Tuesday update

SHORT TERM: gap up opening then selloff, DOW -425

Overnight the Asian markets gained 0.8%. Europe opened higher and gained 0.1%. US index futures were higher, and at 9am Case-Shiller was reported higher. The market gapped up at the open to SPX 2682, ticked up to 2684, and then started to pullback. The SPX had closed at 2670 yesterday. At 10am consumer confidence and new home sales were reported higher. Just past 11:30 the SPX had dropped to 2661, closing the gap and turning negative. Then after a rally to SPX 2672 by 11:30, the selling accelerated. At 2:30 the SPX hit 2617, the low for the day. Then the market rebounded to close at SPX 2635.

For the day the SPX/DOW lost 1.55%, and the NDX/NAZ lost 1.90%. Bonds slipped 3 ticks, Crude dropped 75 cents, Gold rose $6, and the USD was lower. Medium term support drops to the 2632 and 2594 pivots, with resistance now at the 2656 and 2731 pivots.

The market gapped up at the today. Which is nothing unusual these days when considering all the gap openings during the past few months. After running up to yesterday’s high, 2884 v 2683, the market headed south in a hurry. At today’s low the SPX had dropped 67-points, in 5 hours, on no negative news. It must be a correction. Today’s drop increased the probability of the double three scenario posted on the hourly chart. This suggests a retest of the February/April lows should end this Intermediate wave iv correction. Levels of interest, noted over the weekend, are SPX 2586, 2554 and 2533. Short term support drops to the 2632 and 2594 pivots, with resistance now at the 2656 and 2731 pivots. Short term momentum hit extremely oversold at the lows. Best to your trading!

MEDIUM TERM: downtrend

LONG TERM: uptrend

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

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Weekend update

REVIEW

The week started at SPX 2656. After gap up openings on Monday and Tuesday the SPX rallied to 2717 by Wednesday morning. Then over the next two days the SPX came within 5 points of giving it all back when hitting 2661 late Friday, before bouncing to end the week at 2670. For the week the SPX/DOW gained 0.45%, and the NDX/NAZ gained 0.60%. Economic reports for the week were quite positive. On the downtick: the NY FED and the NAHB. On the uptick: retail sales, business inventories, housing starts, building permits, industrial production, the Philly FED, leading indicators, plus weekly jobless claims declined. Next week’s reports will be highlighted by Q1 GDP and housing.

LONG TERM: uptrend

In the early stages of this bull market we suggested it could last 2 – 4 years and travel to SPX 3000+. It has been a bit more than 2 years now, and the high has been SPX 2873. Was that it? Not, according to the counts the have on the major US indices, some foreign indices, and some leading stocks. At minimum we should see another leg up to new highs. But where is it? All the market has produced, for nearly 3 months, is volatility and range bound corrective waves. It looks like it is waiting for a positive catalyst.

In the meantime the long term wave count continues to unfold as expected. A Major wave 1 bull market dividing in to five Intermediate waves. Intermediate waves i and ii completed in the spring of 2016. Intermediate iii then divided into five Minor waves. Minor waves 1 and 2 completed in the fall of 2016, and Minor waves 3 and 4 completed in the spring of 2017. Recently, in January 2018, Minor wave 5 completed, along with Intermediate wave iii, and an Intermediate wave iv correction began. After this weeks action, it appears it is still underway.

MEDIUM TERM: downtrend

Intermediate wave iv could have completed in February, after a 12% selloff ended with positive RSI divergences everywhere. The market rallied about 10% into March, did not make a new high and then failed. A retest of the low occurred right on the first trading day of April. Again with positive divergences. But the market has again failed to sustain an impulsive rally off those lows.

Some have speculated this correction could be a fourth wave triangle: A 2533, B 2802, C 2554, D 2717?, with E to follow. It could also be a double three: a-b-c zigzag to 2533, x wave to 2802, now another a-b-c (flat or zigzag) underway to retest the lows? Regardless of the final outcome we are still expecting at least one more uptrend, and series of new all-time highs. Medium term support remains at the 2656 and 2632 pivots, with resistance at the 2731 and 2780 pivots.

SHORT TERM

We were tracking the rally from SPX 2554 with a potential impulsive count. We had Minor waves 1 and 2 at SPX 2673 and 2586. Then a Minor 3 underway. Minor 3 divided into three Minutes waves: 2665, 2645, 2717. Then it blew up on Friday, when the market dropped below 2665. Now all we have is a lot of corrective activity from the high at SPX 2672 in early April. This potential uptrend no longer looks to have any chance of being impulsive.

