weekend update

REVIEW

The market started this choppy week at SPX 2165. After a gap down opening on Monday (DB related) the market declined to SPX 2142 by Tuesday’s open. After that it rallied to SPX 2173 Thursday morning. Then sold off (DB related) to SPX 2145 by Thursday afternoon. After a late day rally on Thursday the market gapped up on Friday (DB related) and hit SPX 2175. For the week the SPX/DOW gained 0.25%, and the NDX/NAZ gained 0.25%. Economic reports were mixed. On the downtick: Case-Shiller, the Q3 GDP estimate, pending/new home sales, plus weekly jobless claims rose. On the uptick: Q2 GDP, consumer confidence/sentiment, personal income, the Chicago PMI and the PCE. Next week’s reports will be highlighted by monthly Payrolls and ISM.

LONG TERM: uptrend

The month of September started off with a high of SPX 2188, then a decline to 2119/2120 by mid-month. Then while we were expecting a new uptrend to get underway, all the market could offer was lots of choppy activity. As every rally was sold. If the SPX/DOW are indeed in an uptrend, we cannot envision it being anything more than a B wave within a Minor wave 2 correction. It is just too choppy.

spxweekly

The long term count remains unchanged. Primary wave I ended in 2015, and Primary wave II ended in February 2016. A Primary III bull market began at that time. Thus far we have observed an Intermediate wave i uptrend, and an irregular Intermediate wave ii. Then a Minor wave 1 uptrend, followed by a Minor 2 downtrend. When Minor wave 3 gets underway it will be quite obvious. And the recent activity is not it. Nothing to add to the alternate counts, as they have not accomplished much of anything recently either.

MEDIUM TERM: uptrend/downtrend looks correctional

After making an all time high in mid-August the SPX ended its Minor 1 uptrend and headed into a correction. The market declined into early-September and hit SPX 2119. The low at SPX 2119/2120 could have ended the downtrend, and a new uptrend was underway. However, as noted earlier, the advance since then does not look impulsive at all. It is certainly not a Minor 3 wave, and looks more like a Minute B wave of an ongoing Minor 2.

spxdaily

Reviewing the daily chart you will observe Intermediate wave ii unfolded in three trends. A Minor A downtrend, a Minor B uptrend to a slightly higher high, then a Minor C downtrend. This is called an irregular correction. Irregular in that it made a higher high during the correction. It is possible we are witnessing a similar event underway now. Only on a wave degree of one lesser scale. In other words the SPX could make a marginal all time new high, and then head right back down to complete an irregular Minor wave 2 correction.

This possibility would fit with the recent uptrend confirmations in the NDX/NAZ, and the 80% uptrend probability noted last week in the SPX. In either case, uptrend gets confirmed or does not, the most probable scenario suggests a retest of the 2116 pivot or lower in coming weeks. Medium term support is at the 2131 and 2116 pivots, with resistance at the 2177 and 2212 pivots.

SHORT TERM

After the mid-September low at SPX 2119/2120 we observed several rallies that were immediately sold off, but not fully retraced. Then there was a spike up to SPX 2180 post the FOMC meeting that was also sold off. In a broader sense we can see a double zigzag from SPX 2120: 2154-2136-2180. Then a drop to SPX 2142. This is currently followed by another potential double zigzag: 2173-2145-2175 so far. It would appear the SPX 2142 level is key support for this pattern to continue. And a rally above SPX 2180 should offer the potential to hit the 2194 all time high, or even the 2212 pivot range.

spxhourly

Overall it appears the market may be just marking time until earnings season approaches. Short term support is at SPX 2142 and the 2131 pivot, with resistance at the 2177 pivot and SPX 2194. Short term momentum ended the week just above neutral.

FOREIGN MARKETS

Asian markets were mostly lower on the week losing 0.9%.

European markets were all lower losing 0.9% as well.

The Commodity equity group were mixed losing 0.2%.

The DJ World index lost 0.4% on the week.

COMMODITIES

Bonds continue to downtrend and lost 0.2% on the week.

Crude is in an uptrend and gained 8.5% on the week.

Gold is in a choppy uptrend and lost 1.8% on the week.

The USD is in a choppy uptrend and finished flat on the week.

NEXT WEEK

Monday: ISM, construction spending and auto sales at 10am. Tuesday: the ECB meets. Wednesday: the ADP, trade deficit, factory orders and ISM services. Thursday: weekly jobless claims. Friday: monthly Payrolls (est. +183K), wholesale inventories and consumer credit. Best to your weekend and week!

