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 An historical reference can be found in the DOW between 1932 and 1937.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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thursday update

SHORT TERM: drift higher continues, DOW -3

Overnight the Asian markets gained 0.3%. Europe opened lower but gained 0.5%. US index futures were higher overnight, and at 8:30 weekly Jobless claims were reported the lowest in 8 years: 284k v 302k. The market opened at SPX 1989, two points above yesterday’s close, then hit 1990 in the first few minutes. After a pullback to SPX 1986 right after New home sales were reported lower: 406k v 504k, the market rallied to 1991 by 11:30. The pullback hit SPX 1986 just after 3pm. Then the market bounced to close at SPX 1988.

For the day the SPX/DOW were mixed, and the NDX/NAZ were -0.05%. Bonds lost 14 ticks, Crude dropped $1.10, Gold fell $13, and the USD was higher. Medium term support remains at the 1973 and 1956 pivots, with resistance at the 2019 and 2070 pivots. Tomorrow: Durable goods orders at 8:30.

The market opened higher again today for the third day in a row. After making a new high at SPX 1991, and setting up a short term negative divergence, the market started to pullback. So far the pullback is a modest 5 points. But if it extends further the market could be in the fourth wave from the Minor 4 low at SPX 1956: 1980-1966-1991-.

Short term support is at SPX 1986 and the 1973 pivot, with resistance at SPX 2000 and the 2019 pivot. Short term momentum declined after a negative divergence. The short term OEW charts ended positive with the reversal level now SPX 1987. Best to your Friday 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 -27

Overnight the Asian markets gained 0.4%. European markets opened lower but gained 0.1%. US index futures were higher overnight, and the market opened three points above yesterday’s SPX 1984 close. In the opening minutes of trading the market dipped to SPX 1982, then began to rally to new highs. At 10:30 the SPX hit 1989, pulled back to 1985 by 12:30, then rallied back to 1989. A small dip ended the day at SPX 1987.

For the day the SPX/DOW were mixed, and the NDX/NAZ were +0.50%. Bonds gained 1 tick, Crude rose 60 cents, Gold dipped $2, 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 at 8:30, then New home sales at 10am.

The market opened higher today, made an all time high early, then after a small pullback hit SPX 1989. Clearing the previous resistance of SPX 1986 now allows for the uptrend to move towards the 2000 level - next resistance. Thus far we count three waves up from the Minor 4 low at SPX 1956: 1980-1966-1989.

Short term support is now at SPX 1986 and the 1973 pivot, with resistance at SPX 2000 and the 2019 pivot. Short term momentum ended the day just under overbought. The short term OEW charts remain positive with the reversal level now SPX 1985. Best to your trading!

MEDIUM TERM: uptrend

LONG TERM: bull market

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

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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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