monday update

SHORT TERM: OPEX pullback continues, DOW -107

Overnight the Asian markets lost 0.6%. European markets opened lower and lost 0.5%. US index futures were lower overnight, and the market opened lower at SPX 2006. The SPX had closed at 2010 on Friday. The market continued to pullback, and at 10am Existing home sales were reported lower: 5.05mn v 5.15mn. The pullback continued until noon when the SPX hit 1992. Then after a bounce to SPX 1997 by 1:30, the market headed lower again. At 2:30 the SPX hit 1991, bounced to 1996 by 3:30, then end the day at 1994.

For the day the SPX/DOW were -0.70%, and the NDX/NAZ were -1.05%. Bonds gained 12 ticks, Crude lost 85 cents, Gold slipped $2, and the USD was lower. Medium term support remains at the 1973 and 1956 pivots, with resistance at the 2019 and 2070 pivots. Tomorrow: a speech from FED governor Powell at 9:20, then New home sales at 10am.

The market opened lower today, then pulled back to SPX 1992 before it even had a five point bounce. Even though we had posted short term support at SPX 2000 and SPX 1993, this was a bit more than expected. Thus far we have had a rally from SPX 1979 to 2019, and now a pullback to 1991: 40 points up, 28 points down. So far it still looks like a Minute i to 2019, and a Minute ii to today’s low.

Should we get another day like today the Minute wave short term count will probably fail, and the next logical support level would be the 1973 pivot range. Still no damage to the uptrend as the market could still be in an irregular Minor 2: 1979-2019-1979+/-. Currently looking for some sort of bounce/rally off the slight positive divergence on the hourly chart. Short term support is the 1973 and 1956 pivots, with resistance now at SPX 2000 and the 2019 pivot. Short term momentum hit extremely oversold today, and now displays a slight +div. Best to your trading!

MEDIUM TERM: uptrend

LONG TERM: bull market

CHARTS: http://stockcharts.com/public/1269446/tenpp

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weekend update

REVIEW

The wild and volatile week we expected was nearly all to the upside. The market started the week unchanged, completed its 1.5 week pullback on Tuesday, then made new highs on Thursday and Friday. For the week the SPX/DOW were +1.5%, the NDX/NAZ were +0.5%, and the DJ World index rose 0.3%. Economic reports for the week were mixed. On the uptick: NY FED, NAHB, leading indicators, WLEI, monetary base, and weekly jobless claims improved. On the downtick: industrial production, capacity utilization, CPI, housing starts, building permits and the Philly FED. Next week we get more reports on Housing, Durable goods orders, and Q2 GDP.

LONG TERM: bull market

This week the FED announced they will be ending QE 3 in October, and the ECB had a somewhat disappointing TLTRO 1. Nevertheless US and European markets reacted well to both events. The count we have been carrying on the SPX remains as posted. Primary waves I and II, of an expected five primary wave bull market, ended in 2011. Primary wave III has been underway since then. Primary wave I divided into five Major waves with a subdividing Major wave 1. Primary III has also divided into five Major waves, but this time Major waves 3 and 5 have subdivided.

SPXweekly

The SPX count suggests the market is currently in Intermediate wave v of Major 5. The last uptrend of Primary III. The recent underperformance of the R2K and the NYAD suggest this uptrend is indeed a fifth wave. Should this count work out to be the market’s count, then Primary IV would begin when this uptrend ends. Primary II lasted about five months, and the market lost 22% of it value. Primary IV should be a similar 3-5 month decline, while the market loses about 15%-20% of its value. The key level to watch is SPX 1905. Should the market decline to this level at any time in the near future Primary IV is underway.

DOWweekly

Due to the odd pattern in the DOW, and the smaller than expected recent correction in the NDX/NAZ, we are carrying another count on the DOW charts. This counts suggests that the last uptrend high and downtrend low were of one lesser degree: Minor waves 1 and 2. Not Intermediate waves iii and iv. Under this count Intermediate wave iii would be extending, just like the Intermediate wave iii during Major 3. The key level to watch for this count is SPX 1991. After this uptrend completes, and the next downtrend begins, if the market drops below SPX 1991 the extension is invalidated. If one is adept at Elliott Wave they will now realize, any future downtrend that drops below SPX 1991, or is confirmed below 1991, suggests Primary IV is underway.

MEDIUM TERM: uptrend

The current uptrend started at SPX 1905 in early August. After it completed five waves up to SPX 2011 in early September, we expected a pullback into the 1973 or 1956 pivot ranges. That pullback completed at the open on Tuesday when the SPX traded at 1979. When the market made new highs on Thursday we updated the count to display the first five waves up only completed Minor wave 1 of the uptrend. Minor wave 2 ended at SPX 1979. Minor wave 3 is currently underway.

