Weekend Report

Weekend Report

Provided by the OEW Group

August 17 2019

SPX started out the week with a gap down (same as last week) and continued lower for the rest of the day to close 9 points off Monday’s low at 2882.  Last week’s close was 2919.  Tuesday rallied sharply to the high of the week at 2943 within the first hour of trading, but then pulled back and traded in a range to finish the day at 2926. Wednesday gapped down big at the open, as the bond market reacted forcefully, apparently to the turmoil in Hong Kong.  Within the first 10 minutes, SPX retraced the entire Tuesday rally, then proceed to decline for the rest of the day and close on the low at 2840.  Thursday saw continued weakness as SPX declined to the low of the week at 2826 in the afternoon, followed by a rally back to 2855 before closing the day at 2845.  Friday finally gapped up and rallied to a high of 2891 just before noon, then leveled off within a few points for the rest of the day to close the week at 2889.  A third consecutive week of volatility!

For the week, SPX/DOW lost 1.03%/1.53% while NDX/NAZ lost 0.60%/0.55%.

On the economic front, CPI, Core CPI, Import Prices, and the Treasury Budget deficit all increased.  Our Weekly Leading Indicator is down slightly from last week but holding firm at 49.5%.

Next week economic news comes from Existing Home Sales and Initial Claims.

LONG TERM: Uptrend

spxwkly

In the US, the long-term count remains unchanged with the Super Cycle SC2 low in March 2009.  The Primary wave I high occurred in May 2015 and Primary wave II low in February 2016.  Primary wave III has been underway ever since.  Major wave 1 high of Primary wave III occurred in October 2018 and Major wave 2 low in December 2018.  Intermediate wave i of Major 3 is now underway and is subdividing into Minor and Minute waves.

As mentioned last week, we haven’t yet seen any evidence on the long term charts to suggest anything more than a typical medium term downtrend in context of an ongoing bull market.  However, the move in bonds this week pushed 3o year rates to new lows, prompting an additional subdivision and extension of our long term cycle low originally established by Tony back in 2016 (updated chart below).

tyxmonthly

This caused some concern and generated much discussion within the group.  The general consensus was that even though tariffs may be a contributing factor, the root cause of such a shift is most likely based on worries over economic risk in Asia due to the Hong Kong protests and potential for recession in Europe.  Nevertheless, it’s just not showing up broadly in the US markets yet.  We discussed several options for alternate counts with more bearish outcomes and concluded that the probabilities are too low at this time to warrant adding these into the mix.  We will continue to monitor and adjust our outlook on these alternates as more data comes in.

Currently we have all four of our core US markets and most US sectors in confirmed bull markets and trading not far from the highs.  While RUT and TRAN are notable outliers, these indices have been in bear markets since December and have been struggling to regain their footing.  It’s not unusual for TRAN to deviate from DOW like this, it happened exactly the same way back in 2012 coming off a deep 20% correction in 2011.  One of our members has suggested that RUT in particular may be more susceptible than most to the bond rally due to higher weighing in rate sensitive shares.  Still there’s historical precedence for these kinds of sideways moves as RUT moves in corrective structures whether in bull or bear mode.  Consequently, we don’t consider these deviations either out of the norm or cause for concern.  The bottom line here again is, there’s just not enough OEW evidence in the few sectors that are underperforming to change our long term outlook.

