Weekend update

REVIEW

The week started off at SPX 2905. After a dip down to SPX 2886 by Monday afternoon the market started to rally. Higher opens took the SPX to 2911 on Tuesday, 2912 on Wednesday, a new all-time high of 2935 on Thursday, and 2941 on Friday. For the week the SPX/DOW gained 1.6%, and the NDX/NAZ lost 0.25%. Economic reports for the week were mostly positive. On the downtick: the NY FED and building permits. On the uptick: the Philly FED, housing starts, leading indicators, plus weekly jobless claims and the account deficit both improved. Next weeks reports will be highlighted by the FOMC meeting, Q2 GDP and more housing. Another rate hike on Wednesday probable.

LONG TERM: uptrend inflection point

The Major wave 1 bull market extended into its 31st month for the DOW this week, as it made all-time new highs on Thursday. The SPX made all-time new highs as well. The NDX and NAZ had made their new highs in August. Now that the four major indices have registered five Intermediate waves up from the February 2016 low, it’s time to review the technicals.

The first observation is the building negative divergences on the SPX/DOW weekly and monthly RSI. Not a problem until new highs were hit. Now that they have, it’s a potential warning of a bull market high in the making. We can add that the R2K may also be in its last uptrend of its bull market.

Typically nearing a bull market top various sectors begin to displays negative divergences as well. The banking index BKX, and the housing index HGX are doing just that. Plus, the four major indices breadth, as measured by the percentage of stocks above their 200 dma, are all displaying negative divergences. As well as the NYAD.

Last, the weakness in the foreign markets. Which most have been noticing for a while. Eleven of the fourteen indices we track appear to have topped. Three have already confirmed bear markets: China, Spain and Switzerland. And we know Switzerland usually tops within a year of an SPX top. After more than two years of riding the bull we think its time to get cautious.

MEDIUM TERM: uptrend

For the past couple of weeks the SPX has had a short term inflection point to resolve. There were three possible counts. With this week’s new high one count was totally eliminated, one downgraded, and the other made the primary count. That count is on the daily chart below. This suggests the uptrend is in Minor wave 3 of Intermediate wave v, with Minor waves 4 and 5 still to unfold.

The NDX/NAZ continue to display weakness as the cyclicals make new high. In fact if they do not make new highs next week they will likely confirm a downtrend. And that might be it for their bull market. The only other thing that would alter this scenario is if Intermediate wave v were to subdivide into five Minor wave trends. Just like Int. iii. Other than that we continue to believe this is the last uptrend of the 2016-2018 bull market.

SHORT TERM

We have been labeling this Int. v uptrend, from the early-April low, with five Minor waves. Minor waves 1 and 2 completed at 2791 and 2692 in June. Minor wave 3 has been underway since that low. Minor 3 has been labeled with five Minute waves: 2863-2802-2917-2864-2941 so far. Since Minute iii is shorter than Minute i, Minute v has to be the shortest up wave. This give us a maximum for Minor 3 at SPX 2979.

We have a similar situation with the DOW. You can check the hourly chart using the link below for that. Short term support is at the 2929 and 2884 pivots, with resistance at the 2995 pivot. Short term momentum ended the week at neutral. Best to your week!

FOREIGN MARKETS

Asian markets were mostly higher on the week and gained 1.3%.

European markets were all higher on the week and gained 2.1%.

The DJ World index gained 1.6%, while the NYSE gained 1.4%.

COMMODITIES

Bonds are downtrending and lost 0.5% on the week.

Crude is uptrending and gained 2.6%.

Gold looks like its uptrending but ended flat.

The USD is downtrending and lost 1.5% during the week.

NEXT WEEK

Tuesday: Case-Shiller and consumer confidence. Wednesday: FOMC statement and new home sales. Thursday: Q2 GDP (est. 4.3%), weekly jobless claims, durable goods, and pending home sales. Friday: personal income/spending, consumer sentiment, and the Chicago PMI.