SPXdaily

This uptrend should complete five Minor waves before we should look for an uptrend high. Typically third waves get quite overbought on the daily RSI, and MACD before they begin to top. Thus far we have only observed a 40 point rally off the recent Minor 2 low at SPX 1979. During this rally the RSI has just reached overbought, and the MACD is just beginning to turn higher.

When this uptrend began we gave a minimum target of the OEW 2019 pivot, which was reached on Friday. Our expected target was the OEW 2070 pivot, which we have been expecting for over a year heading into the timeframe. We would now like to add one more pivot at SPX 2085. Since these last two pivots nearly overlap there should be significant resistance once the SPX reaches their pivot ranges. Medium term support is at the 1973 and 1956 pivots, with resistance at the 2019 and 2073 pivots.

SHORT TERM

From the early August downtrend low at SPX 1905 we counted five waves up to SPX 2011. Waves 1 and 2 at 1945 and 1928. Wave 3 subdivided into five waves: 1964-1942-1995-1985-2005. Wave 4 was a simple decline to SPX 1991. Then wave 5 unfolded in a diagonal triangle: 2006-1995-2009-1998-2011. After that we got a somewhat complex zigzag. After a simple Wave A to SPX 1990, and wave B to SPX 2008, wave C got complex. Wave a of C declined: 1991-2000-1983; wave b of C rose: 1997-1986-1998; wave c of C declined: 1978-1987-1979. This pullback completed at the open on Tuesday.

SPXhourly

From that SPX 1979 low the market rallied quite nicely to 2004 on Wednesday, and then had a series of reversals right after the FED released their FOMC statement. Since none of these swings actually registered quantitatively, we are considering them just post-FOMC noise. The market then gapped up on Thursday and Friday, hitting SPX 2019, and then had its first quantitative pullback since the low. Therefore, we are counting the entire rally from SPX 1979 to 2019 as one wave, potentially Minute i, and Friday’s pullback to 2007 as likely the major part of Minute ii. If Minute wave i is not subdividing, as we expect, the market should pullback a bit further Monday to end Minute ii. Then a rising Minute iii should be underway. Oddly, Minute i of Minor 1 was 40 points (1905-1945), and Minute i of Minor 3 appears to be 40 points (1979-2019). Short term support is at SPX 2000 and SPX 1993, with resistance at the 2019 and 2070 pivots. Short term momentum ended the week at neutral.

FOREIGN MARKETS

The Asian markets ended the week mixed with a net gain of 0.1%.

The European markets were mostly higher gaining 0.4%.

The Commodity equity group was mostly lower losing 0.9%.

The DJ World index gained 0.3%.

COMMODITIES

Bonds continue to downtrend but ended about even on the week.

Crude remains in a downtrend losing 0.5% on the week.

Gold is also in a downtrend losing 1.2% on the week.

The USD continues its strong uptrend gaining 0.7% on the week.

NEXT WEEK

Monday: Existing home sales at 10am. Tuesday: the FHFA housing index, then FED governor Powell gives at speech at 9:20am. Wednesday: New home sales. Thursday: weekly Jobless claims and Durable goods orders. Friday: Q2 GDP (est. +4.6%) and Consumer sentiment. Would be quite impressed if GDP is actually reported that high. Best to your weekend and week!

CHARTS: http://stockcharts.com/public/1269446/tenpp

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friday update

SHORT TERM: gap up opening fades, DOW +14

Overnight Scotland rejected independence. Asian markets rallied 0.7%. European markets opened much higher but faded to +0.1% at the close. The market gapped up at the opening to SPX 2018, ticked up to 2019, and then began to pullback. The SPX had closed at 2011 yesterday. At 10am Leading indicators were reported higher: +0.2% v +0.9%. The pullback continued until about 1:30 when the SPX hit 2007. Then after as a rally to SPX 2014 by 3:30 the market pulled back to close at 2011.

For the day the SPX/DOW were mixed, and the NDX/NAZ were -0.20%. Bonds gained 10 ticks, Crude slipped 20 cents, Gold dropped $7, and the USD was higher. Medium term support remains at the 1973 and 1956 pivots, with resistance at the 2019 and 2070 pivots. Last night the FED reported an increase in the Monetary base: $4.150tn v $4.084tn. Today the WLEI was reported higher: 52.1% v 51.7%.

