Saturday, 20 January 2018

Weekend update - US equity indexes

It was a broadly bullish week for US equity indexes, with net weekly changes ranging from +1.0% (Dow, Nasdaq comp'), +0.9% (sp'500), +0.4% (R2K), to -0.6% (Trans). Mid term outlook remains bullish, with first big target of sp'2950/3047. The year end target of 3245 remains on track.


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

sp'500


The sp' climbed for a third consecutive week, +24pts (0.9%) to a new historic high of 2810. The weekly upper bollinger is currently at 2797, and rising around 30pts a week. Technically, the 2830s will be viable next week, with the 2900s as early as late February.

Best guess: continued broad upside into the late spring/early summer, with big target of 2950/3047. The market will be extremely prone to stall within this zone, and then see a correction of 5%. Unless there is a geo-political 'shock' this summer, I'd look for the market to then resume upward. The year end target of 3245 is on track.

Equity bears have nothing to tout unless a bearish monthly close. For me, that would equate to a monthly close under the key 10MA, which currently stands at 2538. I do not expect any such bearish monthly close this year.
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Nasdaq comp'


Tech is leading the way, with the Nasdaq higher for a third week, +1.0%, breaking a new historic high of 7336. The 8000s are a valid target by late spring, with the 9000s for year end.


Dow


The mighty Dow settled higher for a third week, +1.0%, breaking a new historic high of 26153. Note the upper bollinger, currently at 26090, climbing around 350pts a week, with the 26400s on offer next week. The giant psy' 30k threshold is a valid target for year end.


NYSE comp'


The master index settled +0.7%, having broken a new historic high of 13384. The 14000s will be valid by mid/late spring.


R2K


The second market leader gained a moderate 0.4%, but with a notable new historic high of 1604. The 1700s will be within range by the summer. More broadly, a year end close in the 1800/900s now looks probable. On balance, 'R2K @ 2K' still appears off the menu until 2019.


Trans


The 'old leader' - Transports, struggled this week, settling -0.6%, but did manage a new historic high of 11423. The tranny is cyclically extremely high - much like Dec'2016, but that doesn't mean a sig' down wave is due in the near term.
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Summary

A bullish week, with all six indexes breaking new historic highs.

The Dow and Nasdaq are leading the way, with the Transports lagging.

All indexes have around 5% of downside buffer before first soft support would be tested.

Equity bears have nothing to tout unless a majority of indexes see a bearish monthly close.
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Looking ahead 

As well as a truck load of corp' earnings...
 
M - -
T - Rich' fed' manu'
W - Existing home sales, EIA Pet' report
T - Weekly jobs, intl' trade, new home sales, leading ind'
F - Durable good orders, Q4 GDP (first est'). Market consensus is seeking 2.9%. A print >3.0% would really help to remind some that annualised growth has distinctly accelerated since late 2016.

*World economic forum annual meeting: Davos, Jan'23-26. That will capture a great deal of media/mainstream attention this week. Interestingly, Trump will be there, due to speak Friday 1pm UK/EU (8am EST).

Schedule: https://www.weforum.org/events/world-economic-forum-annual-meeting-2018/programme

**The only fed official due is Evans (Tues' evening). After that, the usual blackout period will be in effect, as we have an FOMC the following week.
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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, 19 January 2018

New highs into the weekend

US equity indexes ended the week on a positive note, sp +12pts at 2810. The two leaders - Trans/R2K, settled +1.3% and +0.4% respectively. VIX settled -8.1% at 11.27. Near term outlook offers the 2820/30s. More broadly, first big target is 2950/3047, where the market will get stuck... much like May 2015.


sp'daily5



VIX'daily3



Summary

US equities opened fractionally mixed, and from there, it was mostly a day of very minor swings. However, the sp'500, Nasdaq comp', and NYSE comp', did manage new historic highs in the late afternoon. Considering it was opex, these new highs were just another reminder of how super strong underlying price pressure is.

Volatility cooled into the weekend, as Mr Market shrugged off any concerns about a possible (if unlikely) US govt' shutdown.
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Bonus chart: Italy, monthly


The Italian market is currently +8.7% at 23749. A monthly close (whether Jan', or Feb') >24k will offer grander upside to at least 35k by mid 2019. Huge implications for other markets.
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The sun sets on yet another bullish week
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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 equity indexes 
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Thursday, 18 January 2018

Thursday chop

US equity indexes closed on the weaker side, sp -4pts at 2798. The two leaders - Trans/R2K, settled u/c and -0.6% respectively. VIX settled +2.6% at 12.22. Near term outlook threatens moderate weakness into the opex-weekly close. More broadly, first big target remains 2950/3047, which is clearly at least a few months away.


sp'daily5



VIX'daily3



Summary

US equities opened a little weak, saw some chop, leaned a little higher into mid afternoon, with closing hour minor weakness. The Dow notably broke a new historic high.

VIX saw a few minor swings, notably settling higher for the 9th day of past 10. Cyclically high, with the VIX highly prone to cooling back into the 10/9s by end month.
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Bonus chart: China, monthly


The Shanghai comp' is currently net higher for January by a very significant 5.1% at 3474. This is a provisional breakout. The 3500s would be decisive, and offer 4500 within 9-15 months. Huge implications for other world markets.

I'd also refer you to the Russian (RTSI) and Italian (MIB) markets. 
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A day of blustery showers in the metropolis
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Extra charts in AH (usually around 7pm EST) @ https://twitter.com/permabear_uk

Goodnight from London
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