REVIEW
The week started with the SPX at 2128. After a gap down opening Monday the SPX hit 2119 then rallied to 2163 just before the close. On Tuesday another gap down opening took the SPX to 2120, then after a rally to 2141 on Wednesday the SPX hit 2120 again. On Thursday the SPX rallied to 2151, then gapped down again on Friday to 2131 before ending the week at 2139. For the week the SPX/DOW gained 0.35%, and the NDX/NAZ gained 2.60%. Three gap down openings and the market ended positive on the week. Economic reports for the week were predominantly negative. On the downtick: export prices, retail sales, NY FED, industrial production, capacity utilization, the Q3 GDP estimate, plus weekly jobless claims and the budget deficit increased. On the uptick: the Philly FED and the CPI. Next week’s reports will be highlighted by the FOMC and housing.
LONG TERM: uptrend
Markets worldwide are now seven months into the reversal off the February lows. The four major US indices have made all time new highs, as has the Wilshire 5000 an index of just US operating companies. At its recent peak the NYSE is still 3.1% below its all time high, and the DJ World index is 3.8% below. Just this week alone the four major US indices had gains ranging from 0.35% to 2.60%, while the NYSE lost 0.75% and the DJ World index lost 0.95%. It is now quite clear the NYSE composite is more of an international index, than a US index.
In OEW terms this is quite important, as the NYSE is the only US based index, of the six noted above, that quantifies with a potential Primary V underway. Suggesting an ongoing bull market from the year 2009. The other five indices, (SPX, DOW, NDX, NAZ, W5K), all quantify a new Primary III bull market, or alternately a Primary B, is underway. There is a significant difference between a Primary V scenario, and a Primary III scenario.
Under the Primary V scenario all the NYSE is required to do is to make all time new highs. Then a significant bear market would follow retracing a major portion of the entire advance from 2009. Under the Primary III scenario the bull market from the year 2009 ended in 2015, and the retracement bear market ended in 2016. This suggests a new bull market is underway that should last anywhere from two to four years, with the SPX possibly reaching 3000+. The alternate Primary B scenario is nowhere near as favorable. But will be eliminated when, and if, the SPX exceeds 2336.
As a result of this observation we will still be tracking the P5 count on the NYSE charts, but are dropping it from consideration as a viable US stock market count. The two remaining scenarios, we have been noting in recent months, will be the main and alternate counts. The Primary III scenario is now the main count, and the Primary B the alternate. The charts will now display the SPX, DOW, then NYSE, with the NAZ and NDX remaining on the second page. The DOW count displays the main P3 scenario, as well as the SPX hourly/daily charts. The alternate Primary B scenario will be displayed only on the SPX weekly chart.
MEDIUM TERM: uptrend underway?
The uptrend from SPX 1992-2194 topped in price in mid-August. But we counted that high as part of a one month expanding fifth wave diagonal triangle, which ended at SPX 2188 in early-September. Confirming that pattern the market dropped to SPX 2119 in only three days. When we count that three day decline as a zigzag, it is followed by a one day rally to SPX 2163, then a two day decline that formed a flat: 2120-2141-2120.
At that point we considered the downtrend potentially complete with a double three pattern. Supporting this possibility is an oversold weekly RSI similar to the last downtrend, an extremely oversold daily RSI, and an extremely oversold hourly RSI followed by a positive divergence at the SPX 2120 lows. If correct this would have been the smallest downtrend decline, in percentage terms, in the past 10 years. Which would suggest relative strength going forward. Medium term support is at the 2131 and 2116 pivots, with resistance at the 2177 and 2212 pivots.
SHORT TERM
As you probably noticed by now the daily chart above, and the hourly chart below have been updated with the main count we have been carrying on the DOW charts. Remember, this is the main count, the Primary B scenario is an alternate count, and the Primary V scenario has been left to the NYSE alone. And is not a US stock index count.
After the SPX 2120 low the market rallied to 2151, then pulled back to 2131. This could be counted as the first two waves off the downtrend low. As long as the OEW 2131 pivot range (2124-2138) holds for support a new uptrend should be underway. Any break below this range would obviously challenge the OEW 2116 pivot range, and a reassessment would be required. Short term support is at the 2131 and 2116 pivots, with resistance at the 2177 pivot and SPX 2194. Short term momentum ended the week at neutral. Best to your trading!
FOREIGN MARKETS
Asian markets were all lower for a net loss of 1.8%.
European markets were all lower for a net loss of 3.0%.
The Commodity group were all lower too for a net loss of 1.9%.
The DJ World index lost 0.95%.