The market gapped up at the open today, hit the 2019 pivot exactly, then pulled back to SPX 2007. The market has now rallied from SPX 1979 on Tuesday to 2019 on Friday. Quite a run in such a short period. The negative hourly divergence finally kicked in at the pivot, and it appears we just completed Minute wave i of Minor 3. Minute wave i of Minor 1 was 40 points as well. We would now like to see short term momentum get oversold to confirm. It certainly has been a wild week. Short term support is at SPX 2000 and SPX 1993, with resistance at the 2019 and 2070 pivots. Short term momentum ended the week at neutral. Best to your weekend!

MEDIUM TERM: uptrend

LONG TERM: bull market

CHARTS: http://stockcharts.com/public/1269446/tenpp

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thursday update

SHORT TERM: gap up opening to new high, DOW +109

Overnight the Asian markets gained 0.7%. Europe opened higher and gained 0.8%. US index futures were higher overnight. At 8:30 weekly Jobless claims were reported lower: 280k v 315k, Housing starts were reported lower: 956k v 1093k, and Building permits were lower: 998k v 1052k. Then at 8:15 FED chair Yellen’s speech was released: http://www.federalreserve.gov/newsevents/speech/yellen20140918a.htm. The market gapped up at the open, for the first time in two weeks, to SPX 2008. After a small dip to SPX 2005 it rallied to 2012 just before 11am. At 10am the Philly FED was reported lower: 22.5 v 28.0. After the SPX 2012 high the market entered a 4 point trading range (2008-2012) for the rest of the day, closing at 2011.

For the day the SPX/DOW were +0.60%, and the NDX/NAZ were +0.70%. Bonds lost 11 ticks, Crude dropped $1.25, Gold added $3, and the USD was lower. Medium term support remains at the 1973 and 1956 pivots, with resistance at the 2019 and 2070 pivots. Tomorrow: the somewhat interesting Scotland independence vote, Leading indicators 10 am, the much awaited BABA IPO, and it’s OPEX day. This wild fundamental data week draws to a close.

The market gapped up at the open today, dipped a bit, then hit a marginal new all time high. The new high was the signal we had been waiting for to suggest an uptrend extension. At the new high we upgraded the count on the SPX hourly chart from five Minor waves up to SPX 2011, to just Minor waves 1 and 2 complete at SPX 2011 and 1979 with Minor 3 now underway. We had been carrying this count on the SPX daily chart. Minor wave 3 should now unfold in five Minute waves, and the OEW 2070 pivot looks like a good target. Short term support is at SPX 2000 and SPX 1993, with resistance at the 2019 and 2070 pivots. Short term momentum continues to display a negative divergence. Best to your OPEX trading!

MEDIUM TERM: uptrend

LONG TERM: bull market

CHARTS: http://stockcharts.com/public/1269446/tenpp

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wednesday update

SHORT TERM: rally continues, DOW +25

Overnight the Asian markets gained 0.5%. Europe opened higher and gained 0.3%. US index futures were higher overnight. At 8:30 the CPI was reported lower: -0.2% v +0.1%. The market opened unchanged at SPX 1999, rallied to 2004 by 10am, then started to drift lower ahead of the FOMC statement. At 10am the NAHB was reported at a 9 year high: 59 v 55. By 1:30 the SPX had hit 1997, and then started to rise. At 2pm the FED released several reports: http://www.federalreserve.gov/newsevents/press/monetary/20140917a.htm, http://www.federalreserve.gov/newsevents/press/monetary/20140917c.htm, http://www.federalreserve.gov/newsevents/press/monetary/20140917b.htm. The market responded by initially rising back to SPX 2004, then dropping to 1993, and then rallying to 2008 by 2:30. Normal volatility after a FOMC statement. Then after a dip to SPX 2002 just before 3pm, the market rallied to the all time high at 2011 just past 3pm. Another pullback followed to SPX 2000 by 3:30. Then the market bounced to close at 2002.

For the day the SPX/DOW were +0.15%, and the NDX/NAZ were +0.20%. Bonds lost 10 ticks, Crude dropped 75 cents, Gold slid $14, and the USD was higher. Medium term support remains at the 1973 and 1956 pivots, with resistance at the 2019 and 2070 pivots. Tomorrow: the ECB concludes its two day meeting, then weekly Jobless claims, Housing starts and Building permits at 8:30. A speech from FED chair Yellen at 8:45. Then the Philly FED at 10am.