MEDIUM TERM: Downtrend

spxdaily

SPX opened lower for the third week in a row, rallied back on Tuesday to find resistance at the medium term EMA’s, then accelerated down from there to find support right at last week’s higher low of 2826.  This is now the second test of the low established last week at 2922 and sets up a potentially completed pattern for Minute wave ii, with Micro wave a = 2822, Micro wave b = 2943 and Micro wave c = 2826. The 200+ point 6.5% decline mentioned last week is still intact.  Although, the rally off the low is substantial, it’s still within range of countertrend moves in context of the existing downtrend.  Consequently, caution is advised for a possible extension lower.  Some in our group have noted that strength in NAZ and NDX may be a bullish indicator, since these are making higher lows relative to DOW and SPX.  It’s possible, but could also be a case of the glass half full, since these may still have work to do on the downside.  There’s just not enough evidence yet to mark the bottom for this downtrend.  A SPX rally back above 2930 or so will further build confidence for the Minute wave ii bottom.  However, a break below 2822 will signal Micro wave c is subdividing and brings into play alternate counts.  We will report on those if/when price dictates.  We’re still waiting till it becomes clear that a new uptrend is underway before updating our targets for Minute wave iii.

Medium term, RSI ended the week neutral and MACD is yet again trying to turn back up.  DOW continues to show positive divergence based on the low this week.

SHORT TERM

spxhourly

SPX was never able to impulse higher off of last week’s rally, but instead failed at the 2943 high on Tuesday, after a corrective sequence of overlapping waves up from 2822, then collapsed to retest prior lows at 2826.  This now suggests the irregular zig-zag pattern reported last week becomes our preferred count for Micro wave a, followed by an overlapping five wave structure for Micro wave b.  Micro wave c is either underway with two small waves so far or completed as a failed flat at 2826.  As mentioned in the previous section, the wave status at this juncture is unclear, so further waves are needed to sort it out.  As always, we’re looking for an impulsive structure to develop using our short term techniques to help solidify a potential bottom.  We can count one 68 point wave up to 2894 based on Friday’s rally, but so far, it’s inconclusive.  If the market reverses lower, that will suggest the possibility of double three pattern and potential extension for Minute wave ii.  Not much more to report until further price action clears up the near term picture.

Short term support is at the 2884 and 2858 pivots.  Resistance is at 2929 and 2957 pivots.  SPX is still holding within the same support and resistance levels as last week.

FOREIGN MARKETS

Asian markets (using AAXJ as a proxy) gained 0.33%.

European markets (using FEZ as a proxy) lost 1.48%.

The DJ World index lost 1.28%, and the NYSE lost 1.32%.

COMMODITIES

Bonds are in an uptrend and gained 1.04%

Crude oil is in a downtrend and gained 0.57%

Gold is in an uptrend and gained 1.00%

GBTC is in a downtrend and lost 11.35%.

The USD is in an uptrend and gained 0.70%.

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

 

Have a good week!

Posted in Updates | 79 Comments

Weekend Report

Weekend Report

Provided by the OEW Group

August 10 2019

SPX started out the week with a large gap down and continued lower till late afternoon, to make the low of the week at 2822, before a brief rally to finish Monday down at 2845.  Last week’s close was 2932.  Tuesday gapped down again and retested within a few points off the low in the first 20 minutes of trading, then made a strong rally for the rest of the day with only one small pullback along the way, to finish higher at 2884.  Thursday gapped higher and continued to rally straight up with no pullbacks to finish the day just off the high at 2938.   Friday opened lower and continued down to 2900 by noon, then reversed course and rallied back to close the week at 2919.  A consecutive week of volatility!

For the week, SPX/DOW lost 0.46%/0.034% while NDX/NAZ lost 0.60%/0.56%.

On the economic front, Crude Oil Inventories, Consumer Credit and MBA Mortgage Application Index increased, while ISM non-Manufacturing Index decreased.  JOLTS were little changed.

Next week economic news comes from the Treasury Budget, CPI, Core CPI and Import Prices.

LONG TERM: Uptrend

spxwkly

In the US, the long-term count remains unchanged with the Super Cycle SC2 low in March 2009.  The Primary wave I high occurred in May 2015 and Primary wave II low in February 2016.  Primary wave III has been underway ever since.  Major wave 1 high of Primary wave III occurred in October 2018 and Major wave 2 low in December 2018.  Intermediate wave i of Major 3 is now underway and is subdividing into Minor and Minute waves.  Despite the recent volatility and calls by some for the end of this bull market, we see no evidence yet to suggest these subdivisions are anything more than typical medium term downtrends in context of an overall bull market profile.  We will update the long term status, if/when anything develops to change this view.

