Thursday update

SHORT TERM: market in pullback mode, DOW -10

Overnight the Asian markets gained 0.2%. Europe opened lower but gained 0.6%. US index futures were higher overnight. At 8:30 weekly Jobless claims were reported higher: 313k v 283k, the CPI was reported lower: -0.7% v -0.4%, but Durable goods were reported higher: +2.8% v -3.3%. Then at 9am the FHFA was reported higher: +0.8% v +0.8%. The market opened one point below yesterday’s SPX 2014 close, then pulled back to SPX 2106 by 10am. After that it rallied to SPX 2014 by 11am, before starting a choppy pullback to 2104 by just after 3pm. Then the market rallied to close at SPX 2111.

For the day the SPX/DOW were -0.10%, and the NDX/NAZ were +0.45%. Bonds lost 19 ticks, Crude dropped $1.95, Gold added $3, and the USD rallied. Medium term support remains at the 2085 and 2070 pivots, with resistance at the 2131 and 2198 pivots. Tomorrow: Q4 GDP (est. +2.0%) at 8:30, the Chicago PMI at 9:15, Consumer sentiment and Pending home sales at 10am, then a speech from FED vice chair Fischer at 1:30.

The market opened lower today, like it has done for about two weeks. It dipped down to SPX 2106 by 10am, bounced to 2114 by 11am, hit 2104 just after 3pm, then rallied into the close. Our initial short term concern level, at SPX 2102, was not hit today, but the market did set up a potential short term positive divergence at the 2104 low. As the NDX/NAZ tried to rally all day, the cyclicals appeared to be held in check by the strong USD rally +1%, and the 5% drop in Crude at its lows. Nevertheless, we do see five waves up from the SPX 1981 downtrend low, with each rising wave shorter than the previous one. This suggests a few potential short term scenarios. But we will await either new highs or a drop below SPX 2102 before getting into any detail. Q2 GDP tomorrow could be the catalyst. Short term support is at SPX 2104 and the 2085 pivot, with resistance at SPX 2120 and the 2131 pivot. Best to your trading!

MEDIUM TERM: uptrend

LONG TERM: bull market

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

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Wednesday update

SHORT TERM: new highs again, DOW +15

Overnight the Asian markets finished mixed. Europe opened higher but lost 0.1%. US index futures were lower overnight, but the market opened one point below yesterday’s SPX 2115 close. In the opening minutes the market dipped to SPX 2111, then turned higher. At 10am New home sales were reported unchanged at 481k. The market made a new high at SPX 2120 by 1:30. Then it started to pullback. The pullback hit SPX 2110 around 3pm, then the market bounced to close at 2114.

For the day the SPX/DOW were mixed, and the NDX/NAZ were -0.10%. Bonds gained 4 ticks, Crude rose $1.50, Gold added $4, and the USD was lower. Medium term support remains at the 2085 and 2070 pivots, with resistance at the 2131 and 2198 pivots. Tomorrow: weekly Jobless claims, the CPI, and Durable goods orders at 8:30, then the FHFA index at 9am.

The market opened one point lower today, dipped a bit lower, then rallied to a new high at SPX 2120. After that the market had its first notable pullback since Friday’s low at SPX 2085. While a 10 point pullback after a 35 point rally looks quite normal. The uptrend wave structure suggests it could have the potential to turn into something larger. There are two levels to watch heading into the end of the week: SPX 2102 and SPX 2085. Should the SPX drop below 2102 then we could be looking at five waves up from the SPX 1981 downtrend low. Should the SPX drop below 2085 then we will have five waves up from the SPX 1981 downtrend low. So far, this week does not look like a Minute iii of Minor 3 is in progress. Short term support is at the 2085 and 2070 pivots, with resistance at SPX 2120 and the 2131 pivot. Short term momentum dropped to below neutral after hitting overbought earlier in the day. 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: new highs, DOW +92

Overnight the Asian markets gained 0.1%. Europe opened higher and gained 0.6%. US index futures were higher overnight, and at 9am Case-Shiller was reported higher: +4.5% v +4.3%. The market opened one point below yesterday’s SPX 2110 close, ticked up to 2111, then pulled back to 2106 by 10am. At 10am Consumer confidence was reported lower: 96.4 v 102.9, and FED chair Yellen testified before the Senate: http://www.federalreserve.gov/newsevents/testimony/yellen20150224a.htm. During the testimony the market rallied to SPX 2117 by 11:30. Then it pulled back to SPX 2109 by 12:30. After that the market made a new high at SPX 2118 before dipping to 2115 at the close.

