friday update

SHORT TERM: volatile Friday, DOW -70

Overnight the Asian markets lost 1.0%. Europe opened lower and lost 1.3%. US index futures were lower overnight, but rallied after the NFP report. At 8:30 monthly Payrolls were reported lower than expected: 209k v 288k, Unemployment ticked up: 6.2% v 6.1%, Personal income (+0.4% v +0.4%)/spending (+0.4% v +0.2%) rose, and PCE prices were higher: +0.1% v +0.2%. The market gapped down at the open to SPX 1926, dipped to 1925, and then started to rally. At 10am Consumer sentiment was reported higher: 81.8 v 81.3, Construction spending was lower: -1.8% v +0.1%, Auto sales were higher, and ISM manufacturing was reported higher: 57.1 v 55.3. The rally hit SPX 1937 just past 10am, and then the market started to pullback. After a decline to SPX 1929 by 10:30, the market bounced to 1934, then declined to 1916 by noon. Hitting several technical support levels the market started to rally. By 12:30 the SPX hit 1922, dipped to 1917 by 1pm, then rose to 1932 by 2:30. Then the market pulled back into the close to end the week at SPX 1925.

For the day the SPX/DOW were -0.35%, and the NDX/NAZ were -0.35%. Bonds gained 22 ticks, Crude lost 50 cents, Gold rallied $11, and the USD was lower. Medium term support drops to the 1901 and 1869 pivots, with resistance at the 1929 and 1956 pivots. Today the WLEI was reported lower: 54.1% v 54.2%.

Wild day! Index futures were sharply lower overnight, rallied after the NFP report, but the market still gapped down at the open. After holding the OEW 1929 pivot range, the market rallied, but then broke down below the pivot when hitting SPX 1916. With SPX 1916 representing several technical support levels: the June print low, a double bottom in ES at S1, and a 2.618 relationship between Minor C and Minor A. The market started to rally. Lots to update this weekend, and yes, downtrends confirmed.

Short term support is now at SPX 1916 and the 1901 pivot, with resistance at the 1929 and 1956 pivots. Short term momentum had a very slight positive divergence at the low and headed to neutral. The short term OEW charts remain negative with the reversal level now SPX 1935. Best to your weekend!

MEDIUM TERM: downtrend

LONG TERM: bull market

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

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thursday update

SHORT TERM: throwback Thursday, DOW -317

Overnight the Asian markets lost 0.3%. Europe opened higher but lost 1.3%. US index futures were lower overnight , and at 8:30 weekly Jobless claims were reported higher: 302k v 284k. The market gapped down at the open to SPX 1955 and continued lower. The SPX had closed at 1970 yesterday. At 9:45 the Chicago PMI was reported lower: 52.6 v 62.6. The decline continued until 12:30 when the SPX hit 1937. From extreme oversold levels the market rallied to SPX 1944 by 2pm, but then headed lower again. Near 3:30 the SPX hit 1931, bounced to 1936, then closed at 1931.

For the day the SPX/DOW were -1.95%, and the NDX/NAZ were -2.10%. Bonds lost 2 ticks, Crude dropped $2.25, Gold slid $14, and the USD was higher. Medium term support drops to the 1929 and 1901 pivots, with resistance now at the 1956 and 1973 pivots. Tomorrow: the monthly Payrolls report (est. +235k) at 8:30, along with Personal income/spending and PCE prices. Then Consumer sentiment, ISM manufacturing, Construction spending and Auto sales all around 10am.

The market gapped down at the open today, below the 1973 pivot range, then lost the 1956 pivot range just past 10:30. The selloff continued, with only a 7 point rally, to SPX 1931 by 3:30. That’s within the 1929 pivot range. So after holding the 1956 pivot range for the entire month of July, the market lost it on the last day of the month trading down to mid-June levels. Selloffs like this have not occurred since the April correction and February correction. Certainly looks like the SPX Intermediate wave iv downtrend will be confirmed soon. Along with the Major wave 4 downtrend in the NDX/NAZ. The DOW confirmed its Intermediate wave d downtrend today. Remember they are all on different counts.

Short term support is at the 1929 and 1901 pivots, with resistance at the 1956 and 1973 pivots. Short term momentum hit extremely oversold today, with a very slight positive divergence. The short term OEW charts are still negative with the reversal level now SPX 1952. Best to your NFP trading tomorrow!

