weekend update

REVIEW

The market started the week at SPX 2081, gapped up on Monday/Tuesday hitting 2110, pulled back to 2091 by Wednesday, then with a gap up on Friday hit a new high at 2121. For the week the SPX/DOW gained 1.6%, the NDX/NAZ gained 3.8%, and the DJ World index gained 1.6%. Economic reports were sparse, and again biased to the upside. On the uptick: the FHFA, existing home sales, durable goods orders and the WLEI. On the downtick: new homes sales plus weekly jobless claims were higher. Next week will be highlighted by Q1 GDP, the FOMC meeting, and PCE prices.

LONG TERM: bull market

After making what we feel is an important Major wave 4 low at SPX 1981 in early February, the market confirmed an uptrend and made new highs at SPX 2120 by late February. After that the market spent the next two months in a choppy sideways pattern between SPX 2040 and 2115, until late this week. What is interesting is despite the sideways activity the market never once confirmed a downtrend. In other words, the uptrend that started in early February is still underway. More on this below.

SPXweekly

We continue to label this bull market as Cycle wave [1] consisting of five Primary waves. Primary waves I and II completed in 2011, and Primary wave III has been underway since then. Primary I rose in five Major waves with a subdividing Major wave 1 and simple Major waves 3 and 5. Primary III is also rising in five Major waves, but Major 1 was simple, Major 3 subdivided quite a bit, and Major 5 is expected to subdivide as well. When Primary III concludes there will be a steep Primary IV correction, probably in 2016, then a rising Primary V to end the bull market, probably by 2017. Our target for Primary III remains SPX 2530-2630 by Q1/Q2 2016.

MEDIUM TERM: uptrend

After the market made new highs in late-February at SPX 2120 and started to pullback, we expected a small decline, about 5%, and then the uptrend to resume. After the market declined to SPX 2040 by early March, rallied to 2115 by mid March, and then declined to 2046/48 by late March we thought the pullback might be over. The rally off the SPX 2048 low started off well but then got quite choppy. This led us to believe that the market would need to retest the SPX 2040’s again, or worse case the 2019 pivot, before the pullback/correction ended. We even went so far as to post five potential counts to cover all possibilities, even though the two highest probability counts met the above support parameters. The market nonetheless chopped its way to new highs on Friday.

SPXdaily

With the SPX/NAZ/NDX/NYSE/WLSH indices all making new uptrend highs, and the NYAD making new highs as well, it is time to find some sort of impulsive wave out of this months choppy activity. Since Major wave 4 ended in a failed flat: 1973-2094-1981, Minor wave 2 could have also ended in a failed flat: 2040-2115-2046. On Thursday we posted a potential count that was mentioned in our OEW group: a leading diagonal. This count, which was mentioned by Bill C., suggests a leading diagonal from SPX 2046: 2089-2048-2108-2083-2112. This could be labeled Minute i of Minor 3, and the pullback that followed to SPX 2072 Minute ii. After that Minute iii kicked off, and has thus far risen: 2110-2091-2121. This count would not only explain the choppy activity over the past month, but also suggests some explosive upside ahead. Medium term support is at the 2085 and 2070 pivots, with resistance at the 2131 and 2198 pivots.

SHORT TERM

After Thursday/Friday’s market activity we have dropped the three alternate counts we had only given a 10% probability. The two remaining: a Minor 1 high at SPX 2120 if the uptrend remains, and an Intermediate wave i high at SPX 2120 if we confirm a downtrend. Since the uptrend appears to be extending we are going with Minor wave 1 at SPX 2120, Minor wave 2 at SPX 2046, and Minor wave 3 underway. As long as the OEW 2070 pivot is not broken to the downside the uptrend should extend higher.

SPXhourly

Should the OEW 2070 pivot be broken, then as the DOW charts suggests, at this point, this choppy activity is not over, and a downtrend will likely be underway next. This activity would then favor the Intermediate wave i count noted above. Should the market do move lower we still feel the downside is limited to the SPX 2040’s or worse case the 2019 pivot. Short term support is at SPX 2112/2115 and the 2085 pivot, with resistance at SPX 2121 and the 2131 pivot. Short term momentum ended the week with a negative divergence. Best to your trading this tough market.

DOWhourly

FOREIGN MARKETS

The Asian markets were mostly higher for a net gain of 0.5%.

The European markets were all higher for a net gain of 1.6%.

The Commodity equity group were all high gaining 2.8%.

The DJ World index is still in an uptrend and gained 1.6%.

COMMODITIES

Bonds are still uptrending but lost 0.3% on the week.

Crude is also uptrending and lost 0.4% on the week.