For the day the SPX/DOW were +0.40%, and the NDX/NAZ were +0.10%. Bonds gained 24 ticks, Crude slipped 35 cents, Gold slid $2, and the USD was higher. Medium term support remains at the 2085 and 2070 pivots, with resistance at the 2131 and 2198 pivots. Tomorrow: New home sales, and FED chair Yellen addresses Congress at 10am.

The market opened slightly lower today, put in its low for the day within the first hour for the sixth day in a row, then moved higher for the rest of the day. The market made another new high today at SPX 2118, as it continues to rise from Friday’s 2085 low with small pullbacks along the way. One of the three short term counts posted over the weekend, the 30% probability #2, was eliminated today with Greece getting final approval for the 4 month loan extension. The 10% probability option #1, suggests the maximum upside for the uptrend is SPX 2145. It is still in play and we raise its probability to 20%. Option #3, at now an 80% probability, continues to look like the most obvious count. Short term support is at the 2085 and 2070 pivots, with resistance now at the 2131 and 2198 pivots. Short term momentum is now overbought. 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: consolidation day, DOW -24

Overnight the Asian markets finished mixed. Europe opened higher and gained 0.5%. US index futures were lower overnight, and the market opened four points below Friday’s SPX 2110 close. By 10am the SPX had hit 2103 and then tried to rally. Also at 10am Existing home sales were reported lower: 4.82mn v 5.04mn. Around 1:30 the SPX hit 2109 and then started to pullback. At 3pm the SPX hit 2103 again, and then rallied to finish the day unchanged at 2110.

For the day the SPX/DOW were -0.10%, and the NDX/NAZ were +0.10%. Bonds gained 19 ticks, Crude dropped $1.60, Gold added $2, and the USD was higher. Medium term support remains at the 2085 and 2070 pivots, with resistance at the 2131 and 2198 pivots. Tomorrow: Case-Shiller at 9am, then Consumer confidence and FED chair Yellen testifies before the Senate at 10am.

The market opened 4 points lower today. Then spent the rest of the day between +3 and -3 points of the opening level until the close. Clearly a consolidation day after Friday’s big rally. While many awaited the Greek gov’t submitting its letter to the EU today. The submission was put off until tomorrow as details were discussed with EU members. Friday’s optimism was clearly subdued today. Today’s narrow trading range did nothing to alter the count(s) posted over the weekend. Starting tomorrow FED chair Yellen reports the state of the economy and monetary policy to Congress. These reports are always interesting. Short term support remains at the 2085 and 2070 pivots, with resistance at SPX 2111 and the 2131 pivot. Short term momentum declined during the day and ended above just neutral. Best to your trading!

MEDIUM TERM: uptrend

LONG TERM: bull market

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

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weekend update

REVIEW

The market started the holiday shortened week at SPX 2097. It made a new high on Tuesday, pulled back some, then another new high on Thursday, pulled back on options expiration Friday, then ended the week at new highs. For the week the SPX/DOW were +0.65%, the NDX/NAZ were +1.85%, and the DJ World index was +0.85%. On the economic front reports again came in biased to the downside. On the uptick: industrial production, building permits, leading indicators and weekly jobless claims improved. On the downtick: the NY/Philly FED, the NAHB, housing starts, the PPI, capacity utilization, and the monetary base. Next week we get reports on Q4 GDP, the CPI and more housing.