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

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Wednesday update

SHORT TERM: market opens higher, DOW +159

The first three days of this week displayed Asian markets rallying 0.6%, and European markets rallying 0.7%. The SPX opened flat on Monday at 2905, then dipped to 2886 late in the day. Tuesday and Wednesday the market opened higher as the SPX hit 2912 Wednesday. While this all looks and sounds good, there is something else that is noteworthy. Some would call it rotation.

As of this writing the DOW is +1.1% for the week, the SPX +0.1%, and the NDX/NAZ -0.9%. The only index, of the major four, to exceed its August high has been the DOW. Yes the DOW still needs to make a new all-time high. It’s less than 1% away. It appears, however, the DOW is the only index trying to make new highs, and the other three are just being dragged along by the DOW. But what happens after the DOW makes new highs? Quarterly options expiration this Thursday/Friday, should be volatile. Short term support at the 2884 and 2858 pivots, with resistance at the 2929 pivot. Short term momentum displays a slight negative divergence. Best to your trading!

MEDIUM TERM: uptrend inflection point

LONG TERM: uptrend

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

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Weekend update

REVIEW

The week started at SPX 2872. After a gap up opening Monday to SPX 2887, the market headed lower and a gap down opening took it to SPX 2867 Tuesday morning. After that the market rallied, helped by a gap up opening on Thursday, into the end of the week. For the week the SPX/DOW gained 1.05%, and the NDX/NAZ gained 1.50%. Economic reports were mostly positive. On the downtick: the PPI and the budget deficit increased. On the uptick: consumer credit, the NFIB, wholesale inventories, the CPI, retail sales, industrial production, capacity utilization, consumer sentiment, business inventories, plus jobless claims declined. Next week’s reports will be highlighted by the NY/Philly FED and housing. And, it’s quarterly options expiration.

LONG TERM: uptrend

For the past two weeks the bull market had seemed to stall after the SPX hit 2917. The indices we are focused on all pulled back, and the SPX lost 54 points. Tuesday the SPX retested last weeks’ low. Then the market rallied, and the DOW was making new highs for the uptrend by Thursday. It looks like the uptrend has resumed.

 

The Major wave 1 bull market count remains unchanged. Intermediate waves i and ii completed in the spring of 2016. Intermediate waves iii and iv completed in the spring of 2018. Intermediate wave v has been underway since that Int. iv April low. We are still expecting SPX 3000+ by 2018+ before the bull market ends. And the DOW, NYSE and DJ World to all make new highs too.

MEDIUM TERM: uptrend inflection point

The count we have been tracking for this uptrend remains: Minor wave 1 SPX 2791, Minor 2 SPX 2692, Minute i of Minor 3 SPX 2863, Minute ii of Minor 3 SPX 2802, then Micro 1 of Minute iii SPX 2917. This count is posted on the SPX hourly chart in the short term section.

Last weekend we noted the possibility that the SPX 2917 high may not have been a Micro wave 1, but a Minute wave iii. This would suggest the current pullback to SPX 2864 was Minute wave iv. As long as the pullback does not drop below SPX 2863, the high of Minute i, this count remains possible. This count is also posted on the SPX hourly chart with the “or iii” labeling.

On Wednesday we added another count into the fray. Just trying to be objective as the market passes through another inflection point. This count suggests the entire uptrend is not Intermediate wave v, but only Minor wave 1 of Int. v. This count is posted above. If the SPX makes new all-time highs this count will be eliminated. Another interesting juncture in this 2+ year bull market.

SHORT TERM

While this uptrend continues to unfold a potential three short term counts have emerged. These three counts were described in the above section. And, none of them suggest a bull market top is near. Br-exit, Trump, Macron and even Tariff events have occurred in the past 2+ years, and still the bull market continues.

