weekend update

REVIEW

The market started this gap filled week at SPX 2329. A gap up opening Monday took the SPX to 2349. Then after a gap down opening on Tuesday the market found support at SPX 2335. A gap up opening on Wednesday took the SPX to 2353, which was sold off into 2335 again. On Thursday another gap up opening took the market to SPX 2361. Then the market pulled back to SPX 2349 on Friday. For the week the SPX/DOW gained 0.70%, and the NDX/NAZ gained 1.75%. Economic reports for the week were mixed. On the downtick: the NY/Philly FED, the WLEI, the NAHB, housing starts, plus weekly jobless claims rose. On the uptick: building permits, industrial production, capacity utilization, leading indicators and existing home sales. Next week’s reports will be highlighted by Q1 GDP, the Chicago PMI, durable goods and housing. Best to your week!

LONG TERM: uptrend

This week let’s look at the big picture. The very big picture. While published data on the US stock market only began in the year 1885, we have been able to piece together, using secular Saeculum cycles and economic cycles, how the US market would have looked from the early 1700’s. As an emerging growth economy the US would have not looked anything like the European markets that do have stock market data going back that far. That data was not considered.

From around the year 1700 to 1929 the US experienced a 200+ year grand super cycle bull market GSC 1. The 1929-1932 crash, when the stock market lost nearly 90% of its value, ended GSC 2. While short in time the crash made up for it in price damage. A GSC 3 bull market began at that 1932 low.

Within GSC 1 there were five super cycles, approximately: SC1 1700-1770, SC2 1770-1776, SC3 1776-1850, SC4 1850-1857, and SC5 1857-1929. Within the current GSC 3 there have been two completed super cycles, with the third underway: SC1 1932-2007, SC2 2007-2009, SC3 2009-xxxx. Since super cycle bull markets last 70+ years, this SC3 is not likely to top until around the year 2080.

Within each super cycle bull market there are five Cycle waves. SC1 of GSC 3 divided as follows: C1 1932-1937, C2 1937-1942, C3 1942-1973, C4 1973-1974 and C5 1974-2007. Notice the Cycle wave bull markets can be as short as 5 years or as long as 30+ years. Also note, no matter the wave degree the bear markets are always much shorter in time than the bull markets. Currently the US stock market is in Cycle wave 1, from the 2009 low, of SC3. Which brings us up to the present.

Cycle wave bull markets unfold in five Primary waves. During this C1 bull market: P1 2009-2015, P2 2015-2016, and P3 currently underway. Thus far, from the 2016 low, we have Int. waves i and ii Apr-Jun 2016, Minor waves 1 and 2 Aug-Nov 2016, and Minor 3 completed in March, with Minor 4 underway now. When Minor 4 concludes Minor 5 should take the market to new highs to complete Int. iii. Then after an Int. iv correction, Int. v would only complete Major wave 1 of Primary III. As you can observe, Primary III should last quite a while as Major waves 1-2-3-4-5 unfold. For now we are looking for a Major wave 1 high in one-three years around SPX 3000+.

MEDIUM TERM: downtrend

The Minor wave 3 uptrend travelled from SPX 2084-2401 during Nov-Mar. The uptrend was the longest and strongest of the three impulsive uptrends in this bull market. After the March high the market entered a Minor 4 correction. Thus far it has lasted nearly two months and has only corrected 3.3%. Quite a small correction even for this bull market. With the two previous corrections declining 5.6% and 5.0% this one probably has more downside to go.

We have been labeling this downtrend from SPX 2401 as three Minute waves: 2322-2379-2329 so far. With Minute C underway we have anticipated downtrend support in the SPX 2290’s, and the OEW 2286 to 2270 pivot ranges. We are also waiting for the NDX/NAZ to confirm downtrends. They have dipped but continue to remain near their highs. A selloff in this sector should be all that is required to put in a downtrend low across the board. Medium term support remains at the 2336 and 2321 pivots, with resistance at the 2385 and 2411 pivots.

SHORT TERM

The market has been quite choppy, with a downward bias, since the SPX topped at 2401 in early March. After the Minor wave 4 downtrend was confirmed a week ago, the short term pattern within the downtrend was upgraded. Within this Minute a-b-c pattern we have noticed this week some symmetry.

