Monday update

SHORT TERM: gap up opening and rally, DOW +90

Overnight the Asian markets gained 0.5%. Europe opened lower but finished mixed. US index futures were higher overnight and the market gapped up to SPX 2389 at the open. The SPX had closed at 2382 on Friday. The market continued to rise until it hit SPX 2392 around 10am. Then after a pullback to SPX 2387 by 11am it headed even higher. Heading into the close the SPX hit 2395, then closed at 2394.

For the day the SPX/DOW gained 0.45%, and the NDX/NAZ gained 0.85%. Bonds lost 1 tick, Crude rose 35 cents, Gold added $5, and the USD was lower. Medium term support rises to the 2385 and 2336 pivots, with resistance at the 2411 and 2428 pivots. Tomorrow: new home sales at 10am.

The market gapped up at the open today for the second day in a row. The market opened at Friday’s SPX 2389 high and continued to rally. We now have a wave up from SPX 2353 to 2395 with several insignificant pullbacks along the way. Unlike Friday, however, the NAZ/NDX led today’s advance, and is now a bit over 0.50% from its all-time high. The DOW is still over 1.0% below its all-time high. As noted in the weekend update, we prefer the DOW leading at this stage of the uptrend and wave structure. Short term support is at the 2385 pivot and SPX 2353, with resistance at the 2411 and 2428 pivots. Short term momentum displayed a negative divergence all day, but no notable pullback occurred. Best to your trading!

MEDIUM TERM: uptrend

LONG TERM: uptrend

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

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weekend update

REVIEW

The market started the week at SPX 2391. The market rose on Monday, hit an all-time high on Tuesday at SPX 2406, then started to pullback. On Wednesday the market had a gap down opening, hit SPX 2353 on Thursday, then rallied to end the week at 2382. For the week the SPX/DOW lost 0.40%, and the NDX/NAZ lost 0.60%. Economic reports were mostly positive. On the downtick: the NY FED, housing starts, building permits, and the WLEI. On the uptick: the Philly FED, the NAHB, industrial production, capacity utilization, leading indicators, the Q2 GDP estimate, plus weekly jobless claims declined. Next week’s reports will be highlighted by: Q1 GDP, durable goods, FOMC minutes, and housing.

LONG TERM: uptrend

It’s a bull market. For the past several months, however, the SPX 2400 level has offered stiff resistance. Maybe it is the high multiple valuations. Maybe it is the failure to get any of the promised economic policies passed. Maybe it is the FED raising rates and suggesting they are ready to start winding down their balance sheet. Maybe it is a combination of all three, and others. Whatever the reason the SPX has managed to add only 5 points to the 2401 all-time high since March 1st.

The long-term count remains unchanged. Intermediate waves i and ii ended in the spring of 2016. Minor waves 1 and 2, of Int. iii, ended in the fall of 2016. Minor waves 3 and 4, of Int. iii, ended in the spring of 2017. And Minor wave 5 is currently underway, or has topped recently at SPX 2406. The key to that decision point depends on the performance of the DOW and NAZ in the coming days/weeks.

MEDIUM TERM: uptrend

The Minor wave 5 uptrend began with a Minor wave 4 failed flat in April: wave a 2322 and wave c 2329. From that low the market has rallied in five waves, confirmed by two different timeframes, to SPX 2406. While the uptrend is not even 100 points, there is some concern that it may have ended as another weak fifth wave. Especially after the recent mid-week 50+ point decline. We have labeled the SPX 2406 high as either the end of Minor 5 or only the end of Minute i of Minor 5, (see hourly chart).

The key to this determination appears to be the NAZ and the DOW. The NAZ is currently in Minor wave 5 of Int. iii as well. It should make new highs in the coming days/weeks. The rally in this sector should keep the general market rising at least until that is accomplished. The DOW, also in Minor 5, has been quite weak and has yet to exceed its March 1st high. This suggests it may have only completed Minute waves i and ii of its Minor 5, similar to the potential SPX count. In order to keep the uptrend going the DOW has to start to outperform on a relative basis, and carry the SPX with it, while the NDX/NAZ are rising. Failure to do so suggests only a marginal new high in the NDX/NAZ to complete their uptrend. Then all four indices would enter an Intermediate wave iv downtrend. Suggest keeping an eye on the DOW and the NAZ (high 6170) next week. Medium term support is at the 2336 and 2321 pivots, with resistance at the 2385 and 2411 pivots.

SHORT TERM

With the five waves up completed at SPX 2406 this week, the market declined about 61.8% of that advance to SPX 2353 on Thursday. Then the market started to rebound. If the five waves up and subsequent decline were only Minute waves i and ii of Minor 5, then the DOW should start rallying/outperforming on its way to new highs. If it doesn’t, SPX 2406 could be the high of Minor 5/Intermediate iii, leading to a 5% to 6% decline for Intermediate wave iv downtrend that follows.

