Weekend update

REVIEW

The week started at SPX 2760. After a gap up opening on Monday, and higher open Tuesday, the SPX rallied to 2796. A gap down opening on Wednesday took the SPX to 2771. But the market gapped up on Thursday, hit SPX 2799, then moved over 2800 on Friday. For the week the SPX/DOW gained 1.9%, and the NDX/NAZ gained 2.05%. Economic reports for the week were mostly positive. On the downtick: import prices and consumer sentiment. On the uptick: consumer credit, the CPI/PPI, wholesale inventories, plus the budget deficit and jobless claims improved. Next week’s reports will be highlighted by the FED’s semi-annual report to congress, industrial production and housing. Best to your week!

LONG TERM: uptrend

The range bound activity in the SPX/DOW, since February’s decline, has kept most of us guessing what EW pattern was forming during all that choppiness. At times, after the April low, the market looked like it was ready to make new highs. Which the NDX/NAZ/R2K did. And at other times it looked like it was going to retest the February/April lows again. Which clearly has not happened. What has happened, as often does, the market eliminates one potential count after another until it settles into its final pattern. The latter occurred this week.

Longer term the 2016 Major wave 1 bull market continues. Four of the five Intermediate waves that create a Major wave bull market have already completed. Intermediate waves i and ii ending in the spring of 2016, and Intermediate waves iii and iv ending in the early-spring of 2018. Int. wave i was simple, and Int. iii subdivided into five Minor waves. Int. wave ii was an irregular zigzag, and Int. iv was a flat. A nice and clear pattern until the choppiness in recent months. Nonetheless, we’re still looking for SPX 3000+ by 2018+.

MEDIUM TERM: uptrend

After the April downtrend low at SPX 2554 the NDX/NAZ/R2K impulsed higher, but the SPX/DOW was nothing but choppy three wave movements higher. It looked more corrective than impulsive. After the uptrend seemed to have failed at SPX 2791 in early June, while the NDX/NAZ/R2K were already making new all-time highs, we settled on either an Int. wave iv triangular pattern or a complex flat pattern. Both patterns suggested retest of the February/April low, or near retest.

On the first trading day of July the market gapped down at the open, hit SPX 2699, and appeared ready to confirm a downtrend within days across all four major indices. A downtrend confirmation would have confirmed the triangular, or complex flat, Int. iv correction. But the market was not doing that kind of pattern and started to rally. When the downtrend did not occur we posted a potential impulsive pattern on the SPX hourly chart. Then by Wednesday of this week we noticed the NYSE had a clear leading diagonal triangular pattern from its April low.

This pattern would explain the choppiness in the SPX/DOW since the April low. Diagonal triangles are created by choppy three waves patterns forming five larger waves that create an even larger wedge formation. Supporting the LD pattern was the strength being displayed in market breadth since April.

SHORT TERM

To increase the probability of this LD scenario a few things had/have to occur. Continuation of the April SPX uptrend with a rally above 2791. This occurred on Tuesday. The rally needed to exceed SPX 2802 to eliminate the IV triangular scenario. This occurred on Friday. The rally from the recent SPX 2692 low to start looking impulsive. So far we have three waves up: 2743-2699-2805. And the market should started acting like a third wave, since Minor waves 1 and 2 should have already completed.

Should we get all the parameters noted above the SPX could hit 3000 before this uptrend ends. With Minor wave 1 equaling 237 points (2554-2791), and Minor 2 at 2692. If Minor waves 3 thru 5 are only 1.5 times Minor 1 we hit SPX 3048. Let’s see how the remaining parameters play out. Short term support is at the 2798 and 2780 pivots, with resistance at the 2835 and 2858 pivots. Short term momentum ended the week with a negative divergence. Best to your trading!

FOREIGN MARKETS

Asian markets were mostly higher for a gain of 1.9%.

European markets were also mostly higher for a gain of 0.7%.

The DJ World index gained 1.0%, and the NYSE gained 0.8%.

COMMODITIES

Bonds continue to uptrend but were flat on the week.

Crude is also in an uptrend but lost 3.8%.

Gold is in a downtrend and lost 1.2% on the week.

The USD is still in an uptrend and gained 0.9%.

NEXT WEEK

Monday: retail sales, the NY FED at 8:30, then business inventories at 10am. Tuesday: industrial production, the NAHB, and FED Powell congressional testimony. Wednesday: housing starts, building permits and the Beige book. Thursday: weekly jobless claims, the Philly FED, and leading indicators. Friday: options expiration.

