the FED’s Monetary base … update

We have been tracking the Monetary base for a few years now as the FED went through its QE 1, QE 2, Operation Twist, and current QE 3 liquidity programs. As you are aware the Base, if you have been following our updates, has been unfolding in its own Elliott Wave bull market pattern.

Notice the Base has already completed four Primary waves, with a divided Primary III, and is currently in its fifth Primary wave. We did some Fibonacci calculations, using the previous waves, to project a potential high for its bull market. They are posted in the lower right corner. With the Base currently at $3.105 tln, it is already close to the first target of $3.143 tln. Since QE 3 is opened-ended, with no definitive end date. We are using the Fibonacci numbers to help determine when it will end. With the FED purchasing $85 bln in Gov’t Bonds/Mortgage backed Securities per month, our first target will be reached by month’s end. The next target, $3.330 tln, would appear to be about two months away, end of July. The third target, $3.486 tln, could be reached by September. And the fourth, $3.788 tln by January 2014.

Many have wondered if the stock market is rising because of this massive increase in liquidity, or just because of an economic recovery. Others suggest the bull market in equities will continue even after the liquidity ends. While many are speculating on these scenarios we took a look back into history, to a similar period in time — the 1930′s.

During the last deflationary Secular cycle the stock market collapsed into 1932. Those in charge of financial/monetary policy chose austerity rather than liquidity. Our international trading partners started sending Gold to the US, in exchange for USD’s. This Gold went directly to the FED, since we were on a Gold standard then, increasing the Monetary base.

The stock market then bottomed in July 1932 and started to rise. In 1933 after FDR took office he: closed the banks for a holiday, called in all the Gold in the country, opened the banks, started many new government spending programs, then re-priced Gold to $35/oz. Initially the Monetary base fell, but started to increase again as the US remained on the Gold standard. Gold was flowing in from our international trading partners. And, US equities were now in a liquidity driven Cycle [1] bull market.

For nearly four years, all this Gold went to the FED increasing the Monetary base. Then in December 1936 the US Treasury Department, fearing inflation, started sending the Gold received into the Treasury, rather than to the FED. When the Monetary base started to decline, the stock market topped in March 1937 and entered a Cycle [2] bear market. The Treasury, realizing their error, re-routed the Gold back to the FED. But it was too late. The economy had already contracted and World War II was on the horizon. Notice the five Primary waves into that top in 1936.

The last point we would like to make is about the FED’s exit strategy. Ever since the FED started the first liquidity program, QE 1, in October 2008. Later expanded dramatically in March 2009. There has been talk by the FED, and others, of an exit strategy when, optimistically, quantitative easing is no longer needed. The market’s fear, when the open ended QE 3 ends, the FED will start decreasing the size of the Monetary base initiating an economic recession or worse.

Historically, ever since the FED was created in 1913, there has never been an exit strategy. In fact, the Monetary base has grown, and grown, and grown for nearly a century. With the exception of the US Treasury’s policy, a fiasco in 1936, the Monetary base has never really contracted much at all. At best, it has just gone sideways for a while before ramping on up again.

Conclusions: The FED’s massive liquidity build up has been driving risk assets higher, currently mostly stocks, since March 2009. When this build up ends, either due to the FED’s actions or the Government’s. The stock market will enter a Cycle wave [2] bear market just like it did in the late 1930′s. Then after some period of consolidation in liquidity, possibly a few years, the Monetary base build up will begin again. An exit strategy is not required. Simply because the economy will not allow an exit to be implemented. What is already in the monetary system will remain in the system. In fact, after the bear market gets underway, additional liquidity will be required to get the economy going again. Welcome to the century of quantitative easing.

monday update

SHORT TERM: OEW 1680 pivot range reached, DOW -19

Saturday FED chairman Bernanke gave the following speech: http://www.federalreserve.gov/newsevents/speech/bernanke20130518a.htm. Overnight Asian markets gained 1.0%. Europe opened higher and gained 0.7%. US index futures were relatively flat overnight, and the market opened one point under Friday’s SPX 1667 record close. In the opening minutes the SPX hit 1668, then pulled back to 1665 before starting to rally again around 10:00. Around noon the SPX entered the OEW 1680 pivot range when it hit 1673. Then it started to pullback. The pullback hit SPX 1664 at 2:00, the market then bounced to 1668 by 3:00, before dipping to close at 1666.

