Thursday update

SHORT TERM: gap down opening, DOW -40

Overnight the Asian markets lost 1.2%. Europe opened lower and lost 0.6%. US index futures were lower overnight, and at 8:30 weekly Jobless claims were reported lower: 282k v 291k. The market gapped down at the open to SPX 2051, dipped to 2049, bounced to 2059, and then headed lower, all in the first half hour. The market had closed at SPX 2061 yesterday. By 10:30 the SPX hit 2046, and then started to rally. By noon the SPX had closed the opening gap and then reached 2067 by 2pm. But in the last hour the SPX hit 2057 just past 3pm, bounced to 2062 by 3:30, then closed at 2056.

For the day the SPX/DOW were -0.25%, and the NDX/NAZ were -0.30%. Bonds lost 18 ticks, Crude rallied $2.20, Gold rose $8, and the USD was higher. Medium term support remains at the 2019 and 1973 pivots, with resistance at the 2070 and 2085 pivots. Tomorrow: before the open a speech from FED vice chair Fischer at 6:30, Q4 GDP (est. +2.4%) at 8:30, Consumer sentiment at 10am, then a speech from FED chair Yellen at 3:45.

The market gapped down at the open today, found support at SPX 2046, then rallied to 2067 by the afternoon. Today’s low represented nearly a 70 point decline from Monday’s SPX 2115 high. We could count five small waves down: 2099-2108-2049-2059-2046, before the rally to 2067. Before the open we updated the charts to display a potential: Minute A (2120-2040), Minute B (2040-2115), and Minute wave C underway. At SPX 2040 Minor 2 would form a flat, at SPX 2035 Minute C would equal Minute A, and at the OEW 2019 pivot Minor 2 would form a zigzag. These are the three levels we are monitoring. At today’s low the hourly RSI 5 hit its lowest level in more than 14 years. That’s some serious selling. Should we make a lower low soon, this would set up a nice positive divergence. Short term support is at SPX 2035/2040 and the 2019 pivot, with resistance at the 2070 and 2085 pivots. Short term momentum rebounded to near neutral during today’s rally. Best to your trading the often volatile GDP report!

MEDIUM TERM: downtrend probability increases

LONG TERM: bull market

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

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Wednesday update

SHORT TERM: gap up opening immediately reversed, DOW -293

Overnight the Asian markets gained 0.2%. European markets opened lower and lost 0.9%. US index futures were higher overnight, and at 8:30 Durable goods orders were reported lower: -1.4% v +2.8%. The market gapped up at the open to SPX 2097, it had closed at 2092 yesterday. Right after the open, however, the market started to pullback. In the opening minutes the SPX hit 2087, bounced to 2094 by 10:30, then hit 2087 again just before 11am. After a bounce to SPX 2092 by 11am the market dropped to 2069 by 1:30. Another rally attempt could only manage a bounce to SPX 2075 by 2:30, then market headed lower to close at 2061.

For the day the SPX/DOW were -1.5%, and the NDX/NAZ were -2.35%. Bonds lost 10 ticks, Crude rallied $1.45, Gold rose $2, and the USD was lower. Medium term support drops to the 2019 and 1973 pivots, with resistance at the 2070 and 2085 pivots. Tomorrow: weekly Jobless claims at 8:30.

The market gapped up at the open today, but then immediately turned lower. Yesterday the cyclicals were putting downside pressure on the market while the growth sector was trying to rally. Today, the growth sector led lower. Around 11:30 the SPX broke key support, for the impulsive pattern, from the recent SPX 2040 low. This created an overlap between this pullback, which we were labeling Micro 4, and the SPX 2081 high, Micro 1. This overlap now makes the entire rally from SPX 2040 to 2115 look corrective. The five week failure to make back to back higher closes, and the constant gap openings, appear to have taken their toll on the uptrend. We now have to consider the recent SPX 2040 low as an A wave, and the SPX 2115 high as a B wave, with the C wave down currently underway. Under this scenario initial support would be naturally at SPX 2040, with the next support at the 2019 pivot. Short term support is at the SPX 2040 and the 2019 pivot, with resistance at the 2070 and 2085 pivots. Short term momentum ended the day extremely oversold. Best to your trading!