LONG TERM: bull market

We continue to label this six year bull market as a five Primary wave Cycle wave [1]. Primary waves I and II completed in 2011, and Primary III has been underway ever since. The five Major waves that created Primary I had a subdividing Major 1 and simple Major waves 3 and 5. The five Major waves that are creating Primary III appear to be alternating with that pattern. Thus far we have a simple Major 1, a subdividing Major 3, and potentially a subdividing Major 5 underway. When Primary III does conclude we should see a steep correction for Primary IV, then another advance to new highs for Primary V. This suggests this bull market still has a ways to go in time and price.

SPXweekly

During the October 2014 10% correction the OEW group had a lengthy discussion on the wave pattern for Primary III. There have been so many waves (trends) during this 3+ year advance that the pattern offered several possibilities. We arrived at three potential counts, posted them on the SPX/DOW/NAZ charts, and gave them a probability of 70%, 20% and 10% respectively. With the recent new all time highs in 2015, the latter two counts were eliminated. The past couple of weeks, however, the OEW group has arrived at another alternate count. This is count suggests the October correction was the end of Major 4, and Major 5 began then. It is posted on the DOW charts.

DOWweekly

The long awaited new all time highs in the DOW was finally achieved on Friday. This is the last index, of the four major US indices, to hit all time highs in 2015. As promised we are now posting our next long term target for this bull market: SPX 2530 to SPX 2630 by Q1/Q2 2016. This target will be posted on the SPX weekly chart, like the ones in the past that have been achieved.

MEDIUM TERM: uptrend

After what appears to be an irregular Major wave 4 flat, between early-December and early-February, the market kicked off an uptrend from the SPX 1981 low. We had observed an impulse wave in its early stages, first one this year, and the market triggered a WROC uptrend signal. Since that low the market has advanced about 6.5% in just two weeks.

SPXdaily

Our preferred count, posted above, suggests the market is currently in Major wave 5 of Primary III. When the current uptrend concludes it may be all of Major wave 5, or as we suspect just Intermediate wave one of Major 5. The reason we believe Major wave 5 will subdivide is twofold. First, this would create an alternate pattern for the Major waves of Primary waves III and I. Second, the ECB’s EQE program, which begins next month, should last until at least September 2016. During this entire bull market the only time we had a Primary wave correction was when there wasn’t a QE program ongoing, or even considered. Nevertheless, let’s see how the market acts after the EQE program starts. Medium term support is at the 2085 and 2070 pivots, with resistance at the 2131 and 2198 pivots.

SHORT TERM

We were counting the impulsive advance from the recent SPX 2042 low as it unfolded. Friday, however, the market pulled back a bit more than expected for that short term count, even thought it held the 2085 pivot and then rallied to new highs. As a result we must now count four completed waves, with the fifth underway, from the downtrend low at SPX 1981. Unfortunately there are three possible ways of counting this pattern. First, this fifth wave up will end this uptrend. Second, this fifth wave up will complete Minor wave 1 of this uptrend. Third, this fifth wave up is actually Minute wave iii of Minor 3 for this uptrend.

SPXhourly

The first possibility suggests the maximum this uptrend could reach is SPX 2145. The fifth wave (2085-2145) can not be longer than the third (2042-2102), when the third is shorter than the first (1981-2072). We give this count a 10% probability, as it appears too short, overall, for Intermediate wave one of Major 5.

The second possibility we give a 30% probability. Should Greece fail to deliver a letter on Monday that falls within the expected guidelines, the EU could put a halt to Friday’s drafted four month loan extension. The market would likely then selloff dramatically, retracing Friday’s entire rally. The third possibility we give a 60% probability. It suggests SPX 2072 and SPX 2042 completed Minor waves 1 and 2. Then SPX 2102 and SPX 2085 completed Minute waves i and ii, and Minute wave iii is currently underway. Whatever happens on Monday will likely determine which of these two short term counts are in play. Short term support is at the 2085 and 2070 pivots, with resistance at SPX 2111 and the 2131 pivot. Short term momentum rose to overbought on Friday and ended there.

FOREIGN MARKETS

Asian markets were all higher on the week for a net gain of 0.7%.

European markets were mostly higher for a net gain of 0.9%.

The Commodity equity group were mixed and finished mixed on the week.

