Weekend update

REVIEW.

The week started at SPX 2779. The market opened slightly higher Monday. Rallied to SPX 2790. Then bounced off of SPX 2789/91 for the next three days. On Friday’s option expiration, the market gapped down, hit SPX 2762, then rebounded to close unchanged for the week. For the week the SPX/DOW were mixed, and the NDX/NAZ gained 1.05%. Economic reports for the week were mostly positive. On the downtick: industrial production, plus the budget deficit expanded. On the uptick: the CPI, the PPI, the NY FED, retail  sales, import/export prices, business inventories, consumer sentiment, plus weekly jobless claims declined. Next week’s reports will be highlighted by the Philly FED, leading indicators, and housing.

LONG TERM: uptrend

We have been hearing some reports this week that the FED is behind the yield curve, and rates should be at least another 1.5% higher at this time. We disagree. In fact according to the indicator we track for future FED funds, the FED is exactly where the market wants it to be at this stage of the economic expansion. In early 2011 we published the following report on short term rates, and what we track to anticipate them: https://caldaro.wordpress.com/2011/01/18/interest-rates-the-economy-and-the-1yr-t-bill/. Using the 50 basis point rule the current 1YR chart suggests the FED is right where is should be: 1.75% to 2.00%.

The weekly chart displays the SPX price action since the great recession low in 2009. The market advanced for 6 years, to 2015, to complete Primary I of a Cycle wave bull market. Primary II ended in early 2016 at SPX 1810. Since then the market has been rising in a Major wave 1, of Primary III, bull market. When Major 1 concludes, and it looks like we’re already in Int. wave v, a Major wave 2 bear market should follow. Our mid-2016 projection for this bull market remains SPX 3000+ by the 2018+.

MEDIUM TERM: uptrend

From late-January to early-April the SPX corrected in an Intermediate wave iv flat. This flat alternates with the Q2-2016 Intermediate wave ii irregular zigzag. In fact, even the Minor waves 2 and 4, of Int. wave iii, display alternation. From that early-April low the uptrend has been unfolding in what appears to be a nesting of 1-2’s.

We have labeled SPX 2717 in mid-April Minor 1, and SPX 2595 in early-May Minor 2. Then SPX 2742 as Minute i, and SPX 2677 as Minute ii in mid-May. This count suggests Minute iii has been underway since then. Over the past three weeks the SPX has risen an unimpressive, for a third wave, 100+ points. The market is still looking for a catalyst.

SHORT TERM

A quiet week as the SPX could not make much upside progress after hitting the OEW 2798 pivot range. In fact, on options expiration Friday the market sold off to SPX 2762 before recovering in the afternoon. The gap down opening and rebound could set things up for the SPX to start impulsing again internally. A rally to SPX 2791 again would help in that regard.

Short term support is at the 2731 and 2656 pivots, with resistance at the 2780 and 2798 pivots. Short term momentum ended the week with a positive divergence. Best to your trading!

FOREIGN MARKET

Asian markets were mixed on the week and lost 0.7%.

European markets were mostly higher and gained 0.9%.

The DJ World index lost 0.5%, and the NYSE lost 0.8%.

COMMODITIES

Bonds continue to downtrend and ended unchanged for the week.

Crude remains in a downtrend and lost 1.0%.

Gold also remains in a downtrend and lost 1.9% on the week.

The USD has been in an uptrend and gained 1.0% on the week.

NEXT WEEK

Monday: NAHB at 10am. Tuesday: housing starts and building permits. Wednesday: existing home sales. Thursday: jobless claims, leading indicators and the Philly FED.

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

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Wednesday update

While the US appears to remain on cruise control we have been uncluttering the weekly charts on the chart link. Some go back to 2009 with lots and lots of historical, but currently unnecessary waves. For example the AAPL weekly chart looked like this:

now looks like this:

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

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Weekend update

REVIEW

The week started at SPX 2735. The market gapped up on Monday to start the week. Then it made a higher high, than the day before, every day until Thursday when it hit SPX 2780. After that it pulled back by to SPX 2760, and then rallied to 2779 to end the week. For the week the SPX/DOW gained 2.2%, and the NDX/NAZ gained 1.1%. Economic reports for the week were mixed. On the downtick: factory orders and consumer credit. On  the uptick: ISM, plus the trade deficit and weekly  jobless claims improved. Next week’s economic highlights include the FOMC meeting and industrial production.

