Wednesday update

SHORT TERM: gap up opening, DOW -100

Overnight the Asian markets lost 1.1%. Europe opened higher and gained 1.3%. US index futures were higher overnight. Prior to the open FED chair Yellen’s congressional testimony was released, and then one half hour later FED vice chair Fischer’s speech: http://www.federalreserve.gov/newsevents/testimony/yellen20160210a.htm, http://www.federalreserve.gov/newsevents/speech/fischer20160210a.htm. The market gapped up at the opening to SPX 1865. The market had closed at SPX 1852 yesterday. After a dip to SPX 1860 in the opening moments the market rallied to 1882 by 10:30, after the testimony began. Then the market dropped to SPX 1858 by 11:30. The market tried to rally again and hit SPX 1875 by 1:30, but then started to pullback. At 2pm the Budget deficit was reported as a surplus: +$55.2B v -$14.4B. The decline continued into the close, when the SPX hit 1850 then ticked up to close at 1852.

For the day the SPX/DOW were -0.30%, and the NDX/NAZ were +0.40%. Bonds gained 11 ticks, Crude lost 60 cents, Gold rose $9, and the USD was lower. Medium term support remains at the 1841 and 1828 pivots, with resistance at the 1869 and 1901 pivots. Tomorrow: weekly Jobless claims at 8:30, and FED chair Yellen resumes her testimony with the Senate at 10am.

The market had its eleventh gap opening in the past twelve trading days today. This time around it was up after three straight gap down openings. The market rallied to SPX 1882 by 10:30 and that was the high of the day. The rally from Monday’s SPX 1828 low to today’s high was quite corrective SPX: 1862-1835-1882. And it looked quite similar to the recent SPX 1872-1927 rally, including the number of points gained, i.e. 55 points. After today’s high the market started stair-stepping down again SPX: 1858-1875-1850. If this counter rally is done, as it appears, an attempt to break the lows should be next. Short term support is at the 1841 and 1828 pivots, with resistance at the 1869 and 1901 pivots. Short term momentum did hit overbought during today’s rally then dropped below neutral. Best to your trading this volatile market!

MEDIUM TERM: downtrend

LONG TERM: bear market

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

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Tuesday update

SHORT TERM: gap down opening then rebound, DOW -13

Overnight the Asian markets lost 2.2%. Europe opened higher but lost 1.2%. US index futures were lower overnight and the market gapped down to SPX 1837 at the open. The market had closed at SPX 1853 yesterday. In the opening minutes the market ticked down to SPX 1835, then began to rally. At 10am Wholesale inventories were reported lower: -0.1% v -0.3%. The rally continued until just past 10am when the SPX hit 1862. Then the market headed back down again. At 11am the SPX hit 1840, bounced to 1857 by 11:30, then hit the low again at 1835 by 1:30. After that another rally was underway. This rally made a new high for the day at SPX 1868 by 3pm. Then again the market pulled back. Just before the close the SPX hit 1850, then bounced to close at 1852.

For the day the SPX/DOW were -0.05%, and the NDX/NAZ were -0.35%. Bonds slipped 1 tick, Crude lost $1.15, Gold dipped $2, and the USD continued lower. Medium term support remains at the 1841 and 1828 pivots, with resistance at the 1869 and 1901 pivots. Tomorrow: FED chair Yellen testifies before Congress at 10am, then the Budget deficit at 2pm.

Another volatile day. The market opened with a gap down (1835), quickly reversed to turn positive on the day (1862), sold off again to retest the lows (1835), then rallied to break through the highs of the day (1868). Pivot (1828 ad 1869) ping pong? This afternoon’s action looked similar to yesterday afternoon’s action: low of the day, then ramp up 30+ SPX points. Yesterday we updated the SPX daily chart with a potential, unfinished, five Intermediate waves down for a Major A downtrend. The hourly chart we have left unchanged since the SPX has not broken the downtrends range SPX: 1812-2116. Under the daily count, today’s action would be considered part of a Minor wave 4 of Int. v. Short term support remains at the 1841 and 1828 pivots, with resistance at the 1869 and 1901 pivots. Short term momentum nearly hit overbought during this afternoon’s rally. FED chair Yellen testifies before an economically challenged Congress tomorrow in an election year. Sets up to be quite a circus. Best to your trading!

MEDIUM TERM: downtrend

LONG TERM: bear market

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

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Monday update

SHORT TERM: gap down opening, DOW -178

Overnight the Asian markets lost 0.1%. Europe opened lower and lost 3.1%. US index futures were sharply lower overnight, and the market gapped down at the open to SPX 1857. The market had closed at SPX 1880 on Friday. The market continued to decline to just past 10am when it hit SPX 1839. Then after a rally to SPX 1849 by 10:30 it made a lower low at 1833 by 11am. Another rallied followed to SPX 1848 by 12:30. Then the market made its low of the day at SPX 1828 at 2:30. After that the market rebounded strongly to hit SPX 1861 just past 3:30 before closing at 1853. Volatile day!