If the market does rollover into a downtrend. Then support for the SPX should appear around the OEW 2270 pivot, and around 5800 in the NAZ. Daily and weekly RSI/MACD indicators are displaying negative divergences at the recent highs, supporting the potential upcoming downtrend scenario. Short term support is at SPX 2353 and the 2336 pivot, with resistance at the 2385 and 2411 pivots. Short term momentum ended the week declining from overbought. Best to your trading!

FOREIGN MARKETS

Asian markets were mixed and lost 0.6%.

European markets were mostly lower and lost 0.6%.

The DJ World index gained 0.1%, and the NYSE was flat.

COMMODITIES

Bonds are trying to uptrend and gained 0.6%.

Crude is trying to uptrend and gained 5.9%.

Gold is also trying to uptrend and gained 2.1%.

The USD remains in a downtrend and lost 1.4%.

NEXT WEEK

Tuesday: new home sales. Wednesday: existing home sales, the FHFA index and the FOMC minutes. Thursday: weekly jobless claims. Friday: Q1 GDP, durable goods and consumer sentiment.

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

Posted in weekend update | Tagged , , , | 169 Comments

Friday update

SHORT TERM: higher open and rally, DOW +142

Overnight the Asian markets gained 0.1%. Europe opened higher and gained 0.5%. US index futures were higher overnight, and the market gapped up to SPX 2373 at the open on this options expiration Friday. After the open the market continued to rally. At noon FED: https://www.federalreserve.gov/newsevents/pressreleases/other20170519a.htm. At 2:30 the SPX hit 2389, and then began to pullback. Around 3:30 the SPX hit 2380, then bounced to end the week at 2382.

For the day the SPX/DOW gained 0.65%, and the NDX/NAZ gained 0.45%. Bonds were flat, Crude rose $1.05, Gold added $6, and the USD was lower. Medium term support remains at the 2336 and 2321 pivots, with resistance at the 2385 and 2411 pivots. Today the WLEI was reported lower: 55.0% v 55.1%.

The market gapped up at the open today, then rallied into the 2385 pivot range before pulling back some into the close. Thus far the market has rallied 36-points from Thursday’s SPX 2353 low, then ran into resistance at the 2385 pivot. The SPX/DOW outperformed the NDX/NAZ, which is a positive sign for a continuation of the uptrend. More on this in the weekend update. Enjoy the weekend!

MEDIUM TERM: uptrend

LONG TERM: uptrend

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

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Thursday update

SHORT TERM: lower open then rally, DOW +56

Overnight the Asian markets lost 1.0%. Europe opened lower and lost 0.6%. US index futures bounced around overnight. At 8:30 weekly jobless claims were reported lower: 232k v 236k, and the Philly FED was reported higher: 38.8 v 22.0. The market opened 4 points below yesterday’s SPX 2357 close, and then started to rally. At 10am leading indicators were reported higher: 0.3% v 0.4%. Around 10:30 the SPX hit 2369. Then the market pulled back to nearly unchanged by noon. Another rally followed, this time to SPX 2376 by 2:30, then the market pulled back to close at 2366.

For the day the SPX/DOW gained 0.30%, and the NDX/NAZ gained 0.75%. Bonds lost 4 ticks, Crude rose 20 cents, Gold dropped $10, and the USD was higher. Medium term support remains at the 2336 and 2321 pivots, with resistance at the 2385 and 2411 pivots. Tomorrow is options expiration.

The market opened at SPX 2353, then immediately rallied 16 points in one hour to 2369. After a pullback to SPX 2360 by 1:30, the market rallied 16 points again in one hour to 2376. A three-wave counter rally, or is the market stabilizing to resume the uptrend. Taking the extreme low of the recent downtrend (SPX 2322), the market has already retraced about 61.8% of the advance to SPX 2406 at today’s SPX 2353 low. A drop below today’s low would be a negative, and a loss of the 2336 pivot range would likely confirm a downtrend. A rally above today’s high would be a positive, and clearing the 2385 pivot range would likely resume the uptrend. Today’s SPX 2353-2376 looks like a key range day. Short term support is at SPX 2353 and the 2336 pivot, with resistance at SPX 2376 and the 2385 pivot. Short term momentum rose off of yesterday’s positive divergence to just past neutral. Trade what’s in front of you!