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

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OEW tutoring

All markets are driven by long term investor confidence cycles. When the cycle is positive a bull market unfolds, when negative a bear market. The Objective Elliott Wave (OEW) technique not only determines if a market is bullish or bearish, it also determines how far a market has progressed in its current cycle.

OEW is not textbook Elliott Wave. It is a proprietary technique that defines every significant wave within bull and bear markets quantitatively. With this approach one can historically analyze any market to define its most probable wave structure, and determine what the past is projecting for the future.

We first uncovered this technique in the early 1980’s when doing an analysis of the entire history of the US stock market. When waves are determined quantitatively, mathematically, they never change, past or present. At that time our analysis led us to believe that a stock market crash was likely in late-1987 to early-1988. Then another bull market would be underway. When the stock market did crash in October 1987, and a new bull market began in late-1987, we knew we had quantified the Elliott Wave Theory.

Over the decades OEW analysis has led to some important projections in a variety of markets. In the US stock market: the correction in 1990, the correction in 1998, the 2000-2002 bear market, the 2002-2007 bull market, the 2007-2009 bear market, then the 2009-2115 bull market, and the current bull market as well. OEW pinpointed the bull market high in Crude at $148 in 2008, and identified a new bear market in Gold not too far from its 2011 $1900 high. In currencies: OEW tracked the bear market in the USD until 2011, then signaled a new bull market in the USD and bear markets in most other currencies. Now the USD is bearish again. In real estate: OEW identified the bull market top in 2005, and then the bear market bottom in 2011. All of our projections since the year 2005 are detailed – unedited – on this blog.

Bull and bear markets usually last for years. Uptrends and downtrends last for months, and are often mistaken for changes in long term trends. OEW analysis not only confirms when changes in long term trends are occurring, but often projects them ahead of time. OEW tutoring covers the various indices in the US stock market and most foreign markets, along with various technical indicators. It also covers individual stocks, currencies, bonds, commodities, housing, long term asset cycles and the Saeculum. If you are interested in learning how to do this type of analysis yourself, and joining our private international OEW group, please contact us at caldaro@msn.com for details. Best to your trading/investing.

The possession of knowledge, unless accompanied by the manifestation and expression in sharing is a vain and foolish thing. The Law of Use is universal, and he who violates it suffers by reason of his conflict with natural forces.”

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Wednesday update

SHORT TERM: gap down opening, DOW -219

The SPX rallied 1.2% the first two days of the week. Then overnight Tuesday, it was reported the US was preparing an additional $200B in tariffs against China. Naturally China stated they would retaliate. ES futures dropped immediately and remained substantially lower heading into Wednesday’s open. Asian markets dropped 0.8% overnight, and European markets lost 1.4%. The SPX gapped down to 2776 at the open, closed at 2794 yesterday, rallied to 2786, then headed lower. The low for the day was SPX 2771 just past 2pm. Then the market bounced to close at SPX 2774.

While perusing the charts yesterday we noticed a very clean rising diagonal in the NYSE from the April downtrend low. Then a large pullback during June. Followed by a rally into early July: https://bit.ly/2ubPmvR. This pattern could explain the choppiness in the SPX/DOW over the past few months. Diagonals are created by three wave advances, in an overall contracting five wave pattern. We carried the same leading diagonal pattern onto the DOW charts, even though the ‘e’ wave has some overshoot: https://bit.ly/2KXDjfB. When you add in the two counts posted on the SPX charts, bulls and bears have plenty to choose from. Overall, two of three counts suggest higher prices are ahead for this month. When one adds in the impulsive NDX/NAZ/R2K patterns, and new highs in market breadth, probabilities suggest this April uptrend will continue. A rally above SPX 2802 would eliminate the Int. wave iv triangle posted on the SPX daily chart too. Good luck, and best to your trading!

MEDIUM TERM: uptrend still underway

LONG TERM: uptrend

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

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Weekend update

REVIEW

The week started at SPX 2718. After a gap down opening on Monday to SPX 2699, the market rallied for the rest of this holiday week. Tuesday’s gap up opening carried the SPX to 2737. Then after a pullback to SPX 2713 by Tuesday’s close, the market gapped up again on Thursday. By Friday the SPX had hit 2764, then ended the week at 2760. For the week the SPX/DOW gained 1.15%, and the NDX/NAZ gained 2.4%. Economic reports for the week were mostly positive. On the downtick: the ADP, Payrolls, plus jobless claims increased. On the uptick: ISM manufacturing/services, construction spending, auto sales, factory orders, and the trade deficit improved. Next week’s reports will be highlighted by the CPI/PPI and export/import prices. Best to your week!

