weekend update

REVIEW

The market started the holiday shortened week at SPX 2356. After a rally to SPX 2366 early Monday the market started to pullback. After a decline to SPX 2337 Tuesday morning the market rallied to 2353 by Wednesday morning. Then the market declined into the end of the trading week, closing at the SPX 2329 low. For the week the SPX/DOW lost 1.05%, and the NDX/NAZ lost 1.15%. Economic reports for the week were mostly negative. On the downtick: the CPI/PPI, retail sales, the WLEI, the Q1 GDP estimate, consumer sentiment, plus weekly jobless claims and the budget deficit rose. On the uptick: export/import prices. Next week’s reports will be highlighted by the Beige book, the NY/Philly FED, and industrial production. Best to your week!

LONG TERM: uptrend

As suspected, the corrective activity since the early March all-time SPX 2401 high was confirmed as a Minor wave 4 correction this week. This suggests Minor wave 3 of Intermediate wave iii ended at that high, and Minor wave 4 has been underway since then. When a correction unfolds for this long, six weeks, before being confirmed, it is usually near its end.

The long-term count remains unchanged, except for upgrading the tentative green Minor 3 label to dark blue. A Major wave 1 of Primary III bull market is underway. Intermediate waves i and ii completed in Apr/Jun 2016, and Minor waves 1 and 2 completed in Aug/Nov 2016. Minor wave 3 just completed last month, and Minor wave 4 is currently underway. When it does conclude Minor wave 5 should take the market to all-time highs.

MEDIUM TERM: downtrend

As noted above a Minor 4 downtrend was confirmed this week, from the Minor 3 high at SPX 2401. The correction looks like it is unfolding in a double three: abc-x-abc. Or simply Minute a, Minute b, and Minute c. Minute a unfolded in three waves bottoming at SPX 2322. Minute b rallied in three waves to SPX 2378. Minute c is already unfolding in three waves and has hit SPX 2329 as of Thursday.

Should Minute c = Minute a then we should see a low around SPX 2299. Should Minute c extend, at SPX 2260 = 1.50 Minute a, or at SPX 2250 = 1.62 Minute a. Fibonacci supports are at SPX 2280 = 38.2% Minor 3 retracement, or at SPX 2243 = 50.0% retracement. There is OEW pivot support at the 2286 and 2270 pivots. And finally, the previous 4th wave bottomed at SPX 2267 which is wave support. Combining all these parameters the OEW 2270 and 2286 pivot ranges appear to be the most likely support area. Medium term support is currently at the 2321 and 2286 pivots, with resistance at the 2336 and 2385 pivots.

SHORT TERM

The short term count we had been tracking since early-November appeared to be unfolding quite nicely until, and even a few days after, the FED raised rates on March 15th. The market had hit a high at SPX 2401 on March 1st, pulled back to SPX 2355 by March 9th, then rallied to SPX 2390 on March 15th. After that the market pulled back about 20 points by March 20th, then started to rise into the 21st. When news broke that the Ryan healthcare bill was short of votes the market, and the short term pattern, started to breakdown. The market then made a low at SPX 2322 on March 27th. But the rally that followed was clearly corrective. It is clear on the hourly charts the healthcare bill failure helped terminate the uptrend.

Nevertheless the Minor 3 uptrend was the longest in time and price of the three impulsive uptrends in this ongoing bull market. Corrections, thus far, have been quite shallow at about 5+% and between 110 and 130 SPX points. You can do the math from the SPX 2401 high. Short term support is at the 2321 and 2286 pivots, with resistance at 2336 and 2385 pivots. Short term momentum ended the week quite oversold. Best to your trading!

FOREIGN MARKETS

Asian markets were mostly negative and lost 0.3%.

European markets were all negative and lost 2.1%

The DJ World index lost 0.5%, and the NYSE lost 1.1%.

COMMODITIES

Bonds are in an uptrend and gained 1.1%.

Crude appears to be in an uptrend and gained 1.8%.

Gold is in an uptrend and gained 2.5%.

The USD is in a downtrend and lost 0.7%.

NEXT WEEK

Monday: NY FED at 8:30, the NAHB at 10am, and after the close a speech from FED vice chair Fischer.. Tuesday: industrial production, housing starts and building permits. Wednesday: the FED’s beige book. Thursday: weekly jobless claims, the Philly FED and leading indicators. Friday: existing home sales and options expiration.

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

About tony caldaro

Investor
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142 Responses to weekend update

  1. Dex T says:

    The retail apocalypse is creating a ‘rolling crisis’ that is rippling through the US economy

    “Retailers are closing thousands of stores and going bankrupt at a rate not seen since the recession, and tens of thousands of people are losing their jobs as a result. ”

    “Since October, 89,000 workers in general merchandise stores have lost their jobs, which is more than the number of people employed in the entire US coal industry, reports The New York Times.”

    “The retail industry, which employs one out of every 10 American workers, typically pays low wages but provides employment to people in every age bracket, including those who are low-skilled and need flexible scheduling options. ”

    http://www.businessinsider.com/retail-job-losses-are-hurting-the-economy-2017-4

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  2. phil1247 says:

    Fotis

    52.35 net station stop on /clk7

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  3. pull back and makes higher highs, Key levels, see if it breaks out or breaks down. looks like it wants higher

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  4. phil1247 says:

    phil1247 says:
    April 16, 2017 at 9:38 pm
    /ESM7

    there is a 15 min extension short currently which is bearish below 2329

    that was last nite……….
    now there is a bullish above………….guess where ???
    yup…..2329
    until that breaks forget about going down

    Like

  5. learnedmylesson25 says:

    I’m going with the Ira theory that VIX breaking away from the upper BB will take it to support at the 18d–13.49 at the moment and rising.He considers VIX a major breakout.First things first though.In the meantime,enjoy the SPX bounce.Good luck all(but especially me…lol)

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  6. H D says:

    Thx Tony. “It is clear on the hourly charts the healthcare bill failure helped terminate the uptrend.” Interesting. So maybe the August timeframe for tax reform will terminate a wave too. Market priced in 35/15 % if I recall. Also notable zero alternation in minor 2 and minor 4 so far.

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  7. blackjak100 says:

    2328.95 completed a 89% retrace of 2322-2378 which is not good enough for a flat. Still looking for minuette b to bottom 2305-2310 for an expanded flat before rocketing towards 2400 to complete minute B.

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  8. micky says:

    good one fellas, 30 held nicely .Got to see what happens on the next pb.

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  9. phil1247 says:

    Gary Rodgers
    bond cycle peak due wed +or – 1 day

    bought some 10yrs after lunch thursday cuz traditional held even tho ext failed

    getting dicey now for bonds….

    but bigger picture is TLT to 82 after upwards correction is over

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  10. phil1247 says:

    /ESM7
    da boyze broke the extension short overnite

    further downside is out of the picture till 2326 fails

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