We had a quiet opening to the typical volatile FOMC day. At 10am the SPX hit 2004, twenty-six points above Monday’s 1978 low. Then after a small pullback the market hit SPX 2004 again right after the FOMC statement. After that the market had its first notable pullback to SPX 1993. Then the market retested the all time high at SPX 2011, before pulling back again into the close. Several reversals is nothing unusual for an FOMC day. The important day, as we see it, is tomorrow. After traders have had the opportunity to digest whatever news resulted from the FED’s meeting. Counts remain the same.

Short term support is now at SPX 1993 and the 1973 pivot, with resistance still at SPX 2011 and the 2019 pivot. Short term momentum displayed a negative divergence at the SPX 2011 high and pulled back. Best to your trading the ECB day!

MEDIUM TERM: uptrend

LONG TERM: bull market

CHARTS: http://stockcharts.com/public/1269446/tenpp

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tuesday update

SHORT TERM: gap down then big rally, DOW +101

Overnight the Asian markets lost 0.8%. Europe opened lower and lost 0.3%. US index futures were lower overnight, and at 8:30 the PPI was reported unchanged: 0.0% v +0.1%. The market gapped down at the open to SPX 1979, then immediately started to rally. After hitting SPX 1989 just before 10:30, it pulled back four points by 11:30, and then resumed the rally. At 1:30 the SPX hit 2002, then drifted lower into a 1999 close.

For the day the SPX/DOW were +0.65%, and the NDX/NAZ were +0.85%. Bonds gained 2 ticks, Crude rallied $1.90, Gold added $2, and the USD was lower. Medium term support remains at the 1973 and 1956 pivots, with resistance at the 2019 and 2070 pivots. Tomorrow: the CPI at 8:30, the ECB starts their two day meeting, the NAHB index at 10am, then the FOMC statement at 2pm. With Friday’s OPEX, an interesting and potentially volatile three days ahead.

The market gapped down at the open today to SPX 1979, apparently completing the small ‘c’ wave we had been expecting from yesterday’s SPX 1987 high. While the decline was a bit smaller than expected, SPX 1973-ish, the ‘c’ wave apparently ended in a failure as it did not reach yesterday’s low of 1978. Nevertheless, the count we have been tracking appears complete: A 1990, B 2008, and then C (‘a’ 1991-2000-1983, ‘b’ 1997-1986-1998, ‘c’ 1978-1987-1979). This morning’s low should have concluded this somewhat complex a-b-c pullback.

During today’s rally, which is the strongest since the pullback began, the market broke out of a descending channel, the advance looked impulsive, and the laggard DOW made all time new highs. While we have placed a green Minor 2 label at today’s low on the SPX chart, we would like to see the SPX make new highs next to add confidence that an extension is underway. Short term support is at the 1973 and 1956 pivots, with resistance at SPX 2011 and the 2019 pivot. Short term momentum hit extremely overbought during today’s rally. Best to your FOMC trading!

MEDIUM TERM: uptrend

LONG TERM: bull market

CHARTS: http://stockcharts.com/public/1269446/tenpp

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monday update

SHORT TERM: techs tank, DOW +44

Overnight the Asian markets lost 1.0%. Europe opened lower and lost 0.1%. US index futures were sharply lower overnight, then recovered heading into the open. At 8:30 the NY FED was reported higher: 27.5 v 14.7, but at 9:15 Industrial production was reported lower: -0.1% v +0.4%. The market opened unchanged at SPX 1986, then pulled back to 1978 by 10am. After a rally to SPX 1985 by 10:30, the market pulled back to 1979 by noon. After that the market worked its way to the high for the day at SPX 1987, before dipping to a 1984 close.

For the day the SPX/DOW were mixed, and the NDX/NAZ were -1.0%. Bonds gained 7 ticks, Crude rose 55 cents, Gold added $3, and the USD was flat. Medium term support remains at the 1973 and 1956 pivots, with resistance at the 2019 and 2070 pivots. Tomorrow: PPI at 8:30, Senate testimony from FED director Hunter at 10am, and the FED starts its FOMC meeting.

After the futures went sharply lower at the open last night, they spent the rest of pre-market rebounding. The market opened unchanged, but made a slightly lower low for the pullback at SPX 1978. In the mean time the NDX/NAZ were under selling pressure all day, as high multiple growth stocks were being sold. Selling to purchase BABA’s IPO this week? We did get that rally we were expecting as the SPX hit 1987. Next we would expect the market to rollover again into the OEW 1973 pivot. Short term support is at the 1973 and 1956 pivots, with resistance at SPX 2011 and the 2019 pivot. Short term momentum ended the day around neutral. Best to your trading!

MEDIUM TERM: uptrend

LONG TERM: bull market

CHARTS: http://stockcharts.com/public/1269446/tenpp

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