weekend update

REVIEW

The week started at SPX 2295. After a gap down opening Monday the market traded down to SPX 2267 on Tuesday. Then Wednesday’s opening was a gap up, followed by a pullback, then another gap up opening on Friday ending the week at SPX 2297. For the week the SPX/DOW were mixed, and the NDX/NAZ were mixed as well. Economic reports for the week were again mostly positive. On the downtick: the Chicago PMI, consumer confidence, construction spending, auto sales, ISM services, the WLEI, plus the unemployment rate rose. On the uptick: personal income/spending, the PCE, pending home sales, Case-Shiller, the ADP, the ISM, NF Payrolls, factory orders, the Q1 GDP estimate, plus weekly jobless claims were lower. Next week’s reports will be highlighted by the trade balance, the budget deficit and export/import prices. Best to your week!

LONG TERM: uptrend

The Primary wave III bull market continues to unfold, but has spent the most part of the last two months trading above and below the OEW 2270 and 2286 pivots. For the year, which is about 5 weeks old, the SPX is up 2.6%. The wave pattern/labeling we have been tracking remains unchanged.

spxweekly

Since we are expecting a relatively long Major wave 1 of Primary III, we started the first waves with an Intermediate labeling i and ii. The second set of waves is a subdivision of Intermediate wave iii: Minor waves 1 and 2. From the Minor 2 low in early November, just before the election, we have been expecting a Minor wave 3 to unfold. Thus far it still looks too short to be all of Minor 3, as it is barely longer than the previous Minor 1 uptrend (216 pts. v 202 pts.). In the meantime while the market sorts itself out there are a couple of more important points that should be noted.

Should the market enter a correction soon we are likely to see only a 5% decline. Should the market clear SPX 2336, the last potential B wave count, then we can expect 1 – 3 years of bull market activity with the SPX reaching 3000+. Should the market drop below SPX 2084, then the B wave has topped and we are likely in a C wave bear market.

MEDIUM TERM: uptrend

The current uptrend began in early November at SPX 2084. The uptrend has risen for 2 months, which has been the characteristic of the previous impulse uptrends for this bull market. Any new high in the month of February would immediately suggest this uptrend is extending in time and price.

spxdaily

After tracking several potential variations of the short term waves of this uptrend, we settled on two potential counts. The count posted on the chart above suggests only Minute i of Minor 3 completed at SPX 2279, and since then the market has been in an irregular Minute ii correction. This count would require a decline to at least SPX 2234, possibly lower, before ending the correction.

dowdaily

The second count is posted on the DOW charts as noted above. This count suggests Minute i ended at around the same area as the SPX, but Minute ii ended in mid-January. And, the market is currently working its way higher in a Minute iii rally. Thus far it has not been acting like a third wave, and will need to clear SPX 2305 to look more positive. Medium term support is at the 2286 and 2270 pivots, with resistance at the 2321 and 2336 pivots.

SHORT TERM

The five waves up from the SPX 2084 early-November low on both the SPX and DOW counts looks quite clear. The question that is intriguing most is what has transpired since then. Is the market preparing to break out or break down?

spxhourly

The irregular B count in green suggests the rally has probably topped, or soon will top below SPX 2305, before declining in a small c wave to SPX 2234 or lower. The count posted in orange, which looks more like the count posted on the DOW charts, suggests Minute iii is currently underway and has already completed two smaller Micro waves 1 and 2. The five wave advance for Minute i from SPX 2084-2279 was also five Micro waves. SPX 2305 and SPX 2267 are the key levels for both counts. A drop below SPX 2267 and a correction is likely underway. A breakout above SPX 2305 and the uptrend is extending.

Short term support is at the 2286 and 2270 pivots, with resistance at SPX 2301 and the 2321 pivot. Short term momentum ended the week overbought with a slight negative divergence. However, the market needs to decline at least 5 points to put the divergence in play. Best to your trading!

FOREIGN MARKETS

Asian markets were mostly lower on the week for a net loss of 0.8%.

European markets were also mostly lower and lost 0.6%.

The DJ World index gained 0.2%, and the NYSE gained 0.2% as well.

COMMODITIES

Bonds are in an uptrend and gained 0.1% on the week.

Crude appears to be in an uptrend and gained 1.2% on the week.

Gold is in an uptrend as well and gained 2.7% on the week.

The USD is in a downtrend and lost 0.8% on the week.

NEXT WEEK

Tuesday: trade deficit and consumer credit. Thursday: weekly jobless claims and wholesale inventories. Friday: export/import prices, consumer sentiment and the budget deficit. Saturday: a speech from vice chair Fischer in the UK.

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

About tony caldaro

Investor
This entry was posted in weekend update and tagged , , , . Bookmark the permalink.

163 Responses to weekend update

  1. CampFreddie says:

    Well done here all the Gold traders who caught the recent rally.

  2. gtoptions says:

    Thanks Tony
    SPY ~ > WPP @ 228.40 Swing Long
    GC ~ Failure or Breakout at Red Resistance Zone
    https://www.tradingview.com/x/WHkvzI5t/
    GL All

  3. phil1247 says:

    bada bing

    1237

    target hit !

  4. CampFreddie says:

    –Phil1247–
    I am aware you’re looking to position into strength for the “Big Short” in Bonds. This chart suggests the coming bear closing rally will be sharp and long, which will be just perfect for us to short into. 🙂

  5. phil1247 says:

    /gc 1237 is next target

    new extension longs
    upside acceleration

  6. Lee X says:

    just noticed NG hitting some support on the weekly

  7. kvilia says:

    gc 1234 target hit, profit locked. Let’s have a pullback now.
    Anyone is still looking at DRYS? Tomorrow is press release 🙂

  8. johnnymagicmoney says:

    The way this market moves with no volume and no volatility is sad. Lots of wonderful things about the market five ten years ago is no longer there. It’s sad really. It’s skynet and the humans are dying. Really blows

  9. Anyone on UNU now? It is really cool.

  10. vivelaamo says:

    Is it a National Holiday or something. So boring

  11. CampFreddie says:

    Gartman has flip-flopped again and covered his shorts for a loss.
    Over the years he has perfected the art of covering shorts at the high and selling his longs at the lows, so this is probably the best signal yet for the Bears.

  12. Okay,my clipboard is out on why the rally should’ve happened:
    Tax cuts this year.
    Probably not
    Obamacare overhaul this year
    Hopefully,but probably next year as well.
    Infrastructure spending
    As soon as they can figure out cutting other areas to pay
    for the infrastructure.(That’s never)
    Those were the positives.That leaves China,Iran,Mexico and Russia for negatives,which seem a helluva lot easier to accomplish.
    Put the recession clock up and set.Watch bonds and that damn dollar.
    Gold needs to break the 1230-32 level.Later.

  13. phil1247 says:

    DOLLAR

    short squeeze brewing in dollar

    has rip your face off potential

    lets see how gold reacts if this unfolds
    not anxious to rebuy gold even if it supports

  14. phil1247 says:

    TBT

    bought back initial position liquidated in friday bond plunge

    short of a lifetime kid

    bonds still should rally to mid feb

    then collapse

Comments are closed.