Minute ‘a’ divided into three waves: 2355-2390-2322. Minute ‘b’ was also three waves reaching a 2379 high. Minute ‘c’ now looks like three waves as well: 2329-2361-underway. When we examine the three wave decline of ‘a’ in points: 46-35-68. The three wave decline of ‘c’ in points is thus far: 49-32-xx. Notice the smaller a and b, of Minute waves ‘a’ and ‘c’ are quite similar. Also similar is the time element in days: 6-4-8 and 6-4-x. Should the market continue to maintain this symmetry, the SPX should bottom in the 2290’s around May 2nd. Short term support is at the 2336 and 2321 pivots, with resistance at the 2385 and 2411 pivots. Short term momentum ended the week below neutral. Best to your trading!

FOREIGN MARKETS

Asian markets were mostly lower for a net 0.8% loss.

European markets were also mostly lower and lost 0.7%.

The DJ World index gained 0.6%, as did the NYSE.

COMMODITIES

Bonds remain in an uptrend and gained 0.1%.

Crude is in a downtrend and lost 6.7%.

Gold is in an uptrend and gained 0.1%.

The USD is in a downtrend and lost 0.7%.

NEXT WEEK

Tuesday: Case-Shiller, new home sales and consumer confidence. Thursday: weekly jobless claims, durable goods and pending home sales. Friday: Q1 GDP (est. 1.0%), the Chicago PMI, and consumer sentiment.

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

About tony caldaro

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

322 Responses to weekend update

  1. fotis2 says:

    Starting to look similar to the brexit and trump move but this time in opposite direction.

  2. johnnymagicmoney says:

    Does anyone find the VIX smash to be a little fishy? 25% down to under 11 today? Huge move for only a 1% up day. Seems quite out of whack

    thoughts?

    • ragnar5 says:

      “When VIX is outside the upper of lower Bollinger band 20/2 it usually signals a reversal within 2 days” Erin Helm StockCharts.com. It backtests nicely.

    • NEWBIE says:

      Johnny, yep extremely fishy. I wouldn’t be surprised if an “event” is on the horizon.

      • scottycj1 says:

        Nuclear war is about to start…..but your shorts will be worthless—-underwear and stocks.
        Only a few Zombies left running a lemonade stand

      • By all rights,after consolidating for months and then breaking out over 16,it should have only retraced to 13.30 or so–in a normal market.They put it in its place again.Smells like fish,rotten eggs and limburger cheese combined.That reminds me,time for dinner.

    • phil1247 says:

      VIX
      gave you a stock market BUY signal a week ago

    • fionamargaret says:

      UVXY broke its sequence….almost never happens….I posted a message just after it happened, and suggested shorting as the next sequence in this algo takes UVXY to 9.

  3. vivelaamo says:

    Why is every time we see a rally the bubble talk appears? Do people forget we went nowhere for 2 years?

  4. Dex T says:

    Plastc folds after raking in millions for smart credit cards it never shipped

    SAN FRANCISCO — Another crowdfunded Bay Area startup has closed its doors without shipping customers the products they paid for, a failure that raises fresh concerns about risky online pre-order campaigns.

    San Francisco-based digital payments startup Plastc shut down Thursday, saying it’s considering filing for bankruptcy after failing to raise the cash it needed to mass produce and ship its smart credit cards. The 3-year-old company raised millions through pre-orders of its $155 Plastc Card, but failed to ship a single order — and its demise leaves behind scores of angry customers.

    http://www.siliconvalley.com/2017/04/21/plastc-folds-after-raking-millions-smart-credit-cards-never-shipped/

  5. Interesting how VIX has plummeted today almost 25%, back into the 10’s. VIX instruments like SVXY and VIXY have only changed half as much, indicating the VIX futures market isn’t quite convinced. Maybe another day of gains will convince these instruments to ‘catch up’ a little more.

    • NEWBIE says:

      Something fishy here guys VIX is being crushed too much

      • vivelaamo says:

        Newbie the other day you said a rally was false because the Vix was up. I don’t get it? All I see is downtrend lines smash through in all 4 major US indices. Screw what the VIX does. Means nothing.