The DJ World index is in an uptrend and gained 0.85% on the week.

COMMODITIES

Bonds look like they are in a downtrend and they lost 0.5% on the week.

Crude looks like it is in an uptrend, but lost 3.5% on the week.

Gold look like it is in a downtrend and it lost 1.9% on the week.

The USD remains in a weakening uptrend and gained 0.2% on the week.

NEXT WEEK

Monday: Existing home sales at 10am. Tuesday: Case-Shiller, Consumer confidence, and FED chair Yellen testifies before the Senate with the semiannual report to Congress. Wednesday: New home sales, and FED chair Yellen testifies before Congress. Thursday: weekly Jobless claims, the CPI, Durable goods orders, and the FHFA housing index. Friday: Q4 GDP (est. +2.1%), the Chicago PMI, Consumer sentiment, Pending home sales, and FED vice chair Fischer gives a speech. Best to your weekend and week!

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

https://caldaro.wordpress.com/2014/11/01/guidelines-how-to-use-this-site/

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Friday update

SHORT TERM: options expiration Friday, DOW +155

Overnight the Asian markets lost 0.1%. Europe opened lower but gained 0.2%. US index futures were lower overnight and the market opened three points below yesterday’s SPX 2097 close. The pullback continued until 10am when the SPX hit the 2085 pivot. Then the market started to work its way higher. Heading into the afternoon the market responded positively to a potential four month debt extension between the EU and Greece. Just past 3pm the SPX hit 2111, a new high, then closed at 2110.

For the day the SPX/DOW were +0.75%, and the NDX/NAZ were +0.65%. Bonds lost 3 ticks, Crude slid $1.05, Gold dropped $6, and the USD was lower. Medium term support remains at the 2085 and 2070 pivots, with resistance at the 2131 and 2198 pivots. Last night the FED reported a decline in the Monetary base: $3.883tn v $4.036tn. Today the WLEI was reported unchanged at 45.7%.

The market opened lower today for the fourth consecutive day this week. And for the fourth time made its low for the day within the first hour of trading. At the low, lowest level this week, the SPX hit 2085 and then rallied, with only three point pullbacks along the way, to make new highs. Even the DOW made an all time new high today. Will we cover what this implies and other tidbits in the weekend update. 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: gap down opening again, DOW -44

Last night FED governor Powell gave this speech: http://www.federalreserve.gov/newsevents/speech/powell20150218a.htm. Asian markets gained 0.2% overnight. Europe opened lower but gained 0.3%. US index futures were lower overnight, and at 8:30 weekly Jobless claims were reported lower: 283k v 304k. The market gapped down to SPX 2094 at the open, and hit 2091 in the first few minutes. The SPX had closed at 2100 yesterday. After the low the market started to rally. At 10am Leading indicators were reported higher: +0.2% v +0.5, but the Philly FED was lower: 5.2 v 6.3. By 11:30 the market hit a marginal new high at SPX 2102 and then started to pullback. After a pullback to SPX 2095 by 12:30, the market high 2100 by 3pm, then dipped to close at 2097.

For the day the SPX/DOW were -0.20%, and the NDX/NAZ were +0.45%. Bonds lost 12 ticks, Crude dropped 90 cents, Gold slipped $4, and the USD was higher. Medium term support remains at the 2085 and 2070 pivots, with resistance at the 2131 and 2198 pivots. Tomorrow is Options expiration Friday.

The market gapped down at the open for the second day in a row. And, for the second day in a row the low occurred within the first hour. Market volatility has calmed in the past week or so. At the low the SPX hit 2091, and then the market made a marginal new high at 2102. It now appears we have seven waves up from the recent SPX 2042 low: 2058-2049-2071-2058-2101-2091-2102 so far. As soon as this short term wave ends we should get a pullback, then another rally to possibly end the third wave up from the downtrend SPX 1981 low. Short term support is at the 2085 and 2070 pivots, with resistance now at SPX 2102 and the 2131 pivot. Short term momentum ended the day around neutral. Best to your op-ex Friday trading!

MEDIUM TERM: uptrend

LONG TERM: bull market

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

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