tuesday update

SHORT TERM: gap up opening, DOW +62

Overnight the Asian markets gained 1.2%. Europe opened higher and gained 1.3%. US index futures were higher overnight. At 8:30 the CPI was reported higher: +0.3% v +0.4%, then at 9am the FHFA was reported higher: +0.4% v +0.0%. The market gapped up at the open to SPX 1981 and continued to rally. The SPX had closed at 1974 yesterday. At 10am Existing home sales were reported higher: 5.04mn v 4.89mn. The rally continued until 11am when the SPX made a marginal new high at 1986. It then pulled back to SPX 1981 by 3pm, and bounced to 1984 to end the day.

For the day the SPX/DOW were +0.45, and the NDX/NAZ were +0.70%. Bonds gained 6 ticks, Crude slipped 50 cents, Gold lost $6, and the USD rallied. Medium term support remains at the 1973 and 1956 pivots, with resistance at the 2019 and 2070 pivots. Nothing on the economic schedule tomorrow.

The market gapped up at the open, the tenth gap opening in the past 12 trading days. The SPX opened above the recent 1980 high, at 1981, then cleared 1984, but ran into resistance again at 1986. The marginal new high was barely sufficient to update the charts to the alternate count. We are now counting last Thursday’s SPX 1956 low as the end of Minor 4, with Minor wave 5 underway. The activity over the past two weeks, or so, was not enough to break the uptrend. Despite some quite negative news. Should the market clear SPX 1986 the next resistance level is SPX 2000: Minor 5 equals 0.618 Minor 1. After that we have the OEW 2019 pivot.

Short term support is at the 1973 and 1956 pivots, with resistance at SPX 1986 and SPX 2000. Short term momentum neared quite overbought and then backed off some. The short term OEW charts remain positive with the reversal level now SPX 1980. Best to your trading!

MEDIUM TERM: uptrend

LONG TERM: bull market

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

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monday update

SHORT TERM: gap down opening then recovery, DOW -48

Overnight the Asian markets ended mixed. Europe opened lower and lost 0.7%. US index futures were lower overnight, and the market gapped down to SPX 1972 at the open. The SPX had closed at 1978 on Friday. The market continued to decline until 11am when the SPX hit 1966. Then with the market slightly oversold it start to rally. Around 3:30 the SPX hit 1976, then dipped to 1974 to end the day.

For the day the SPX/DOW were -0.25%, and the NDX/NAZ were -0.15%. Bonds ended flat, Crude rallied 85 cents, Gold rose $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, FHFA housing at 9am, then Existing home sales at 10am.

The market gapped down at the open today and traded down to the lower end of the 1973 pivot range (1966). Then it rallied back over the pivot again in the afternoon. At the open we labeled Friday’s SPX 1980 high as Minute wave b of Minor C. When the market rallied 10 points off the low we were a bit surprised. No matter how much bad news has been thrown at this market, it has just sold off and then recovered again. From a wave viewpoint, it almost appears like it still needs to complete a pattern. We have been carrying a Minor 4 alternate count on the NAZ charts. Today we can see, for the first time, that possibility on the SPX charts as well at Thursday’s 1956 low. When this market breaks out of its trading range: SPX 1953-1986, we will get the uptrend/downtrend answer.

Short term support is at the 1973 and 1956 pivots, with resistance at SPX 1986 and the 2019 pivot. Short term momentum hit slightly oversold this morning then rebounded past neutral. The short term OEW charts continue to flip-flop, ending the day positive, with the reversal level SPX 1973. Best to your trading!

MEDIUM TERM: downtrend/uptrend inflection point

LONG TERM: bull market

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

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weekend update

REVIEW

Last week we had four gap openings, three to the downside, and the market traded to SPX 1953 on Thursday before ending the week at 1968. This week we had four gap openings again, three to the upside, and the market traded to SPX 1956 on Thursday before ending the week at 1978. Meanwhile during all this volatility the SPX has yet to hit the bull market high at 1986 achieved the week before all this began. For the week the SPX/DOW were +0.70%, the NDX/NAZ were +0.65%, and the DJ World index was +0.45%. On the economic front positive reports outpaced negative reports nine to six. On the uptick: the NY/Philly FED, retail sales, business inventories, the PPI, industrial production, the NAHB, leading indicators and weekly jobless claims improved. On the downtick: export/import prices, housing starts, building permits, consumer sentiment and the WLEI. Next week we get reports on home sales, durable goods and the CPI.

