wednesday update

SHORT TERM: gap up and go day, DOW +162

Overnight the Asian markets gained 0.7%. Europe opened higher and gained 1.2%. US index futures were higher overnight. At 8:30 Housing starts were reported higher: 946k v 907k, Building permits lower: 990k v 1018k, then at 9:15 Industrial production was reported higher: +0.7% v +0.6%. The stock market gapped up at the open to SPX 1856, then pulled back to 1848 by 11am. The SPX had closed at 1843 yesterday. The market then rallied to SPX 1858 by 12:30 as FED chair Yellen was giving her speech: http://www.federalreserve.gov/newsevents/speech/yellen20140416a.htm.  After a pullback to SPX 1852 by 1pm the market moved higher again. At 2pm the Beige book: http://www.federalreserve.gov/monetarypolicy/beigebook/beigebook201404.htm. Heading into the close the SPX hit 1862 and closed there.

For the day the SPX/DOW were +1.05%, and the NDX/NAZ were +1.30%. Bonds lost 8 ticks, Crude added 15 cents, Gold ticked up $1, and the USD was higher. Medium term support remains at the 1841 and 1828 pivots, with resistance at the 1869 and 1901 pivots. Tomorrow: weekly Jobless claims at 8:30, the Philly FED at 10am, and it is Options expiration day.

The market gapped up at the open today for the second time this week. But for the first time this week it did not experience a sharp selloff in the NDX/NAZ. Thus far the SPX has retraced about 61.8% of its 1897-1814 downtrend, when reaching 1862 today. Since the wave activity off the SPX 1814 low was quite choppy, it is difficult to determine if this rally is just a B wave in an ongoing downtrend, or the beginning of a new uptrend. Should the SPX close above the 1869 pivot tomorrow then a new uptrend is probably underway.

Short term support is at the 1841 and 1828 pivots, with resistance at the 1869 and 1901 pivots. Short term momentum ended the day quite overbought. The short term OEW charts remain positive from SPX 1838, with the reversal level now 1843. Best to your trading options expiration and your three day weekend!

NOTE: Will be taking a road trip over the holiday weekend: Friday markets are closed. Will not be available Thursday, Friday, Saturday or Sunday. May be able to do the Thursday update, and Weekend update, but no guarantees. Options expiration this week is Thursday.

MEDIUM TERM: downtrend

LONG TERM: bull market

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

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tuesday update

SHORT TERM: another bungee day, DOW +89

Overnight the Asian markets lost 0.5%. Europe opened lower and lost 1.1%. US index futures were higher overnight. At 8:15 FED chair Yellen’s speech was released: http://www.federalreserve.gov/newsevents/speech/yellen20140415a.htm. At 8:30 the CPI was reported higher: +0.2% v +0.1%, and the NY FED lower: 1.3 v 5.6. The market opened two points above yesterday’s SPX 1831 close and continued to rally. Before 10am the SPX hit 1844, and then began to pullback. At 10am the NAHB index was reported unchanged at 47. By 10:30 the SPX turned negative hitting 1827. After a bounce to SPX 1834 just past 10:30, the SPX pulled back to 1824 by 11am, bounced to 1832 by 11:30, and then hit 1816 by 1pm. After this stair step down into yesterday’s low the market started to rally. By 3pm the SPX hit 1841, dipped to 1836 just past 3pm, then rallied to 1844 again just before an 1843 close.

For the day the SPX/DOW were +0.60, and the NDX/NAZ were +0.30%. Bonds gained 1 tick, Crude lost 50 cents, Gold dropped $23, and the USD was higher. Medium term support rises to the 1841 and 1828 pivots, with resistance at the 1869 and 1901 pivots. Tomorrow: Housing starts, Building permits and a speech from FED governor Stein at 8:30, Industrial production at 9:15, a speech from FED chair Yellen at 12:30, then the FED’s Beige book at 2pm.

Yesterday the SPX gapped up from 1816 rallied to 1834, dropped to 1816, then closed at 1831. Today the market rallied to 1844, dropped back to 1816, then rallied back to 1844. While all these wild swings were occurring the NDX/NAX were making lower lows for their downtrend. Over the past few weeks, every rally in the SPX/DOW has ended with selling pressure in the NDX/NAZ.

Since the NDX/NAZ have been leading this market lower during their Int. wave four downtrend we decided to take a closer look at the cash NAZ. This downtrend from 4372 has unfolded in a complex a-b-c: wave a 4132, wave b 4286, and wave c 3946 thus far. Fibonacci relationships suggest the following support levels: @ 3925 c = 1.5 a, and @ 3895 c = 1.62 a. The two previous Int. four downtrends, during this bull market, have corrected 9.7% and 13.0%. This translates into the 3950 and 3805 levels. The 3950 level was actually hit today. Should this fail to hold support, then 3925 or 3895 would be next with a worse case level at 3805.