For the day the SPX/DOW were -0.10%, and the NDX/NAZ were -0.15%. Bonds lost 2 ticks, Crude gained 60 cents, Gold rallied $40, and the USD was lower. Medium term support remains at the 1628 and 1614 pivots, with resistance at the 1680 and 1699 pivots. Nothing on the economic agenda tomorrow.

The market opened about flat today, bounced around a bit, and then made all time new highs again. At the high, SPX 1673, the SPX entered the OEW 1680 pivot range (1673-1687). Then it had a notable pullback to SPX 1664. While the market did clear the resistance at SPX 1666-1667. It has now run into another series of resistance levels within the 1680 pivot range. Todays’ pullback does look like it could be the start of Minute iv of Minor 5. A decline into the SPX low 1660′s could get it started. Then a further decline below SPX 1650 would all but confirm it.

Short term support is at the 1628 and 1614 pivots, with resistance at the SPX 1658-1667 range and the 1680 pivot. At today’s highs momentum displayed a negative divergence and momentum dropped to neutral. The short term OEW charts remain positive with the reversal level now SPX 1649. Best to your trading!

MEDIUM TERM: new uptrend high SPX 1673

LONG TERM: bull market

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

Commodity bear market

We have written about the commodity market over the years, and have been generally bearish for quite some time. The typical commodity bull market lasts about 13 years, followed by about a 21 year bear market. This is the 34-year cycle. Commodity bull markets usually begin near the beginning of stock market Secular inflation/deflation cycles. Then end just before these cycles end. During the stock market Secular growth cycles commodities remain in a longer term bear market.

Some historical examples:

1929-1949 Secular deflationary cycle … commodity bull market 1933-1946.

1966-1982 Secular inflationary cycle … commodity bull market 1968-1980.

2000-2016? Secular deflationary cycle … commodity bull market 1999-2011.

In years past the CRB index was used to determine the overall trend of commodities. In recent years this has been replaced by the world consumption oriented GTX index. Notice the bull market in the GTX started in 1999, but ended in 2008. Other sectors within this index, there are five, started/ended at different times. The barometer we use to determine the beginning/end of the commodity bull/bear markets is Gold.

As you can observe from the above chart, the consumption bull market started in 1999, completed five waves up into 2008, and the long term trend has been down since 2008. Keep in mind the GTX is about 70% weighted in Energy.

Other sectors, such as Industrial metals, Agriculture, and Precious metals started about the same time but topped in 2011. Livestock, the fifth sector, recently peaked in 2013.

Now that commodities are in a longer term bear market, this is what lies ahead for this asset class. The best example of a commodity bear market is the historical price activity in the CRB index. Notice the sharp decline from the 1980 peak was an ABC down, which lasted about 6 years. Then the index went into a trading range for the next 15 years before the next Cyclical bull market began.

When we review the historical chart of Gold, using the same time period, we observe a slight difference in time, but the same general pattern. Gold declined sharply, in an ABC pattern, for 5 years. Then entered a trading range for the next 14 years, before it put in that double bottom in 1999-2001.

If we dissect the 1980 bear market in Gold, we observe a two year decline of about $575 to form Primary A. Then a one year $225 rally for Primary B. This is followed by another two year decline. But this time it is only $240, to a slightly lower low, to form Primary C.

When we compare this activity to the current market, we find the bull market peak in 2011. Then a $600 two year decline that may have formed Primary A. If this comparison is correct, Gold should rally back to around $1545 by early next year to complete Primary B. Then the next two year Primary C decline should begin.

Keep in mind, commodities in general are quite volatile. Gold, in fact, has started to trade like Crude since it entered a bear market. One, two, three percent swings are possible in a single day.

The last chart of note is Natural Gas. While we do not have much historical data we already notice a pattern. Nat Gas bottomed in 1992, then went into a choppy 13 year bull market until it had a blow off peak in 2005. Since that peak it has had a lengthy 7 year ABC decline into 2012. This fits with Gold’s 5 year ABC, and the CRB’s 6 year ABC in the 1980′s bear market.

This comparison would suggest Nat Gas is now in an X wave rally, which starts the trading range of its longer term bear market. Therefore, just under $2.00 would be the base price for decades to come. This chart also suggests Nat Gas will likely be the first commodity to end its bear market. Possibly as much as 6 to 8 years ahead of the other commodities. With lots of supply coming on line in the next few years. An earlier bottom in Nat Gas would fit quite nicely with the demand/economic growth curve of the expected stock market Cycle wave [3]: approximately 2016-2034. The pieces, if we dare look that far out, seem to fit.