Gold is still in an uptrend but lost 2.0% on the week.

The USD appears to be downtrending and lost 0.6% on the week.

NEXT WEEK

Tuesday: Case-Shiller, Consumer confidence, and Senate testimony from FED director Van Der Weide. Wednesday: Q1 GDP (est. +0.75%), Pending home sales and the FOMC concludes. Thursday: weekly Jobless claims, Personal income/spending, PCE prices, the Chicago PMI, and a speech from FED governor Powell. Friday: ISM manufacturing, Construction spending, Consumer sentiment, and Auto sales. Best to your weekend and week!

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

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Friday update

SHORT TERM: growth stock Friday, DOW +21

Overnight the Asian markets lost 0.4%. Europe opened higher and gained 0.4%. US index futures were higher overnight, and at 8:30 Durable goods orders were reported higher: +4.0% v -1.4%. The market gapped up at the open for the fourth time this week, hit SPX 2119, then pulled back to yesterday’s close by 10am at 2113. Then it started to rally. Around 12:30 the SPX hit an all time high at 2121, pulled back to 2116 by 3pm, then closed at 2118.

For the day the SPX/DOW were +0.20% and the NDX/NAZ were +1.00%. Bonds gained 10 ticks, Crude slid 50 cents, Gold dropped $16, and the USD was lower. Medium term support remains at the 2085 and 2070 pivots, with resistance at the 2131 and 2198 pivots. Today the WLEI was reported higher: 49.3% v 48.6%.

The market gapped up at the open, hit SPX 2119, pulled back, then made a new high at 2121. While the rise from SPX 2048, at the beginning of the month, to today’s high has been choppy, the market has nonetheless made new highs. Guess it is time to look at both sides of this chop-fest April. Will review the charts and see what surfaces in the weekend report. Best to your weekend!

MEDIUM TERM: still an uptrend

LONG TERM: bull market

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

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Thursday update

SHORT TERM: gap down opening then rally, DOW +20

Overnight the Asian markets lost 0.2%. Europe opened higher but lost 0.5%. US index futures were lower overnight, and at 8:30 weekly Jobless claims were reported higher: 295k v 294k. Then just before the open Congressional testimony from FED director Hunter: http://www.federalreserve.gov/newsevents/testimony/hunter20150423a.htm. The market gapped down at the open to SPX 2103, then rebounded to 2110 by 10am. Also at 10am Existing home sales were reported lower: 481k v 543k. The market then pulled back to SPX 2104 by 10:30, and then started to rally. The rally continued until just past 3pm when the SPX hit its all time high at 2120. After that the market pulled back to close at SPX 2113.

For the day the SPX/DOW were +0.20%, and the NDX/NAZ were +0.40%. Bonds gained 8 ticks, Crude rallied $1.35, Gold rose $8, and the USD was lower. Medium term support remains at the 2085 and 2070 pivots, with resistance at the 2131 and 2198 pivots. Tomorrow: Durable goods orders at 8:30.

The market gapped down at the open today after three successive gap up openings this week. The market made the low for the day at the open, SPX 2103, bounced around, then rallied to the all time high at 2120. The potential B wave triangle posted yesterday, was quickly eliminated when the SPX cleared resistance at 2112/2115. With the NDX/NAZ making new uptrend highs, it appears this uptrend may be extending. We still consider the rally from SPX 2046 in mid-March to be quite choppy and not impulsive looking. However, some within our group have suggested a failed Minor 2 flat at SPX 2046. Then a leading diagonal advance: 2089-2048-2108-2083-2012 for Minute i of Minor wave 3 , a Minute ii pullback to SPX 2073, and Minute iii underway now. Possible. If this market can extend higher tomorrow, the SPX 2100, DOW 18,000 and NDX 5,000 overhead resistance may finally have been broken. Short term support is at SPX 2112/2115 and the 2085 pivot, with resistance at SPX 2120 and the 2131 pivot. Short term momentum hit quite overbought at today’s high then dipped to near neutral into the close. Best to your trading!

MEDIUM TERM: still an uptrend

LONG TERM: bull market

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

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Wednesday update

SHORT TERM: gap up opening again, DOW +88

Overnight the Asian markets gained 0.7%. Europe opened higher but lost 0.2%. US index futures were higher overnight, and at 9am the FHFA was reported higher: +5.4% v +5.1%. The market gapped up at the open for the third day in a row, hit SPX 2102, and then immediately to pullback. At 10am Existing home sales were reported higher: 5.19mn v 4.89mn. The SPX hit 2091 just past 10am and then started to rally. Nearing 3:30 the SPX hit 2110, then backed off the 2106 before closing at 2108.