LONG TERM: bull market

We continue to count the bull market of 2009 as Cycle wave [1] with five Primary waves. Primary waves I and II completed in 2011, and Primary wave III began then. Primary wave I had a subdividing Major wave 1 and simple Major waves 3 and 5. Primary III is just the opposite: a simple Major wave 1 and subdividing Major waves 3 and 5. We have counted Major waves 1 and 2 complete in late 2011, and Major waves 3 and 4 complete in early-2014. A subdividing Major wave 5 has been underway since that low.

SPXweekly

When Major wave 5 concludes, Primary III will conclude as well. Then the market should experience its largest correction since 2011. However, when that Primary wave IV correction ends, the market should again makes new highs in Primary wave V.

MEDIUM TERM: downtrend probably underway

The recent uptrend began in mid-April at SPX 1814. It has unfolded in five Minor waves with a subdividing Minor wave 3. Recently Minor wave 5 hit SPX 1986, a near perfect 0.618 Fibonacci relationship to Minor wave 1. This new all time high was accompanied with negative divergences on the daily and weekly RSI/MACD. Also since that high, all eight European indices we track have entered confirmed downtrends. These are typically signs of a pending downtrend.

SPXdaily

Since that high, however, the SPX has gone basically sideways. Trading between SPX 1953 and 1984 for two weeks, and closing at 1978 on Friday. Also, the narrow DOW, NDX and TRAN indices have all made new uptrend highs during the past two weeks. The larger indices, such as; the SPX, NAZ and NYA have failed to do so. The recent market activity looks similar to the Major wave 3 high: a trading range for a couple of weeks with rising volume. For now, we continue to label the SPX 1986 high as the end of Intermediate wave iii. Should an Intermediate wave iv downtrend get confirmed, as expected, then an Intermediate wave v uptrend will again take the market to new highs. When it completes so does Primary wave III. Medium term support is at the 1973 and 1956 pivots, with resistance at the 2019 and 2070 pivots.

SHORT TERM

Short term support is at the 1973 and 1956 pivots, with resistance at SPX 1986 and the 2019 pivot. Short term momentum ended the week overbought. The short term OEW charts are positive with the reversal level SPX 1973.

SPXhourly

Since the SPX 1986 high, two weeks ago, the market has been quite choppy with eight gap openings. We first had a decline to SPX 1953 (1956-1974-1953), we labeled that Minor A. Then a rally to SPX 1984 (1970-1960-1983-1965-1984), we labeled that Minor B. Now we have had a decline to SPX 1956 (1966-1976-1956), and on Friday a rally to SPX 1980. We are counting the decline to SPX 1956 as Minute A, and Friday’s rally as Minute B. Another decline, Minute C, should follow shortly.

FOREIGN MARKETS

The Asian markets were all higher on the week for a net gain of 1.0%.

The European markets were mostly higher gaining 0.4%.

The Commodity equity group were mixed losing 0.9%.

The DJ World index gained 0.45%.

COMMODITIES

Bonds are uptrending but lost 0.1%.

Crude appears to be uptrending again and gained 1.5%.

Gold remains in an uptrend but lost 2.3%.

The USD is still uptrending and gained 0.5%.

NEXT WEEK

Tuesday: the PPI, FHFA index and Existing home sales. Thursday: weekly Jobless claims and New home sales. Friday: Durable goods orders. Nothing scheduled for the FED ahead of the July 29/30 FOMC meeting. Best to your weekend and week!

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

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friday update

SHORT TERM: gap up opening rebound, DOW +123

Overnight the Asian markets lost 0.3%. European markets opened lower, but closed +0.1%. US index futures made lower lows, but then rallied higher overnight. The market gapped up at the open to SPX 1963 and continued to rally. At 10am Consumer sentiment was reported lower: 81.3 v 82.5, and Leading indicators were reported higher: +0.3% v +0.5%. The rally continued until 3:30 when the SPX hit 1980. Then a dip ended the week at SPX 1978.