MEDIUM TERM: Downtrend

spxdaily

SPX opened lower for the second week in a row and accelerated down, but seemed to find a near term bottom on Monday at 2822.  This gives 200+ points so far for this Minute wave ii downtrend that we believe has been underway since mid-July at the 3018 early top.  Although it’s exceeded the typical 5% decline mentioned last week, the 6.5% decline so far is still within the norm for this bull market.  SPX retested the low on Wednesday for an apparent double bottom, then rallied back above the 50% retracement zone, but ran into resistance there.  Consequently, we updated our medium term status to reflect a potential Minute wave ii bottom with the possibility of another retest before it’s complete.  A rally above 2950 or so will further confirm the Minute wave ii bottom.  If SPX breaks lower, then we will revaluate.

Some in our group pointed out a possible correlation of this downtrend with prior declines triggered by Tariff Man Tweets (TMT).  We’ve had three occurrences of these tariff threats since December and each time the market sold off in the 200+ point range.  We’ve annotated the medium term chart to show this effect.  The May selloff bottomed after a 200+ point decline.  The Dec selloff paused at 200+ points, but then continued lower after Fed autopilot comments (PAP on chart), which likely contributed to that extension.

SPX followed the DOW profile from last week and got extremely oversold at the low, the most so since Major wave 2 last December.  We will be watching the short term waves for direction of the pending rally.  Although we still expect Minor wave 3 to exceed the 3300 level, our medium target for Minute wave iii will be updated after it becomes clear that a new uptrend is underway.

Medium term, RSI is in the neutral zone and MACD is turning back up.  DOW generated a positive divergence off the low on Wednesday.

SHORT TERM

spxhourly

SPX gapped down and blew right through our support targets mentioned last week to reach beyond the 61.8% retrace level of Minute wave i, but was able to close above that level at 2845.  From there, SPX rallied to fill the gap and close the week back above the 38.2% retrace level at 2919.  We noticed a pattern developing this week based on our qualified small waves and short term tracking techniques, so we adjusted the count accordingly.  We continue to track the irregular Minute wave ii previously discussed, but have rescaled the count to reflect a double three pattern.  That gives an irregular zig-zag for Micro wave a, [3018]-2973-3028-2958, followed by Micro wave b single wave rally to 3014.  Micro wave c then suggests a potentially complete zig-zag pattern at the low [3014]-2914-2944-2822.  We can also make a case for an elongated flat into the higher low at 2826, but either one suggests a completed double three pattern from the Minute wave i top.  From there, we can count two waves up from the failed bottom, [2826]-2939-2900, with a potential third wave still developing.  There’s still a possibility of another retest of the low as shown with the optional ii/a label on the chart.  We’re waiting to see if this rally can impulse or is going to fade into another b-wave.

Short term support is at the 2884 and 2858 pivots.  Resistance is at 2929 and 2957 pivots.

FOREIGN MARKETS

Asian markets (using AAXJ as a proxy) lost 2.07%.

European markets (using FEZ as a proxy) lost 0.36%.

The DJ World index lost 0.90%, and the NYSE lost 0.71%.

COMMODITIES

Bonds are in an uptrend and gained 0.64%

Crude oil is in a downtrend and lost 2.08%

Gold is in an uptrend and gained 3.50%

GBTC is in a downtrend and gained 0.20%.

The USD is in an uptrend and lost 0.11%.

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

 

Have a good week!