MEDIUM TERM: downtrend probabilities increasing

LONG TERM: bull market

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

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Tuesday update

SHORT TERM: pullback continues, DOW -105

Overnight the Asian markets lost 0.2%. European markets opened lower bit gained 0.5%. US index futures were higher overnight. At 8:30 the CPI was reported higher: +0.2% v -0.7%, then at 9am FHFA housing prices were reported higher: +0.3% v +0.8%. The market opened one point below yesterday’s SPX 2104 close, then hit 2099 in the opening minutes. At 10am New home sales were reported at a seven year high: 539k v 481k. The market rallied to SPX 2108 by 11:30, but then pulled back again. At 2:30 the SPX hit 2094, bounced to 2099 just past 3pm, then closed at 2092.

For the day the SPX/DOW were -0.60%, and the NDX/NAZ were -0.30%. Bonds gained 9 ticks, Crude was flat, Gold added $2, and the USD was higher. 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 opened slightly lower today, dipped below SPX 2100, rallied to 2108, then made a lower low at 2092. During the second decline the market triggered a Micro wave 4 underway, and we updated the hourly chart accordingly. The pullback from SPX 2115 looks like another abc (2099-2108-2092). Each of the previous three pullbacks during this rally have been between 21 and 25 points. This one is 23 points thus far. Today also marked the fifth consecutive week that the market has failed to rally two days in a row. This is quite odd considering the market has been in an uptrend since early February. And, it is probably the reason the market has not made much upside progress. Five week ago the SPX closed at 2100. Short term support is at the 2085 and 2070 pivots, with resistance at SPX 2107 and SPX 2115. Short term momentum ended the day quite oversold. Best to your trading!

MEDIUM TERM: uptrend

LONG TERM: bull market

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

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Monday update

SHORT TERM: consolidation day, DOW -12

Overnight the Asian markets gained 0.4%. Europe opened lower and lost 0.3%. US index futures were lower overnight, but the market opened two points above Friday’s SPX 2108 close and continued to move higher. At 10am Existing home sales were reported higher: 4.88mn v 4.82mn. Just past 10am the SPX hit 2115 and started to pullback. At 12:30 FED vice chair Fischer’s speech was released just as the SPX hit 2109: http://www.federalreserve.gov/newsevents/speech/fischer20150323a.htm. The pullback lasted for the rest of the day, as the SPX bounced to 2114 by 2:30, then declined to close at 2104.

For the day the SPX/DOW were -0.10%, and the NDX/NAZ were -0.30%. Bonds gained 6 ticks, Crude rose 75 cents, Gold added $7, and the USD was lower. Medium term support remains at the 2085 and 2070 pivots, with resistance at the 2131 and 2198 pivots. Tomorrow: the CPI at 8:30, FHFA housing prices at 9am, then New home sales at 10am.

The market opened higher today, rallied to SPX 2115 just past 10am, then went into a choppy pullback mode for the rest of the day. The gap opening streak ended at seven days, and the alternation between up and down days looked like it was ending until the close. The short term wave pattern posted over the weekend remains the same. A notable pullback is underway, but the SPX will have to drop below 2095 to suggest Micro wave 3 ended at today’s high. Short term support is at the 2085 and 2070 pivots, with resistance at SPX 2107 and SPX 2115. Short term momentum ended the day oversold. Best to your trading!

MEDIUM TERM: uptrend

LONG TERM: bull market

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

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weekend update

REVIEW

The market started the week at SPX 2053. On Monday the market gapped up and hit SPX 2083. Then after two gap down openings the market pulled back to SPX 2061 by Wednesday, before the FOMC statement. After a strong Wednesday afternoon rally, the market gapped down on Thursday, but rose into a Friday high of SPX 2114. For the week the SPX/DOW gained 2.40%, the NDX/NAZ gained 3.25%, and the DJ World index gained 3.25%. On the economic front reports continue to come in slightly negative. On the uptick: industrial production, building permits, leading indicators, the WLEI and the monetary base. On the downtick: the NY/Philly FED, capacity utilization, the NAHB, housing starts, current account deficit, and weekly jobless claims. Next week we get updates on Q4 GDP, the CPI and more Housing reports.