COMMODITIES
Bonds are still downtrending but gained 0.1%.
Crude’s downtrend continues as it lost 6.2%.
Gold is still in a downtrend and lost 1.8%.
The USD may be in an uptrend and gained 0.8%.
NEXT WEEK
Monday: NAHB at 10am. Tuesday: housing starts and building permits. Wednesday: FOMC rate decision. Thursday: weekly jobless claims, FHFA, and existing home sales. Best to your weekend and week!
Trump is in wave 3 of 3 now with this terror attack.
just read (and this is done by the LA Times of Southern Cal – ie Compton and whatnot) that a month ago trump’s black support was at 6%. Now it is over 20%. If Clinton only gets 71% of the black vote she is toast. she will lose Florida, Ohio, North Carolina, and possibly PA. Crazy
That is crazy. Immigration is a really sensitive topic that Trump seems to be killing the dems on overall, which is probably helping to negate whatever racist quotient he’s being labeled with.
She’s already behind in all of those states, except PA, but she still leads in the electoral college. A great place to get a snapshot of the polls is realclearpolitics.com
By the way just to once again show you how ridiculous the spin is. Even after the IEA last week said the glut would last longer than expected and oil production continues to ramp up in key countries, oil was up almost 3% this morning on fighting in Libya in 2 key oil ports. A local militia briefly took over two ports which were then retaken by the Libyan Army. The production per day is 300k in Libya. The invasion which didn’t even last a day (ie skirmish) delayed loading ONE tanker. Worldwide oil production is 77 million per day. Funny how those algos work
I agree with your premise JMM,so then I wonder–is there ANYTHING that’s programmed into the algos,that would be bearish?What econ stat,what event,what support level broken?Maybe there IS none.After January,maybe the algos were tweaked to eliminate everything bearish–except maybe Gartman giving a buy signal…lol.
I guess what I don’t understand (and maybe someone can shed light on this) is when do the algos get reprogrammed or do their algorithims work in bear markets as well? Are they biased to the bull side because overall markets go higher over time? What is the impetus to flip the algo the other way? Is it built in or can people make a concerted effort to change the algo to fit the bear? How did those trading units do in February? DId they make money then too? Do the same things that measure or quantify internals, waves, or trend lines effect the algo as well flipping BTD to STR?? Maybe I make no sense or my mind is too feeble. Comments welcomed.
As far as I understand, they are usually based on trends in market orders and volume either way.
Tony, you swept the blog clean pretty good, what type of broom you use? 😉
Summer is drawing to an end
Spooky season is almost here
Oh and it’s football (soccer) season….now back to volunteer coaching for me
And thanks for all you do Tony.
Not as good as Bleachbit….lol.Welcome back EL Mat.
“you mean wipe it clean with a cloth”
…..volunteer coaching…leaving the world a better place…and maybe Rooney will be available to help…x
http://www.bing.com/images/search?q=super+broom+gif&view=detailv2&&id=C4A4BA62B71948C5F0A88A4E642F6FBC5417C72E&selectedIndex=0&ccid=rpbLOe4t&simid=608015714978300027&thid=OIP.Mae96cb39ee2d70c3f3fff96286fde116o0&ajaxhist=0
SPX top in , next target below 1800

NYSE truncates
Is this the first time you call the top in?
also on August 19 at SPX 2185
Thanks JJ, I must be mistaken you with someone else who called it last year also.
I have no dispute with anybody nor am I correct all the time . I am learning somethings & I post charts for all to see my take on EW count . If anyone has a technical question I will be glad to answer
Thanks JJ, no problem, my tech question is; why such a bold statement that the top is in, before it has been proven ie 5 waves down or a LD where the last w4 also have been taken out.
the action in the last few days is enough indication that top was 2185 ,other than my proprietary method which I use for even the smallest tradable cycle.
all good thanks.
[110pm] SPX update –
Squiggles and tracking counts. See charts.
http://market-timing-update.blogspot.com/2016/09/market-timing-update-91916.html
/ES
daily short traded at 10 am
target remains 2078
bearish below 2157 as it has been since last monday
interesting note
boyze were busy at lunchtime
they took /es 15 min chart from bouncing off extension long support to smashing thru the extension and then putting us in extension shorts
ALL in 30 minutes !
looks like they want this to collapse
I haven’t drawn any extentions, been inside last Monday’s range for 5 days now. Did nut the (34) off the low into 21(55)
good times.
new extension 15 min ……HD
bear below 2137
target 2131
actually its…. same anchor (2140) to new low …..anyway … target 2131
bada bing!
target hit!
HD
just keep drawing the extension from 2140 to new low again and again till it fails
good luck!
see ya!