For the day the SPX/DOW were +0.50%, and the NDX/NAZ were +0.50%. Bonds lost 19 ticks, Crude slipped 30 cents, Gold dropped $15, and the USD was lower too. Medium term support remains at the 2085 and 2070 pivots, with resistance at the 2131 and 2198 pivots. Tomorrow: weekly Jobless claims at 8:30, Congressional testimony from FED director Hunter at 9:15, then New home sales at 10am.

The market gapped up at the open today, and just like yesterday the opening was immediately sold. While yesterday’s pullback did not get back to opening levels, today’s turned right around and hit yesterday’s opening high at SPX 2110. After weeks of choppy patterns we took at look at other potential counts after yesterday’s close. Today we posted one on the hourly chart, suggesting SPX 2040 ended an A wave, and a triangular B wave has been underway for the past few weeks. Should this be correct, the B wave should be topping quite soon and a C wave down into the SPX 2040’s should follow. There are other counts. But this looked the most obvious at the moment. We also ended the day with the SPX over 2100, the DOW over 18000, and the NAZ over 5000. The previous times this has occurred the market sold off. Short term support is at the 2085 and 2070 pivots, with resistance at SPX 2112/2115 and SPX 2120. Short term momentum hit quite overbought today during the rally. Best to your trading!

MEDIUM TERM: still an uptrend

LONG TERM: bull market

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

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Tuesday update

SHORT TERM: gap up opening faded, DOW -85

Overnight the Asian markets gained 1.1%. European markets opened higher and gained 0.2%. US index futures were higher overnight. The market gapped up to the high of the day at SPX 2110 at the open, and then began to pullback. At 10:30 the market dropped below yesterday’s close when hitting SPX 2098. It then bounced to SPX 2103 by 11am before heading lower again. Around 2pm the SPX hit 2094, bounced to 2100 by 2:30, then dipped to 2097 to end the day.

For the day the SPX/DOW were -0.30%, and the NDX/NAZ were +0.40%. Bonds lost 5 ticks, Crude dropped $1.30, Gold rallied $6, and the USD was higher. Medium term support remains at the 2085 and 2070 pivots, with resistance at the 2131 and 2198 pivots. Tomorrow: the FHFA index at 9am, then Existing home sales at 10am.

The market gapped up at the open, hit SPX 2110, and then started to pullback. This morning’s gap up, for the second day in a row, broke the recent gap up then sell off pattern that had occurred a few times over the past month. In fact, this is the first time the market has gapped up two days in a row since the beginning of February – when the uptrend began. Not sure what to make of that factoid in this choppy market. For now the trend is up, and we continue to look for the last leg down of this pullback/correction. Short term support is at the 2085 and 2070 pivots, with resistance at SPX 2112/2115 and SPX 2120. Short term momentum hit overbought at the open, setup a negative divergence, then declined to neutral. Best to your trading!

MEDIUM TERM: still an uptrend

LONG TERM: bull market

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

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Monday update

SHORT TERM: gap up and go Monday, DOW +209

Overnight the Asian markets lost 1.3%. Europe opened higher and gained 0.8%. US index futures were higher overnight, and the market gapped up to SPX 2094 at the open. The SPX had closed at 2081 on Friday. The rally continued until 11am when the SPX hit 2104. Then the market started to pullback. By 2pm the market had pulled back to 2099. Then after a bounce to SPX 2103 by 3:30 the market closed at 2100.

For the day the SPX/DOW were +1.05%, and the NDX/NAZ were +1.40%. Bonds lost 9 ticks, Crude gained 40 cents, Gold dropped $9, and the USD was higher. Medium term support rises back to the 2085 and 2070 pivots, with resistance at the 2131 and 2198 pivots. Tomorrow: nothing scheduled on the economic agenda.

The market gapped up at the open today, reversing Friday’s selloff, and nearly rallied back to Thursday’s SPX 2105 close. While we were not surprised by the rally, it’s a choppy market, we were surprised that the SPX cleared 2100 and the DOW cleared 18000 again. Also of note, the last two gap up openings Mar 30th and Apr 15th, made a last hour high, and then dropped 40 points over the next two days. This gap up opening failed to reach the early SPX 2104 high by one point in the last hour of trading. This is fairly close to the previous pullback setups. Short term support is at the 2085 and 2070 pivots, with resistance at SPX 2112/2115 and SPX 2120. Short term momentum hit overbought during the rally, then backed off some into the close. Best to your Tuesday trading!