  6. another interesting close set up. Good luck all

  7. phil1247 says:

    https://caldaro.wordpress.com/2016/03/08/stock-market-myths-and-whats-wrong-with-the-economy/

    People…………please read this again

    it really is all you need to know

  8. scottycj1 says:

    Some Ditties
    “The markets are moved by animal spirits, and not by reason”
    John Maynard Keynes
    “Markets can remain irrational longer than you can remain solvent”
    John Maynard Keynes

    • You can fool all the people some of the time, and some of the people all the time, but you cannot fool all the people all the time.
      Abraham Lincoln,well known stock broker and president
      LML25:”All the time” is the point of debate for me..What time frame does that constitute?5 years,10?
      Later.

      • fionamargaret says:

        “It is perhaps a more fortunate destiny to have a taste for collecting shells than to be born a millionaire”…my grandfather quoting Robert Louis Stevenson.

  9. johnnymagicmoney says:

    how many times have you seem a stock with a 430 billion dollar market cap that trades at a forward PE of 130 and for the last 5 years have had a profit margin ranging from -2% to 3%

    But out of 50 analyst 45 of them have a buy or outperform on Amazon, 4 have a hold, and 1 has a sell on the largest most overvalued company of all time in AMZN. Fear not I say Bezos is selling 1 billion of AMZN stock each year to fund a space program so he can take everyone into outer space. Think about that. When the CEO is taking 1 billion of AMZN stock and putting it into a space program what does that tell you?

    Fundamentals don’t matter just price and there my friends is what the market is built on……..lets buy because other people are buying

    we are in the final phases of this market…….this is bubble time

    • Dex T says:

      I agree with the gist of the post. Investors give AMZN a great deal of leeway for some reason for a perfectly ordinary business model.

      AMZN’s long term chart shows it’s gone parabolic. The stock price is straight up and begging for a massive drop.

      I don’t when it’ll drop or plan on shorting it – but it’s chart is textbook P5 of 5 of 5…

  10. johnnymagicmoney says:

    I love the market

    GDP blows
    valuations stretched
    Asian markets got hammered overnight because they are cracking down on speculation (or so they say)
    Debt Celling looming
    Cop tax reform being pushed back
    Geopolitical issues

    but no no no lets bid the market up on al election result that was 95% certain in the first place and lets all make up a grand story that the worst was priced in when in no way whatsoever much risk at all was priced in

    irrational exuberance all over again

  11. phil1247 says:

    gary r
    /zb short traded
    you know what i did

  12. gary61b says:

    ES on the shorter time charts 2365 will be the support needed to continue up, on long term charts 2363 will be the support needed. Below and I thinks B is complete.

  13. Lee X says:

    Thanks Tony

    I just crossed the Ohio River into Illinois, beauty day enjoy !

  14. I sold my 1000 shares of QQQ at 134.03 this morning. I had purchased them poorly at 133.40. But still I bungled my way to a small gain.
    I still own my large long term position in mid cap growth (PEMGX) in my 401K. Since it is a mutual fund, the sale, if I so choose to do, would not occur until closing time.

  15. phil1247 says:

    YM

    key to direction… canary in coal mine
    cash dow below around 20700 is red flag ie..ext long break
    confirms resistance once again of short from high which has never broken

  16. Wave 4 pull back to 2363 then wave 5 up to 2405 ish looks the most logical count to me

  17. taskara says:

    Would love to see some charts on housing numbers…where can I see them please..

  18. This time are divergences from ES and SPX but in a bullish stance. Someone know something we still dont. N. Korea coming at better therms ??

  19. soulsurfer says:

    well my post from yesterday was clearly looking for the wrong way, so within this whipsawing soup, here’s what I see is unfolding:

    https://investingintelligent.com/2017/04/24/update-to-sp500-remains-on-track-to-2300-2280/

    as tony says: anticipated, monitor, and adjust when necessary. Today adjusting is necessary.

    trade safe folks!

    • pooch77 says:

      Bought tza at17.25 call me crazy but should be down rest of week,see ya all next week

    • blackjak100 says:

      You and I are on the same page somewhat, but I don’t agree with your labeling. Not sure why you list 2377 as a target since green b must retrace 90% of 2401-2322 for a flat for starters.

      • soulsurfer says:

        Thanks jak. Just plotting the Fib-extensions. They are what they are. It’s a target zone. We’ll then let the market decide which it will be.

      • micky says:

        BJ you were waiting for lower lows than just below 30 for an b because it only did 89% then remember? Trying to be too precise does not work out most of the time. Then you were looking at some possible triangle which also didn’t happen. What im saying is there are always too many could- be scenarios with EW that you miss the good moves. One can not trade maybe scenarios.

