Weekend update

REVIEW

The market started the week at SPX 2500, and didn’t stray too much from that level all week. On Monday the market opened higher, hit a new high in the opening minutes at SPX 2508. Then after only an 8-point pullback, eked out a SPX 2509 print on Wednesday. After the Wednesday FOMC statement/conference, the market pulled back to SPX 2497 then rallied back to 2509 near the close. Then the market pulled back to SPX 2497 again by Friday’s open, then ended the week at 2502. For the week the SPX/DOW gained 0.25%, and the NDX/NAZ lost 0.60%. Economic reports for the week were mostly positive. On the downtick: the NAHB, housing starts, and existing home sales. On the uptick: building permits, import prices, the Philly FED, leading indicators and weekly jobless claims declined. Next week will be highlighted by Q2 GDP, personal income/spending, and the Chicago PMI.

LONG TERM: uptrend

We continue to monitor the DOW and TRAN for potential headwinds to the bull market scenario. As you can observe from the DOW chart, it shows no signs of weakening as it is still in Minor 5 of Int. wave iii. Like the SPX, it still requires an Int. iii top, an Int. iv correction, then new highs during Int. v to potentially end the bull market.

The Transport continue to improve after ending a downtrend low at 9010 in August. The current uptrend is closing in on the all-time high at 9764. Should that high be exceeded, then Major wave 5, from the Major 4 8744 low, is subdividing an extending. This would provide an all clear in 2018.

As noted above, the SPX and DOW are on the same waves count. Intermediate waves i and ii ended in the spring of 2016. Minor waves 1, 2, 3, and 4 have completed, with Minor 5 underway. When it concludes Int. iii will end. Then after an Int. iv correction, Int. v will take the SPX to new highs.

MEDIUM TERM: uptrend

This lengthy Minor 5 uptrend, from the Minor 4 low at SPX 2429 in April, has been quite complex. At times it has looked corrective, but continues to unfold impulsively. Minor 5 is dividing into five Minute waves (i-v). And the rising Minute waves (i, iii, v) are subdividing into five Micro waves (orange).

Minute i ended in June, after 5 Micro waves up, at SPX 2454. Minute ii corrected into July and bottomed at SPX 2408. Since then Minute iii has been underway. Thus far, Micro waves 1 and 2, of Minute iii, have completed at SPX 2491 and 2417 respectively. Micro 3 has been underway since that August low. We would expect the market to at least reach the 2525 pivot before Micro 3 ends. Medium term support is at the 2479 and 2456 pivots, with resistance at the 2525 pivot.

SHORT TERM

The hourly chart provides a closer look at this Minor 5 uptrend. In fact, one could see the similarities between Micro waves 1, 2, and 3 of Minute i, and Micro waves 1, 2, and 3 of the current Minute iii. And yes, we are expecting a relatively small Micro 4 when the current Micro 3 ends.

The short term wave structure from the Micro 2 SPX 2417 low remains unchanged: (1) 2455, (2) 2428, (3) 2480-2447-2509. Micro 3 clearly has some more work to do to the upside, with a couple of pullbacks along the way. Then after a Micro 4 pullback, Micro 5 should only end Minute iii of Minor 5. Then after Minute iv pullback, Minute v should take the SPX into, after recent calculations, the 2650 area. Best to your trading!

FOREIGN MARKETS

Asian markets were mixed on the week and gained 0.1%.

European markets were mostly higher and gained 0.7%.

The DJ World index gained 0.2%, while the NYSE gained 0.6%.

COMMODITIES

Bonds nearly confirmed a downtrend while losing 0.6% on the week.

Crude remains in an uptrend and gained 1.5%.

Gold looks to be in a downtrend and lost 2.1%.

The USD remains in a downtrend but gained 0.4%.

NEXT WEEK

Tuesday: Case-Shiller, consumer confidence, and new home sales. Wednesday: durable goods and pending home sales. Thursday: Q2 GDP (Est. 3.2%) and jobless claims. Friday: personal income/spending, the Chicago PMI and consumer sentiment.

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

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Friday update

SHORT TERM: lower open then rebound, DOW -10

Overnight the Asian markets lost 0.9%. Europe opened lower but gained 0.3%. US index futures were lower overnight, and the market opened 4-points below yesterday’s SPX 2501 close. Right after the open the market rebounded to SPX 2501 by 10:30. Then the market retested the low at SPX 2497 by 1:30. After that the market rallied to SPX 2503 in the closing minutes, and ended the week at 2502.

For the day the SPX/DOW were mixed, and the NDX/NAZ were mixed. Bonds rose 5 ticks, Crude added 10 cents, Gold bounced $6, and the USD was lower. Medium term support remains at the 2479 and 2456 pivots, with resistance at the 2525 pivot. This week the Q3 GDP estimate remained at 2.2%.

The market opened at the low today, bounced, then remained in the opening range for most of the day. For the week the entire trading range was 12 points. This follows the last four days of last week, which had a trading range of 10 points. This market is going nowhere fast. Obviously, no change on the short term count. Fortunately we have plenty to write about in the weekend update. Best to your weekend!