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

 

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OEW tutoring

All markets are driven by long term investor psychology 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 could 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 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 uncovered some of the missing tenets of 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 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 identified a new bull market in the USD and bear markets in most other currencies. In real estate: OEW identified the bull market top in 2005, and then the bear market bottom in 2011. However, sometimes my personal analysis, rather than OEW, falters at times. In any case, all of our projections since 2005 are detailed – unedited – day by day on the 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, allowing one to follow the bull or bear market as its unfolds. OEW tutoring covers the various indices in the US stock market and foreign markets, along with various modified technical indicators. It also covers 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, benefits no one. The Law of Sharing is universal. And he who violates it, suffers by reason of their conflict with natural laws within their own illusions.”
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Friday update

SHORT TERM: gap up opening, DOW +165

Overnight the Asian markets lost 1.1%. Europe opened lower but gained 0.3% when Deutsche Bank’ stock reversed higher. US index futures were higher overnight. At 8:30 personal income (0.2% v 0.4%)/spending (0.0% v 0.3%) were reported mixed, and PCE prices were higher: 0.2% v 0.1%. The market gapped up at the open to SPX 2165, then dropped to 2158 just before 10am. The SPX had closed at 2151 yesterday. At 9:45 the Chicago PMI was reported higher: 54.2 v 51.5, then at 10am consumer sentiment was reported higher: 91.2 v 89.8. The market then resumed its rally into the afternoon, hitting SPX 2175 by 3:30 before closing at 2168.

For the day the SPX/DOW gained 0.85%, and the NDX/NAZ gained 0.80%. Bonds lost 12 ticks, Crude rose 15 cents, Gold dropped $4, and the USD was lower. Medium term support remains at the 2131 and 2116 pivots, with resistance at the 2177 and 2212 pivots. Today the Q3 GDP estimate was lowered: 2.4% v 2.8%.

After yesterday’s afternoon negative news on Deutsche bank, the news turned not so negative this morning and the stock/markets reversed. Instead of heading lower the market rallied back into the 2177 pivot range, after being quite oversold at yesterday’s lows. Since the SPX 2120 low this advance has been quite choppy. All rallies have been sold creating a series of overlapping advances up to SPX 2180, and even after that high. This certainly does not look like an impulse wave. Will cover the implications in the weekend update. Best to your weekend!

MEDIUM TERM: corrective activity continues

LONG TERM: uptrend

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

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Thursday update

SHORT TERM: higher early then decline, DOW -196

Overnight the Asian markets ended mixed. Europe opened higher and gained 0.3%. US index futures were lower overnight. At 8:30 Q2 GDP was reported higher: 1.4% v 1.1%, and weekly jobless claims rose: 254K v 252K. The market opened three points below yesterday’s SPX 2171 close, then rose to 2173 by 10am. At 10am pending home sales were reported lower: -2.4% v 1.3%, and FED governor Powell’s speech was released: http://www.federalreserve.gov/newsevents/speech/powell20160929a.htm. Then the market declined to SPX 2163 just past 11am and rallied to 2170 by 12:30. Then some negative news broke on Deutsche Bank and the market sold off to SPX 2145 by 2pm. After that there was a rally to SPX 2161, then a decline to 2151 to end the day.

For the day the SPX/DOW lost 1.00%, and the NDX/NAZ lost 0.85%. Bonds added 3 ticks, Crude rose 60 cents, Gold slipped $2, and the USD was higher. Medium term support remains at the 2131 and 2116 pivots, with resistance at the 2177 and 2212 pivots. Tomorrow: personal income/spending and the PCE at 8:30, the Chicago PMI at 9:45, then consumer sentiment at 10am.

The market opened slightly lower today, then hit SPX 2173. After a pullback the market started to rally, and then the DB news broke. The stock sold off and the market sold off with it. For the first time, since the SPX 2120 low and seven rallies, the SPX fully retraced one: 2152-2173-2145. Now it is quite clear, the entire advance off the SPX 2120 low is corrective. This suggests SPX 2120 was an A, and SPX 2180 was a B, with a C wave underway now. Would have taken this viewpoint earlier if it wasn’t for the ongoing uptrend in the NDX/NAZ indices. Cyclicals fighting the Tech advance. Short term support is now at the 2131 and 2116 pivots, with resistance at the 2177 pivot and SPX 2194. Short term momentum was quite oversold at today’s lows then bounced. Trade what’s in front of you!

MEDIUM TERM: potential uptrend looks corrective

LONG TERM: uptrend

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

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Wednesday update

SHORT TERM: pullback, then rally, DOW +111

Overnight the Asian markets lost 0.2%. Europe opened higher and gained 0.7%. US index futures were higher overnight, and at 8:30 durable goods orders were reported unchanged. The market opened four points above yesterday’s SPX 2160 close, then declined to 2152 by 11am. At 10am FED chair Yellen testified before congress: http://www.federalreserve.gov/newsevents/testimony/yellen20160928a.htm. The market then continued to work its way higher. Just past 2pm it was reported OPEC had reached a limit on Oil production. The market rallied higher. Also at 2pm FED director Sullivan: http://www.federalreserve.gov/newsevents/testimony/sullivan20160928a.htm. Heading into the close the SPX hit 2172, then closed at 2171.