LONG TERM: bull market

The six year bull market came within six points of matching its all time high of SPX 2120 this week. While the market has been quite choppy during 2015 it continues to work its way higher. Our long term count remains unchanged. A cycle wave [1] bull market underway, probably lasting until 2017, unfolding in five Primary waves. Primary waves I and II completed in 2011 and Primary wave III has been underway since then.

SPXweekly

Primary I divided into five Major waves, with a subdividing Major wave 1 and simple Major waves 3 and 5. Primary III is doing just the opposite, with a simple Major wave 1 and subdividing Major waves 3 and 5. Major waves 1 and 2 completed in late 2011, and Major waves 3 and 4 completed in late-2014 to early-2015. Major wave 5 is currently underway. When it concludes, which we believe will be next year, Primary III will complete. Then after a Primary IV correction, a Primary wave V to new highs should follow.

MEDIUM TERM: uptrend

After a Major wave 4 bottom at SPX 1981 on the first trading day of February, the market rallied to 2120 by late-February. Since the wave was quite small for uptrend standards, only 7%, we counted that rally as Minor wave 1 of the Intermediate i uptrend. The market then pulled back for two weeks hitting SPX 2040, for a bit more than a 50% retracement. At the low it found support just below our SPX 2042-2072 wave structure range, and between our 2034-2051 Fibonacci range. And, it was quite oversold on the daily RSI and had dipped just below neutral on the MACD.

SPXdaily

Since that low the market has rallied, with 20+ pullbacks along the way, to within six points of the all time high of SPX 2120 on Friday. We are counting this advance as Minor wave 3 of the uptrend. Since Minor wave 1 rose about 140 points (1981-2120) we are expecting Minor waves 3 through 5 to rise at least 140 points as well. This would put an upside target, for this uptrend, around at least SPX 2180. Since this is close to our OEW 2198 pivot, we would expect that range to be the minimum going forward. Medium term support is at the 2085 and 2070 pivots, with resistance at the 2131 and 2198 pivots.

SHORT TERM

During the Minor wave 2 pullback we counted it as a somewhat complex zigzag: 2088-2104-2040. At SPX 2040 the ‘c’ wave was exactly twice the ‘a’ wave. Then from an extremely oversold short term condition the market started to rally. The first advance to SPX 2066 was followed by nearly a full retracement pullback to 2041. However, the market held that low and then advanced to SPX 2081. The pullback that followed that rally was also a bit odd: 2065-2079-2061. Then the market took off on FOMC day to SPX 2107 and had another steep pullback to 2086. This was followed by a rally to SPX 2114 on Friday, and then a small pullback into the close.

SPXhourly

We are counting all this wave activity as a Minute i-ii (2066-2041) of Minor 3. Then a Micro 1-2 (2081-2061) of Minute iii, followed by a Micro 3 underway to 2114 thus far. For now the rally from SPX 2061 to 2114 appears to be part of Micro wave 3. Short term support is at SPX 2107 and the 2085 pivot, with resistance at SPX 2120 and the 2131 pivot. Short term momentum ended the week above neutral.

FOREIGN MARKETS

The Asian markets were nearly all higher and the net gain was 2.2% on the week.

The European markets were also nearly all higher gaining 1.7% on the week.

The Commodity equity group were all higher gaining 4.2% on the week.

The DJ World index gained 3.25% on the week.

COMMODITIES

Bonds appear to have reversed a downtrend gaining 1.2% on the week.

Crude appears to have bottomed gaining 3.5% on the week.

Gold appears to have reversed a downtrend too gaining 2.3% on the week.

The USD appears to have ended its 10 month uptrend as it lost 1.3% on the week.

