Monday update

SHORT TERM: pullback resumes, DOW -27

Overnight the Asian markets lost 0.2%. Europe opened lower and lost 0.7%. US index futures were lower overnight, and the market opened 4 points below Friday’s SPX 2271 close. In the opening minutes the market popped to SPX 2272, then resumed its decline. At 11:30 the SPX hit 2257, and then did a zigzag up to 2267, before closing at 2265.

For the day the SPX/DOW lost 0.25%, and the NDX/NAZ were mixed. Bonds gained 19 ticks, Crude lost 40 cents, Gold rose $8, and the USD was lower. Medium term support drops again to the 2212 and 2177 pivots, with resistance at the 2270 and 2286 pivots. Tomorrow: existing home sales at 10am.

The market opened lower today, turned slightly positive at SPX 2272, then dropped to SPX 2257. The rest of the day it just drifted higher. The recent decline from SPX 2279, a week ago Friday, looks fairly symmetrical: 2258-2277-2257. Overall, however, the market activity remains choppy and looks corrective. The DOW has been weak, the NDX/NAZ stable, and the SPX appears caught in the middle. Looks like the Techs need to lead lower if a downtrend in underway. Short term support drops to SPX 2254 and SPX 2245, with resistance at the 2270 and 2286 pivots. Short term momentum dropped to oversold at today’s low, then bounced to neutral. Best to your trading!

MEDIUM TERM: downtrend underway?

LONG TERM: uptrend

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

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weekend update

REVIEW

This holiday shortened week started at SPX 2275. The market opened lower on Tuesday, remained in the same lower range on Wednesday, dropped to SPX 2258 on Thursday, then rallied to 2277 on Friday, and ended the week at 2271. For the week the SPX/DOW lost 0.25% and the NDX/NAZ were mixed. On the economic front reports came in quite positive. On the downtick: the NY FED and the NAHB. On the uptick: the CPI, industrial production, capacity utilization, housing starts, building permits, the Philly FED, the WLEI, plus weekly jobless claims improved. Next week’s reports include: Q4 GDP, leading indicators and durable goods orders. Best to your weekend and week!

LONG TERM: uptrend

There is a new sheriff in town. Donald J Trump was sworn in Friday as the 45th President of the USA. The Trump rally, as this uptrend has been called, started just a couple of days before the election and continued into mid-December. Since then the market has made little progress either up or down during the past 5 weeks. Nevertheless the long term count remains unchanged.

spxweekly

We continue to label the May 2015 high as Primary I, and the February 2016 low as Primary II. A Primary III bull market has been underway since that February low at SPX 1810. Currently there are three sets of waves up from that low: Intermediate waves i and ii, Minor waves 1 and 2, and probably Minute waves i and ii. With Minute wave ii currently underway. When it concludes Minute iii should kick in to the upside and take the market to all-time new highs.

MEDIUM TERM: downtrend underway?

From the early November low at SPX 2084 the uptrend has progressed in five waves. The five waves are now best counted as SPX: 2147-2125-2214-2187-2278. The recent short term action in the SPX has not occurred during any uptrend in this bull market, only during pullbacks/corrections. As a result, the correct count appears to be the one we have been posting on the daily chart below.

spxdaily

This count suggests Minute wave i ended at SPX 2278. Then an A wave declined to SPX 2234, a B wave rallied to SPX 2282, and currently a C wave down is underway. It does not, however, conclude that the B wave ended at SPX 2282. It could go higher before the C wave down. In either case the C wave should end the pullback/correction in the coming weeks. Medium term support is at the 2270 and 2212 pivots, with resistance at the 2286 and 2321 pivots.

SHORT TERM

The preferred count, Minute wave i ending at SPX 2278, provides us with some definitive parameters going forward. Regardless of where the B wave ends the most common low for Minute wave ii would be to retest SPX 2234, to form an irregular flat. The next probable support levels, if the B wave ended at SPX 2282, would be the following.

spxhourly

If the C wave is 1.618 times the A wave, then the 2212 pivot would provide support. If the C is twice the A wave, then SPX 2194 would provide support. If the C is 2.618 times the A wave, then the 2177 pivot would provide support. Short term support is currently at the 2270 pivot and SPX 2254, with resistance at the 2286 and 2321 pivots. Short term momentum ended the week around neutral. Best to your trading next week!

