Wednesday update

SHORT TERM: gap down open again, DOW -100

Overnight the Asian markets lost 0.4%. Europe opened lower and lost 1.1%. US index futures were lower overnight as well. At 8:15 the ADP was reported lower: 156K v 200K, and at 8:30 the Trade deficit reportedly narrowed: -$40.4B v -$47.1B. The market gapped down at the opening to SPX 2053. The market had closed at SPX 2063 yesterday. In the opening minutes of trading the market dropped to SPX 2048, and then began to rally. At 10am Factory orders were reported higher: +1.1% v -1.7%, and ISM services was higher: 55.7 v 54.5. Just after 10am the SPX hit 2059, again failing to close the gap, and then began to pullback again. At 2pm the SPX hit 2046, rallied to 2054 by 3:30, then closed at 2051.

For the day the SPX/DOW lost 0.55%, and the NDX/NAZ lost 0.75%. Bonds gained 7 ticks, Crude added 25 cents, Gold dropped $7, and the USD was higher. Medium term support remains at the 2043 and 2019 pivots, with resistance at the 2070 and 2085 pivots. Today: Q2 GDP was lowered to +1.7% v +1.8%. Tomorrow: weekly Jobless claims at 8:30.

The market gapped down at the open for the second day in a row. It has not done this since early March. Just after the open the SPX took out Friday’s 2052 low by 4 points. Then after a rally to SPX 2059, the market made a lower low at 2046. After that the market bounced into the close. Techs continue to lead to the downside. Short term support is at the 2043 and 2019 pivots, with resistance at the 2070 and 2085 pivots. Short term momentum was quite oversold at today’s lows, then bounced. Trade what’s in front of you!

MEDIUM TERM: downtrend should be underway

LONG TERM: bear market

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

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Tuesday update

SHORT TERM: gap down opening, DOW -140

Overnight the Asian markets lost 0.9%. Europe opened lower and lost 1.1%. US index futures were lower overnight, and the market gapped down to SPX 2070 at the open. The SPX had closed at 2081 yesterday. The market continued to decline until about 11:30, when the SPX hit 2055. Then it rallied back to SPX 2069 by 2pm before heading back down again. In the last hour of trading the SPX hit 2059 by 3:30, then bounced to close at 2063.

For the day the SPX/DOW lost 0.90%, and the NDX/NAZ lost 1.00%. Bonds gained 19 ticks, Crude lost $1.10, Gold slipped $3, and the USD was higher. Medium term support drops back to the 2043 and 2019 pivots, with resistance at the 2070 and 2085 pivots. Tomorrow: the ADP at 8:15, Trade deficit at 8:30, then ISM services and Factory orders at 10am.

The market gapped down at the open for the first time since early April. The decline came within three points of Friday’s SPX 2052 low before the market rebounded. The rebound fell one point shy of the SPX 2070 gap down opening level. This kind of action did not usually occur during the two month uptrend. As noted in the weekend update, the NDX/NAZ are currently probably the least noisiest indices due to their limited exposure to energy and commodities. They are both suggesting a general market downtrend is underway. As a result we are posting a tentative green Major wave B label at the SPX 2111 high. Short term support is back to the 2043 and 2019 pivots, with resistance at the 2070 and 2085 pivots. Short term momentum hit oversold during today’s initial decline, bounced to neutral during the rally, and ended the day just below neutral. Trade what’s in front of you!

MEDIUM TERM: downtrend may be underway

LONG TERM: bear market

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

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Monday update

SHORT TERM: market rebounds, DOW +118

Overnight the Asian markets lost 1.2%. Europe opened higher and gained 0.3%. US index futures were higher overnight, and the market opened five points above Friday’s SPX 2065 close. After a push up to SPX 2072, and a dip to 2066, in the first half hour the market turned higher. At 10am ISM manufacturing was reported lower: 50.8 v 51.8, and Construction spending higher: +0.3% v -0.5%. The market rose to SPX 2075 by 10:30, dipped to 2070 by 11am, and then moved even higher. Around 3:30 the SPX hit 2083, then dipped to close at 2081.

For the day the SPX/DOW gained 0.70%, and the NDX/NAZ gained 0.90%. Bonds lost 12 ticks, Crude dropped $1.00, Gold slipped $4, and the USD was lower too. Medium term support rises back to the 2070 and 2043 pivots, with resistance at the 2085 and 2131 pivots. Tomorrow: monthly Auto sales.

The market opened higher today, following Friday’s afternoon rally, bounced around a bit early, and then hit the 2085 pivot range. With the rally above SPX 2081 today the entire decline from the recent 2111 high to 2052 low begins to look corrective. Unless the market heads lower again before hitting SPX 2100. Considering how oversold the NDX/NAZ were on Friday, this rebound should not have been too much of a surprise. Short term support now at the 2070 and 2043 pivots, with resistance at the 2085 pivot and SPX 2104. Short term momentum rose from quite oversold on Friday to quite overbought today. Trade what’s in front of you!