Under the market we can see three potentials levels of medium term support: 2586, 2554, and 2533. Let’s see what the technicals looks like as these levels are hit. Short term support is at the 2656 and 2632 pivots, with resistance at the 2731 and 2780 pivots. Short term momentum ended the week oversold. Best to your trading this volatile market!

FOREIGN MARKETS

Asian markets were mostly higher and gained 0.3%.

European markets were all higher and gained 1.7%.

The DJ World index gained 0.4%, and the NYSE gained 0.5%.

COMMODITIES

Bonds are now in a downtrend and lost 0.8%.

Crude remains in an uptrend and gained 1.5%.

Gold is also in an uptrend but lost 0.7%.

The USD is in an uptrend and gained 0.6%.

NEXT WEEK

Monday: Chicago PMI and existing home sales. Tuesday: Case-Shiller, consumer confidence and new home sales. Thursday: weekly jobless claims, and durable goods. Friday: Q1 GDP (est. 2.1%) and consumer sentiment.

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

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Thursday update

SHORT TERM: gap down opening, DOW -83

Overnight the Asian markets gained 0.7%. Europe opened higher and gained 0.1%. US index futures were lower overnight. At 8:30 weekly jobless claims were lower, and the Philly FED was higher. The market opened at SPX 2700, after closing at 2709 yesterday. The decline continued until 10am when the SPX hit 2692 and leading indicators were reported higher. The market then rallied to SPX 2703 by 10:30,a but rolled over to a lower low at SPX 2682 around 1:30. Then the market rallied to SPX 2699 by 3:30 before ending the day at 2693.

For the day the SPX/DOW lost 0.45%, and the NDX/NAZ lost 0.80%. Bonds dropped 9 ticks, Crude slipped 25 cents, Gold slid $2, and the USD was higher. Medium term support remains at the 2656 and 2632 pivots, with resistance at the 2731 and 2780 pivots. Tomorrow is Options expiration.

The market gapped down at the open today, traded down to SPX 2682, then tried to rally. At SPX 2682 the market had pulled back 35-points from yesterday’s SPX 2717 high. Thirty-five points also happens to be equal to the previous pullback: SPX 2680-2645. No change in the short term count. Still looks like a Minor 3 underway, albeit quite a choppy one. A drop below 2665, however, would negate the that count. Short term support remains at the 2656 and 2632 pivots, with resistance at the 2731 and 2780 pivots. Short term momentum was quite oversold at today’s lows, then bounced. Best to your trading!

MEDIUM TERM: downtrend may have bottomed

LONG TERM: uptrend

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

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Tuesday update

SHORT TERM: gap up opening again, DOW +214

Overnight the Asian markets lost 0.2%. Europe opened higher and gained 0.9%. US index futures were higher overnight. At 8:30 building permits and housing starts were reported higher. Then at 9:15 industrial production was reported higher too. The market opened at SPX 2695 and continued to rally. The SPX had closed at 2678 yesterday. By 11:30 the SPX had hit 2708. It then pulled back to 2702 by 1:30, hit 2709 by 2pm, then returned to 2702 at 2:30. In the last hour of trading the SPX hit 2713, then pulled back to 2706 to end the day.

For the day the SPX/DOW gained 0.95%, and the NDX/NAZ gained 1.95%. Bonds gained 2 ticks, Crude rose 25 cents, Gold added $1, and the USD was higher. Medium term support remains at the 2656 and 2632 pivots, with resistance at the 2731 and 2780 pivots. Tomorrow the Beige book at 2pm.

The market had a gap opening today for the 12th day in a row. Quite an amazing string of wide ranging overnight activity. Last week’s string had 4 UP and 1 DN. And despite all of the rallies being sold last week the market still gained 2%. This week we have had two gap up openings and nothing is being sold. Earnings appear to be overshadowing everything else. The beginning of this rally from SPX 2586 certainly did not look like a Minor 3 last week. The first two days of this week, however, have looked far more impulsive. Let’s see how the market handles the 2731 pivot. Short term support is at the 2656 and 2632 pivots, with resistance at the 2731 and 2780 pivots. Short term momentum ended the day quite overbought. Best to your trading!