FOREIGN MARKETS

Asian markets were mostly lower on the week for a net loss of 0.5%.

European markets were also mostly lower for a 1.2% loss.

The DJ World index lost 0.3%, and the NYSE index lost 0.3%.

COMMODITIES

Bonds appear to be in an uptrend but lost 0.2%.

Crude is in an uptrend and gained 1.6%.

Gold is in an uptrend too and gained 0.7%.

The USD appears to be in a downtrend and lost 0.4%.

NEXT WEEK

Tuesday: existing home sales. Wednesday: the FHFA housing index. Thursday: weekly jobless claims, leading indicators and new home sales. Friday: Q4 GDP (est. +2.2%), durable goods and consumer sentiment.

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

Posted in weekend update | Tagged , , , | 191 Comments

Friday update

SHORT TERM: gap up opening faded, DOW +95

Last night FED chair Yellen gave a speech on the economy and FED policy: https://www.federalreserve.gov/newsevents/speech/yellen20170119a.htm. Overnight Asian markets lost 0.5%. European markets opened lower but gained 0.1%. US index futures were higher overnight, and the market gapped up at the open to SPX 2273. The SPX had closed at 2264 yesterday. In the opening minutes the market rallied to SPX 2277, and then started to pullback. At 1pm the SPX hit 2265, bounced to 2271 by 1:30, then hit 2265 again at 2:30. After that the market worked its way higher to close at SPX 2271.

For the day the SPX/DOW gained 0.40%, and the NDX/NAZ gained 0.25%. Bonds gained 1 tick, Crude rallied $1.05, Gold added $3, and the USD was lower. Medium term support rises to the 2270 and 2212 pivots, with resistance at the 2286 and 2321 pivots. Today the WLEI was reported at 62.0% v 61.9%. And we have a new POTUS.

The market gapped up at the open for the first time since January 4th. But unlike that day the market did not hold its early gains, and pulled back minutes after the opening. The high of the day was the upper range of the OEW 2270 pivot (2277). A fairly quiet week as the entire range for the 4 days was SPX 2258-2277, with the entire range occurring between Thursday afternoon and Friday morning. The DOW slightly outperformed the other major indices today, but continues to lag. Another quiet week in the market, just like last week. Short term support rises to the 2070 pivot and SPX 2254, with resistance at the 2286 and 2321 pivots. Short term momentum hit overbought again early, then declined to neutral. Best to your weekend!

MEDIUM TERM: downtrend underway?

LONG TERM: uptrend

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

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Thursday update

SHORT TERM: market declines after higher open, DOW -72

Overnight the Asian markets gained 0.3%. Europe opened higher, but lost 0.3%. US index futures were lower overnight. At 8:30 weekly jobless claims were reported lower: 234K v 247K, housing starts were reported higher: 1226K v 1090K, building permits was reported higher: 1210K v 1201K, and the Philly FED was reported higher: 23.6 v 21.5. The market opened 2 points above yesterday’s SPX 2272 close and immediately began to pullback. By 11am the SPX hit 2265, bounced to 2270 by 11:30, then dropped even lower. Around 2:30 the SPX hit 2258, then bounced to close at 2264.

For the day the SPX/DOW lost 0.35%, and the NDX/NAZ lost 0.20%. Bonds dropped 21 ticks, Crude rose 25 cents, Gold slipped $1, and the USD was higher. Medium term support drops back to the 2212 and 2177 pivots, with resistance again at the 2270 and 2286 pivots. Today the Q4 GDP estimate was reported unchanged at 2.8%. Tonight there is a speech from FED chair Yellen at 8pm, and tomorrow is options expiration. Also on Friday, Donald J. Trump is sworn in as the new POTUS.

The market opened slightly higher today and then declined to within 4 points of last week’s SPX 2254 low. While the SPX/NDX/NAZ have remained in a tight range, or made new uptrend highs, today the DOW traded at its lowest level since the first week of December. The uptrend leader in November/December continues to lag. The SPX, after making a new all-time high at 2282 in the first week of January has displayed nothing but choppy sideways activity since. The recent SPX action looks similar to the choppy action before the declines in September/October. Short term support is at SPX 2254 and SPX 2245, with resistance at the 2270 and 2286 pivots. Short term momentum dropped from overbought early to quite oversold at the low. Trade what’s in front of you!