LONG TERM: uptrend

Trade and tariffs have in the news for weeks and months. In fact, the POTUS started this whole series of events back in January: https://www.nytimes.com/2018/01/22/business/trump-tariffs-washing-machines-solar-panels.html. Initially most stock markets fell: Dow Jones Global index dropped 11%. Since then most world markets have stabilized, except one: China. Since its January high it has dropped 24% in one continuous downtrend into a bear market. S. Korea, which is also mentioned in the article is only down 14% from January. And the US is currently down only about 5% from its January high. China is the clear loser in any trade war with the US.

Nothing has changed with the long-term view. Super cycle low 2009, Primary I high 2015, and Primary II low 2016. Primary III has been underway since then. Primary III is dividing into five Major waves. The first Major wave bull market is currently in its late stages. Major wave 1 has divided into five Intermediate waves. Int. waves i and ii completed in the spring of 2016. Int. iii then subdivided into five Minor waves. Minor waves 1 and 2 completed in the fall of 2016, and Minor waves 3 and 4 completed in the spring of 2017. Minor wave 5, completing Int. iii, took 10 months to unfold and completed in January. Since then a complex Int. iv has been underway. When it concludes Int. v should take the SPX to new highs.

MEDIUM TERM: downtrend probably underway

Last weekend, with the SPX at 2718, we expected the market to continue to decline until it hit the 2656 or 2632 pivots. The market opened on Monday at SPX 2699, but then immediately rallied after that and ended the week 2% higher at 2760. No decline, and no downtrend conformation. The choppiness continues.

We  continue to carry the triangle scenario on the SPX daily chart. Should/when we do see an OEW downtrend confirmation, then we can be relatively certain wave e, of the triangle, is underway. Until then this market is still in an uptrend, and only about 1% from a higher high (SPX 2791). It has been that kind of market. Medium term support is at the 2731 and 2656 pivots, with resistance at the 2780 and 2798 pivots.

SHORT TERM

Last weekend we posted this count on the hourly chart but spent little/no time discussing it. On Wednesday we noted that the SPX 2690’s were providing support, while the rallies had been topping at lower and lower levels: 2746, 2743, 2737. On Thursday the SPX hit 2738, before closing at 2737. Then on Friday, the market opened at SPX 2738 and rallied all the way to 2764, before closing at 2760. Clearly the short term pattern changed over the past two days.

What this suggests, is that a continuation of the uptrend is back on the table if SPX 2791 is exceeded. Other than that we are still expecting lower lows (SPX 2692) this month. Short term support is at the 2731 pivot and the SPX 2690’s, with resistance at the 2780 and 2798 pivots. Short term momentum ended the week extremely overbought. Best to your trading!

FOREIGN MARKETS

The Asian markets were mostly lower and lost 1.3%.

The European markets were mostly higher and gained 1.0%.

The DJ World index gained 0.9%, and the NYSE gained 1.3%.

COMMODITIES

Bonds are uptrending and gained 0.2% on the week.

Crude continues to uptrend but lost 0.5% on the week.

Gold continues to downtrend but gained 0.1% on the week.

The USD remains in an uptrend but lost 0.1%% on the week.

NEXT WEEK

Monday: consumer credit at 3pm. Wednesday: the PPI and wholesale inventories. Thursday: the CPI, weekly jobless claims, and the budget deficit. Friday: export/import prices and consumer sentiment.

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

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Fourth of July update

SHORT TERM: national holiday in US

For the first three days of this week we have seen the Asian markets decline, and European markets slip lower as well. US markets opened Monday with a gap down, hit SPX 2699 soon after the open, rallied to 2737 after a gap up on Tuesday, then sold off to 2713 by the close. Economic reports for the week, so far, are all higher: ISM, construction spending, auto sales, and factory orders. FOMC minutes on Thursday, then Payrolls on Friday.

The selloff on Monday took the SPX down to the 2690’s area for the third time in the past two weeks. Each time it has held and the market has rallied. But the rallies have been reaching lower highs: 2746, 2743, 2737. Next support area looks like the low 2680’s. The decline from the recent SPX 2791 high looks corrective. Quite normal for corrections in bull markets. The major indices are getting quite close to confirming downtrends. For the SPX, this would support the Int. iv triangle scenario. Will post an update, if/when the downtrend confirmation occurs. Enjoy your holiday!