MEDIUM TERM: awaiting downtrend confirmation

LONG TERM: bull market

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

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wednesday update

SHORT TERM: wacky Wednesday, DOW -32

Overnight the Asian markets gained 0.3%. Europe opened lower and lost 0.8%. US index futures were higher overnight. At 8:15 the ADP was reported lower: 218k v 281k, then at 8:30 Q2 GDP was reported higher: +4.0% v -2.9%. The market gapped up at the open to SPX 1978, hit 1979, and then started to pullback. At 11am the SPX hit 1964, bounced to 1969 by 11:30, then hit 1962 just past 12pm. The market then gradually drifted higher ahead of the FOMC statement at 2pm: http://www.federalreserve.gov/newsevents/press/monetary/20140730a.htm. After the statement the market first ticked down, then rallied to SPX 1976 by 2:30. Then the market went into pullback mode again. At 3pm the SPX hit 1967, then bounced to end the day at 1970 – where it closed yesterday.

For the day the SPX/DOW were mixed, and the NDX/NAZ were +0.45%. Bonds lost 24 ticks, Crude dropped $1.35, Gold slipped $4, and the USD was higher. Medium term support remains at the 1956 and 1929 pivots, with resistance at the 1973 and 2019 pivots. Tomorrow: weekly Jobless claims at 8:30, then the Chicago PMI at 9:45.

The market gapped up at the open, hit SPX 1979, and then pulled back. During the pullback it broke through the OEW 1973 pivot range, hitting SPX 1962. This to us, suggests the Minor wave 5 diagonal ended at SPX 1985. And, all the activity since then is the beginning of an Intermediate wave iv downtrend. From that high the market has been quite choppy SPX: 1970-1979-1962-1976-1967—. Difficult to count at this point, but this morning’s positive divergence suggests an ‘a’ wave ended at SPX 1962, and a ‘b’ wave is underway.

Short term support remains at the 1956 and 1929 pivots, with resistance at the 1973 pivot and SPX 1991. Short term momentum continues to rise off that positive divergence. The short term OEW charts ended negative with the reversal level now SPX 1972. Best to your trading!

MEDIUM TERM: uptrend may have topped

LONG TERM: bull market

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

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tuesday update

SHORT TERM: choppy pullback day, DOW -70

Overnight the Asian markets gained 0.8%. European markets opened higher and gained 0.5%. US index futures were higher overnight, and at 9am Case-Shiller was reported lower: +9.3% v +10.8%. The market opened three points above yesterday’s SPX 1979 close and continued to move higher. At 10am Consumer confidence was reported at a seven year high: 90.9 v 85.2. Around 10:30 the SPX hit 1985, was slightly overbought, and began to pullback. By 11:30 the SPX had declined to 1974, then rallied to 1982 by 1:30. Another decline followed, taking the SPX to 1970 by the close.

For the day the SPX/DOW were -0.45%, and the NDX/NAZ were -0.15%. Bonds gained 8 ticks, Crude lost 75 cents, Gold slipped $4, and the USD was higher. Medium term support drops to the 1956 and 1929 pivots, with resistance at the 1973 and 2019 pivots. Tomorrow is FOMC day! At 8:15 the ADP index, 8:30 Q2 GDP (est. +3.45%), then at 2pm the FOMC statement.

The market opened higher today, came within 6 points of the all time high, then went into pullback mode for the rest of the day. We entered the week looking at two possibilities: 1. a subdividing Minor 5; and 2. a diagonal Minor 5. The choppy activity on Monday/Tuesday have significantly lowered the likelihood of option #1. That leaves us with the diagonal triangle Minor wave 5, and possibly an ‘e’ wave failure at SPX 1985. If the SPX loses the OEW 1973 pivot range (1966-1980) that might be what just occurred today.

Short term support drops to the 1956 and 1929 pivots, with resistance at the 1973 pivot and SPX 1991. Short term momentum touched overbought in the am then ended the day oversold. The short term OEW charts are back in the flip-flop mode, ended negative, with the reversal level now SPX 1978. Best to your trading the often volatile FOMC day!