MEDIUM TERM: downtrend underway?

LONG TERM: uptrend

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

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Wednesday update

SHORT TERM: quiet sideways day, DOW -22

Overnight the Asian markets gained 0.6%. Europe opened higher and gained 0.3%. US index futures were flat overnight. At 8:30 the CPI was reported higher: 0.3% v 0.2%, and at 9:15 industrial production was reported higher: 0.8% v -0.4%. The market opened 1 point above yesterday’s SPX 2268 close, then immediately dropped to yesterday’s 2263 low in the opening minutes. After that it started to drift higher. At 10am the NAHB was reported lower: 67 v 70. At 10:30 the SPX hit 2270, and started to drift lower. At 2pm the FED’s: https://www.federalreserve.gov/monetarypolicy/beigebook/default.htm. At 3pm https://www.federalreserve.gov/newsevents/speech/yellen20170118a.htm. After hitting SPX 2266 by 1pm the market rallied to 2272 at the close.

For the day the SPX/DOW were mixed, and the NDX/NAZ gained 0.25%. Bonds lost 26 ticks, Crude dropped $1.15, Gold slid $10, and the USD was higher. Medium term support rises back to the 2270 and 2212 pivots, with resistance at the 2286 and 2231 pivots. Tomorrow: weekly jobless claims, housing starts, building permits, and the Philly FED all at 8:30. Then a speech from FED chair Yellen at 8pm.

The market opened flat today, dropped to yesterday’s SPX 2263 low, then closed at yesterday’s 2272 high. Same range, 2263-2272, two days in a row. During today’s decline, however, the DOW, which was the leader during the entire uptrend, made a lower low than yesterday, a lower low than last week, and came within 20 points of reaching the end of December low (SPX 2234 equivalent). Tech which was the laggard during the uptrend is again close to making new highs. The tug of war continues in the choppy environment. Short term support rises to the 2270 pivot and SPX 2254, with resistance at the 2286 and 2321 pivots. Short term momentum reached overbought at today’s close. Trade what’s in front of you!

MEDIUM TERM: uptrend

LONG TERM: uptrend

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

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Tuesday update

SHORT TERM: lower open on pullback Tuesday, DOW -59

Overnight the Asian markets lost 0.4%. Europe opened lower and lost 0.7%. US index futures were lower yesterday, and overnight, and at 8:30 the NY FED was reported lower: 6.5 v 9.0. The market opened 7 points below Friday’s SPX 2275 close, ticked down to 2265 by 10am, then tried to rally. After hitting SPX 2272 by 10:30 the market went into a 4 point trading range, and hit 2272 again by 1:30. After that it headed even lower. Around 3pm the SPX hit 2263, then bounced to close at 2268.

For the day the SPX/DOW lost 0.30%, and the NDX/NAZ lost 0.45%. Bonds gained 16 ticks, Crude added 15 cents, Gold rallied $17, and the USD was lower. Medium term support drops again to the 2212 and 2177 pivots, with resistance at the 2270 and 2286 pivots. Tomorrow: the CPI at 8:30, industrial production (est. 0.7%) at 9:15, the NAHB at 10am, the FED’s beige book at 2pm, then a speech from FED chair Yellen at 3pm. Full day!

The market opened lower to start the holiday shortened options expiration week. After hitting SPX 2265, it bounced to 2272, then hit 2263 just before a 2269 close. Last week’s entire trading range, SPX 2254-2279, which occurred within 24 hours, has already been retraced 61.8% at today’s low. Market movement continues to look like choppy corrective activity. Short term support drops back to SPX 2254 and SPX 2245, with resistance at the 2270 and 2286 pivots. Short term momentum ended the day with a slight positive divergence. Trade what’s in front of you!