MEDIUM TERM: uptrend

LONG TERM: uptrend

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

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Thursday update

SHORT TERM: another narrow range inside day, DOW -53

Overnight the Asian markets ended mixed. Europe opened higher and gained 0.3%. US index futures were lower overnight, and at 8:30 jobless claims were reported lower, plus the Philly FED was higher. The market opened one-point below yesterday’s SPX 2508 close, then began to pullback. At 10am leading indicators were reported higher. Then at 10:30 the SPX hit the low of the day at 2499. After that the market went into the drift up mode. By 12:30 the SPX hit 2506, then pulled back to 2501 to end the day.

For the day the SPX/DOW lost 0.25%, and the NDX/NAZ lost 0.60%. Bonds lost 2 ticks, Crude was flat, Gold lost $9, and the USD was lower. Medium term support remains at the 2479 and 2456 pivots, with resistance at the 2525 pivot.

The market opened two-points bel0w yesterday’s SPX 2509 high, pulled back to within two-points above yesterday’s SPX 2497 low, then traded in a seven-point trading range for the rest of the day. Exciting, right? A short term negative divergence has been in place since Monday at SPX 2508. And despite a couple of pullbacks the market has still not reached oversold. Not much action today, and no change in the count. Short term support remains at the 2479 and 2456 pivots, with resistance at the 2525 pivot. Short term momentum ended the day near oversold. Best to your trading!

MEDIUM TERM: uptrend

LONG TERM: uptrend

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

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Wednesday update

SHORT TERM: ATH then FOMC volatility, DOW +42

Overnight the Asian markets gained 0.1%. Europe opened lower and ended mixed. US index futures were flat overnight, and the market opened at a new high: SPX 2509. Right after the open the market started to drift lower. At 10am existing home sales were reported lower. At 11am the SPX hit 2504, and started to rebound. By 12:30 the SPX had hit the 2509 level again, then drifted lower heading into the FOMC statement and conference. At 2pm the FED released thee following two statements: https://www.federalreserve.gov/newsevents/pressreleases/monetary20170920a.htm, and https://www.federalreserve.gov/newsevents/pressreleases/monetary20170920b.htm. The market initially bounced around in a narrow range, then dropped to SPX 2497 by 2:30. After FED chair Yellen began to speak the market rallied. Heading into the close the SPX hit 2509 again, then closed at 2508.

For the day the SPX/DOW gained 0.10%, and the NDX/NAZ lost 0.20%. Bonds dropped 10 ticks, Crude rallied 80 cents, Gold fell $10, and the USD was higher. Medium term support remains at the 2479 and 2456 pivots, with resistance at the 2525 pivot. Tomorrow: jobless claims and the Philly FED at 8:30, then leading indicators at 10am.

The market opened at another ATH today, bounced around a bit, then after the FOMC statement was released the market had its largest pullback in two weeks: 12 points. Despite the pullback being the largest in two weeks it did not register quantitatively on our short term count. The short-term count from SPX 2417 remains unchanged: (1) 2455, (2) 2428, (3) 2480-2447-2509. Short term support remains at the 2479 and 2456 pivots, with resistance at the 2525 pivots. Short term momentum nearly hit oversold during the pullback then ended the day above neutral. Best to your trading!

MEDIUM TERM: uptrend

LONG TERM: uptrend

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

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Tuesday update

SHORT TERM: consolidation day, DOW +39

Overnight the Asian markets gained 0.5%. Europe opened higher and gained 0.1%. US index futures were higher overnight. At 8:30 housing starts were reported lower and building permits were reported higher. The market opened at SPX 2507, 3-points above yesterday close, and then started to pullback. By 11am the SPX had only reached 2503, then turned around and hit yesterday’s ATH at SPX 2508 by noon. After that the market went into a 2-point range into the close, ending the day at SPX 2507.

For the day the SPX/DOW gained 0.15%, and the NDX/NAZ gained 0.15%. Bonds lost 4 ticks, Crude dropped 35 cents, Gold added $2, and the USD was lower. Medium term support remains at the 2479 and 2456 pivots, with resistance at the 2525 pivot. Tomorrow: existing home sales at 10am, then the FOMC statement and press conference at 2pm and later.

The market opened slightly higher today, then spent the entire day in a 5-point trading range. No new highs, just a retest of yesterday’s ATH. No change in the count either. See yesterday’s update for that. Two days into the week and all the market has done is maintain an 8-point trading range. The last four days of last week it traded in a 10-point trading range for the entire time. Short term support is at the 2479 and 2456 pivots, with resistance at the 2525 pivot. Short term momentum ended the day just below overbought. Best to your trading FOMC day!

MEDIUM TERM: uptrend

LONG TERM: uptrend

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

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Monday update

SHORT TERM: all-time new high then pullback, DOW +63

Overnight the Asian markets gained 0.8%. Europe opened higher and gained 0.4%. US index futures were higher overnight, and the market opened at a new high: SPX 2504. In the opening minutes the SPX hit 2508, and then started to drift lower. At 10am the NAHB was reported lower: 64 v 67. The market continued lower until it hit Friday’s SPX 2500 close around 2:30. Then it bounced into a SPX 2504 close.