        • blackjak100 says:

          You are correct, but I also said B waves are impossible to trade because of unpredictability. The lower lows are still coming. I also said the triangle was invalidated during futes last night. My count has not wavered for over a month…still looking for a minor 4 flat. The one thing I cannot do is accurately predict the form of a B wave…nobody can. I only gave a min target for the wave of 2393. This is why one of the written ‘rules’ is not to trade B waves.

  20. shauryagh says:

    A strong close above 1390 for the Russel will validate the break of the March downtrend line and will possibly start a beautiful new uptrend after four long months of consolidation…

    • vivelaamo says:

      Four months of going absolutely nowhere during a bull market. Bears are frustrated but this is they all getting. Expect all time highs during May or sooner.

  21. purplember says:

    Gaps – many talk about gap up or down have to be filled. does today’s large gap up need to be filled ?

    • tommyboys says:

      Not necessarily. Could be a break away or “runaway” gap that doesn’t get filled – or at least for a very long time. Have to watch how the rest of the day and maybe next couple develop to determine with more certainty. Based on some other indications – at least on the SP – it does look like this move may have some legs and not fill for a while.

    • This is most likely the B wave of 4 (i think TC had it labeled prematurely), so it will get filled as the C wave takes hold. That’s my count anyway.

    • scottycj1 says:

      That gap will also give an upside target

  22. Page says:

    Bulls should keep one thing in mind before they giddy up too much and that is the election result between Trump and Hillary. This rally will give up all its this week’s gain by the end of this week.
    Gold/Silver will regain their strength as week goes by. 😀 😀 😀

  23. Days like this,the upside feeds on itself.If it settles at 2366 would be a surprise.2380.

  24. CampFreddie says:

    Newbie checks his account :-

    • NEWBIE says:

      NEWBIE says:
      April 11, 2017 at 12:42 pm
      Vive, that sharp fall is currently on hold it looks like we may go up from here to new highs.

      • tommyboys says:

        Newb you stated you are “heavy short” two weeks ago – c’mon man… I don’t believe you’re long or short. I just think you “think” the markets must crash based on your susceptibility of the media’s chronic fear mongering or erroneously reading the market or economy or both or you are just biased 😦

        • NEWBIE says:

          Tommy, are you on drugs? I have said it many times, I trade both sides of the market. My positions change depending on what I see. However, I do believe the economy is in shambles,the USA is not prospering, and tough times are coming.

          • tommyboys says:

            You have no positions. You do like to antagonize however – it’s the internet and everyone is on drugs but you bud 🙂

            • tommyboys says:

              Hey why not post the next time you go long/short? Last one was short “heavy”…

              • NEWBIE says:

                Tommyboy, you are sadly mistaken. I am a day trader/ swing trader who makes a living from this. Sometimes I make 10 trades a day. You don’t know me or my positions. For you to come on here and say I’m this or that or I that I don’t have any positions couldn’t be farther from the truth. You don’t know me, so I don’t know why you make these comments.

              • tommyboys says:

                Nobody “new” to the markets just a couple years ago – as you had stated – is making a “living” off trading. But hey it’s the internet – and I’m on drugs!

              • NEWBIE says:

                Tommy, I never said you were on drugs, I asked you if you were on drugs? By your irrational responses I think I already know the answer. Furthermore, I joined the blog roughly four years ago and I decided to use the name newbie. Just because I selected the name newbie does that automatically indicate I am new to stocks and trading? Could it be that I was just new to the blog? You are making a whole bunch of assumptions about me and pretty much attacking me for what reason? Why are you characterizing someone you don’t even know? You are spreading false non sense on here about me, please discontinue this or Tony may give you the boot out of here.

  25. phil1247 says:

    SPX close today

    2366.58….

    you all have till 15 min before the close to post your pick

    good luck!

  26. lunker1 says:

    Looking at recent SPX daily candles might need to test prior resistance at 2367/68 to establish support.

  27. H D says:

    mjtplayer. Very nice call on gold last week!

  28. H D says:

    Is the count French Toast? 2385P becomes a little more important IMO.

    Those that have been fighting the news cycle are ignoring how linked politicians are to market expectations. You gotta adapt. News matters, especially fake news :mrgreen:

    • Dex T says:

      If that’s the case then why is so much news frequently discounted by the markets? what news has been moving the markets in the past few months? Nearly all of the buying and selling has been done by the algorithms that are oblivious to the news only price levels.

