weak, the VIX opened lower, and stayed negative across the day. Its arguably a sign of underlying capital market confidence. The key VIX 20 threshold looks out of range for the rest of the year. Near term offers a little equity weakness to begin next week, but not much below sp'2572.
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Extra charts in AH (usually around 7pm EST) @ https://twitter.com/permabear_uk

Goodnight from London
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*the weekend post will appear Sat'12pm EST, and will detail the US weekly indexes
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Thursday, 16 November 2017

Naturally rebounding

US equity indexes closed broadly higher, sp +21pts at 2585. The two leaders - Trans/R2K, both settled higher by around 1.6%. VIX settled -10.4% at 11.76. Near term outlook offers a touch of cooling to the mid sp'2570s, but with the 2600s due before end month.


sp'daily5



VIX'daily3



Summary

US equities opened moderately higher, and built broad gains into the afternoon.

It was notable that once again the mainstream have seen their mood swing from effectively 'on suicide watch' to 'everything is fine again'. We're only in the sp'2500s, what happens when we're in the 3000s next year, and we drop 1% at the open? Who at CNBC, Bloomberg, or Fox Business, is responsible for calling the fed to request at least a press release threatening QE4 ?

Market volatility was naturally whacked at the open, and ground down to the mid 11s in early afternoon. With a retrace to the mid sp'2570s, VIX 12.50/13s seem due, before another wave to the 9s. Whether that is before or after the Thanksgiving break.... is of no importance.
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Appropriate.

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Extra charts in AH (usually around 7pm EST) @ https://twitter.com/permabear_uk

Goodnight from London