All charts, of the commodity sectors, the precious metals, and energy can be found using the following link: http://stockcharts.com/public/1269446/tenpp/9, on pages 9 – 11.

weekend update

REVIEW

For the past three weeks the stock market has made new all time highs. In fact, the SPX has now risen exactly 1,000 points from the Mar09 667 low in 50 months. That is a flat 3% per month, for fifty months, while banks and T-bills have been paying next to nothing. For the week the SPX/DOW gained 1.8%, the NDX/NAZ gained 1.7%, and the DJ World index gained 0.8%. On the economic front, a week of negative reports outpacing positive ones. On the uptick: retail sales, the NAHB, building permits, consumer sentiment, leading indicators and the monetary base. On the downtick: export/import prices, the CPI/PPI, the NY/Philly FED, industrial production, housing starts, the WLEI, and weekly jobless claims rose. Next week will be highlighted by FED chairman Bernanke’s congressional testimony of the Economic Outlook, the FOMC minutes and Housing reports.

LONG TERM: bull market

It would appear, from recent observations and correspondence, that nearly everyone in the country knows that US stocks are in a bull market. It also appears that every overhead resistance pivot, in the past four months, has been nothing more than a target for this rising uptrend. This is quite exciting if you have owned stocks for the past few years. But a bit risky if you are just deciding to enter the market.

We published: http://caldaro.wordpress.com/2013/05/16/international-equity-markets/ on Thursday. If you are involved in foreign markets, or a foreign investor, it might be a worthwhile read.

The bull market we have been tracking for four years is now beginning to rise even beyond our expectations. We have posted, on the chart below, a 2014 target between SPX 1650 – 1780. And the market has already entered the range, with, what we estimate, three more uptrends to go. Our overall OEW theme remains the same: this is a Cycle wave [1] bull market.

A Cycle wave [1] divides into five Primary waves. Primary waves I and II competed in 2011, and Primary III has been underway since SPX 1075. Primary I divided into five Major waves, with a subdividing Major wave 1. Primary III is also dividing into five Major waves, but both Major waves 1 and 3 are subdividing into five Intermediate waves. Major waves 1 and 2 completed by mid-2012, and Major wave 3 has been underway since SPX 1267. Intermediate waves i and ii completed by late-2012, and Intermediate wave iii has been underway since SPX 1343. When Int. iii ends, we should have an Int. iv correction, then an Int. v uptrend to complete Major 3. When Major 3 ends, we should have a Major 4 correction, then a Major 5 uptrend to complete Primary III. Finally, when Primary III ends, we should have a Primary IV correction, then a Primary V uptrend to complete the bull market. Overall we should have at least three more uptrends, after the next correction, before the bull market ends.

MEDIUM TERM: Intermediate iii uptrend

The two longest uptrends of this entire bull market have been six months, (Int. iii/Major 1/Primary I), and seven months, (Major 3/Primary I). This uptrend, (Int. iii/Major 3/Primary III), is currently six months old. The three biggest point gaining uptrends, in this bull market, have been 281 pts., 289 pts. and 333 pts. This uptrend has already gained 324 pts. As you can see, our current uptrend is reaching the limits of the longest and strongest uptrends of the entire bull market. Quite a feat after a four year bull market.

We have been counting this uptrend as five Minor waves: Minor 1 SPX 1424, Minor 2 SPX 1398, Minor 3 SPX 1597, Minor 4 SPX 1536, and Minor 5 underway. We have also been tracking the OEW pivots at 1614, 1628, 1680 and 1699 as this uptrend has unfolded. In between that somewhat large gap we placed a Fibonacci resistance zone: SPX 1658-1667. This is exactly where the uptrend stopped this week: SPX 1667.

Right around this level we observe: SPX 1666 Minor 5 = Minute iii/Minor 3, SPX 1667 Minor 5 = 1.618 Minor 1, and SPX 1667 is 1,000 points from the Mar09 667 low. Just above this level: SPX 1676 Int. iii equals all of Major 3/Primary I, SPX 1680 Int. iii = 1.618 Int. i, and SPX 1690 Int. iii equals all of Major 1/Primary III. Then we have the OEW 1699 pivot. After a good run, free of resistance levels from the OEW 1628 pivot until now. The market is starting to run into a series of resistance levels, that include some of the entire bull market’s wave relationships. It would appear unlikely this uptrend can make it through all of these levels before rolling over into a downtrend.

