US equities holding strong

The broader US equity market has yet to see any significant weakness this year. With new historic highs in the Transports, Dow, NYSE Comp', and SP'500, the market continues to climb from the Oct'2011 low of sp'1074. Near term outlook is bullish, but there remains threat of a mid term rollover.

sp'monthly'9

Summary

US indexes are indeed...holding at MARCON 7.

Barring a break under the monthly 10MA - in the 1830s, and more importantly... a break of rising trend - currently around 1750, the trend remains outright bullish.
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Update on QE

sp'monthly8

The Fed is set to announce QE taper'5 at the FOMC of June'18, with monthly QE of $35bn a month beginning in July.

If Q2 GDP comes in less than +1.0%, and certainly if it comes in negative, then I'd expect the Fed will halt QE taper, and might even raise monthly purchases in the autumn.

If the deflationary doomers are correct - with the economy slipping into a significant recession, then we could even see QE fully reverted back to $85bn a month - an annual rate of around $1trn.

After all, what else can the Fed do? Ohh yeah, they could turn interest rates negative, but then, that really would cause all sorts of quirky side effects in the financial system.
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MARCON 6 later this year?

Even if the market maxes out this June/July, it will take a good 2-3 months for the monthly MACD cycle to turn negative - with MARCON 6.

I do not envision MARCON 5 under any scenario this year, and my core outlook is for 'broad upside' into late 2015/early 2016.

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.