NEXT WEEK

Monday: Existing home sales at 10am, and a speech from FED vice chair Fischer at 12:30. Tuesday: the CPI, FHFA home prices and New home sales. Wednesday: Durable goods orders. Thursday: weekly Jobless claims. Friday: Q4 GDP (est. +2.4%), Consumer sentiment, a speech from FED vice chair Fischer, and a speech from FED chair Yellen. Best to your weekend and week!

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

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Friday update

SHORT TERM: gap up and go options expiration, DOW +169

Overnight the Asian markets lost 0.2%. Europe opened higher and gained 1.0%. US index futures were higher overnight, and the market gapped up to SPX 2098 at the open. The SPX had closed at 2089 yesterday. The rally continued higher with only a three point pullback into the afternoon. At noon the FED released this statement: http://www.federalreserve.gov/newsevents/press/other/20150320a.htm. At 1:30 the SPX hit 2114, then started to pullback. By 3:30 the SPX had reached 2108. Then a bounce to SPX 2112 in the last few minutes led to a close at 2108.

For the day the SPX/DOW gained 0.90%, and the NDX/NAZ gained 0.70%. Bonds gained 16 ticks, Crude rose 85 cents, Gold added $12, and the USD was lower. Medium term support remains at the 2085 and 2070 pivots, with resistance at the 2131 and 2198 pivots. Last night the FED reported an increase in the Monetary base: $4.144tn v $3.807tn. Today the WLEI was reported higher: 46.3% v 46.0%.

The market gapped up at the open for the seventh gap opening in a row. The market opened one point above yesterday’s high and continued to rally into the afternoon. Since SPX 2081 was never approached the impulsive pattern upwards continues. No change in the short term count, as we see a Minute i-ii, and a 1-2-3 of Minute iii still underway. Also of note: the SPX closed above 2100, the DOW above 18,000 and the NAZ above 5,000. Short term support now rises to SPX 2107 and the 2085 pivot, with resistance at SPX 2120 and the 2131 pivot. Short term momentum hit quite overbought today before pulling back. Best to your weekend!

MEDIUM TERM: uptrend

LONG TERM: bull market

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

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Thursday update

SHORT TERM: gap down opening again, DOW -117

Overnight the Asian markets gained 0.2%. European markets opened lower bit gained 0.1%. US index futures were lower overnight, and at 8:30 weekly Jobless claims were reported higher: 291k v 289k. The market gapped down at the opened for the third day in a row. It opened at SPX 2094, dipped to 2090, and then tried to rally. The SPX had closed at 2100 yesterday. At 10am the Philly FED was reported lower: 5.0 v 5.2, Leading indicators were reported higher: +0.2% v +0.2%, and FED governor Tarullo’s senate testimony: http://www.federalreserve.gov/newsevents/testimony/tarullo20150319a.htm. By 10:30 the market had hit SPX 2097, and then started to pullback again. At 1pm the SPX hit 2086, and then tried to rally. The rally lasted to 3pm and hit SPX 2093, then the market pulled back to close at 2089.

For the day the SPX/DOW were -0.55%, and the NDX/NAZ were +0.15%. Bonds lost 11 ticks, Crude slid $1.05, Gold dipped a $1, and the USD was higher. Medium term support remains at the 2085 and 2070 pivots, with resistance at the 2131 and 2198 pivots. Tomorrow is Options expiration Friday.

The market had its sixth straight gap opening today, four of them down, after yesterday afternoon’s spike up rally. In fact, since February 17th the SPX has not had two successive up days in a row. Day traders market. After yesterday’s SPX 2107 high the market has now pulled back a larger than expected 21 points. This pullback, thus far, looks similar to the last pullback (2081-2061) and the one before that (2066-2041). However, if the pullback continues lower, and drops below SPX 2081, the entire rally from 2040 will start to look choppy. This would then suggest it could have all been a B wave of an ongoing correction from SPX 2120. For now the Minor wave 3 impulsive structure remains. Short term support is at the 2085 and 2070 pivots, with resistance at SPX 2107 and SPX 2120. Short term momentum dropped to neutral during today’s pullback then turned higher. Best to your Opex trading!

MEDIUM TERM: uptrend

LONG TERM: bull market

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

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