 

 

Posted in Updates | 443 Comments

Weekend Report

Weekend Report

Provided by the OEW Group

August 3 2019

This week SPX stared off down by 14 points within the first hour, then rallied and traded in a narrow range to close Monday just 6 point off last week’s close of 3026.  Tuesday gapped down and declined to 3001, then rallied back to partially fill the gap, but closed down another 10 points to 3010.  Wednesday opened up slightly higher and traded in a narrow range until the Fed announcement to move fed funds lower by 25 basis points.  After the press conference began, the market sold off aggressively to a low of 2958 by 3pm, then rallied and bounced around to finish the day at 2981.  On Thursday, SPX rallied nearly all the way back by noon to pre-Fed levels around 3014, until Tariff Man intervened to announce new tariffs on China.  From there, the market rapidly sold off to end Thursday at 2950, followed by a gap down and further decline on Friday to reach the low of the week at 2914 before noon.  SPX then chopped higher and rallied up to 2944, before settling into the close to finish the week at 2932.  An exciting and volatile week!

For the week, SPX/DOW lost 3.10%/2.60% while NDX/NAZ lost 4.04%/3.92%.

On the economic front, Personal Income and Spending, PCE and Core PCE Price Index, and S&P Case-Shiller Index were all higher.

Next week economic news comes from ISM non-Manufacturing Index, JOLTS, MBA Mortgage Application Index, Crude Oil Inventories and Consumer Credit.

LONG TERM: Uptrend

spxwkly

In the US, the long-term count remains unchanged with the Super Cycle SC2 low in March 2009.  The Primary wave I high occurred in May 2015 and Primary wave II low in February 2016.  Primary wave III has been underway ever since.  Major wave 1 high of Primary wave III occurred in October 2018 and Major wave 2 low in December 2018.  Intermediate wave i of Major 3 is now underway and is subdividing into Minor waves.

MEDIUM TERM: Downtrend

spxdaily

This week opened down and continued to close down every single day, which generated the largest pullback since Minor wave 2.  The decline was sufficient to confirm a new downtrend.  As a result, our medium term status has been updated, which suggests Minute wave ii is subdividing with an irregular structure.  All four of our key US markets are now in confirmed downtrends, as well most international markets that we track.  We cautioned last week that DOW had not yet confirmed the third wave up, as it peeked in line with our SPX Minute wave i, which turned out to be a good indicator of the pending reversal (see chart below).

djiadaily

We anticipate that a typical decline for this downtrend would be in the 5% range, which suggests there may be more to go.  But 114 points down so far from the irregular top meets minimum requirements for Minute wave ii.   Notice DOW got extremely oversold at the low, the most so since Major wave 2 last December.  We will be watching the short term waves for signs of a bottom in the coming days.  Although we still expect Minor wave 3 to exceed the 3300 level, we will be updating our medium target for Minute wave iii after this downtrend completes.

Medium term, RSI is oversold at the low this week and MACD continues to roll over from a negative cross.

SHORT TERM

spxhourly

We updated our short term count to reflect the subdividing Minute wave ii as referenced in the previous section.  This suggests that a complex irregular structure is in play with Micro wave a = 2973, Micro wave b at 3028 and a subdividing Micro wave c in progress with a low of 2914 so far.  As noted last week, the key level of 2976 was broken which triggered the failure of our previous more bullish count.  Now we have Minute wave ii reach within just a point of our 2913 target mentioned in the last couple of reports.  This begs the question of a potential bottom close by and suggests the possibility of at least a meaningful bounce in the near term.  Next target for an extension lower would be the prior small wave at 2875, which is just below our next lower pivot range.

Short term support is at the 2929 and 2884 pivots.  Resistance is at the 2957 pivot and prior support at 2973-2976.  RSI ended the week neutral and has yet to generate a positive divergence off the lows.

FOREIGN MARKETS

Asian markets (using AAXJ as a proxy) lost 5.54%.

European markets (using FEZ as a proxy) lost 4.04%.

The DJ World index lost 3.07%, and the NYSE lost 2.99%.

COMMODITIES

Bonds are in an uptrend and gained 1.34%

Crude oil is in a downtrend and lost 0.96%

Gold is in an uptrend and gained 2.69%

GBTC is in a downtrend and gained 8.54%.

The USD is in an uptrend and gained 0.10%.