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 2177. After a quiet session Monday the market inched up to SPX 2279 by Tuesday. Then Wednesday and Thursday the SPX declined to 2254. After that low the market rallied back to SPX 2279 on Friday and ended the week at 2275. For the week the SPX/DOW lost 0.25%, and the NDX/NAZ gained 1.0%. Economic reports for the week were positive. On the downtick: import prices, consumer sentiment, Q4 GDP est., plus weekly jobless claims rose. On the uptick: consumer credit, business/wholesale inventories, export prices, the PPI, retail sales, and the WLEI. Next week’s economic highlights include: industrial production, the FED’s beige book, and the NY/Philly FED.

LONG TERM: uptrend

Not much has changed on the long term count, with only a 2 point decline in the SPX and a 25 point trading range for the entire week. Major wave 1, of a five Major wave Primary III bull market, continues to unfold. Thus far Intermediate waves i and ii have completed, with Intermediate wave iii underway. Int. iii is subdividing into five Minor waves, with Minor waves 1 and 2 completed and Minor 3 underway. The question remains if Minor 3 is also subdividing into five Minute waves, since the current uptrend is much shorter than expected for all of Minor 3.

spxweekly

Thus far this uptrend has advanced 198 SPX points over the past 2 months. Minor wave 1 was 202 SPX points, and Intermediate wave i was 301 SPX points. That makes this uptrend currently the shortest of the three and not likely all of Minor 3, unless the uptrend extends in time and price. Two possible scenarios are noted below. One suggesting that it will extend (daily section), and one suggesting that it will subdivide (hourly section). We’ll let the market decide which one unfolds, as it makes little difference in the long-term trend.

MEDIUM TERM: uptrend

This uptrend, that began in early November at SPX 2084, has become quite choppy in recent weeks. Usually this is an indication of a completed uptrend, with a downtrend to follow. Sometimes it is only a period of consolidation after five waves up in an extended uptrend.

spxdaily

The sometimes scenario, that occurs when an uptrend is about to extend in time and price, is that the market is simply going through a consolidation period before it turns higher again. This would account for the choppiness with limited downside damage, and the repeated attempts to make new highs. We can count five waves up from SPX 2084 to SPX 2278, as noted in the above chart. After that we can count an ‘a’ wave down to SPX 2234, followed by a ‘b’ wave to SPX 2282. If completed, a ‘c’ wave down could find support at SPX 2234 again, for an irregular flat, or decline to the 2212 pivot range for an irregular zigzag. Under this scenario the market would have worked off its overbought condition, with limited damage in price, before it resumes to much higher prices and extends in time. Medium term support is at the 2270 and 2212 pivots, with resistance at the 2286 and 2321 pivots.

SHORT TERM

In the first week of January this uptrend reached the typical, for this bull market, two month duration. Since that SPX 2282 high the market has displayed a series of choppy waves, with a gradual drift to the downside until the low on Thursday at SPX 2254. After Thursday’s low the market rallied to SPX 2279 – within a few points of the all-time high again. It had hit that level on Tuesday as well.

spxhourly

With the negative divergence in the daily MACD we suspect, under the usual scenario, that the market is forming an uptrend top before a downtrend kicks in. The typical decline for downtrends in this bull market is about 5%. This would place support around the SPX 2177 pivot. Under either scenario it would appear the choppiness will continue until the SPX retraces back to SPX 2234, or declines further. Short term support is at the 2270 pivot and SPX 2254, with resistance at the 2286 and 2231 pivots. Short term momentum ended the week just below overbought.

FOREIGN MARKETS

Asian markets were mixed on the week but gained 0.4%.

European markets were mostly higher and gained 0.3%.

The DJ World index gained 0.7% on the week.

COMMODITIES

Bonds look like they may have started an uptrend and gained 0.3% on the week.

Crude continues to uptrend but lost 3.0%.

Gold is in an uptrend and gained 1.9%.

The USD may have started a downtrend and lost 1.0% on the week.

NEXT WEEK

Monday: holiday. Tuesday: NY FED. Wednesday: the CPI, industrial production, the NAHB, the FED’s beige book, and speech from FED chair Yellen. Thursday: weekly jobless claims, housing starts, building permits, the Philly FED, and another speech from FED chair Yellen. Friday: options expiration. Best to your 3-day weekend and week!

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

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