LONG TERM: uptrend

Big picture. From the years 1932 to 2007 the stock market completed a Super cycle bull market. This multi-decade bull market, which includes multiple smaller bull/bear markets, was then corrected by the largest stock market decline since the 1929-1932 depression. The 2007-2009 great recession. Then in early 2009 the next multi-decade Super cycle bull market began. Each of these super cycle bull markets are created by five Cycle waves. The Cycle waves during that super cycle occurred during the following years: 1937-1942-1973-1974-2007. Note, of the three bullish cycle waves 1, 3 and 5, one was short (5 yrs.) and the other two were quite long (30+ yrs.). The US market is currently in a long Cycle wave 1 of the new Super cycle.

Each of these bullish cycle waves are created by five Primary waves. Waves within waves, greater to lesser: Super cycle, Cycle, Primary, Major, etc. From the early 2009 low the market unfolded in a 6-year bull market until mid-2015. We labeled that Primary I of Cycle 1. Then there was a short bear market into early 2016, which we labeled Primary II. From that low a Primary III bull market began. Historically, third Primary waves, in long cycle waves, are 15+ years in length. This suggests the current bull market is only Major wave 1 of Primary III, as labeled. Our target for the current bull market, since mid-2016, has been SPX 3000+ by 2018+.

MEDIUM TERM: uptrend

Over the past couple of weeks one short/medium term count appears to have emerged out of a handful of potential counts. This count is posted below, and also on several other important indices. When reviewing the entire wave structure of the 2016-2018 bull market the wave count does look quite clear. See weekly chart above.

Intermediate wave i rose 300+ points, and then was corrected by a multi-month irregular Int. wave ii zigzag correction. Intermediate wave iii took 19 months to unfold and gained nearly 900 points. After that there was an Int. wave iv, multi-month, flat correction, alternating with Int. ii. Even Minor waves 2 and 4 of Int. iii alternated in structure (zigzag-flat). Since that April low the SPX has been in a somewhat choppy uptrend. We are labeling this as Intermediate wave v.

SHORT TERM

As noted above. This uptrend has been rising since the early April low at SPX 2554. Internally it has been somewhat choppy compared to other uptrends in this bull market. However, the larger waves within the uptrend do suggest the market is progressing impulsively.

We have labeled Minor waves 1 and 2 at SPX 2717 and 2595. Then Minute waves i and ii at SPX 2742 and 2677. Minute wave iii should be underway at this time. Short term support is at the 2731 and 2656 pivots, with resistance at the 2780 and 2798 pivots. Short term momentum ended the week overbought. Best to your trading!

FOREIGN MARKETS

Asian markets were mostly higher and gained 1.0% for the week.

European markets were mixed and lost 0.15% for the week.

The DJW index gained 1.3%, while the NYSE gained 1.7%.

COMMODITIES

Bonds remain in a downtrend and lost 0.2% on the week.

Crude is also in a downtrend and lost 0.1%.

Gold, a downtrend here as well, but gained 0.3%.

The USD is in an uptrend but lost 0.8% on the week.

NEXT WEEK

Tuesday: CPI and FED budget. Wednesday: PPI and FOMC statement. Thursday: jobless claims, retail sales, export/import prices, and business inventories. Friday: industrial production, the NY FED, and consumer sentiment. Best to your investing week!

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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Tuesday morning

Thank you all for your well wishes. Working on getting back up to date with the charts, etc. Planning to continue the weekend updates, and post during the week when there is something important. Thank you for your patience.

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Friday Update

Tony is back everything is going well. He’ll do his normal posting in the next few days.

To answer some of the questions that keep being thrown my way. First I’m his daughter and he is in the later stages of COPD. So, if you know anything about it, it means some absences here and there. Please keep being positive, respectful and considerate!

Thank you for your patience in the last few weeks!

Posted in Updates | 234 Comments

Weekend Update

Tony should be returning sometime next week!

Thanks everyone for your well wishes!

Have a great Monday or Memorial Day!

Posted in Updates | 513 Comments