For the day the SPX/DOW lost 1.25%, and the NDX/NAZ lost 1.70%. Bonds gained 27 ticks, Crude dropped 85 cents, Gold rallied $15, and the USD was lower. Medium term support drops to the 1841 and 1828 pivots, with resistance at the 1869 and 1901 pivots. Today: long term investor sentiment was reported lower: 52.5% v 55.3%. Tomorrow: Wholesale inventories at 10am.

The market gapped down at the open to start the week. The fourth gap down opening in the past six trading days. The market opened below the two week support level at the 1869 pivot, and continued to decline. The first decline held the 1841 pivot, then the next decline found support at the 1828 pivot. There is a cluster of pivots in this area: 1818, 1828 and 1841. The next lower pivot is at SPX 1779. With todays’ drop below the SPX 1852 level, noted in the weekend update, it appears the first downtrend of this bear market is actually extending. While the SPX has still remained with the downtrend range (1812-2116), a break lower now appears more probable. Short term support is at the 1841 and 1828 pivots, with resistance at the 1869 and 1901 pivots. Short term momentum rose to neutral after remaining extremely oversold early in the day. Best to your trading!

MEDIUM TERM: downtrend may be extending

LONG TERM: bear market

CHARTS: http://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 exact 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 recent 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.

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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weekend update

REVIEW

The market started the week at SPX 1940. On Monday the market rose to SPX 1947 and then traded down to 1872 by early Wednesday. Then the market rallied to SPX 1927 early Thursday, only to selloff again and end the week at SPX 1880. For the week the SPX/DOW lost 2.35%, the NDX/NAZ lost 5.70%, and the DJ World index lost 2.20%. Economic reports for the week were again biased negatively. On the uptick: personal income, construction spending, consumer credit, Q1 GDP, plus the unemployment rate improved. On the downtick: ISM manufacturing/services, the ADP, factory orders, monthly payrolls, the WLEI, plus weekly jobless claims and the trade deficit worsened. Next week will be highlighted by FED chair Yellen’s semiannual monetary policy report to Congress.

LONG TERM: bear market

During the entire six year bull market, the longest period between new highs was May 2011 to Feb 2012. During that period Primary I had topped in May, Primary II bottomed in October, and the market was solidly in an uptrend from a December low that would last until April 2012. Currently the market made its highest price in May 2015, sold off until August, made a lower high in October, and then an even lower low in January. The price action since May looks more like a bear market than anything that occurred during the bull market. We continue to see a Cycle wave [2] bear market underway.

SPXweekly

The six year bull market completed its expected five Primary wave advance with a somewhat abrupt ending. Primary waves I and II completed in 2011, and Primary waves III, IV and V completed in 2015. Primary V, however, impulse higher in a strong uptrend but failed to make new all time highs by about 1%. This completed Cycle wave [1] and a Cycle wave [2] bear market is now underway. Cycle waves typically lose 45% to 50% of market value before they bottom. This would suggest a low around SPX 1100, more or less, by sometime in 2017. The decline may be a simple zigzag, or a complex three. With only one confirmed downtrend underway it is still too early to determine the pattern.

MEDIUM TERM:

After the Primary IV low at SPX 1867 in August, the market rallied in five impulse waves SPX: 1993-1872-2116-2019-2104. The fifth wave failed to make a higher high falling short of the third wave at SPX 2116. Also this Primary V uptrend fell short of the bull market high at SPX 2135. So in effect the bull market ended with a failed fifth of a failed fifth wave. This was quite an abrupt ending to what had been a very good bull market, i.e. the SPX more than tripled in the six years.

After Primary V ended the market entered a three wave downtrend, made lower lows, and hit SPX 1812 in mid-January. Then with a positive daily RSI divergence, and a quite oversold MACD we expected the first uptrend of the bear market. After about 2.5 weeks of market activity, and a 135 point rally to SPX 1947, the advance is not looking like what we had expected. While the SPX/DOW are still well above their mid-January lows, the NDX/NAZ are both getting quite close to making lower lows. This should not be happening during an uptrend.

SPXdaily

At the mid-January lows we expected an uptrend to unfold, with a worse case trading range during the month of February. This can still occur. But if the market breaks down much further we have to accept that the downtrend from the Primary V high is still underway. We had counted the three waves into the SPX 1812 low as corrective. Suggesting the market is not impulsing down, but unfolding in a more complex set of a-b-c’s. Should the downtrend extend we will be forced to find a new short term wave filter, since the bull market’s filter will no longer be in effect. Medium term support is at the 1869 and 1841 pivots, with resistance at the 1901 and 1929 pivots.

SHORT TERM

Tracking the SPX/DOW, in isolation of the NDX/NAZ, the waves have been unfolding somewhat as expected. After a potential Major wave A downtrend low at SPX 1812, the market has rallied in an expected Major wave B uptrend to SPX 1947. Since we have not confirmed that the downtrend has ended, we labeled that low with a tentative green Major A. The rally to SPX 1947 has not confirmed an uptrend either, so we are stuck, at this point, with two tentative green labels. Should the downtrend resume we will have the answer to this dilemma. Should the market stay in a trading range the trend confirmations will come eventually.