For the day the SPX/DOW gained 0.20%, and the NDX/NAZ ended mixed. Bonds lost 7 ticks, Crude slipped 10 cents, Gold dropped $12, and the USD was higher. Medium term support remains at the 2479 and 2456 pivots, with resistance at the 2525 pivot. Tomorrow: housing starts, building permits and export/import prices all at 8:30.

The market opened at an all-time high today, rallied to SPX 2508, then drifted lower into the afternoon. At the high the hourly RSI set up a negative divergence. Let’s see if this pullback gathers some momentum overnight/tomorrow. The short-term count from SPX 2417 remains unchanged: (1) 2455, (2) 2428, (3) 2480-2447-2508. Plenty of room for a decent pullback here without overlapping any waves. Short term support is at the 2479 and 2456 pivots, with resistance at the 2525 pivot. Short term momentum displays a negative divergence. Best to your Tuesday 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 2461. After a gap up opening on Monday the market rallied to an ATH on Tuesday. After that it did something quite odd. For three days, which included a Thursday/Friday options expiration. The SPX traded in a 9-point trading range, ending the week at the ATH SPX 2500. For the week the SPX/DOW gained 1.90%, and the NDX/NAZ gained 1.35%. Economic reports for the week were on the negative side. On the downtick: retail sales, the NY FED, industrial production, capacity utilization, consumer sentiment, the Q3 GDP estimate, plus the budget deficit increased. On the uptick: the CPI/PPI, business inventories, plus weekly jobless claims declined. Next week is FOMC week and mostly housing reports. Best to your week!

LONG TERM: uptrend

Continuing with our monitoring of potential long-term headwinds. This week the market resolved its multi-week inflection point to the upside, as the SPX broke out to new highs on Tuesday.

The bullish DOW continued to extend its Minor wave 5, as it made new ATHs as well. Very little chance of a bear market any time soon, as long as the DOW remains in the middle of its 5/9 wave bull market. One side note. The XLE sector confirmed an uptrend this week after a nasty 8-month downtrend (Dec.-Aug.). It is possible the cyclicals will assume leadership for a while.

The Transports also turned in a positive performance, gaining 1.7% on the week and confirming an uptrend. With the recent downtrend ending much above the 8744 level, this suggests the possibility of an extending Major wave 5. This type of event would extend the general bull market in time. New highs, above 9764, would suggest an extension is underway. Note the updated labeling on the chart.

The SPX chart looks quite similar to the DOW chart now. With Intermediate waves i and ii completed in the spring of 2016. Then five Minor waves, with Minor 5 still underway, creating Int. wave iii. When this uptrend does end, it will end Int. iii, then an Int. iv correction, similar to Int. ii, would be underway. After that an Int. v uptrend, or subdividing wave, will take the market to higher ATHs. Should the TRAN enter an extension to its bull market, the SPX will probably do so as well.

MEDIUM TERM: uptrend

With the breakout to new highs this week we updated the SPX daily chart to reflect the more positive count that was posted on the SPX hourly chart. From the Minor wave 4 low at SPX 2329 in April, we are tracking/labeling a subdividing Minor wave 5. Minute wave i completed at SPX 2454 with five Micro waves (orange). Then a Minute ii decline ended at SPX 2406/2408 in July. Minute iii of Minor 5 has been underway since then.

Thus far Minute iii looks like a bigger version of Minute i. Strong rally for Micro 1, big decline for Micro 2, then Micro 3 starts working its way higher. During Minute i, Micro 3 was longer than Micro 1 (93 v 77). With Micro 1, of Minute iii, 86-points, this suggests Micro 3 should hit the 2525 pivot range before any significant Micro 4 pullback occurs. Medium term support is at the 2479 and 2456 pivots, with resistance at the 2525 pivot.

SHORT TERM

Micro wave 3, which we think will reach the 2525 pivot range before a Micro 4 pullback, continues to work its way higher. The count we have been tracking for the sub-waves of Micro 3 remains unchanged: (1) 2455, (2) 2428, (3) 2480-2447-2500 so far. At Friday’s close the third wave of (3) is now longer than the first (53 v 52), setting up for a potential 10+ point pullback to occur at any time.

Short term support is at the 2479 and 2456 pivots, with resistance at the 2525 pivot. Short term momentum ended the week slightly overbought. Best to your trading!

FOREIGN MARKETS

Asian markets were mostly higher for a net gained of 0.8%.

European markets were also mostly higher and gained 0.9%.

The DJ World index gained 1.1%, and the NYSE gained 1.6%.

COMMODITIES

Bonds looks like they have rolled over into a downtrend losing 1.9% on the week.

Crude is uptrending again, gaining 5.1% on the week.

Gold is still in an uptrend but lost 1.9%.

The USD remains in a prolonged downtrend but gained 0.4%.

NEXT WEEK

Monday: the NAHB at 10am. Tuesday: housing starts, building permits and import prices. Wednesday: existing home sales, and the FOMC concludes with a speech from the FED chair. Thursday: jobless claims, the Philly FED and leading indicators.

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

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