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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weekend update

REVIEW

The week started at SPX 2139. The market rallied, after a gap up opening, to SPX 2154 on Monday. Then after the opening gap was closed on Monday the market finished unchanged. This sequence continued on Tuesday: gap up opening- close gap. On Wednesday another gap up opening-close gap sequence occurred, but during the FOMC statement/press conference the market rallied. The rallied continued to SPX 2180 on Thursday after another gap up opening, then pulled back to 2164 on Friday. For the week the SPX/DOW gained 1.4%, and the NDX/NAZ gained 1.4%. Economic reports for the week were sparse and mostly negative. On the downtick: housing starts, building permits, existing home sales, leading indicators and the Q3 GDP estimate. On the uptick: the NAHB, FHFA and weekly jobless claims improved. Next week’s reports will be highlighted by Q2 GDP, the PCE and the Chicago PMI. Best to your week!

LONG TERM: uptrend

Have recently come to realize there are quite a few EW counts floating around the blogosphere to define the advance from the SPX 1810 February low. We have been tracking four over the past few months, and have recently whittled it down to one with two alternates. The main count is a new bull market Primary III underway. The two alternates are basically two different views of the same irregular Primary B count. The count we eliminated is probably the most popular EW count: a Primary V underway. This count also has a few variables in the EW blogosphere. It is an interesting point in time for the stock market heading into a presidential election. New presidents seem to come along every eight years these days, instead of the customary four years. Bull markets also appear to last longer these days, than they were in the past. Connection?

Our quantitative OEW analysis suggests the bull market from 2009 ended in 2015, and it was the third longest bull market in the past 100 years. Only the 1921-1929 and 1987-2000 bull markets were longer. The bear market that followed, May 2015 – February 2016, was a bit short in time and percentage of decline. There are, however, several other quantified bear markets that were similar. One that immediately comes to mind took only six months while the market lost 17% of its value in 1984.

spxweekly

This week we updated the SPX weekly chart to display the preferred count, and moved the alternate count(s) to the NYSE daily charts. Since the NYSE has a similar 2016 pattern as the SPX, displaying the counts there appeared to be a good fit. Counting the February low as the end of the Primary wave II bear market, we have a Primary III bull market underway. The Primary I bull market lasted from 2009-2015. Since Primary III should last a number of years, Primary I was 6 years, we started off with labeling the first uptrend (1810-2111) as Intermediate wave i of Major wave 1. Then after an irregular Intermediate wave ii (2026-2121-1992) we have a shorter uptrend to 2194, and have labeled that Minor 1 of Intermediate wave iii. At this point it is much too early to speculate whether or not the next bear market will be at the end of Primary III, or the end of just Major wave 1 of Primary III. However it unfolds, we are currently expecting SPX 3000+ in the next 2 to 4 years.

MEDIUM TERM: uptrend an 80%+ probability

The last uptrend, which is labeled Minor 1, was five waves from SPX 1992-2194 (or 2188). From SPX 2194 a leading diagonal A to 2157, a B to 2188, then an ending diagonal C to 2120 could be counted. From SPX 2188 a simple, and short, A-B-C (2119-2163-2120) can be counted. Either way it appears the downtrend ended at SPX 2119/2120, as the NDX/NAZ have already confirmed new uptrends and have made new all time highs. Also, based upon a recent finding by one of our members Patrick M., there is a 80%+ probability that an uptrend is underway.

spxdaily

At the downtrend low the technicals, daily and weekly RSI/MACD, looked similar to the recent downtrend lows during this bull market. The daily RSI was quite oversold, and the MACD was negative. The weekly RSI was near oversold, just like the Br-exit downtrend low. The advance from the SPX 2119/2120 low has been a bit odd. There was first a rally to SPX 2151, then a pullback to 2131. After that there were three gap up openings that were completely closed before the latest rally from SPX 2140-2180. Will cover what this could mean in wave terms below. Medium term support is at the 2131 and 2116 pivots, with resistance at the 2177 and 2212 pivots.

SHORT TERM

After the apparent downtrend low at SPX 2120 the market had several overlapping rallies. The last three of the four rallies were created by gap up openings, that were completely sold off. Clearly there was a lot of positioning ahead of the FED’s FOMC statement on Wednesday.

spxhourly

Thus far we have the following sequence from SPX 2120: 2151-2131-2154-2136-2151-2139-2152-2140, then 2180-2164. What this suggests is that there are a series of nested 1-2’s ending at SPX 2140. Then either the third wave, or part of, ending at SPX 2180. We will track this sequence to see how it unfolds in the coming weeks. For now, the current pullback could dip to around SPX 2160 before resuming the rally. Pullbacks of 15-20 points were fairly common during the last uptrend. Short term support is the at 2131 and 2116 pivots, with resistance at the 2177 pivot and SPX 2194. Short term momentum ended the week oversold. Best to your trading!

FOREIGN MARKETS

Asian markets were all higher on the week gaining 1.6%.

European markets were also all higher gaining 2.7%.

The Commodity equity group were also higher gaining 3.1%.

The DJ World index gained 2.2%.

COMMODITIES

Bonds continue to downtrend but ended the week flat.

Crude is trying to uptrend and gained 2.0%.

Gold is also trying to uptrend and gained 2.4%.

The USD is still in a downtrend and lost 0.7%.