Medium term support is at the OEW 1628 and 1614 pivots, with resistance at the 1680 and 1699 pivots.

SHORT TERM

Within Minor wave 5, from SPX 1536, we have been counting five Minute waves: Minute i SPX 1598, Minute ii SPX 1581, and Minute iii underway. Within Minute iii we have been counting five Micro waves: Micro 1 SPX 1635, Micro 2 SPX 1623, Micro 3 SPX 1661, Micro 4 SPX 1649 and Micro 5 underway. So this uptrend should be nearing its conclusion soon, as it is in Micro 5/Minute iii/Minor 5.

In fact, barring another extension, Micro wave 5 has an upside limit of SPX 1687. Due to the fact that Micro 3 was 38 pts., and shorter than Micro 1′s 62 pts. when Minute wave iii concludes we would expect a pullback into the SPX 1640′s. Then a simple rally to complete Minute v/Minor 5 and the uptrend. With negative divergences forming everywhere: hourly/daily/weekly. The SPX 1658-1667 resistance zone looks like it could hold Minute wave iii, and the OEW 1680 pivot range could hold the rest of the uptrend. We will see how this unfolds next week.

Short term support is at the 1628 and 1614 pivots, with resistance at the SPX 1658-1667 zone and the 1680 pivot. Short term momentum is developing a negative divergence. The short term OEW charts are positive with the reversal level at SPX 1643. Best to your weekend and investing/trading!

FOREIGN MARKETS

The Asian markets were mixed on the week for a net gain of 1.0%. Only S. Korea remains in a downtrend.

The European markets were all higher on the week for net gain of 2.3%. All uptrends.

The Commodity equity group were mixed on the week for a net loss of 0.5%. Canada remains in a downtrend.

The DJ World index is uptrending and gained 0.8%.

COMMODITIES

Bonds continue to downtrend losing 0.3% on the week.

Crude appears to be in an uptrend, but lost 0.2% on the week.

Gold is still downtrending and lost 6.1% on the week.

The USD is uptrending and gained 1.4% on the week. The downtrending EURUSD lost 1.2%, and the downtrending JPYUSD lost 1.6%.

NEXT WEEK

Nothing scheduled until Wednesday: Existing homes sales and the FOMC minutes. Thursday: weekly Jobless claims, FHFA housing prices, and New home sales. Friday: Durable goods orders. FED chairman Bernanke gives a speech on Saturday 5/18 at 11:00. Then gives congressional testimony on Wednesday at 10:00. Best to your week!

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

friday update

SHORT TERM: consolidation continues, DOW +121

Overnight the Asian markets gained 0.4%. Europe opened lower but gained 0.5%. US index futures were higher overnight, and the market gapped up at the open to SPX 1656. The market had closed at SPX 1650 yesterday. In the opening minutes the market popped to SPX 1658, dipped to 1655, then turned higher. At 10:00 Leading indicators were reported higher: +0.6% vs. -0.2%, and Consumer sentiment was reported higher: 83.7 vs. 76.4. Around 10:30 the SPX hit the all time highs again at 1661, pulled back to 1656, and then started to rally again. Around 3:30 the SPX hit 1667, then dipped to 1666 to end the week.

For the day the SPX/DOW were +0.90%, and the NDX/NAZ were +0.95%. Bonds lost 19 ticks, Crude gained 85 cents, Gold dropped $30, and the USD was higher. Medium term support remains at the 1628 and 1614 pivots, with resistance at the 1680 and 1699 pivots. Last night the FED reported a record high in the Monetary base: $3.105 tln vs. $3.034 tln. Today the WLEI was reported lower: 57.0% vs. 57.3%.

Today the market gapped up for the first time in exactly two weeks. Hard to believe it has been making higher and higher highs without opening gaps. After a bit of bouncing around the market tested the high at SPX 1661, pulled back, and then broke through to new highs. This is becoming a “Fly me to the Moon” type of bull market. Over the past four months, every overhead pivot and resistance area has become just another target for this uptrend. With this bull market being Cycle wave [1], just imagine Cycle wave [3]. It appears we are getting a preview of that in this third, of a third, of a third wave uptrend. Overall the SPX has now gained 1,000 points in 50 months. A flat rate of 3% per month for fifty months.

