US indexes back on the rise

The decline from sp'1897, appears to have found a floor of 1814. Once again, a multi-week decline never amounted to anything more than 'minor' declines. All the main US indexes look set to close April at MARCON 7. Equity bears have at least another 2 or 3 months to wait.

sp'monthly9

Summary

Suffice to say, equity bears were teased again, with a decline of 83pts (around 4.4%) across 8 trading days.

Yes, the monthly MACD (blue bar histogram) is continuing to tick lower, but prices are still broadly climbing. Until bears can attain a monthly close under the 10MA - currently @ 1779 (the low 1800s in May), there is no justification for any excitement.
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So, we're Holding at MARCON 7, and right now, I'd guess we won't see 6 until at least June.

UK FTSE falls to MARCON 6, DOW set to follow

The UK equity market has rolled over, and looks set for a decline of at least 10% to the big 6k level this spring/summer. The US Dow'30 looks set to follow..as early as next week.


UK, FTSE, monthly

USA, Dow, monthly

Summary

So..we have the shaky UK market already getting a bearish MACD cross on the big monthly chart, and thus...a lowered rating of MARCON 6 - the first time since Oct'2012. Downside to the low 6000s looks a pretty easy target, whether that is this spring..or the summer.



Dow set to break 16k

The Dow remains the weakest of the USA indexes (despite the recent declines in the R2K, Nasdaq), The Dow has not seen a negative MACD (green bar histogram) cycle since Dec'2012. As ever, how we close the month, we be all important.

On any cyclical basis, we're more than due at least a moderate multi-month down wave.

The upward trend continues

With continuing QE (although reducing) from the Fed, US equities continue their upward trend from the Oct'2011 low of sp'1074. The issue for this year is how will the Fed react if the market gets upset, falling 15/20%? Will QE be raised, spurring a new hyper-ramp to the sp'2000s, and beyond?

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sp'monthly8 - MARCON status

Summary

So, the market is holding at MARCON 7, and looks unlikely to drop to 6 until at least May. I do not expect MARCON 5 to be hit this year, even if the market drops to the best 'bear case' target zone of sp'1625/1575 this summer.

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An update on the ongoing Fed QE.

sp'monthly8 - QE periods

My best guess for this year is the market becomes increasingly weak - not least due to geo-political rumblings, and we fall to the low 1600s..perhaps even (briefly) the 1500s.

I've little doubt the mainstream will get real upset at such a fall, with immense pressure on the Fed to halt taper, and actually increase QE.

Based on their past actions, I'd have to guess the Fed will indeed respond with increased QE, from a low of $35/25bn to $50/60bn a month. That would likely be more than enough to inspire a new multi-month up wave in equities.

I continue to hold to an outlook of broad upside into late 2015/early 2016. At that point, we'll very likely be trading in the sp'2000s..as outlined in the following...

sp'monthly6b

The notion of sp'2500..or higher, probably sounds like 'crazy talk' to many, but then, so was talk of sp'1500s or higher, back in late 2011. All traders - not least the equity doomer bears, would do well to keep an open mind this year.