MEDIUM TERM: uptrend

LONG TERM: uptrend

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

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Wednesday update

SHORT TERM: gap down opening selloff, DOW -373

Overnight the Asian markets lost 0.2%. Europe opened lower and lost 1.1%. And there was another round of DC drama. US index futures were lower overnight, and the market gapped down 20 points at the open to SPX 2381. The market had closed at SPX 2401 yesterday. Around 11am the SPX hit 2368, bounced to 2376 by noon, then headed even lower. At 2:30 the SPX hit 2360, bounced to 2368 by 3:30, dropped to 2356 in the last few minutes, and closed at 2357.

For the day the SPX/DOW lost 1.80%, and the NDX/NAZ lost 2.55%. Bonds gained 28 ticks, Crude rose 30 cents, Gold rallied $21, and the USD was lower. Medium term support drops to the 2336 and 2321 pivots, with resistance at the 2385 and 2411 pivots. Tomorrow: weekly jobless claims and the Philly FED at 8:30, then leading indicators at 10am.

The market gapped down at the open for the first time since last Thursday. In fact the market has had one gap down opening each of the prior three weeks, without any gap up openings. Today’s decline opened below the previous 4th wave at SPX 2382, confirming the five waves up from SPX 2329 was a completed pattern. During the day we updated the SPX chart to display a tentative green Minor 5/Minute i. Should the market continue to decline to SPX 2329, then the Minor 5 is the correct label. Should it not and resume the uptrend, then the Minute i label is the correct label. After five waves up the market was due for a pullback of some degree. What degree it was we could find out during options expiration: Thursday/Friday. Short term support is at the 2336 and 2321 pivots, with resistance at the 2385 and 2411 pivots. Short term momentum hit extremely oversold this morning and ended the day with a positive divergence. Trade what’s in front of you!

MEDIUM TERM: uptrend

LONG TERM: uptrend

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

Posted in Updates | Tagged , , , | 146 Comments

Tuesday update

SHORT TERM: new high open then pullback, DOW -2

Overnight the Asian markets gained 0.3%. Europe opened higher and gained 0.2%. US index futures were higher overnight. At 8:30 housing starts were reported lower: 1172k v 1203k, and building permits were reported lower: 1229k v 1260k. Then at 9:15 industrial production was reported higher: 1.0% v 0.4%, and capacity utilization was reported higher: 76.7% v 76.1%. The market opened at SPX 2406, four points above yesterday’s close, and at a new all-time high. Then it immediately started to pullback. At 10:30 the SPX hit 2396, bounced to 2403 by 12:30, hit 2398 by 2:30, then closed at 2401.

For the day the SPX/DOW lost 0.05%, and the NDX/NAZ gained 0.35%. Bonds gained 4 ticks, Crude slipped 25 cents, Gold rose $5, and the USD was lower. Medium term support remains at the 2385 and 2336 pivots, with resistance at the 2411 and 2428 pivots. Today the Q2 GDP estimated was raised to 4.1% v 3.6%.

The market opened at SPX 2406 today then immediately pulled back to 2396 in the first hour of trading. After that it went into a trading range for the rest of the day. Thus far the pullback is not quite significant enough to confirm a down wave on either of the two short term timeframes we track. A drop down to the low-2390’s would do it. We continue to maintain a five small wave count up from the SPX 2329 downtrend low. Should this pullback drop to SPX 2382 or lower, then the 2406 would be labeled either all of Minor 5 or Minute i of Minor 5. The OEW 2411 pivot is certainly offering some stiff resistance. SPX 2401 in early March, then after a downtrend, SPX 2404 and SPX 2406 recently. SPX 2361 still remains the uptrend/downtrend critical level. Clearing the 2411 pivot range would offer more upside to the uptrend. Tax reform hearings start Thursday, and Friday is options expiration. Short term support remains at the 2385 pivot and SPX 2361, with resistance at the 2411 and 2428 pivots. Short term momentum displayed a negative divergence at the open and momentum has dropped to below neutral. The Swarm is next. Best to your trading!

MEDIUM TERM: uptrend

LONG TERM: uptrend

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

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Swarm today at 5pm, and last week’s results

Participation improved in the Swarm last week, and the results continue to be above the average response. After 12 weeks the Swarm is 71% accurate in the weekly direction of the 6 sectors we track. Impressive!

Scoring Weekly scoring out of 6 Directional response* (12 points possible)
Swarm 4 8
Average individual score 2 5.38

If you have not previously participated and would like to, please follow the instructions in the second paragraph of this link: https://caldaro.wordpress.com/2017/02/05/swarm-intelligence/.

Please fill out this survey any time before entering the swarm on Tuesday at 5pm. Unanimous AI is offering a $25 Amazon Gift card to the most correct participant each week: https://www.research.net/r/C7XXDSP

Use this private link to enter the SPX UNU on Tuesday: https://go.unu.ai/unums/2382.

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