MEDIUM TERM: uptrend rebounding

LONG TERM: bear market rally

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

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weekend update

REVIEW

The market started the week at SPX 2092. On Monday the market pulled back to SPX 2072, rallied to 2097 on Tuesday, pulled back to 2082 ahead of the FOMC statement, then rallied to 2100 after it was released. On Thursday the market pulled back to SPX 2086, rallied to 2099, declined to 2052 on Friday and ended the week at 2065. For the week the SPX/DOW lost 1.25%, and the NDX/NAZ lost 2.80%. Economic reports for the week were generally positive. On the downtick: new home sales, consumer confidence/sentiment, the Chicago PMI and Q1 GDP was lower. On the uptick: durable goods, Case-Shiller, pending home sales, the PCE, personal income/spending, and the WLEI. Next week’s reports will be highlighted by the monthly Payrolls report and the ISMs.

LONG TERM: bear market

We continue to label the 2009-2015 as having completed last year in December, and a bear market now underway. During the first decline of the expected bear market the SPX lost 15% of it value and bottomed in mid-February. We labeled that Major wave A. The uptrend that followed has thus far also lasted two months until mid-April, and oddly enough retraced nearly all of the first decline. Since B waves sometimes do this sort of thing, and occasionally retrace more than the A wave decline, (an irregular B wave), the bear market call remains.

SPXweekly

Since this strong uptrend has been driven by beaten down energy and commodity stocks, we took a look at the NDX which has neither of these sectors. The NDX made it absolute price high in December 2015, after five Primary waves up from early 2009 and a clear five wave Primary V. It then lost 18% during its first decline, which was clearly five waves down.

NDX weekly

It then rallied along with the other three major indices until mid-April, when it came within 3.5% of its bull market high. After that high it has declined for the past eight days, losing 5.8% at Friday’s low, and is very close to confirming a new downtrend. Notice the negative divergences at the highs on the RSI and MACD.

NDXdaily

The Nasdaq (NAZ) recently reached within 5% of its bull market high. Its recent decline of seven straight down days is not quite as bad as the NDX since it does have some energy/commodity stocks. Nevertheless it is quite close to confirming a downtrend too.

MEDIUM TERM: uptrend weakening

The current SPX uptrend, which started at 1810 in mid-February, continues to look corrective. We have counted eleven significant waves right into the SPX 2111 high, and the market confirmed the completion of the last wave by dropping below 2074 this week. We have been labeling this uptrend as Major wave B , with three Intermediate waves: a-b-c. At the high the RSI displayed a double negative divergence, like the one during the previous uptrend, and a negative divergence in the MACD. Quite similar to the NDX chart above.

SPXdaily

Last weekend we noted three significant levels for this uptrend: 2111, 2074 and 2034. Exceeding the first would suggest the uptrend is extending, and still does. Breaking below SPX 2074 suggests the last five wave rally from 2034 completed, and it has. Breaking below SPX 2034 would suggest the uptrend has ended and a new downtrend is underway. And, it still does. Medium term support is now at the 2043 and 2019 pivots, with resistance at the 2070 and 2085 pivots.

SHORT TERM

As noted above at the SPX 2111 we counted eleven corrective waves up from 1810. Nine waves and thirteen waves would be considered impulsive. We counted five overlapping waves up to SPX 2009 to complete Int. A: 1947-1891-1963-1932-2009.  Then after a Int. wave B pullback, we counted another five overlapping waves to 2111: 2057-2022-2075-2034-2111.

SPXhourly

Since that high a week ago the market has declined 59 points for the largest decline since the uptrend began. The previous largest decline was 56 points back in February. At Friday’s low the hourly RSI hit its most oversold level of the entire uptrend. A level not seen since the last downtrend in the RSI and some other measures. Definitely some downside pressure has hit the market after weeks of a cruise control uptrend. Short term support is at the 2043 and 2019 pivots, with resistance at the 2070 and 2085 pivots. Short term momentum ended the week around neutral.

FOREIGN MARKETS

Asian markets were mostly lower on the week for a 1.9% loss.

European markets were all lower for a 2.4% loss.

The commodity equity group all rose for a 1.4% gain.

The DJ World index lost 0.70%.

COMMODITIES

Bonds are still in an uptrend and gained 0.4% on the week.

Crude continues to uptrend and gained 5.0%.

Gold hit new uptrend highs and gained 4.6%.

The USD hit new downtrend lows and lost 2.2% on the week.

NEXT WEEK

Monday: ISM manufacturing and Construction spending at 10am. Tuesday: Auto sales. Wednesday: the ADP, ISM services, Trade deficit and Factory orders. Thursday: weekly Jobless claims. Friday: Payrolls (est. +210K) and Consumer credit. Best to your weekend and week!

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

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Friday update

SHORT TERM: decline continues, DOW -57

Overnight the Asian markets lost 0.5%. Europe opened lower and lost 2.3%. US index futures were lower overnight as well. At 8:30 Personal income +0.4% v +0.2%/spending +0.1% v +0.1% were reported higher and PCE prices were reported higher: +0.1% v+0.1%. The market opened five points below yesterday’s SPX 2076 close and continued to decline. At 10am Consumer sentiment was reported lower: 89.0 v 89.7, and the Chicago PMI was reported lower: 50.4 v 53.6. The market hit SPX 2060 at 10am, rallied to 2069 by 10:30, then headed even lower. After hitting SPX 2053 at 11:30, the market rallied to 2063, then declined to 2052 just past 2pm. After that the market rallied to SPX 2069 before ending the day/week/month at 2065.