      News rarely matters unless there is a sudden surprise event.

      99% of cases the market moves then something is suddenly written to “explain”

      • Fed day,Employment day are two big news days.Trump talking tax cuts is more market moving “news”.The best news for markets is fake news.They love it.Fake earnings(via financial engineering),buybacks,rumors of takeovers that never happen.Prognostication of future earnings like Tesla that are,shall we say,optimistic?

        • Dex T says:

          Bullshit !

          All of these reasons and more have been used for years now with little correlation to actual market events.

          The Fed, earnings, politics all matter and then suddenly don’t based upon… what?

          They are just reason being given by major financial media to explain market moves.

          • The biggest moving day for equities is Fed day.Of all days in the year,most money is made on Fed day.I forget the exact percent but a majority of the years gains are Fed day.(As I recall the article).

        • H D says:

          “Trump talking tax cuts”…. I’d put that in the fake news category. 17 days of golf really messing up his first 100 days.

      • H D says:

        Dex T, I hear ya. Tuff adjustment for me too. Always been a technician and could find technical reasons for price action but the global elections are movers. As always do your own due diligence and interpret as you see fit. I’ll have May 7 on the radar though.

  29. phil1247 says:

    gary r

    took some profits on TBT
    /zn nicked ext short
    /es aggressive ext long failed

    • Gary Rodgers says:

      yeah Ynot. saw the fail in ES. ZB still holding <'10 so…. ext alive.

      • phil1247 says:

        gary

        are you a DH subscriber ?

        • phil1247 says:

          he had a good video this am
          said /YM is the key
          it has never broken its short from highs
          and is about to trade the short again now
          not buying into any stock rally till dow joins in

        • Gary Rodgers says:

          Phil, No never was. Hey, in ZB what concerns me more is a longer term view of the breakout from the consolidation range from December/April. It retested it at the low and so far it’s holding. It can’t get very bearish till we get acceptance back in that range.

          • phil1247 says:

            http://tos.mx/3oY7hk?image..

            not that concerned about it….. the ext short .618 and trad short .50
            were a powerful resistance level that bonds ran from like a scalded cat
            at the perfect cycle high date
            now with gap down the bears are in charge until they drop the ball

            plus german bunds are on sell and should be down this week
            europe is where the worst of the bond crash will be seen

  30. micky says:

    The high 70,s seem to be gonna hit, will have to see if that resistance holds. Not a bad run from 30..

  31. phil1247 says:

    SILVER and GDX crash on track

    GOLD should hold the december lows…………

    note……
    …this has been discussed for weeks
    ….not because of some election
    or manipulation
    or conspiracy

  32. phil1247 says:

    TLT /ZB

    bond crash progressing nicely …… TLT to 86

    /ES…

    shorts broken…
    FRANKENTARGET is LIVE at 2430

  33. blackjak100 says:

    Well a 4th wave triangle can be eliminated. However, I still think minor 4 is ongoing as a flat (which I’ve said for a month) with minute b being a double 3. Minute b target is 2393-2422.

    • jhjoyner says:

      Did 2322 and 2328 complete minor 4?
      I think that is a possibility.
      The sentiment ratio at 2328 looked very similar to Int ii and minor 2.

      • blackjak100 says:

        No, 2322 completed minute A only. Minor 2 lasted 10 weeks and minor 4 has only lasted 7 weeks. I expect minor 4 to at least be equivalent in time possibly longer. No changes to my count for over a month. I’ve been expecting 2393 as a minimum followed by C down. This is when NDX/NAZ should confirm its downtrend.

  34. If this futures rally continues into the cash market, a 3rd possibility in addition to the 2 I listed below is that minute C of Minor 4 ended at 2322-29.

  35. If the Futures strength continues into the cash market, it is going to suggest that 2322-29 was the bottom of minute wave a and that we are in a minute wave B rally now, which is likely to be a flat (regular or irregular?). Or else that this was not actually a minor wave 4 correction, but a wave 4 of lower degree (like minute 4). I am aware that such a count may conflict with OEW’s confirmation of a downtrend in a way that I don’t fully understand. Although it is by no means certain that Futures strength will continue into the cash market, I strongly suspect that it will.

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