Currently the SPX/NDX/NAZ/TRAN and R2K have all recently made new all-time highs. The DOW/NYSE/DJW and SOX have yet to do so. Until the latter group does make new highs, the former group will continue to rise. Short term support is at the 2884 and 2858 pivots, with resistance at the 2929 pivot. Short term momentum ending the week at neutral. Best to your trading!

FOREIGN MARKETS

Asian markets were mixed on the week but gained 0.7%.

European markets were also mixed and gained 0.4%.

The DJ World index gained 1.2%, and the NYSE gained 1.1%.

COMMODITIES

Bonds appear to be in a downtrend and lost 0.5% on the week.

Crude is in an uptrend and gained 1.8% on the week.

Gold appears to be in an uptrend and gained 0.1% on the week.

The USD appears to be in a downtrend and lost 0.4% on the week.

NEXT WEEK:

Monday: NY FED at 8:30. Tuesday: the NAHB. Wednesday: housing starts and building permits. Thursday: weekly jobless claims, the Philly FED, existing home sales, and leading indicators. Friday: options expiration.

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

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Wednesday update

SHORT TERM: flat opening, DOW +28

So far this week Asian markets have lost 0.9%, and Europeans markets have gained 0.9%. The SPX started the week at 2872. Monday’s gap up opening took it to SPX 2887 early before heading lower. Tuesday’s gap down opening dropped it to SPX 2867, and then the market started to rally. Today the market opened flat, rallied to SPX 2895, then headed lower. A choppy week so far.

It has been two weeks since the SPX hit an all-time high at 2917. After a drop to SPX 2864 last Friday, a week and a half after that high, the market rallied on Monday, then retested that low on Tuesday. This is a long period of time for what we thought was just a Micro 2 of Minute iii. Other Micro waves have lasted 1 week at best during this uptrend.

In the weekend update we did note SPX 2917 could also have been the high for Minute iii of Minor 3. This is possible as long as the current pullback does not overlap the high of Minute i at SPX 2863. So far the low is SPX 2864.

Now a third possible count, we’re being objective, has revealed itself. It is possible this entire uptrend is not Intermediate wave v, but Minor wave 1 of Int. v. If so, we can count a potentially completed five Minute wave advance from the Int. wave iv low: 2791-2692-2863-2802-2917. Clearly this market has reached an inflection point. However it resolves itself, the bull market is still underway and new highs will be made in the weeks/months ahead. Best to your trading!

MEDIUM TERM: uptrend inflection point

LONG TERM: uptrend

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

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Weekend update

REVIEW

The week started at SPX 2902. After Monday’s Labor day holiday the market had gap down openings on Tuesday, Wednesday and Friday. Each day of the week the SPX made a lower low: 2885, 2877, 2867 and 2864. For the week the SPX/DOW lost 0.60%, and the NDX/NAZ lost 2.75%. Economic reports for the week were mixed. On the downtick: auto sales, the ADP, factory orders, and the trade deficit increased. On the uptick: monthly payrolls, ISM manufacturing/services, construction spending, and weekly jobless claims improved. Next week’s reports will be highlighted by the CPI/PPI, retail sales, the beige book, and industrial production. Best to your week!

LONG TERM: uptrend

The indices we have been tracking did not make any upside progress this week. In fact all of them lost ground as the market pulled back. The DOW was down 0.2%, the NYSE -0.8%, and the DJ World -1.9%. We still expect all three of these indices to make all time new highs, just like the SPX did recently, before the bull market ends.

The long-term count remains the same. A Major wave 1 bull market has been underway since February 2016. Major wave bull markets consist of five Intermediate waves. Intermediate waves i and ii completed in the spring of 2016. Intermediate waves iii and iv completed in the spring of 2018. Intermediate wave v has been underway since that April low. We still expect the SPX to reach 3000+ by 2018+ before the bull market ends.