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

Sorry for it being late. Been a crazy week!

Have a good week!

Posted in Updates | 349 Comments

Weekend Report

Weekend Report

Provided by the OEW Group

July 27, 2019

This week opened higher, then quickly reversed to retest Friday’s close and make the low of the week at 2977 before noon on Monday.  From there, SPX rallied Monday afternoon, gapped up on Tuesday and continued to rally through Wednesday to reach another all-time high at 3020 by the close on Wednesday.  Thursday gapped down and declined to reach the low of the day at 2997 by early afternoon, then rallied and traded in a 10 point range to close the day at 3004.  Friday had another gap up and proceeded to test 3020 within the first hour of trading, then continued to extend the rally to a high of 3028, before closing the week at yet another all-time high of 3026.

For the week, SPX/DOW gained 1.65%/0.14% while NDX/NAZ gained 2.32%/2.12%.

On the economic front, New Home Sales and FHFA Housing Price Index were higher, while Existing Home Sales, Mortgage Applications, and Crude Oil Inventories were lower.

Next week economic news comes from Personal Income and Spending, PCE Price Index and S&P Case-Shiller Price Index.

LONG TERM: Uptrend

spxwkly

In the US, the long-term count remains unchanged with the Super Cycle SC2 low in March 2009.  The Primary wave I high occurred in May 2015 and Primary wave II low in February 2016.  Primary wave III has been underway ever since.  Major wave 1 high of Primary wave III occurred in October 2018 and Major wave 2 low in December 2018.  Intermediate wave i of Major 3 is now underway and is subdividing into Minor waves.

MEDIUM TERM: Uptrend

spxdaily

The strong rally this week to new highs was sufficient to qualify last week’s low as a completed wave, which suggests SPX is working on the third wave up of this uptrend.  As noted in last week’s report, the 45 point pullback is smaller than expected, which resulted in much discussion in the OEW group about how to count it.  Nevertheless, our guidelines suggest it meets the criteria for a medium term subdivision, so we’ve updated the count accordingly.  This suggests that we now have Minute waves i and ii complete, with Minute wave iii in progress.  Still a little caution is advised, since DOW is lagging and was unable to make new highs.  This rally needs to sustain through the next pivot or so to further confirm the third wave up.  A reversal and drop below the prior low would suggest something else is in play.  We will be watching the short term waves for any changes.  The first logical target for Minor wave 3 completion remains above the 3300 level.

Medium term, RSI continues to build negative divergence at the high this week and MACD remains in a bearish cross.

SHORT TERM

spxhourly

We updated the short term count to our alternate contracting diagonal structure mentioned last week, which gives Minute wave i complete at 3018.  We then have Minute wave ii as a slightly failed flat with Micro wave a = 2973, Micro wave b = 3006 and Micro wave c = 2976.   Minute wave iii has been underway since then with a 52 point rally so far, off a failed double bottom.  Minute wave ii never came close to either of the targets mentioned last week, 2963 or 2913, so risk of a potential failure remains.  Key level to watch for next pullback is 2976.  A drop below that suggests Minute wave ii may be subdividing instead.

Short term support is at the 2995 and 2984 pivots.  Resistance is at the 3033 pivot.  RSI ended the week overbought with a negative divergence.

FOREIGN MARKETS

Asian markets (using AAXJ as a proxy) lost 0.24%.

European markets (using FEZ as a proxy) gained 0.55%.

The DJ World index gained 0.73%, and the NYSE gained 0.94%.

COMMODITIES

Bonds are in an uptrend and lost 0.32%

Crude oil is in an uptrend and gained 0.79%

Gold is in an uptrend and lost 0.52%

GBTC is in an uptrend and lost 5.80%.

The USD is in an uptrend and gained 0.96%.

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

 

Have a good week!