NEXT WEEK

Monday: new home sales at 10am. Tuesday: Case-Shiller and consumer confidence. Wednesday: durable goods orders. Thursday: weekly jobless claims, Q2 GDP (est. +1.3%), and pending home sales. Friday: personal income/spending, the PCE, Chicago PMI and consumer sentiment. It is also FED speak week. Monday: governor Tarullo at 11:45. Tuesday: vice chair Fischer. Wednesday: testimony from chair Yellen. Thursday: governor Powell and chair Yellen both have speeches. Could be another day traders week. Best to your weekend and week!

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

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Friday update

SHORT TERM: pullback ends choppy week, DOW -131

Overnight the Asian markets lost 0.4%. Europe opened lower and lost 0.3%. US index futures were lower overnight, and the market opened 5 points below yesterday’s SPX 2177 close. The market continued to decline throughout the day, with only 3 point bounces, until it hit SPX 2164 at 2pm. Then after a bounce to SPX 2171 by 3:30 the market pulled back again to end the week at 2165.

For the day the SPX/DOW lost 0.65%, and the NDX/NAZ lost 0.65%. Bonds gained 4 ticks, Crude dropped $1.60, Gold added $1, and the USD was higher. Medium term support drops to the 2131 and 2116 pivots, with resistance at the 2177 and 2212 pivots.

After yesterday’s gap up rally indicators left a short term negative divergence at the close. The market opened 5 points below yesterday’s close, declined to SPX 2164, hit short term oversold, and then bounced around into the close. Looks like a fairly normal pullback after a 40 point rally. Complete review, long, medium and short term in the weekend update. Best to your weekend!

MEDIUM TERM: uptrend probably underway

LONG TERM: uptrend

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

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Thursday update

SHORT TERM: fourth gap up opening, DOW +99

Overnight the Asian markets gained 0.5%. Europe opened higher and gained 1.9%. US index futures were higher overnight as well. At 8:30 weekly jobless claims were reported lower: 252K v 260K, then at 9am the FHFA was reported higher: 0.5% v 0.2%. The market gapped up at the open hitting SPX 2175. The market had closed at SPX 2163 yesterday. At 10am leading indicators were reported lower: -0.2% v 0.4%, and existing home sales were lower: 5.33M v 5.39M. At 10:30 the SPX hit 2180, and then started to pullback. The pullback lasted until 2:30 when the SPX hit 2172. Then the SPX hit 2180 again just before a 2177 close.

For the day the SPX/DOW gained 0.60%, and the NDX/NAZ gained 0.80%. Bonds gained 10 ticks, Crude rose 75 cents, Gold added $3, and the USD was lower. Medium term support rises to the 2177 and 2131 pivots, with resistance at the 2212 and 2252 pivots.

The market gapped up at the open for the fourth day in a row this week. The first three were completely sold off by early afternoon. This one was not. With a post-FOMC rally underway, the NDX/NAZ have already confirmed new uptrends. Would expect the SPX/DOW to do the same shortly. Thus far from last week’s SPX 2120 low there are four rallies that all had partial retracements, with the last retracement ending at SPX 2140. This rally began at that level and has already hit SPX 2180. It appears we have four nested 1-2’s and a 3rd wave underway. Quite an unusual start to an uptrend. Short term support is at the 2177 and 2131 pivots, with resistance at SPX 2194 and the 2212 pivot. Short term momentum was extremely overbought at the high, and displays a slight negative divergence at the close. Best to your trading!

MEDIUM TERM: uptrend probably underway

LONG TERM: uptrend

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

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Wednesday update

SHORT TERM: gap up, fade, then rally, DOW +164

Overnight the Asian markets gained 0.8%. Europe opened higher and gained 0.3%. US index futures were again higher overnight, and the market gapped up to SPX 2149 at the open. The SPX had closed at 2140 yesterday. At 10am the SPX hit 2152 and started to pullback. At noon the SPX closed the gap and hit 2140. Then the market started to rise ahead of the FOMC statements. At 2pm the FED released: http://www.federalreserve.gov/newsevents/press/monetary/20160921a.htm, and http://www.federalreserve.gov/newsevents/press/monetary/20160921b.htm. A few minutes after the statements the SPX hit 2154. Then it pulled back to SPX 2144 by 2:30. After that the market rallied to 2165 just before a 2163 close.

For the day the SPX/DOW gained 1.0%, and the NDX/NAZ gained 1.0%. Bonds gained 6 ticks, Crude rose $1.55, Gold rallied $19, and the USD was lower. Medium term support remains at the 2131 and 2116 pivots, with resistance at the 2177 and 2212 pivots. Tomorrow: weekly jobless claims at 8:30, the FHFA at 9am, then existing home sales at 10am.

The market gapped up at the open for the third day in a row. And just like the previous two days, it rallied until 10am, then sold off the entire gap up opening. After that there was the usual FOMC volatility on the wildest day of the week. From last week’s SPX 2120 low we now see 8 overlapping waves and a rally above them all after today’s SPX 2140 low. Generally all this activity still looks corrective, however we still can not rule out a nesting of 1-2’s. Which would be an odd beginning to an uptrend. Short term support is at the 2131 and 2116 pivots, with resistance now at the 2177 pivot and SPX 2194. Short term momentum ended the day quite overbought. Trade what is in front of you!

MEDIUM TERM: uptrend potential back on the table

LONG TERM: uptrend

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

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