HD..
new aggressive extension appeared
bear below 2131………….number sound familiar??????????????
From today’s John Hussman’s weekly blog post: http://www.hussmanfunds.com/wmc/wmc160919.htm
“Last week, the most reliable of those trend-following components deteriorated to a negative condition. That’s not a forecast of immediate market direction, particularly with a Fed statement on Wednesday, but it’s an indication that we presently estimate both razor-thin (and even negative) equity risk premiums from a valuation standpoint, and also a uniform, if subtle, shift toward increasing risk-aversion among investors. That, historically, is the most negative combination of conditions we identify. The equity market has been dancing sideways for months on a very thin floor supported strictly by trend-following considerations. That’s kept our near-term outlook rather neutral. Last week, on the most reliable measures we identify, that floor quietly dropped away.”
thanks.
or in a nutshell ……………..markets moved sideways and started to roll over starting with a huge 2.5% drop on heavy volume and horrible breadth. For some reason Christine not only do people forget 00 and 09 but they forget the Fall of 15 and beginning of this year too. The symmetry of the last two sideways – rollover – fast drop movements to the last few months is at the very least something to be highly cognizant of. The fact that so many bulls refuse to give it consideration shows you how price convinces those bullish that trends negate history, risk, and current deterioration if that deterioration is contrary to the trend.
Probably because we have 6 (going on 7) consecutive quarters of declining earnings (GAAP) yet the market is completely unfazed.
I know that they are so hypnotized by rising price that they completely forget that the market moves both ways.
Even when markets crash they always recover. Bulls stay long because the trend since Feb has been up. Until that changes its by the dip territory.
Buy*
Hope you enjoy staying long for years waiting for the recovery.
…after the market crashes here….
Thanks. Stops will hopefully save me when the market crashes. Hope you haven’t been trying to short this market since the last crash waiting for the next one.
I still think if there is a correction it comes in Nov or 2017. Can consolidate for weeks yet.
Thx Tony, I should have waited to read the weekend update. I just ruled out the B wave count on Friday and made the PV complete my primary count. The DJI 2-4 TL will keep me objective.

risky business =)
IBB has a nice chart, with lots of upside… demographics are with you…also CURE
SPXL if you agree we are going up….
VRX if you can handle all the negative comments on generic drugs…..
Thanks for the ideas Fiona. I also have been looking at IBB for a possible rally. I’ll take a look at VRX. The market seems to be a crossroad. here, but Tony’s count is biased toward an uptrend developing as long as the S&P stays above 2116, I think.
VRX is not for the faint of heart, but with new management maybe they can get it together. I suggested 42 as a price, and MS came out and suggested the same.
If we get a good rally the underdogs tend to do better…..
I have the S&P going to 2550…..the first number was 2185 (we have done that), the next is 2330….and then 2550…
Of course Cosmos this is just a pattern…good until it is not….x
This crazy market in general is not for the faint of heart. Frustrating the way it gaps down at the open and then about 11 am or so it just slowly floats up all day with very small pull backs. Never seen this before. This patter might be ending, I hope. VRX looks like it might break out from a basing pattern on the long-term chart. If it is then it could have some good days ahead coming. The 3 mo. chart looks like it is impulsing in five waves up. Currently it looks like it is completing the fourth wave abc down and about to start a fifth wave targeting 32 minimum. I’m thinking placing a stop at 24.5 (top of first wave). A break of 24.5 negates the pattern. Not a great risk/reward setup under my scenario, but you never know 🙂
Nasdaq 196 new highs 115 new lows.The indecision continues.
Such an enormous rally fizzle today is definitely a bearish sign.
Nah…Meaningless. Still some volatility out there.
LOL. I’ve been trading the market for 20 years and have never seen a 30 plus point rally in the Nasdaq revert to negative under bullish conditions. Hoipe your bullish outlook works out for you!
I am about to do a back flip when this Ponzi collapses and its a coming.
You’ve been flipping here for 4 years 😉
Not back flips my friend, I’m still solvent and have my weight in gold.
Newbie,
Did you notice the market gapped up at the open, rallied 15 points from Friday’s close, and the only post here was a compliant about gap up openings after terror attacks.
Since then the market has headed south, turned slightly negative, and there about 30 posts of doom and gloom.
Just to let you know you have lots and lots of company on this blog.
Hhahahahahahaha.
LOL – NEVER? I have.. today could be your introduction…
Oh, look! Did the S & P 500 just fall below last week’s rising trendline and support at 2131? What bullish action!
meant the Nasdaq below rising trendline and support at 5231
bot tbt