Short term support remains at the 1628 and 1614 pivots, with resistance at the SPX 1658-1667 zone and the 1680 pivot. Short term momentum displays a developing negative divergence. The short term OEW charts remain positive from 1590, with the reversal level now SPX 1643. Best to your weekend!

MEDIUM TERM: uptrend

LONG TERM: bull market

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

International equity markets

In the past we had singled out a specific country’s stock market and offered an analysis. Unfortunately, that was not possible to continue since we cover nearly twenty foreign markets. The probable wave patterns of each of these foreign indices are posted on pages 5 to 8 on the public charts: http://stockcharts.com/public/1269446/tenpp/5. We group these countries into three categories: Asia, Europe and Commodity, and report on them daily and every weekend. The countries covered are: Australia, Brazil, Canada, China, England, France, Germany, Greece, Hong Kong, India, Indonesia, Italy, Japan, Russia, Singapore, S. Korea, Spain, Switzerland. We also cover the DJ World index and the european STOX 50.

We had not reported on these stock markets, in detail, since 2011. Since markets, in general, were giving mixed signals during 2011 and 2012. Now that things have cleared up we decided to do a complete review of all the world’s markets we track. The results were quite interesting. In general, while the US has remained in a quantified bull market since 2009 this can not be said of any of the foreign indices we track. Certainly foreign markets have been rising, and some have even made all time new highs. But quantitatively, they are all on different wave patterns than the SPX/DOW.

To arrive at this conclusion we first divided all the world’s indices, we track, into four categories: 1. those that continued to rise from 2009, 2. those that continued to fall from 2007, 3. those that had three wave rallies into 2010/11, and 4. those that had five wave rallies into 2010/11. The first two were easy to decipher since there was only one index in each category: the US in category 1, and Greece in category 2. The US ended its 2007-2009 Super cycle 2, and has been in a Cycle [1] bull market since 2009. Greece ended its 1999-2012 Super cycle 2 bear market, and started a new Cycle [1] bull market in 2012. We actually identified that mid-2012 low without much fanfare on the public blog. The details of the bull market can be found in the public charts. Categories 3 and 4 took  lot more work to decipher.

In category 3 we found: Australia, Brazil, China, England, France, Italy, Japan, Russia, Singapore, Spain and the STOX 50.

Japan has been in a Super cycle bear market since 1989. Despite the recent surge, due to QE and currency devaluation, we still believe this bear market has not concluded.

England, France, Italy and the STOX 50 have been in a Super cycle bear market since 2000. These four indices are following the Secular deflationary cycle. France and the STOX 50 look the same long term: a Cycle [A] low in 2003, a Cycle [B] high in 2007, then a Primary A low in 2009, and now an abc Primary B advance underway. Both indices will lose all of the gains since 2009 during the next bear market.

England is a bit different. A Cycle [A] low in 2003, a Primary A high in 2007, a Primary B low in 2009, and now a Primary C advance underway. It too should lose all of its gains, since 2009, during the next bear market.

Italy is a bit different still. A Cycle [A] low in 2002, a Cycle [B] in 2007, and now there appears to be a diagonal triangle Cycle [C] underway. Italy is much closer to a Super cycle bear market low than the three indices noted above.

Australia and Singapore look quite similar. A Super cycle high in 2007, followed by a Cycle [A] low into 2009, a Primary A into 2010/2011, Primary B low in 2011, and now a Primary C underway. During the next bear market both indices should lose all of their gains from 2009.

Brazil and Russia look similar. A Super cycle top in 2008, followed by a Cycle [A] into 2008, then a Cycle [B] into 2011, and now a Cycle wave [C] underway. It is quite unlikely either index will see the 2011 highs before they fully retrace the advance from 2008.

Spain appears to be in a Cycle [1] bull market since mid-2012 like Greece. Details on the public blog charts.

China, another of the BRICs, has a totally different pattern. A Primary I top in 2001, a 4-year Primary II until 2005, a strong Primary III into 2007, now a 5-year triangular Primary wave IV. We believe the C wave of the triangle completed in late-2012, and the D wave, possibly back to 3,000 is underway. When the D wave completes, a downward E wave will follow to a higher low than waves A and C to complete Primary IV. Then China should be on its way to all time new highs.