Posted in Updates | 273 Comments

Weekend Report

Weekend Report

Provided by the OEW Group

July 20, 2019

This week opened with a gap up in SPX to 3018, which was the high of the week, but quickly reversed to fill the gap within the first 10 minutes, then proceeded to trade in a narrow range for the rest of the day to close Monday exactly where it left off last week at 3014.  SPX traded down both Tuesday and Wednesday to a low of 2985 by the close on Wednesday.  Thursday saw a gap down at the open, rally back to fill the gap, followed by another decline to make the low of the week at 2973 by noon.  From there, the market had a strong rally to end Thursday up 10 points on the day at 2995.   Friday had another gap up to a high 3006 within the first 10 minutes of trading, then proceeded to decline for the rest of the day to close the week just off the low at 2977.

For the week, SPX/DOW lost 1.23%/0.65% while NDX/NAZ lost 1.36%/1.18%.

On the economic front, Empire State Manufacturing and Retail Sales (including ex-Autos) were higher, while Import and Export Prices were both lower.

Next week economic news comes from FHFA Housing Price Index, Existing and New Home Sales, MBA Mortgage Applications and Crude Oil Inventories.

LONG TERM: Uptrend

spxwkly

In the US, the long-term count remains unchanged with the Super Cycle SC2 low in March 2009.  The Primary wave I high occurred in May 2015 and Primary wave II low in February 2016.  Primary wave III has been underway ever since.  Major wave 1 high of Primary wave III occurred in October 2018 and Major wave 2 low in December 2018.  Intermediate wave i of Major 3 is now underway and is subdividing into Minor waves.

MEDIUM TERM: Uptrend

spxdaily

SPX was able to briefly extend the rally this week to an intraday high of 3018, but could not hold it beyond Monday’s open and then proceeded to decline to a low of 2973 on Thursday.  Although the pullback so far is a modest 45 points, it was sufficient to signal the first subdivision of this uptrend.  As a result, we have updated our medium term count to show a completed Minute wave i of Minor wave 3.  Normally we would expect Minute wave ii to be a larger decline, so we are anticipating that this wave has more to go.  The notional size for this decline would be about 80-100 points, however this uptrend has been resistant to pullbacks, so Minute wave ii could end at any time.  We will be watching the short term waves for possible Minute wave ii extensions.  The first logical target for Minor wave 3 completion remains at the 3300 level.

Medium term, the RSI set up a multiple negative divergence at the high and the MACD exhibited the first bearish cross of this uptrend.

SHORT TERM

spxhourly

Using our short term techniques, we continue to count Minute wave i as five Micro waves up from the Minor wave 2 low [2729]> 2911> 2875> 2964> 2913> 2996.  This suggests Minute wave ii has been underway ever since and is subdividing into a complex irregular three pattern with Micro wave a = 2963, Micro wave b = 3018, and Micro wave c ongoing with possible subdivision.  We labelled the first Micro wave c subdivision as small “a” wave down at 2973 and waiting now on further price action.  Although the irregular b wave rally exceeded our target of 3016 mentioned last week, it was too small and too brief to invalidate that pattern.   Our alternate count suggests Minute wave i ended at 3018 as a contracting diagonal triangle.  Either way, we believe the inflection point has been resolved and Minute wave ii is in progress with further downside likely.  Logical target for completion of Minute wave ii would be the prior Micro wave 4 low at 2913, however there’s still support nearby at the Micro wave a low of 2963.

Short term support is at the 2957 and 2929 pivots.  Resistance is at 2984 and 2995 pivots.  Short term RSI ended the week oversold.

FOREIGN MARKETS

Asian markets (using AAXJ as a proxy) gained 0.42%.

European markets (using FEZ as a proxy) lost 1.04%.

The DJ World index lost 0.71%, and the NYSE lost 0.93%.

COMMODITIES

Bonds are in an uptrend and gained 0.45%

Crude oil is in an uptrend and lost 7.39%

Gold is in an uptrend and gained 1.03%

GBTC is in an uptrend and lost 9.88%.

The USD is in a downtrend and gained 0.41%.