Remaining with the current labeling, we have counted three Intermediate waves up to SPX 1947 Major B wave high: 1909-1874-1947. After that we counted three wave down for Minor a of Intermediate A SPX: 1897-1914-1872. Minor b was also three waves SPX: 1918-1901-1927. This count suggests Minor wave c of Intermediate A is currently underway. Should Minor c = Minor a, then the market should find support around SPX 1852. Anything lower than that would suggest the initial downtrend is resuming.

SPXhourly

One other possibility, since the market has now found support on four separate occasions in the SPX 1870’s, (twice last week and twice this week), Major wave B may be much more complex. For now we would expect the market to drop to around SPX 1852 before it starts to rally in an Intermediate wave B. Short term support is at the 1869 and 1841 pivots, with resistance at the 1901 and 1929 pivots. Short term momentum ended the week quite oversold. Best to your trading this volatile market!

FOREIGN MARKETS

Asian markets were quite mixed for a net loss of 0.3%.

European markets were all lower and lost 5.5%.

The Commodity equity group was mixed and lost 0.7%.

The DJ World index remains in a downtrend and lost 2.2%.

COMMODITIES

Bonds continue to uptrend and gained 0.6%.

Crude is still in a downtrend and lost 8.1%.

Gold is still in an uptrend and gained 5.0%.

The USD is in a downtrend and lost 2.6% on the week.

NEXT WEEK

Tuesday: Wholesale inventories. Wednesday: testimony from FED chair Yellen before Congress, and the Budget deficit. Thursday: testimony continues before the Senate, and weekly Jobless claims. Friday: Export/Import prices, Retail sales, Business inventories and Consumer sentiment. Best to your weekend and week!

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

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Friday update

SHORT TERM: gap down opening, DOW -212

Overnight the Asian markets gained 0.2%. Europe opened lower and lost 0.9%. US index futures were higher overnight, then lower after monthly Payrolls were reported lower: 151K v 292K and the Trade deficit widened: -$43.3B v -$42.4B. The market gapped down at the open to SPX 1909 and continued to retreat. The market had closed at SPX 1915 yesterday. At 11:30, after a few bounces, the market hit SPX 1880 and then tried to rally. Around noon the SPX hit 1892, and then headed even lower. At 3pm Consumer credit was reported higher: $21.3B v 13.9B, and the SPX hit 1873. A small rally into the close ended the week at SPX 1880.

For the day the SPX/DOW lost 1.55%, and the NDX/NAZ lost 3.35%. Bonds gained 4 ticks, Crude dropped 70 cents, Gold rallied $17, and the USD was higher. Medium term support drops to the 1869 and 1841 pivots, with resistance at the 1901 and 1929 pivots. Today the WLEI was reported lower: 47.7% v 48.0%, and the Q1 GDP est. was reported higher: +2.2% v +1.2%.

The market started off with a gap down opening for the third time this week. After trading down to SPX 1880, the market bounced to 1892 by noon. After that it traded down to SPX 1873 by 3pm. Monthly payrolls not only came in lower, but much lower than expected. As noted yesterday, a drop below SPX 1904 would suggest Minor C, from Thursday’s SPX 1927 Minor B high, is heading lower. More on this in the weekend update. Best to your weekend!

MEDIUM TERM: tentative Major wave labels remain

LONG TERM: bear market

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

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Thursday update

SHORT TERM: relatively quiet day, DOW +80

Overnight the Asian markets gained 0.2%. Europe opened higher but lost 0.2%. US index futures were higher overnight, and at 8:30 weekly Jobless claims were reported higher: 285Kv 278K. The market opened one point below yesterday’s SPX 1913 close. After a tick up to SPX 1914 the market dropped to 1901, and then started to rally. At 10am Factory orders were reported lower: -2.9% v -0.2%. The rally continued until 10:30 when the SPX hit 1927. Then market then pulled back to SPX 1904 by 11:30. After a rally to SPX 1920 by 1pm, the market pulled back to 1904 again at 2:30. Then the market rallied to SPX 1916 just before closing at 1915.

For the day the SPX/DOW were +0.30%, and the NDX/NAZ were mixed. Bonds gained 10 ticks, Crude lost 50 cents, Gold rallied $13, and the USD was lower again. Medium term support remains at the 1901 and 1869 pivots, with resistance at the 1929 and 1956 pivots. Tomorrow: monthly Payrolls (est. +192K) and the Trade deficit at 8:30, then Consumer credit at 3pm.

The market opened relatively flat today, dropped to SPX 1901, rallied to 1927, then ended the day at 1915. Initially it looked like the three wave Minor B advance from Wednesday’s SPX 1872 low had completed: 1918-1901-1927. But the pullback from that high does not look like it is in any hurry to go down: 1904-1920-1904-1916. As a result we will hold off on posting a Minor B label until SPX 1904 is broken to the downside. Short term support remains at the 1901 and 1869 pivots, with resistance a the 1929 and 1956 pivots. Short term momentum dropped from slightly overbought at today’s high to neutral. Best to your trading NFP tomorrow!

MEDIUM TERM: tentative Major wave labels remain

LONG TERM: bear market

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

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