For the day the SPX/DOW were +0.85%, and the NDX/NAZ were +1.60%. Bonds lost 3 ticks, Crude slipped 40 cents, Gold dropped $10, and the USD was flat. Medium term support rises to the 1973 and 1956 pivots, with resistance at the 2019 and 2070 pivots. Today the WLEI was reported lower: 54.2% v 54.4%.

The market gapped up today and continued to rally into the afternoon as if yesterday did not occur. If the Malaysian airliner was not shot down, and Israeli ground forces did not go into Gaza, then today was not options expiration Friday. The point: the crescendo of negative market sentiment yesterday afternoon, was probably reversed due to options expiration. Monday is another day. Thus far it looks like we had a Minor a to SPX 1953, a Minor b to SPX 1984, and now a Minor c underway. Expected the 1973 pivot range to hold today’s rally, which it did. Also expect Minor c to resume next week.

Short term support is at the 1973 and 1956 pivots, with resistance at SPX 1986 and the 2019 pivot. Short term momentum reversed from extremely oversold yesterday to overbought today. The short term OEW charts turned positive with the reversal level now SPX 1973. Best to your weekend!

MEDIUM TERM: downtrend probably underway

LONG TERM: bull market

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

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thursday update

SHORT TERM: gap down opening and volatile day, DOW -161

Overnight the Asian markets finished mixed. Europe opened lower and lost 1.0%. US index futures were lower overnight. At 8:30 weekly Jobless claims were reported lower: 302k v 304k, Housing starts were lower: 893k v 1001k, and Building permits were lower: 963k v 991k. The market gapped down at the open to SPX 1976, dipped to 1975, and then started to rally. The SPX had closed at 1982 yesterday. At 10am the Philly FED was reported higher: 23.9 v 17.8. The market then closed the opening gap by 10:30 at SPX 1982, and began to pullback. At 11:30 the SPX hit 1968, had a quick bounced to 1973, and then hit 1966 by noon. A rally followed to SPX 1976 just before 1pm, then the market headed lower. Just past 3:30 the SPX hit 1956, then bounced to close at 1958.

For the day the SPX/DOW were -1.05%, and the NDX/NAZ were -1.40%. Bonds gained 21 ticks, Crude rose $1.90, Gold rallied $21, and the USD was lower. Medium term support drops to the 1956 and 1929 pivots, with resistance at the 1973 and 2019 pivots. Tomorrow: Consumer sentiment and Leading indicators at 10am, and it is Options expiration.

The market gapped down at open, again following Europe, but closed the gap by 10:30. After that the market got even more volatile, with a drop to SPX 1966, a rally to 1976, then another drop to 1956. Today, International events created some uncertainty. And, markets dislike uncertainty. This was evident with the rallies in Bonds, Crude and Gold. We continue to hold our primary count, since the SPX 1986 high, as an ongoing, choppy, Intermediate wave iv downtrend. Recent new highs in the DOW/NDX offered an alternative count of Minor 5 underway. This afternoon’s decline certainly lowered the probabilities of the alternate count, with the drop below SPX 1960. We continue to count from the Intermediate wave iii high: Minor A (1959-1973-1953), Minor B (1970-1960-1983-1965-1984), and Minor C underway (1966-1976-1956 so far). As soon as this market loses the OEW 1956 pivot range (1949-1963) there could be a sharp drop to the Intermediate wave iv low.

Short term support is at the 1956 and 1929 pivots, with resistance at the 1973 pivot and SPX 1986. Short term momentum declined after yesterday’s negative divergence, and hit extremely oversold at the lows. The short term OEW charts ended negative with the reversal level SPX 1973. Best to your Friday trading!