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

 

Have a good week!

 

Posted in Updates | 105 Comments

Weekend Report

Weekend Report

Provided by the OEW Group

July 13, 2019

This week started off with gaps down both Monday and Tuesday, which hit the low of the week at SPX 2963 within the first hour of trading Tuesday morning.  SPX closed last week at 2991.  From there, the market rallied for the rest of the week, seeming fueled by Fed Chairman Powell’s testimony of a “very likely” rate cut next month.  Wednesday began with a gap up and rally to 3003 within the first hour, then pulled back and traded in a range the rest of the day to close at 2993.  Thursday had another small gap up to 3002, then traded in a range and closed at an all-time high of 3000.  Friday had another small gap up and then proceeded to rally all day to close on the high of the week at 3014.

For the week, SPX/DOW gained 0.78%/1.52% while NDX/NAZ gained 1.30%/1.01%.

On the economic front, Consumer Credit increased.  The NFIB Small Business Optimism Index, JOLTS and MBA Mortgage Application Index all declined, while Wholesale Inventories increased.

Next week economic news comes from Empire State Manufacturing, Retail Sales, Import Prices and Export Prices.

LONG TERM: Uptrend

spxwkly

In the US, the long-term count remains unchanged with the Super Cycle SC2 low in March 2009.  The Primary wave I high occurred in May 2015 and Primary wave II low in February 2016.  Primary wave III has been underway ever since.  Major wave 1 high of Primary wave III occurred in October 2018 and Major wave 2 low in December 2018.  Intermediate wave i of Major 3 is now underway and is subdividing into Minor waves.

MEDIUM TERM: Uptrend

spxdaily

Not much has changed this week as the uptrend continues to extend reaching all-time highs now at 3014.  The small pullback early in the week was insufficient to trigger any medium term subdivision, so we continue to count this rally as Minute wave i of Minor wave 3, which has been in progress since the Minor wave 2 low at 2729 on June 3rd.  This wave has now achieved 285 points in 28 trading days and has become the longest such rally of our Primary wave III bull market since the exponential rise from Dec 2017 to the Intermediate wave iii top in January 2018. We’re still cautious that a more significant pullback could occur at any time, but the market keeps pushing through our short term targets and pivots.  The first logical target for Minor wave 3 completion remains at 3300.

SHORT TERM

spxhourly

Using our short term tracking, we can now count seven waves up from the Minor wave 2 low [2729]> 2911> 2875> 2964> 2913> 2996> 2963> 3014, which sets a short term inflection point.  The 33 point pullback to Tuesday’s low at 2963 completed the impulsive pattern of five Micro waves as previously reported.  However, the subsequent rally beyond our 3002 target to new highs created an ambiguity.  We can’t yet rule out the possibility of an irregular Minute wave i top.  After much discussion within the OEW group, we decided to track the irregular scenario till the market dictates otherwise.  This suggests Micro wave 5 completed at 2996 and Minute wave ii is subdividing into three waves, Micro wave a = 2963, Micro wave b = 3014 so far, with Micro wave c to follow.  Above 3016, Micro wave b would be greater than 1.618x Micro wave a, which exceeds our limit for this count and suggests something else may be in play.  We have a couple of alternative counts under consideration and will report on those when the time comes.  Friday’s close got within 2 points of our limit, while sitting at another short term divergence at the high.

Short term support is at the 2995 and 2984 pivots.  Resistance is at the 3033 pivot.  Short and medium term RSI both have negative divergences.

FOREIGN MARKETS

Asian markets (using AAXJ as a proxy) lost 0.72%.

European markets (using FEZ as a proxy) lost 0.60%.

The DJ World index gained 0.16%, and the NYSE gained 0.18%.

COMMODITIES

Bonds are in an uptrend and lost 0.34%

Crude oil is in an uptrend and gained 4.69%

Gold is in an uptrend and gained 0.86%

GBTC is in an uptrend and gained 2.45%.