MEDIUM TERM: downtrend may have bottomed

LONG TERM: uptrend

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

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Weekend update

REVIEW

The week started at SPX 2604. After a gap up opening on Monday the market rallied to SPX 2654. Then sold off to SPX 2611 in the last two hours of trading. On Tuesday another gap up opening carried the SPX to 2663. Then a 27 point decline occurred within one hour. But the market recovered to close near the highs of the day. On Wednesday a gap down opening, there were gap openings every day, took the SPX into the low 2640’s where it ended the day. Gap up openings on Thursday and Friday, carried the SPX to 2680. And yes, that was sold too as the SPX ended the week at the 2656 pivot. For the week the SPX/DOW gained 1.9%, and the NDX/NAZ gained 2.9%. Economic reports for the week were mixed. On  the downtick: the CPI, consumer sentiment, plus the budget deficit increased. On the uptick: the PPI, wholesale inventories, plus weekly jobless claims declined. Next week’s reports are highlighted by the Beige book, industrial production, housing and Options expiration.

LONG TERM: uptrend

With many new participants in the blog, some history may be required. Between the early-1700’s and the year 1929 a two century GSC unfolded, topped, and then crashed into the year 1932. After that, with the DOW around 40, a new two century GSC began. The first wave of this GSC was SC1 (super cycle one) from 1932-2007. Then the market had its biggest crash since 1929-1932: 2007-2009 the great recession. In March 2009 the great recession and SC2 ended. From that low a new 70-80 year SC3 began. The first bull market of SC3 was 2009-2015, and first bear market 2015-2016. We have labeled them as Primary waves I and II. The bull market currently underway is part of Primary III. We are counting it as Major wave 1.

With the above background it is easy to see how the Major wave 1 bull market is unfolding. Major waves divide into five Intermediate waves. Intermediate waves i and ii completed in the spring of 2016. Intermediate wave iii then started to divide into five Minor waves. Minor waves 1 and 2 ended in the fall of 2016, and Minor waves 3 and 4 ended in the spring of 2017. Minor wave 5 and Int. iii recently ended in January 2018, and Int. wave iv began at that time. Before this bull market ends, Intermediate wave v should be making new all-time highs. The wave structures of the DOW, the NYSE, and even the DJW index suggest at least one more wave higher.

MEDIUM TERM: downtrend may have bottomed

When we look back at Intermediate wave ii in 2016. We find it lasted two months, and was an irregular zigzag correction [2111]: 2026-2121-1992. The current Intermediate wave iv correction is also three waves [2873] 2533-2802-2554, is just a bit more than two months, and appears to be a flat. The alternation setup, between the significant second and fourth waves of a bull market is clear.

After the SPX 2554 low the market rallied. The first rally looked impulsive (2554-2672) and we labeled it Minor wave 1. The pullback that followed to SPX 2586 we labeled Minor 2. Next we expected a Minor wave 3 liftoff. But all we have seen this week is a lot of choppy, buy the dip-sell the rip activity. Five gap openings, four higher, a 2% weekly gain, but a lot of chop. Medium term support is at the 2656 and 2632, with resistance at the 2731 and 2780 pivots.

SHORT TERM

As noted last weekend, the Minor wave 1 rally looked quite impulsive. Minor wave 2 was steep, but most second waves have been steep in this bull market. The rally from the Minor 2 low looks like a leading diagonal triangle to SPX 2665. After that the rest of the week was quite sloppy: pullback to 2639, three waves to 2680, now another pullback to 2645. A decline to SPX 2639 would make that three days looks like an irregular flat. Lower, an irregular zigzag. Much lower, and the entire advance from SPX 2586 starts looking corrective.

Short term support is at the 2656 and 2632 pivots, with resistance at the 2731 and 2780 pivots. Short term momentum ended the week with an ongoing negative divergence. It has been a day traders market for a couple of months now. Best to your trading!

FOREIGN MARKETS

Asian markets were all higher on the week and gained 1.3%.

European markets were also all higher and gained 1.2%.

The DJ World index  (DJW) gained 1.5%, and the NYSE gained 1.6%.

COMMODITIES

Bonds continue to uptrend but lost 0.5%.

Crude continues to uptrend and gained 8.6%.

Gold is in an uptrend and gained 0.9%.

The USD remains in an uptrend but lost 0.4%.