Short term support is at the 1841 and 1828 pivots, with resistance at the 1869 and 1901 pivots. Short term momentum hit overbought early, dropped to neutral, then was rising into the close. The short term OEW charts turned positive, negative, and ended positive again, with the reversal level now SPX 1838. We continue to monitor the NDX/NAZ intraday to get an edge short term. Best to your trading!

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

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monday update

SHORT TERM: gap up then bungee cord afternoon, DOW +146

Overnight the Asian markets lost 0.2%. European markets opened lower but gained 0.3%. US index futures were higher overnight, and at 8:30 Retail sales were reported higher: +1.1% v +0.3%. The market gapped up at the open to SPX 1828, ticked up to 1829, then began to pullback. The market had closed at SPX 1816 on Friday. At 10am Business inventories were reported higher: +0.4% v +0.4%, the SPX hit 1823 and began to rally. Around noon the SPX hit 1834, but the NDX was already heading lower, and the market began to pullback. Just past 3pm the SPX closed the gap at 1816, then rallied into the close to end the day at 1831.

For the day the SPX/DOW were +0.85%, and the NDX/NAZ were +0.70%. Bonds lost 8 ticks, Crude slipped 15 cents, Gold rallied $9, and the USD was higher. Medium term support rises to the 1828 and 1779 pivots, with resistance at the 1841 and 1869 pivots. Tomorrow: a speech from FED chair Yellen at 8:15, the CPI and NY FED at 8:30, then the NAHB housing index at 10am.

The market gapped up at the open today, rallied close to the upper end of the 1828 pivot (1835), like it did on Friday, then pulled back throughout the afternoon until the last hour. The leader on the downside was again the growth NDX/NAZ indices, as the NAZ made a marginal lower low. It appears this market needs to clear the 1828 pivot range, then the 1841 pivot range, which was major support, before it would appear the downtrend has bottomed. A rally in the NDX/NAZ would certainly help. The short term wave structure is quite choppy, but the SPX 1814 area has held support in successive days.

Short term support is at the 1828 pivot and SPX 1814, with resistance at the 1841 and 1869 pivots. Short term momentum rose above neutral off Friday’s positive divergence. The short term OEW charts remain negative with the reversal level now SPX 1840. Best to your trading!

NOTE: Will be taking a road trip over the holiday weekend: Friday markets are closed. Will not be available Thursday, Friday, Saturday or Sunday. May be able to do the Thursday update, and Weekend update, but no guarantees. Options expiration this week is Thursday.

MEDIUM TERM: downtrend

LONG TERM: bull market

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

Posted in Updates | Tagged , , , | 128 Comments

weekend update

REVIEW

A volatile and somewhat disappointing week for the bulls. The week started off with a gap down on Monday, followed by a tradable low at SPX 1837 on Tuesday. Then after a rally to SPX 1873 at Thursday’s open, the market sold off rapidly into Friday. For the week the SPX/DOW were -2.50%, the NDX/NAZ were -2.85%, and the DJ World index was -2.0%. Economic reports for the week, oddly enough, were all to the upside. On the uptick: consumer credit, wholesale inventories, export/import prices, the PPI, consumer sentiment, the WLEI, the M1-multiplier, plus the budget deficit and weekly jobless claims both improved. Next week we get reports on the FED’s beige book, Industrial production, the NY/Philly FED and Housing.

LONG TERM: bull market

This week’s market activity put a dent in our more bullish realignment scenario as the SPX/DOW/NDX/NAZ all confirmed downtrends. The realignment would have occurred if the SPX/DOW remained in uptrends, while the NDX/NAZ ended its downtrend. As a result of this week’s activity we have shifted the SPX count to match the DOW count, while our NDX/NAZ count remains unchanged. More on this later.

We continue to count this bull market as Cycle wave [1]. Primary waves I and II completed in 2011, and Primary wave III has been underway since then. While only one of Primary I’s five Major waves subdivided, all three rising Major waves of Primary III are subdividing. We have labeled Major waves 1 and 2 completing in mid-2012, and Major waves 3 and 4 completing in mid-2013. Major wave 5 has been underway since that low.

SPXweekly

When Major wave 5 does conclude, it will end Primary III. Then we should see the largest correction since 2012 for Primary IV. After that Primary V should carry the market to new all time highs. Currently our bull market target is SPX 1970-2070 by Q3 2014.

MEDIUM TERM: downtrend

After an uptrend high in January, which we labeled Int. wave one, and a downtrend low in February. We expected the recent uptrend to be Int. wave three. This week, however, a new downtrend was confirmed ending what appears to be a three wave February to April uptrend. This uptrend aborted quite a bit below expectations, and it can not possibly be a wave three, as it has already overlapped the high of the previous uptrend. As a result of this market activity we have aligned the SPX count with the DOW count.