MEDIUM TERM: uptrend

LONG TERM: bull market

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

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monday update

SHORT TERM: lower open then rally, DOW +22

Overnight the Asian markets gained 0.3%. European markets opened higher, but lost 0.1%. US index futures were lower overnight, and the market opened one point below Friday’s SPX 1978 close. In the opening minutes the SPX hit 1979 then began to pullback. At 10am Pending home sales were reported lower: -1.1% v +6.1%. Around 10:30 the SPX hit 1967, was extremely oversold, and began to rally. At 1:30 the SPX had rallied to 1982, then pulled back to close at 1979.

For the day the SPX/DOW were +0.10%, and the NDX/NAZ were mixed. Bonds lost 4 ticks, Crude slipped 50 cents, Gold dipped $2, and the USD was flat. Medium term support remains at the 1973 and 1956 pivots, with resistance at the 2019 and 2070 pivots. Tomorrow: Case-Shiller at 9am, then Consumer confidence at 10am.

The market opened slightly lower today, bounced, and then headed below Friday’s lows to SPX 1967. Then after getting extremely oversold, and barely holding the Minor wave 5 rising wedge scenario, the market started to rally. After the SPX hit 1976 we updated the SPX hourly chart with a Minute wave d at 1967. Under this diagonal triangle Minor 5 scenario the market should now hold that SPX 1967 low and rally to complete Minute wave e of the diagonal. The count posted on the SPX daily chart suggests a rally underway as well.

Short term support remains at the 1973 and 1956 pivots, with resistance at SPX 1991 and SPX 2000. Short term momentum hit extremely oversold early then rose to over neutral. The OEW short term charts turned positive, with the reversal level now SPX 1977. 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

Exciting week? Not quite. The market started the week at SPX 1978, dropped 12 points below that on Monday, rallied to 13 points above that by Thursday, then ended the week where it started: SPX 1978. For the week the SPX/DOW were -0.4%, the NDX/NAZ were +0.5%, and the DJ World index was +0.3%. Economic reports came in mostly positive. On the uptick: the CPI, the FHFA, existing homes sales, durable goods orders, the monetary base, and weekly jobless claims hit an eight year low. On the downtick: new home sales. Next week is FOMC week with a plethora of economic reports. Q2 GDP, monthly Payrolls and PCE prices to note a few. Should be a wild week.

LONG TERM: bull market

We continue to count this bull market as Cycle wave [1] of Super cycle 3. Both the Cycle wave and Super cycle wave began at the March 2009 low of SPX 667. Cycle wave bull markets unfold in five Primary waves. An historical reference can be found in the DOW between 1932 and 1937. In this Cycle [1] Primary waves I and II completed in 2011. Primary wave III has been underway since then, but should be nearing conclusion in the next few months. Primary I had a subdividing Major wave 1 and simple Major waves 3 and 5. Primary III has done just the opposite: a simple Major wave 1 and subdividing Major waves 3 and 5. Major waves 1 and 2, of Primary III, completed in late 2011. Major waves 3 and 4 completed in early 2014. Major wave 5 has been underway since the February low at SPX 1738.

SPXweekly

This year Major wave 5 has been subdividing into five Intermediate waves. Intermediate wave i completed at SPX 1884 (1897) in March, and Intermediate ii at SPX 1814 in April. Intermediate wave iii has been underway since that low. Once it concludes we should see an Intermediate wave iv downtrend/correction, then an Intermediate wave v uptrend to new highs. When this last wave concludes the market should experience its largest correction since 2011, as Primary III ends and Primary IV gets underway. After that the market should make new highs again in a Primary wave V.

MEDIUM TERM: uptrend

This Intermediate wave iii uptrend was difficult to track when it got going in April, and difficult to track as it nears its end. In the middle it just trended and was quite easy to follow. We had been counting the early July high at SPX 1986 as the end of the uptrend and Intermediate wave iii. While the market did go sideways to lower for about two weeks after that high it did not break down into a confirmed downtrend. It only pulled back. When the SPX hit 1986 again, recently, we assumed the uptrend was resuming and adjusted the labeling accordingly. The market did make marginal new highs, as did the DOW and NDX, but the NAZ only matched its uptrend high. The wave pattern since the SPX 1986 high, however, has been quite choppy in both directions. Despite the new highs. After Friday’s larger then desired pullback the market as created a couple potential scenarios from that SPX 1986 high.