NEXT WEEK

Monday: retail sales and the NYV FED at 8:30, the NAHB and business inventories at 10am. Tuesday: housing starts, building permits, and industrial production. Wednesday: beige book. Thursday: jobless claims, Philly FED and leading indicators. Friday: options expiration. Plus, lots of FED speeches during the week.

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

 

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OEW tutoring

All markets are driven by long term investor confidence cycles. When the cycle is positive a bull market unfolds, when negative a bear market. The Objective Elliott Wave (OEW) technique not only determines if a market is bullish or bearish, it also determines how far a market has progressed in its current cycle.

OEW is not textbook Elliott Wave. It is a proprietary technique that defines every significant wave within bull and bear markets quantitatively. With this approach one can historically analyze any market to define its most probable wave structure, and determine what the past is projecting about the future. We first uncovered this technique in the early 1980’s when doing an analysis of the entire history of the US stock market. When waves are determined quantitatively/mathematically they never change, past or present.

At that time our analysis led us to believe that a stock market crash was likely in late-1987 to early-1988. Then another bull market would be underway. When the stock market did crash in October 1987, and a new bull market began in late-1987, we knew we had quantified the Elliott Wave Theory.

Over the decades OEW analysis has led to some important projections in a variety of markets. In the US stock market: the correction in 1990, the correction in 1998, the 2000-2002 bear market, the 2002-2007 bull market, the 2007-2009 bear market, then the 2009-2115 bull market,, and the current bull market as well. OEW pinpointed the bull market high in Crude at $148 in 2008. Identified a new bear market in Gold not too far from its 2011 $1900 high. In currencies: OEW tracked the bear market in the USD until 2011, then signaled a new bull market in the USD and bear markets in most other currencies. Now the USD is bearish again. In real estate: OEW identified the bull market top in 2005, and then the bear market bottom in 2011. All of our projections since the year 2005 are detailed – unedited – day by day on this blog.

Bull and bear markets usually last for years. Uptrends and downtrends last for months, and are often mistaken for changes in long term trends. OEW analysis not only confirms when changes in long term trends are occurring, but often projects them ahead of time. OEW tutoring covers the various indices in the US stock market and most foreign markets, along with various technical indicators. It also covers individual stocks, currencies, bonds, commodities, housing, long term asset cycles and the Saeculum. If you are interested in learning how to do this type of analysis yourself, and joining our private international OEW group, please contact us at caldaro@msn.com for details. Best to your trading/investing.

The possession of knowledge, unless accompanied by the manifestation and expression in sharing is a vain and foolish thing. The Law of Use is universal, and he who violates it suffers by reason of his conflict with natural forces.”

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Thursday update

SHORT TERM: gap up opening rally, DOW +294

Overnight the Asian markets ended mixed. Europe opened lower but gained 0.5%. US index futures were higher overnight, and at 8:30 weekly jobless claims were reported lower and import prices were unchanged. The market opened at SPX 2657, then rallied to 2671 by 10:30. The SPX had closed at 2642 yesterday. After a pullback to SPX 2661 by noon, the market rallied to 2672 by 1pm. Then after a pullback to SPX 2656 the market rallied to 2675, before ending the day at 2664.

For the day the SPX/DOW gained 1.00%, and the NDX/NAZ gained 1.05%. Bonds lost 12 ticks, Crude rose 30 cents, Gold dropped $15, and the USD was higher. Medium term support is back to the 2656 and 2632 pivots, with resistance at the 2731 and 2780 pivots. Tomorrow: consumer sentiment at 10am.

Thus far this week there have been gap openings everyday: three up and one down. The SPX, despite all the choppy activity, is up over 2% on the week. Yet, all it feels like is a lot of choppy activity leading to nowhere fast. Nevertheless, we continue to count the short term waves with a slight positive bias. We have potentially: Minor waves 1 and 2 (2672 and 2586), then Minute waves i (leading diagonal) and ii (2665 and 2639). Minute iii should be underway from yesterday’s low. From yesterday’s low we have two waves: 2672 and 2656 degree unknown at this point. The potential remains for the bull market to resume at any time despite the seemingly endless choppy activity. Short term support is at the 2656 and 2632 pivots, with resistance at the 2731 and 2780 pivots. Short term momentum ended the day above neutral. Best to your trading!

MEDIUM TERM: downtrend may have bottomed

LONG TERM: uptrend

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

Posted in Updates | Tagged , , , | 272 Comments