For the day the SPX/DOW gained 0.55%, and the NDX/NAZ gained 0.20%. Bonds slipped 4 ticks, Crude rallied $2.00, Gold dipped $4, and the USD was higher. Medium term support remains at the 2131 and 2116 pivots, with resistance at the 2177 and 2212 pivots. Tomorrow: Q2 GDP (est. +1.3%) and weekly jobless claims at 8:30, then pending home sales at 10am. Also at 10am there is a speech from FED governor Powell, and at 4pm a speech from FED chair Yellen. Today the Q3 GDP estimate was lowered to 2.8% v 2.9%.

The market opened higher today, pulled back to SPX 2152, then rallied into the 2177 pivot range. We can now count seven rallies since the SPX 2120 low. The first five overlapped each other, and the last two have yet to do so. None of these rallies have been fully retraced. Certainly an odd pattern for a potential uptrend, since it looks more like typical corrective activity. Still can go either way. Short term support is at SPX 2152 and the 2131 pivot, with resistance at the 2177 pivot and SPX 2194. Short term momentum was quite overbought at the close. Best to your trading!

MEDIUM TERM: 80% uptrend probability still being tested

LONG TERM: uptrend

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

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Tuesday update

SHORT TERM: lower open then rally, DOW +133

Overnight the Asian markets rebounded gaining 0.5%. Europe opened higher but lost 0.2%, after trading much lower. US index futures were higher overnight, started losing its gains as Germany declined, then turned negative before the open. At 9am Case-Shiller was reported lower: 5.0% v 5.1%. The market opened four points below yesterday’s SPX 2146 close, then immediately started to rally. At 10am the SPX hit 2156, consumer sentiment was reported higher: 104.1 v 101.1, and the market started to pullback. At 11am the SPX hit 2147, and then turned higher again. At 11:15 FED vice chair Fisher’s speech was released: http://www.federalreserve.gov/newsevents/speech/fischer20160927a.htm. Around 1:30 the SPX hit 2161, then ended the day at 2160.

For the day the SPX/DOW gained 0.70%, and the NDX/NAZ gained 1.00%. Bonds gained 6 ticks, Crude dropped $1.40, Gold slid $10, and the USD was higher. Medium term support remains at the 2131 and 2116 pivots, with resistance at the 2177 and 2212 pivots. Tomorrow: durable goods orders at 8:30, Congressional testimony by FED chair Yellen at 10am, then testimony by FED director Sullivan at 2pm.

The market opened lower today, hit SPX 2142, and then started to rally. Since the SPX 2120 low we have now had five overlapping rallies and not one of them has been fully retraced. This is quite an odd short term pattern. This advance can still roll over and retest that low, or take off to the upside and make new highs. Market is leaving both options open. Meanwhile the NDX, NAZ, R2K, SOX and TRAN are all in uptrends. Short term support is at the 2131 and 2116 pivots, with resistance at the 2177 pivot and SPX 2194. Short term momentum nearly hit overbought after yesterday’s positive divergence. Best to your trading!

MEDIUM TERM: 80% uptrend probability getting tested

LONG TERM: uptrend

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

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Monday update

SHORT TERM: gap down opening, DOW -167

Overnight the Asian markets lost 1.4%. Europe opened lower and lost 1.8%. US index futures were lower overnight, and the market gapped down to SPX 2154 at the open. The SPX had closed at 2165 last week. In the opening minutes the SPX hit 2149, then rallied to 2157 by 10:30. At 10am new home sales were reported lower: 609K v 654K. Then the market resumed its pullback. At noon FED governor Tarullo’s speech was released: http://www.federalreserve.gov/newsevents/speech/tarullo20160926a.htm. Heading into the close the SPX hit 2145, then closed at 2146.

For the day the SPX/DOW lost 0.90%, and the NDX/NAZ lost 0.90%. Bonds gained 11 ticks, Crude rose $1.20, Gold slipped $1, and the USD was lower. Medium term support remains at the 2131 and 2116 pivots, with resistance at the 2177 and 2212 pivots. Tomorrow: Case-Shiller at 9am, consumer confidence at 10am, and a speech from FED vice chair Fischer at 11:15.

Today’s selling appears to have begun overnight in Asia. Then in Europe some non-supportive government comments were made regarding the troubled Deutsche Bank. The DAX was down sharply by time the US markets opened. When Germany closed the DAX had lost 2.2%, and the SPX was at 2148. For the rest of the day the SPX traded between 2145-2153. As a result of today’s decline we now have five overlapping rallies from the recent SPX 2120 low. Yes it looks corrective, and would confirm that with a further drop to SPX 2140 – which would completely retrace the most recent rally. Short term support is at the 2131 and 2116 pivots, with resistance at the 2177 pivot and SPX 2194. Short term momentum is displaying a slight positive divergence at the close. Trade what is in front of you!

MEDIUM TERM: 80% uptrend probability being tested

LONG TERM: uptrend

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

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