Lets take our regular look at five of the US indexes (monthly candle charts)
sp'500
The SPX settled net lower for the week by -85pts (2.5%) to 3340. More broadly, monthly momentum is on the high side, and prone to rolling over. I would note the key 10MA at 3116. Most important of all, I would keep in mind the August low of 3284. If September settles <3284, it would make for a bearish engulfing monthly candle, which would threaten serious problems within October, and I would note the lower bollinger at 2600.
Nasdaq comp'
The Nasdaq saw a powerful net weekly decline of -459pts (4.1%) to 10853. More broadly, monthly momentum is starting to tick lower. I would note the August low of 10762, which we have already broken below. How September settles... will be very important!
Dow
The mighty Dow saw a net weekly decline of -467pts (1.7%) to 27665. More broadly, monthly momentum remains negative. A failure around the key zero threshold would be especially problematic.
NYSE comp'
The master index saw a net weekly decline of -144pts (1.1%) to 12773. Monthly momentum remains negative.
Trans
The Transports was resilient to the main market, with a net weekly gain of +57pts (0.5%) to 11282. More broadly, monthly momentum is showing zero sign of stalling, as new historic highs are just 341pts (3.0%) away.
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Summary
Four indexes settled net lower for the week, the exception being the Transports.
The Nasdaq - which lead the way higher, is now leading the way lower.
More broadly, all five indexes are still trading above their respective monthly 10MA, as the m/t trend remains outright bullish from March.
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Looking ahead
The schedule is very light, and whilst there is a fed meeting, nothing can be expected of that, not least ahead of the election.
Earnings:
M - LEN
T - CBRL, HMY, FDX, ADBE
W -
T -
F -
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Econ-data/events
M -
T - Empire state manu', indust' prod'
W - Retail sales
*FOMC announcement (2pm), Powell press conf' (2.30pm). No change in policy can be expected. However, the fed will very likely re-state its support for further US Govt' fiscal stimulus.
T - Weekly jobs, housing starts, phil' fed
F - Consumer sent', *OPEX*
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| Summer continues to fade |
Final note
Its been a mixed month so far, with the Nasdaq comp' and SPX both breaking new historic highs, but then seeing a powerful reversal. For now, the m/t trend has to be seen as bullish. Indeed, with the monthly 10MA at sp'3116, that makes for a considerable downside buffer of 224pts (6.7%).
The election is an uncertainty to the mainstream cheerleaders and the market itself, and that will be an increasing downward pressure in the weeks ahead. A test of m/t support can be expected.
For the record, I expect Trump to win a second term, and it should be clear, the market would be pleased about that, for a President that is literally the best cheerleader the market has ever had.
If you're reading around only half as much as yours truly, you will also be aware of the dark path that the global populace has decided to follow. With summer soon to end, an increasing number are understandably starting to worry about the winter ahead... within the twilight zone.
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Have a good weekend
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