MEDIUM TERM: still an uptrend

LONG TERM: bull market

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

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weekend update

REVIEW

Another choppy week. The market started the week at SPX 2102, rallied to 2108 on Monday, dropped to 2083 on Tuesday, rallied to 2012 on Wednesday, then dropped to 2072 on Friday, before ending the week at 2081. For the week the SPX/DOW lost 1.15%, the NDX/NAZ lost 1.45%, and the DJ World index lost 0.30%. On the economic front reports again came in mostly to the upside. On the uptick: retail sales, the CPI/PPI, business inventories, the NAHB, housing starts, the Philly FED, consumer sentiment, leading indicators, the WLEI, and the monetary base. On the downtick: the NY FED, industrial production, capacity utilization, and weekly jobless claims rose. Next week we get three reports on housing and durable goods orders.

LONG TERM: bull market

While the SPX has spent the past four months effectively in a 2000 and 2100 trading range, there has been a plethora of counts being passing around. From ending diagonals, to leading diagonals, to Primary IV underway, triangles and flats. It is times like these that has nearly everyone guessing the next big move in the market. During this period we have maintained the same count: Major waves 3 and 4 completed by early-February, and either Minor 1 or Intermediate i ended in late-February at SPX 2120. We see no reason to change that view.

SPXweekly

The Cycle wave [1] bull market of 2009 continues to unfold. Primary waves I and II, of this five primary wave bull market, ended in 2011. Primary wave III has been underway ever since. During Primary I Major wave 1 subdivided, and Major waves 3 and 5 were simple. During Primary III Major wave 1 was simple, and Major wave 3 subdivided. We continue to expect Major wave 5, which is underway now, to subdivide as well. When Primary III does conclude, which we expect in the year 2016, there will be a steep Primary IV correction and then new highs for Primary V by 2017.

MEDIUM TERM: uptrend under pressure

The current Minor 1/Intermediate i uptrend began in early February. By late February it had hit a high of SPX 2120. Since then the market has remained in a 75 point trading range for seven weeks. We have had a decline to SPX 2040, which we labeled Minute/Minor a, then a rally to SPX 2115, which we labeled Minute/Minor b. The Minor wave labels are on the chart below, and the Minute labels are posted on the hourly charts. After the SPX 2115 rally the market dropped to SPX 2046, bounced, dropped to SPX 2048, then rallied to SPX 2112 this week. If one compares the recent corrective activity from SPX 2120, and the activity during Major wave 4, you will notice they still look somewhat similar. In both cases there was a quick decline, a quick rally, and then some choppy sideways action until the correction ended. It appears this correction is now in its last leg down.

SPXdaily

When this pullback/correction began in early March we calculated a few support levels based upon the wave structure of the uptrend and Fibonacci retracement levels. The wave structure suggested support between SPX 2042 and 2072, and Fibonacci support was at SPX 2051 (50% retracement) and SPX 2034 (61.8%). Thus far the low for this pullback/correction has been SPX 2040. More on this below. Medium term support is at the 2070 and 2019 pivots, with resistance at the 2085 and 2131 pivots.

SHORT TERM

While this pullback/correction has been quite choppy it has continued to unfold in abc’s. We have had an abc decline to SPX 2040, and abc rally to SPX 2115, what could be an abc decline to SPX 2048, then an abc rally to SPX 2112. This suggests another abc down will probably end this complex pattern soon.

SPXhourly

Using the hourly chart labeling. If Minute C equals Minute A then we should see support at SPX 2035. Or if Micro C equals Micro A we should see support at SPX 2043. If we then combine these levels with those mentioned in the section above we arrive with the following support levels: SPX 2042/2043 and SPX 2034/2035. If we then add in the OEW pivot range at 2019 we have a good cluster of potential support to end this pullback/correction. Current short term support is at the 2070 pivot and SPX 2057, with resistance at the 2085 pivot and SPX 2112. Short term momentum ended the week just above oversold.

FOREIGN MARKETS

The Asian markets were quite mixed on the week but gained 0.7%.

The European markets were all lower and lost 3.5%.

The Commodity equity group were mixed for a 0.1% loss.

The DJ World index is still uptrending but lost 0.3%.

COMMODITIES

Bonds are uptrending and gained 0.7%.

Crude is uptrending and gained 8.3%.

Gold is uptrending but lost 0.4%.

The USD appears to be in a correction and lost 1.9%.

NEXT WEEK

Wednesday: FHFA home prices and Existing home sales. Thursday: weekly Jobless claims and New home sales. Friday: Durable goods orders. With the lack of important economic data and nothing scheduled from the FED, it appears this will be a technical week for the stock market. Best to your weekend and week!

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

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