Saturday, 20 December 2014

Weekend update - US weekly indexes

From a new cycle low of sp'1972 at the Tuesday close, US equities have soared. Net weekly gains ranged from 3.8% (R2K), 3.4% (sp'500), to 1.7% (Trans). Outlook is for continued broad gains into 2015, with the sp'2300s now viable by late spring.


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

sp'500


A powerful net weekly gain of 3.4% for the sp'500. What is pretty incredible is seeing a 105pt swing from the Tuesday close of 1972 to the Friday afternoon intra high of 2077.. which itself was a mere 2pts from the recent historic high.

Indeed, we now have a clear cycle floor of 1972.. and we're headed into the 2100s. There now appears a very high probability of a straight run up to the 2300s by April/May. Higher oil prices will no doubt help inspire confidence in both the US and most world markets.


Nasdaq Comp'


The tech' gained a respectable 2.4% this week, and is close to breaking new post 2009 highs. The March' 2000 high of 5132 is surely going to be hit in the first half of next year. No doubt, some will get twitchy in the low 5000s, but 7k now looks a broader target for late 2015/early 2016.


Dow


The mighty Dow came very close to breaking the 17k threshold that I was highlighting last week - intra week low 17067, but settling the week up a net 523pts (3.0%). On any basis, this is a huge gain, and again cements 17k as a core support level.

The 18000s are coming.. whether by end year.. or in January.. it should make no difference to anyone on the long side. Next key resistance zone will be around 18250/500 by late Jan/early Feb. However, the big 20k threshold looks a given by late spring. The next 'grand' fib level is 18974.... and if you agree that 20k is likely.. it is arguably important to consider the next fib extrap' is 26702. Clearly, the latter would be called 'crazy talk' right now... but if the market trend accelerates across the first half of 2015, then 26k is viable by early 2016.


NYSE Comp'


The master index gained 3.7% this week, and (surprisingly) a yearly close in the low 11000s now looks possible. Early target for Jan/Feb is around 11300s.. where we might get stuck, before the next retrace.


R2K


The second market leader was the market leader this week, with a net weekly gain of a very powerful 3.8%. With the 1150 threshold holding, the R2K is now just 18pts shy of the July high of 1213. New historic highs look due.. and once we see a monthly close in the 1220s or higher... it should confirm that much higher levels are due in 2015. The next grand target would be around 1500, but clearly... that is a long way up, and would likely equate to sp'2400/500s.


Trans


The 'old leader' gained a reasonable 1.7% this week. No doubt the transports was lagging because Oil prices have now put in a key multi-month floor of $53. As oil prices continue higher in Q1 of 2015, the Transports is going to continue lagging the broader market. Despite that major problem, Trans looks set to break the giant 10k threshold by March/April.


Summary

A very powerful week for US equities. Despite some distinct pre-FOMC weakness into the Tuesday close, the market has put in a key floor on all indexes.

There looks to be continued upside into year end, and probably most of January.

For the equity bulls, most notable is the R2K, which has traded sideways across the year. This is very much in the manner of the Transports in 2012. Once the tranny broke up in Jan'2013.. it never looked back, and I would imagine the R2K doing much the same.


Looking ahead

Next week will naturally be a very quiet holiday week, although there a few data points of note...

M- existing home sales
T- Durable goods orders, GDP (second rev'), Pers' income/outlays, consumer sent', new home sales
W-  weekly jobless claims,  **US markets close early at 1pm
T-  CLOSED
F- *normal trading hours
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Audio podcast from yours truly...


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Back on Monday.

Bull maniacs in total control

US equities have seen an incredible ramp from the Tuesday close of sp'1972, to settle with a net weekly gain of  68pts (3.4%) @ 2070. The sp'2100s are an easy target, the only issue is when the next 'minor retrace' will occur in late Jan/Feb... at best... 3-4%, with broader upside to the 2300s by April/May.


sp'weekly7, rainbow


Summary

A powerful outright bullish green candle for the sp'500... and there is no doubt we have a solid floor of sp'1972.

It is very reasonable to expect the 2300s by late spring 2015.

However, considering Oil.. which is due for a massive $17/22 rally into the $70s... it could certainly help inspire the market to accelerate the trend.
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China continues to soar

The Shanghai Comp' is now higher for the eighth consecutive month, by an extremely powerful 15.9% this month...


... headed for next key resistance of 3500 - the high from summer 2009. Any monthly closes in the 3600s, should clarify that 5k will be hit.. whether late 2015 or early 2016. At present, I find the notion of new historic highs (>6124) difficult.
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Have a good weekend....

Goodnight from London
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*the weekend post will be on the US weekly indexes

Daily Index Cycle update

US equity indexes continued to push higher for a third day, with sp +9pts @ 2070 (intra high 2077). The two leaders - Trans/R2K, settled higher by 0.4% and 0.3% respectively. Near term outlook is for continued broad gains into end year.. and beyond.


sp'daily5


R2K


Trans


Summary

*a very notable weekly close for the R2K in the 1190s. New historic highs are coming, possibly even before year end.
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So.. the third consecutive daily gain, with the sp' ramping from a Tuesday close of 1972, to a Friday high of 2077... just 2pts shy of breaking a new historic high.

The broader trend has indeed resumed.. and we're headed into the sp'2100s.. and beyond.
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Closing update from Riley


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a little more later...

Friday, 19 December 2014

Volatility melts into the weekend

With equities seeing renewed strength into the weekend, the VIX continued to cool, settling -1.9% @ 16.49. Near term outlook is for VIX to fall into the 12/11s.. perhaps even 10s - with sp'2100s in January. Across the week, the VIX declined by a very significant -21.8%.


VIX'daily3


VIX'weekly


Summary

*the third consecutive net daily decline in the VIX.
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Little to add...

Higher equities.... lower VIX... nothing surprising there.

VIX looks set to remain very low for a good 4-6 weeks. The next spike might only get the VIX to the upper teens.
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more later... on the indexes