The week started at SPX 2549. After a small pullback to SPX 2542 on Monday, the market made a new high at SPX 2555 on Tuesday, retested that high on Wednesday/Thursday, then made a new high at SPX 2558 on Friday. The entire range for the week was SPX 2542-2558. For the week the SPX/DOW gained 0.3%, and the NDX/NAZ gained 0.4%. On the economic front all indicators this week were positive. On the uptick: the CPI/PPI, retail sales, business inventories, consumer sentiment, the Q3 GDP estimate, plus weekly jobless claims declined. Next week’s reports will include: the Beige book, industrial production. the NY/Philly FED and housing. Best to your week.
LONG TERM: uptrend
The bull market of February 2016 continues. We have been labeling this bull market as Major wave 1 of a 15+ year Primary wave III. Primary wave I unfolded from 2009 to 2015, as the SPX rose from 667 to 2135. Then after a Primary II bear market, 2015-2016, Primary III began at SPX 1810. According to our very long-term secular cycle analysis, Primary wave III’s are the best time to own stocks. Recent historical examples include; 1949-1966, and 1982-2000.
Thus far Major wave 1 has had a simple wave pattern. Intermediate waves i and ii completed in the spring of 2016. Then Intermediate iii started to subdivide. Minor waves 1 and 2 completed in the fall of 2016, and Minor waves 3 and 4 completed in the spring of 2017. Since then Minor wave 5 of Int. iii has been underway.
MEDIUM TERM: uptrend
This Minor wave 5 uptrend has been unfolding in five Minute waves. Minute wave i rose from SPX 2329 – 2454, with five Micro waves (orange). Then after a Minute ii decline to SPX 2408 in July, Minute iii was underway. Thus far Minute iii has advanced in three Micro waves (orange) from SPX 2408-2558. And is already longer than all of Minute i, with still Micro waves 4 and 5 to go.
Currently, however, there is a negative RSI divergence setup. Similar setups have occurred during all the Micro wave highs of this uptrend. Will the market again ignore this one and grind higher. Or is the elusive 20+ pullback next? This uptrend has relentlessly grinder higher at times. Medium term support is at the 2525 and 2479 pivots, with resistance at the 2575 and 2594 pivots.
While this market has appeared stalled at times, with higher opens sold and lower opens bought. Our short term count from the Micro 2 SPX 2417 low remains on track. Nano 1. 2455, Nano 2. 2428, and Nano 3. 2480-2447-2509-2488-2558. Currently it will take about a 20+ point pullback to register Nano 4. Then after a pop to new highs, completing Micro 3, a 30+ point pullback for Micro 4 would likely be next.
Simply put once Micro 3 ends the market is likely to get quite choppy, day traders market, while the rest of the smaller waves unfold. Then when Minute iv concludes the impulsing higher should return for Minute v. Short term support is at the 2525 and 2479 pivots, with resistance at the 2575 and 2594 pivots. Short term momentum ended the week with another negative divergence. Best to your trading!
Asian markets were all higher for the week and gained 1.4%.
European markets were mostly higher and gained 0.3%.
The DJ World index gained 0.9%, and the NYSE gained 0.3%.
Bonds continue to downtrend but gained 0.6%.
Crude remains in an uptrend and gained 4.4%.
Gold remains in a downtrend but gained 2.3%.
The USD is in an uptrend but lost 0.8%.
Monday: NY FED at 8:30. Tuesday: export/import prices, industrial production, and the home builder index. Wednesday: housing starts, building permits and the Beige book. Thursday: jobless claims, Philly FED and leading indicators. Friday: existing home sales, and a speech by FED chair Yellen well after the market closes.