MEDIUM TERM: uptrend

The Intermediate wave v uptrend entered its fifth month this week, as it started in early April. We are expecting the uptrend to unfold in five Minor waves. And it appears those minor waves are quite lengthy and subdividing – the reason for the length of this uptrend.

Minor waves 1 and 2 ended in June at SPX 2791 and SPX 2692 respectively, and Minor wave 3 underway since then. Currently Minor 3 (225 pts.) is slightly shorter than Minor 1 (237 pts.), and also does not look complete. We have been counting SPX 2863 and SPX 2802 as Minute waves i and ii, and the SPX 2917 all-time high as the first wave of Minute iii. See hourly chart below. SPX 2917 could have actually been all of Minute iii, even though it is quite short compared to Minute i. Suggesting Minute v would also be quite short, and probably top around the OEW 2929 pivot. If the SPX drops below 2863 that possibility is eliminated.

SHORT TERM

As noted earlier Minute waves i and ii of Minor wave 3 completed at SPX 2863 and SPX 2802 respectively. Minute wave iii has been underway since then. While Minute i subdivided into five quantified waves. Minute iii has thus far not subdivided at all. It has been one straight up rally. Leading us to believe it is only the first wave of Minute iii, and this pullback is wave 2.

After this pullback concludes the market should rally to higher all-time highs. Short term support is at the 2858 and 2835 pivots, with resistance at the 2884 and 2929 pivots. Short term momentum ended the week with a positive divergence. Best to your trading!

FOREIGN MARKETS

Asian markets were all lower for the week and lost 2.0%.

European markets were also all lower and lost 3.0%.

COMMODITIES

Bonds continue to uptrend but lost 0.4% for the week.

Crude appears to be in an uptrend, but lost 2.9% on the week.

Gold appears to be in an uptrend too, but lost 0.5% on the week.

The USD appears to be in a downtrend and lost 0.1% on the week.

NEXT WEEK

Monday: consumer credit at 3pm. Tuesday: wholesale inventories. Wednesday: the PPI and the Beige book. Thursday: jobless claims, the CPI, and the budget deficit. Friday: industrial production, retail sales, consumer sentiment and business inventories.

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

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OEW tutoring

All markets are driven by long term investor confidence 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 can historically analyze any market to define its most probable wave structure, and determine what the past is projecting for 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, mathematically, 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 quantified 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, and the current bull market as well. OEW pinpointed the bull market high in Crude at $148 in 2008, and 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 signaled a new bull market in the USD and bear markets in most other currencies. Now the USD is bearish again. In real estate: OEW identified the bull market top in 2005, and then the bear market bottom in 2011. All of our projections since the year 2005 are detailed – unedited – on this 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. OEW tutoring covers the various indices in the US stock market and most foreign markets, along with various technical indicators. It also covers individual stocks, 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 is a vain and foolish thing. The Law of Use is universal, and he who violates it suffers by reason of his conflict with natural forces.

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Wednesday update

SHORT TERM: gap down opening, DOW +23

For the first three days of this week the Asian markets have lost 1.8%, and the European markets have lost 2.0%. The US market was closed Monday, and gapped down at the open on both Tuesday and Wednesday. This would suggest the SPX was also down hard. But it is actually down less than 0.5% for the week.

From last week’s all-time high of SPX 2917 the market has dropped exactly 40 points to today’s low of 2877. More than expected at this stage of the rally. But quite normal for this uptrend. The non-quantified short term wave count we were tracking did not work out. SPX 2917 did end Wave 1 of Minute iii of Minor 3. Wave 2 might have ended today at SPX 2877. Pullbacks of this degree, during this uptrend, have been as much as 50+ points. So maybe a bit more downside before the uptrend resumes. There are, however, positive divergences on both the SPX and DOW hourly charts. Short term support at the 2884 and 2858 pivots, with resistance at the 2929 pivot. Best to your trading!

MEDIUM TERM: uptrend

LONG TERM: uptrend

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

 

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