MEDIUM TERM: downtrend probably underway

LONG TERM: uptrend

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

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Weekend update

REVIEW

This roller coaster week started at SPX 2755. After a gap down opening on Monday the SPX hit 2699 before rebounding in the afternoon. A gap up opening on Tuesday carried the SPX to 2746 by Wednesday morning. After that the market headed right back down and hit SPX 2692 by Thursday morning. Friday’s gap up opening carried the SPX to 2743, before retreating late in the day to end the week at 2718. For the week the SPX/DOW lost 1.3%, and the NDX/NAZ lost 2.3%. Economic reports for the week were mixed. On the downtick: consumer confidence/sentiment, durable goods, pending home sales, Q1 GDP and weekly jobless claims rose. On the uptick: personal income/spending, Chicago PMI, Case-Shiller, and new home sales. Next week’s reports will be highlighted by Payrolls, the ISMs, and the FOMC minutes. Best to your week, and happy Independence Day!

LONG TERM: uptrend

Nothing has changed long term. A Super cycle low in 2009. Leading to a Primary I bull market high in 2015. Then a short and quick Primary II bear market low into 2016. And currently, a Major wave 1, of Primary III, bull market into 2018.

Major wave bull markets divide into five Intermediate waves. Intermediate waves i and ii completed in the spring of 2016. Then Intermediate wave iii started to subdivide into five Minor waves . Minor waves 1 and 2 completed in the fall of 2016. Minor waves 3 and 4 completed in the spring of 2017. Then Minor wave 5, to complete Intermediate wave iii, stretched out into January 2018. Since then, it appears, Intermediate wave iv has been underway. Still expecting SPX 3000+ by 2018+ before this bull market ends.

MEDIUM TERM: downtrend may be underway

The market has been in an uptrend since early April at SPX 2554. The uptrend, as we have noted, has been internally choppy and unlike previous uptrends of this bull market. Nevertheless, we gave it the benefit of doubt while its larger waves unfolded. This week the SPX broke through support levels, turning even this last rally (2677-2791) into a choppy corrective affair.

As a result we added the Intermediate wave iv triangle scenario back to the SPX daily chart. It’s been that type of market activity for most of this year. Triangles are created by five corrective waves that form a wedge. In this case it looks like a contracting wedge, with waves a, b, c, and d already completed. All that is required is a downtrend confirmation to move the e wave close to completion. Keep in mind, the e wave does not have to reach the lower trend line.

SHORT TERM

We were tracking this uptrend, despite the internal choppiness, as an impulse wave until this week. This week the SPX broke below 2742, and then traded below that for most of the week. We now have three overlapping larger waves from the uptrend low in early April. Certainly looks corrective. Unless, the market is unfolding in this new count posted on the hourly chart. It has a low probability at this time, and we’ll leave it at that for now.

Should the triangle scenario continue to unfold, a likely low would occur in the low – mid 2600’s. There are OEW pivots at 2632 and 2656. Also the low could come as early as this week. If it looks like this is occurring we will post a daily update. Short term support is at the 2656 and 2632 pivots, with resistance at the 2731 and 2780 pivots. Short term momentum ended the week nearly oversold. Best to your trading!

FOREIGN MARKETS

Asian markets were all lower for a loss of 1.1% for the week.

European markets were all lower for a loss of 1.4%.

The DJ World index lost 1.3%, and the NYSE lost 1.1%.

COMMODITIES

Bonds confirmed an uptrend and gained 0.2% on the week.

Crude confirmed an uptrend too and gained 8.1%.

Gold remains in a downtrend and lost 1.3%.

The USD is still in an uptrend and gained 1.0%.

NEXT WEEK

Monday: ISM and construction spending at 10am. Tuesday: auto sales and factory orders. Wednesday: holiday! Thursday: ADP, ISM services, jobless claims, and the FOMC minutes. Friday: monthly payrolls.

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

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Wednesday update

SHORT TERM: higher open sold, DOW -166

Negative week so far. Gap down opening on Monday eventually took the market to SPX 2699. A last hour rebound, gap up Tuesday, then higher open on Wednesday, took the SPX to 2746 by the first hour of trading. After that, right back down again to 2699. NAZ rallies – the DOW is sold. DOW rallies – the NAZ is sold. In the meantime, Asia has been lower and Europe mostly lower as well.

With the breakdown below SPX 2729 on Monday, the rally (2677-2791) was corrective like the two previous rallies during this uptrend. This suggests the entire uptrend could be a corrective B, or corrective D of a triangle. Noted the triangle configuration on the SPX daily chart today in green. Keep in mind, the E wave of a triangle does not have to drop to the lower trend line. Also, removed the “uptrend” labels, as it does appear the SPX is in an unconfirmed downtrend. More on this over the weekend. Best to your trading!

MEDIUM TERM: downtrend may be underway

LONG TERM: uptrend

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

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