In category 4 we found: Canada, DJ World, Germany, Hong Kong, India, Indonesia, S. Korea, and Switzerland. Canada, DJ World, Hong Kong and Indonesia all look similar. A Super cycle top in 2007, then a Super cycle low in 2009. This is followed by a short Cycle wave [1] bull market into 2011. Then a Cycle [2] bear market begins with a Primary A down into 2011, currently a Primary B wave up, which will be followed by a Primary C down to complete the Cycle [2] bear market. None, of these indices, like the SPX/DOW, will see the 2009 lows again.

India is a but different long term. The Nifty made a Super cycle low in 2001. The 2008 peak was the end of Cycle wave [1], and the 2008 low Cycle wave [2]. Quite short in time, historically. The five wave advance from that low to 2010 was Primary I, of Cycle [3]. Next we have a selloff into 2011. This is counted as a Primary II, with Primary III underway from that low. We are also carrying an alternate count, listed on the BSE chart. This alternate count, posted below, suggests the 2011 was the end of Major A of Primary II. And the current advance is Major B. Under this scenario the BSE should drop below the 2011 low during the next bear market.

Germany is very similar to the alternate count on India. The only difference is that it completed its Super cycle 2 bear market low in 2003.

Next we have S. Korea. This is a very interesting long term chart. Notice it is currently in a Primary IV bear market. Having completed Primary III in 2011, and Primary’s I and II way back in 2000 and 2001. S. Korea may be forming a Primary IV triangle, then a spike higher to complete Primary V. If not, the 2008 lows may be revisited during the next worldwide bear market.

Last, but not least, is Switzerland. An even more interesting pattern going back to 1991. Notice the five waves up into a 2000 Primary III peak, then the Primary IV bear market into 2003. After that a Primary V, to complete SC 1, in 2007. This is almost identical to the SPX/DOW. But the similarity ends there. The selloff into 2009 we have labeled as Cycle wave [A]. Since then the SMI has rallied in a Primary A, down in a Primary B, and now rising in a Primary C. When this bear market rally concludes we expect the SMI to retest the lows in 2009.

There, you have it. A total review of all the foreign indices we track in one concise report. Hope this will help some of you in the months and years ahead.

thursday update

SHORT TERM: consolidation day, DOW -42

Overnight the Asian markets closed mixed. Europe opened higher but closed mixed as well. US index futures were lower overnight. At 8:30 weekly Jobless claims were reported higher: 360K vs. 323K, the CPI lower: -0.4% vs. -0.2%, Housing starts lower: 853K vs. 1036K, but Building permits were higher: 1017K vs. 902K. The market opened two points under yesterday’s SPX 1659 close, bounced to 1660, then pulled back to 1653 just past 10:00. At ten the Philly FED was reported lower: -5.2 vs. +1.2. Another rally attempt ended at the SPX 1661 high by 11:30, then the market again pulled back. At 12:30 FED governor http://www.federalreserve.gov/newsevents/speech/raskin20130516a.htm Raskin’s speech was released. The market pulled back into the last hour of trading as the SPX hit 1649. Then a bounce into the close ended the day at SPX 1650.

For the day the SPX/DOW were -0.40%, and the NDX/NAZ were -0.15%. Bonds gained 16 ticks, Crude added 70 cents, Gold lost $5, and the USD was lower. Medium term support remains at the 1628 and 1614 pivots, with resistance at the 1680 and 1699 pivots. Tomorrow: Consumer sentiment and Leading indicators at 10:00 on Options expiration Friday.

The market opened lower today, dipped down to SPX 1653, rallied back to 1661, then dropped below yesterday’s low of 1651. This consolidation day is enough to consider this two-day pullback as the fourth wave of Minute wave iii. The market touched oversold on the hourly RSI as the SPX hit 1649. This pullback is now equal to the wave 2 pullback of Minute iii, which also took about two days. This may just be enough to end this pullback and send the market to new highs.

Short term support is at the 1628 and 1614 pivots, with resistance at SPX 1658-1667 and the 1680 pivot. Short term momentum declined to oversold. The short term OEW charts remain positive with the reversal level now SPX 1638. Best to your trading on Opex day!

MEDIUM TERM: uptrend

LONG TERM: bull market

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