MEDIUM TERM: downtrend looks underway

LONG TERM: bull market

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

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wednesday update

SHORT TERM: another gap up opening, DOW +78

Overnight the Asian markets gained 0.5%. Europe opened higher and gained 1.3%. US index futures followed Europe and were higher overnight. At 8:30 the PPI was reported higher: +0.4% v -0.2%, then at 9:15 Industrial production was reported higher: +0.2% v +0.6%. The market gapped up at the open to SPX 1983, ticked up to 1984, then began to pullback. The SPX had closed at 1973 yesterday. At 10am the NAHB was reported higher: 52 v 49. The pullback lasted until 11:30 when the SPX hit 1976, then the market started to rise. At 2pm the FED’s beige book was released: http://www.federalreserve.gov/monetarypolicy/beigebook/beigebook201407.htm. At 2:30 the market hit 1982, then closed there.

For the day the SPX/DOW were +0.45%, and the NDX/NAZ were +0.35%. Bonds gained 1 tick, Crude rose $1.40, Gold added $5, and the USD was higher. Medium term support remains at the 1973 and 1956 pivots, with resistance at the 2019 and 2070 pivots. Tomorrow: weekly Jobless claims, Housing starts and Building permits at 8:30, then the Philly FED at 10am.

The market gapped up at the open for the second day this week. This gap, like Monday, was also inspired by a rally in Europe. The rally took the market above yesterday’s SPX 1983 high to 1984. Despite the new highs in the DOW, NDX and TRAN, the SPX and NAZ have failed to make new highs. As a result, until they do, we continue to feel this is a B wave rally. The same parameters, noted yesterday, are in play: above 1986 Minor 5, below 1960 Intermediate iv.

Short term support is at the 1973 and 1956 pivots, with resistance at SPX 1986 and the 2019 pivot. Short term momentum ended the day with a negative divergence. The short term OEW charts turned positive early, and the reversal level now SPX 1978. Best to your trading!

MEDIUM TERM: still favoring a downtrend

LONG TERM: bull market

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

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tuesday update

SHORT TERM: higher open then pullback, DOW +5

Overnight the Asian markets gained 0.7%. Europe opened lower and lost 0.7%. US index futures were higher overnight. At 8:30 Retails sales were reported higher: +0.2% v +0.3%, Export (-0.3% v +0.1%)/Import (-0.1% v 0.0%) prices were reported lower, and the NY FED was reported higher: 25.6 v 19.3. The market opened three points above yesterday’s SPX 1977 close, hit 1983 in the first 15 minutes of trading, and then started to pullback. Just past 9:30 FED counsel Alvarez’s testimony was released: http://www.federalreserve.gov/newsevents/testimony/alvarez20140715a.htm. Then at 10am Business inventories were reported higher: +0.5% v +0.6%, and FED chair Yellen began her Senate testimony: http://www.federalreserve.gov/newsevents/testimony/yellen20140715a.htm. Just before 11am the SPX hit 1969, bounced to 1975 by 11:30, then dropped to 1965 by noon. After that the market started to rally. Around 2:30 the SPX hit 1976, then dipped to end the day at 1973.

For the day the SPX/DOW were mixed, and the NDX/NAZ were -0.45%. Bonds lost 3 ticks, Crude dropped $1.00, Gold slid $12, 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 PPI at 8:30, Industrial production at 9:15, the NAHB index at 10am, FED chair Yellen continues her testimony in the House, and the FED’s beige book at 2pm.

The market opened higher today, cleared the OEW 1973 pivot range by three points, then immediately began to pullback. The pullback dropped to SPX 1965, overlapping the first rally up from SPX 1953. We still count only three waves up from SPX 1953: 1970-1960-1983. This suggests the entire rally looks like a B wave, unless the alternate count is correct and Minor wave 5 is subdividing. A drop below SPX 1960 would favor the B wave scenario, and a rally above 1986 would favor the Minor 5 scenario. The market ended the day about in the middle.

Short term support is at the 1973 and 1956 pivots, with resistance at SPX 1986 and the 2019 pivot. Short term momentum dropped to oversold then bounced to neutral to end the day. The short term OEW charts flip-flopped again today, ending neutral with the reversal level at SPX 1973. Best to your trading!

MEDIUM TERM: downtrend still the most likely count

LONG TERM: bull market

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

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