DOWdaily

We have been counting the DOW as a potential Major wave 5 diagonal triangle. This pattern is considered a rising wedge a-b-c-d-e pattern that unfolds in higher highs and higher lows. But all uptrends are overlapped by the next downtrend. Under this scenario the NDX/NAZ can continue to complete their Primary III normally, while the SPX/DOW make marginal new highs in their Primary III. Then they will likely all realign again for Primary wave IV.

SPXdaily

When reviewing the SPX chart under this scenario we observed Int. wave A topped in January, then had a 50% retracement for Int. wave B. With the recent uptrend, Int. C, topping in April another 50% retracement would find support around SPX 1814. If the retracement extends to 61.8%, which is acceptable in this pattern, the SPX should find support around 1800. If this level does not hold, and the downtrend creates more of a channel than a rising wedge. Then our alternate count, in green on the daily chart, would suggest a retest of SPX 1738. We are likely to find out which count is in play this week. Medium term support is at the SPX 1779 and 1699 pivots, with resistance at the 1828 and 1841 pivots.

SHORT TERM

Short term support is at SPX 1814, SPX 1800, with resistance at the 1828 and 1841 pivots. Short term momentum ended the week oversold, with a positive divergence. The short term OEW charts remain negative from SPX 1860, with the reversal level now 1846.

The February to April uptrend appears to have ended with three Minor waves: 1884-1842-1897. The downtrend from that high also appears to be unfolding in three Minor waves: 1837-1873-1814 thus far. When we reviewed the January to February downtrend we observed it had also declined in Minor three waves: 1770-1799-1738. This is typical wave activity in a diagonal triangle.

SPXhourly

The a-b-c January to February downtrend unfolded as a 5-3-5 zigzag. Minor A was five waves down, Minor B a strong rally, then Minor C five waves down, in total: 80-30-60 points. This downtrend, from the April high, has already completed five waves down for Minor A, Minor B was a strong rally, Minor C appears in the process of doing five waves down, in total 60-35-60 points so far. Notice these two downtrends are thus far quite similar. If this Minor wave C ends with a small diagonal triangle it could bottom around SPX 1814. If it divides into five clean waves then SPX 1800 could provide support. Thus far we can count four waves down from the SPX 1873 Minor B wave high: 1820-1835-1814-1823. A diagonal triangle Minor C could be forming. If the market continues to fall to the 1779 pivot, then a retest of SPX 1738 is likely. Best to your trading!

FOREIGN MARKETS

The Asian markets were quite mixed ending -0.1%.

The European markets were all lower losing 3.7%.

The Commodity equity group was mixed for a loss of 0.6%.

The DJ World index is still uptrending but lost 2.0%.

COMMODITIES

Bonds are getting close to confirming an uptrend and gained 0.9% on the week.

Crude is still uptrending and gained 2.7% on the week.

Gold is trying to establish and uptrend and gained 1.3% on the week.

The USD appears to be downtrending again losing 1.2% on the week.

NEXT WEEK

Monday: Retails sales at 8:30, then Business inventories at 10am. Tuesday: the CPI, NY FED and NAHB housing index. Wednesday: Housing starts, Building permits, Industrial production and the FED’s Beige book. Thursday: weekly Jobless claims and the Philly FED. The FED has several speeches scheduled this week. Sunday: FED governor Stein at 1:30. Tuesday: FED chair Yellen at 8:45. Wednesday: FED governor Stein at 8:15, and FED chair Yellen at 12:45. 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 -143

Overnight the Asian markets lost 1.2%. European markets opened lower and lost 1.3%. US index futures were lower overnight, and at 8:30 the PPI was reported higher: +0.5% v -0.1%. The market gapped down at the open to SPX 1823, dipped to 1820, and then began to rally. The SPX had closed at 1833 yesterday. At 10am the SPX hit 1830, and Consumer sentiment was reported higher: 82.6 v 80.0. Then after a pullback to SPX 1820 again, just past 10am, the market rallied to 1835 by 11:30. Another decline, to lower lows, at SPX 1814 followed by 3pm. Then after a rally to SPX 1823, the market pulled back to end the week at 1816.

For the day the SPX/DOW were -0.90%, and the NDX/NAZ were -1.25%. Medium term support drops to the 1779 and 1699 pivots, with resistance at the 1828 and 1841 pivots. Last night the FED reported the M1-multiplier higher: 0.701 v 0.695, and today the WLEI was reported higher: 53.3% v 53.0%.