For the day the SPX/DOW lost 0.40%, and the NDX/NAZ lost 0.55%. Bonds gained 2 ticks, Crude slipped 5 cents, Gold rallied $24, and the USD was lower. Medium term support drops to the 2043 and 2019 pivots, with resistance at the 2070 and 2085 pivots. Today the WLEI was reported higher: 54.5% v 53.5%, and the initial Q2 GDP estimate was reported at +1.8%.

The market opened lower for the third day in a row. But unlike the past two days when it rallied shortly after the open, it continued to declined for most of the day until the last two hours. It is possible the current central bank QE holding pattern has taken the tail wind out of this uptrend. Also, the Nasdaq has now declined for seven days in a row, and is very close to confirmed a downtrend. Last weekend we mentioned three important levels for this week: 2111, 2074 and 2034. The market only managed to hit SPX 2100 on Wednesday before taking out 2074 on Thursday. More on this and others in the weekend update. Best to your weekend!

MEDIUM TERM: uptrend weakening

LONG TERM: bear market

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

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Thursday update

SHORT TERM: afternoon decline, DOW -211

Overnight the Asian markets dropped 1.7%. Europe opened lower but gained 0.1%. US index futures were lower overnight. At 8:30 Q1 GDP was reported lower: +0.5% v +1.4%, and weekly Jobless claims were reported higher: 257K v 247K. The market opened seven points below yesterday’s SPX 2095 close, ticked down two more points to 2086, and then began to rally. By 11:30 the SPX hit 2099, and then started to pullback again. The pullback accelerated in the last two hours of trading, as the SPX hit 2072 just before a 2076 close.

For the day the SPX/DOW lost 1.05%, and the NDX/NAZ lost 1.20%. Bonds gained 9 ticks, Crude rose 30 cents, Gold rallied $22, and the USD was lower. Medium term support drops to the 2070 and 2043 pivots, with resistance at the 2085 and 2131 pivots. Tomorrow: PCE prices, Personal income/spending at 8:30, then Consumer sentiment and the Chicago PMI at 10am.

Choppy market activity finally gets resolved to the downside in its sixth day. The market opened lower, hit SPX 2086, rallied to SPX 2099, and then traded to 2072 near the close. Thus far from last week’s SPX 2111 uptrend high the decline does look a bit choppy, but we can see a potentially larger three wave pattern: 2081-2099-2072 thus far. With SPX 2074 broken to the downside, the five waves up from SPX 2034-2111 is complete. Now the uptrend/downtrend range widens to either an uptrend continuation, by breaking through 2111, or a new downtrend, by breaking below SPX 2034. Short term support is at the 2070 and 2043 pivots, with resistance at the 2085 pivot and SPX 2104. Short term momentum dropped to quite oversold after the negative divergence. Best to your trading!

MEDIUM TERM: uptrend under pressure

LONG TERM: bear market rally

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

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Wednesday update

SHORT TERM: FED still on hold, DOW +51

Overnight the Asian markets lost 0.1%. Europe opened higher and gained 0.5%. US index futures were lower overnight and the market opened six points below yesterday’s SPX 2092 close. Right after the open the market bounced back to 2092 before heading lower again. At 10am Pending home sales were reported higher: +1.4% v +3.5%. At 10:30 the SPX hit the low of the day at 2082, and then started to rally. At 12:30 the SPX hit 2091 and then drifted lower ahead of the FOMC statement. At 2pm the FED released: http://www.federalreserve.gov/newsevents/press/monetary/20160427a.htm. The market hit SPX 2085 right after the statement and then rallied. Around 3:30 the SPX hit 2100, then pulled back to close at 2095.

For the day the SPX/DOW gained 0.20%, and the NDX/NAZ lost 0.65%. Bonds gained 19 ticks, Crude rallied $1.30, Gold rose $3, and the USD was lower. Medium term support remains at the 2085 and 2070 pivots, with resistance at the 2131 pivot. Tomorrow: Q1 GDP and weekly Jobless claims at 8:30.

The market opened lower following poor earnings reports in the tech sector again. After a quick rebound the SPX then hit a low at 2082 by 10:30. After that the market rallied for the rest of the day, helped by a cut and paste FMOC statement, to SPX 2100. Despite today’s rally the market still looks a bit choppy. From the SPX 2111 high we had three waves down: 2081-2093-2078, and now three waves up: 2097-2082-2100. Another rally underway from SPX 2078? Or just more choppy activity? Short term support is at the 2085 and 2070 pivots, with resistance at SPX 2104 and SPX 2116. Short term momentum ended the day with a negative divergence. Trade what is in front of you.

MEDIUM TERM: uptrend

LONG TERM: bear market rally

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

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