The USD is in a downtrend and lost 0.48%.

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

 

Have a good week!

 

Posted in Updates | 143 Comments

Weekend Report

Weekend Update

Provided by the OEW Group

July 06, 2019

This holiday shortened week opened with a large gap up to SPX 2971 on Monday, hit 2978 within the first hour then began to sell off.  After lunch the SPX had dropped to 2952 but that was to become the low for the week.  On Tuesday 2970 became resistance early on producing a pullback to 2956 but from there the SPX moved on up and hit 2996 at the early close on Wednesday.  With Thursday being a holiday, Happy 4th to all, Friday saw a gap down to open at 2984 and continued to sell off into 2968.  A rally then started into 2994 before a 2990 close.

For the week, SPX/DOW gained 1.65%/1.21% while NDX/NAZ gained 2.22%/1.94%.

The economic news had positive reports for ISM Manufacturing PMI and Non Farm Payrolls, while ADP Non-Farm Employment Change, ISM Non-Manufacturing PMI were all negative.

Next week economic news comes from Core CPI, Core PPI, FED Minutes and the FED Monetary Policy Report.

LONG TERM: Uptrend

spxwkly

In the US, the long-term count remains unchanged with the Super Cycle SC2 low in March 2009.  The Primary I high occurred in May 2015 and Primary II low in February 2016.  Major wave 1 high occurred in October 2018 and Major wave 2 low in December 2018.  Intermediate wave i of Major 3 is now underway and is subdividing into Minor waves.

MEDIUM TERM: Uptrend

spxdaily

This week started off with a large gap up at the open on Monday and proceeded to rally to a new all-time high of 2996 by the holiday shortened close on Wednesday.  Nice way to celebrate the 4th of July and honor our beloved maestro’s birthday, we miss you Tony!   There was no change to that status post-holiday, as Friday gapped down at the open, but recovered to fill most of the gap and finish just 6 points off the high by the end of the week.  The NAZ and NDX joined the party and confirmed new uptrends, which now puts all our market in alignment.  This extends the Minor wave 3 rally to 267 points from the Minor wave 2 low at 2729.  It’s been a persistent rally, 22 days without a medium term subdivision, which is right up there equal to the longest such duration since the Major wave 2 low last December.  This suggests some caution is advised, since a significant pullback could come at any time.  First logical target for Minor wave 3 completion remains at the 3300 level.

SHORT TERM

spxhourly

Using our short term tracking, we can now count five waves up from the Minor wave 2 low [2729]>2911>2875>2964>2913>2996, which sets up a nice impulsive structure for the beginning of Minor 3.  We continue to track this as a potential Minute wave i of Minor wave 3, that’s subdividing into five Micro waves.  Micro wave 5 has been underway since last week’s low at 2913 and is either at or near completion at the high this week of 2996.  The upper limit for this count remains at 3002, since Micro wave 3 can’t be the smallest wave for this structure.  The market ran into resistance at our next pivot and setup a slight negative RSI divergence at Wednesday’s high.  Risk is now elevated for a sizable decline in the near term.  However, extension beyond 3002 suggests our alternate count may be in play, which is a more bullish Nano wave subdivision.  Once Minute wave i completes, we would expect the largest pullback since the trend began.

Short term support is at the 2984 and 2957 pivots.  Resistance is at the 2995 and 3032 pivots.  Short term and medium term RSI both have negative divergences.

FOREIGN MARKETS

Asian markets (using AAXJ as a proxy) gained 0.13%.

European markets (using FEZ as a proxy) gained 0.55%.

The DJ World index gained 1.21%, and the NYSE gained 1.24%.

COMMODITIES

Bonds are in an uptrend and gained 0.23%

Crude oil is in a downtrend and lost 1.46%

Gold is in an uptrend and lost 1.46%

GBTC is in an uptrend and lost 3.04%.

The USD is in a downtrend and gained 1.28%.

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

 

Have a good week!

Posted in Updates | 169 Comments