SPXdaily

One. Minor wave 5 remains underway as labeled, but it is now starting to subdivide. Minute waves i and ii, SPX 1980 and 1966, then Micro waves 1 and 2, SPX 1991 and 1974 so far. This would suggest this uptrend will go much above SPX 2000. Possibly to the 2019 pivot and beyond.

Two. Minor wave 4 ended at SPX 1953, right after the 1986 high, and all the activity since then has been an unfolding diagonal triangle Minor wave 5. This scenario we have posted on the hourly chart in the short term section below. One of the reasons this particular scenario takes precedence over a few others is the unusual number of opening gaps this month. During June there were only three gap openings as the market was trending higher. During July there have been 13 gap openings in only 19 trading days. The first two took the market to the SPX 1986 high, from 1960 in just three days. The last 11, over the next 15 trading days, has kept the market in a 38 point trading range: 1953-1991. This type of activity is more indicative of the choppy action in a triangle than an impulse wave. We’ll keep both scenarios in mind as the market heads into next week. Medium term support remains 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 SPX 2000. Short term momentum ended the week just above oversold. The short term OEW charts ended the week negative with the reversal level now at SPX 1982.

SPXhourly

As noted above this uptrend was quite tricky when it first started, trended, and now is again tricky as it nears its end. Minor wave 5 can continue to move higher, and subdivide, with the next resistance levels at SPX 2000 and the OEW 2019 pivot. Or it could terminate soon with the diagonal triangle Minor wave 5 currently being presented. Should this scenario unfold the likely uptrend high is but a few points above the recent SPX 1991 high. In fact, from a Minor 4 low at SPX 1953, Minor 5 will equal 0.618 Minor 1 at SPX 1997. A few points shy of SPX 2000. We should be able to determine which scenario is underway during the first few days of next week.

FOREIGN MARKETS

The Asian markets were mostly higher for a net gain of 1.6% on the week.

The European markets were also mostly higher for a net gain of 1.4% on the week.

The Commodity equity group were mixed but gained 0.1% on the week.

The DJ World index continues to uptrend and gained 0.3% on the week.

COMMODITIES

Bonds continue to uptrend but finished flat on the week.

Crude is trying to uptrend again and gained 0.4% on the week.

Gold is uptrending but lost 0.6% on the week.

The USD remains in an uptrend, and gained 0.7% on the week.

NEXT WEEK

Monday: Pending homes sales at 10am. Tuesday: Case-Shiller and Consumer confidence. Wednesday: Q2 GDP (est. +3.4%), the ADP, and the FOMC statement. Thursday: weekly Jobless claims, and the Chicago PMI. Friday: monthly Payrolls (est. 235k), the Unemployment rate, Personal income/spending, PCE prices, Consumer sentiment, ISM manufacturing, Construction spending, and monthly Auto sales. Best to your weekend and week!

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

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friday update

SHORT TERM: gap down opening, DOW -123

Overnight the Asian markets gained 0.3%. Europe opened lower and lost 1.1%. US index futures were lower overnight, and at 8:30 Durable goods orders were reported higher: +0.7% v -0.9%. The market gapped down nevertheless to SPX 1983 and continued to 1978 in the first few minutes. The market had closed at SPX 1988 yesterday. After hitting that low the market rallied five points, then made a lower low at SPX 1974 by 11:30. Heading into the afternoon the market rallied to SPX 1980 by 1pm, then went into a 4 point trading range and ended the week at 1978.

For the day the SPX/DOW were -0.60%, and the NDX/NAZ were -0.50%. Bonds gained 8 ticks, Crude slipped 15 cents, Gold rose $14, 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: $4.041tn v $3.914tn. Today the WLEI came in unchanged at 54.2%.

The market gapped down at the open for the second time this week. The gap openings continue: 11 of the past 15 trading days. Sense an EW pattern here? The pullback, which started yesterday at the SPX 1991 all time high, very quickly dropped below 1980. SPX 1980 was the high of the first wave up from 1956: 1980-1966-1991. So right now, we have a three wave pattern from that low as the market dropped to SPX 1974 today. These three waves could be indicative of several potential larger patterns. We will discuss this in the weekend update.

Short term support drops to the 1973 and 1956 pivots, with resistance now at SPX 1986 and SPX 2000. Short term momentum was quite oversold this AM during the decline. The short term OEW charts turned negative at the open and the reversal level is now SPX 1981. Best to your weekend!

MEDIUM TERM: uptrend

LONG TERM: bull market

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

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