The market gapped down at the open today, hit SPX 1820, then rallied to close the gap before heading to 1814 in the afternoon. We noted yesterday, the most obvious count for the SPX/DOW was the ongoing Major wave 5 diagonal triangle posted on the DOW charts. Today we updated the SPX charts to reflect this pattern. We also included an alternate count, in green, that will be discussed in the weekend update.

Short term support is at SPX 1814 and SPX 1800, with resistance at the 1828 and 1841 pivots. Short term momentum is displaying a slight positive divergence at today’s lows. The short term OEW charts remain negative with the reversal level now SPX 1846. 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: tumble Thursday, DOW -267

Last night FED governor Tarullo gave a speech: http://www.federalreserve.gov/newsevents/speech/tarullo20140409a.htm. Overnight the Asian markets gained 0.5%. European markets opened higher but lost 0.4%. US index futures swung above/below unchanged overnight. At 8:30 weekly Jobless claims were reported at their lowest level since 2007: 300k v 326k, and Export (+0.5% v +0.6%)/Import prices (+0.3 v -0.2%) were reported higher. The market opened two points below yesterday’s SPX 1872 close, dipped to 1868, then hit 1873 before 10am. After that it was all downhill for the rest of the day. With only two 4 point bounces the SPX dropped to 1840 by 1:30. At 2pm the Budget deficit was reported lower: -$36.9bn v -$106.5bn. After a bounce to SPX 1848 by 2:30, the market dropped to 1831 just after 3pm. Then another bounce to SPX 1839 before the close, before declining again to end the day at 1833.

For the day the SPX/DOW were -1.85%, and the NDX/NAZ were -3.10%. Bonds gained 12 ticks, Crude slipped 30 cents, Gold rose $7, and the USD was lower. Medium term support drops to the 1828 and 1779 pivots, with resistance at the 1841 and 1869 pivots. Tomorrow: the PPI at 8:30, then Consumer sentiment at 10am.

The market opened a bit lower today, made a slightly higher high, and then began to pullback. The growth indices NDX/NAZ had a slight down open and continued to fall right from the beginning of trading. While those indices were declining 1% the SPX was only down a handful of points. But when they broke lower they took the whole market with them. After yesterday’s extreme short term overbought reading we expected a pullback. But not a selloff. Currently the DOW count appears to be the most probable count for the Cyclicals, while the NDX/NAZ remain in Intermediate wave iv. The opportunity to realign the four major indices appears squandered. Kudos to those that caught these swings!

Short term support drops to the 1828 pivot and SPX 1814, with resistance at the 1841 and 1869 pivots. Short term momentum ended the day extremely oversold - rally next? The short term OEW charts swung negative at 1860, and the reversal level is now SPX 1858. Best to your trading this volatile week.

MEDIUM TERM: downtrend

LONG BTERM: bull market

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

Posted in Updates | Tagged , , , | 190 Comments

wednesday update

SHORT TERM: gap up and go kind of day, DOW +181

Overnight the Asian markets gained 0.2%. European markets opened higher and gained 0.4%. US index futures were higher overnight, and the market gapped up at the open to SPX 1858 but started to pullback. At 10am Wholesale inventories were reported higher: +0.5% v +0.6%. Just past 10am the opening gap closed at SPX 1852, but the market started to drift higher awaiting the FOMC minutes at 2pm: http://www.federalreserve.gov/newsevents/press/monetary/20140409a.htm. After the minutes were released the market took off to the upside. Heading into the close the SPX hit 1872, the high for the day, and closed there.

For the day the SPX/DOW were +1.10%, and the NDX/NAZ were +1.75%. Bonds gained 4 ticks, Crude rallied 80 cents, Gold rose $2, and the USD was lower. Medium term support rises to the 1869 and 1841 pivots, with resistance at the 1901 and 1962 pivots. Tomorrow: weekly Jobless claims and Export/Import prices at 8:30, then the Budget deficit at 2pm.

The market gapped up at the open today, filled the gap, then moved higher awaiting the FOMC minutes. When they were released the market rallied above the 1869 pivot and held it into the close. Thus far the market has rallied 35 points without one meaningful pullback. Previous rallies, during the 1897-1837 decline, were only 10 and 12 points. Also today the NDX/NAZ led the rally higher, for the first time since what appears to be mid-March. It is also interesting to note that the FED had a secret meeting on March 4th, two days before the NDX/NAZ ended their uptrend on March 6th. Guess it was only secret for the general public.

Short term support rises to the 1869 and 1841 pivots, with resistance at the 1901 pivot and SPX 1927. Short term momentum ended the day extremely overbought. The short term OEW charts turned positive with the reversal level now 1862. Best to your trading!

MEDIUM TERM: uptrend

LONG TERM: bull market

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

Posted in Updates | Tagged , , , | 196 Comments