weekend update

REVIEW

The week started at SPX 2416. After a pullback to SPX 2404 by Wednesday morning the market rallied to all-time highs on Thursday/Friday, hitting SPX 2440. For the week the SPX/DOW gained 0.80%, and the NDX/NAZ gained 1.55%. Economic reports for the week were mixed. On the downtick: consumer sentiment, the Chicago PMI, pending home sales, construction spending, monthly payrolls, the WLEI, the Q2 GDP estimate, plus weekly jobless claims and the trade deficit rose. On the uptick: personal income/spending, the CPI, Case-Shiller, the ADP, ISM manufacturing, plus the unemployment rate declined. Next week’s reports will be highlighted by ISM services and factory orders.

LONG TERM: uptrend

After breaking out of the SPX 2400 area late last week, the bull market headed into unchartered territory this week. Even the DOW joined the party and made all-time new highs. With the TRAN in an uptrend, it looks like the cyclicals are now joining the techs as they continue to extend higher in a seven month uptrend.

The bull market count remains unchanged. A Primary II low in February 2016. Intermediate waves i and ii, of Major 1, of Primary III, completed in the spring of 2016. Minor waves 1 and 2, of Intermediate iii, completed in the fall of 2016. Minor waves 3 and 4 completed in the spring of 2017. And Minor wave 5 is currently underway. When Minor 5 concludes, Intermediate iii will also conclude, then Intermediate wave iv could generate the biggest correction of this bull market thus far. The largest correction of this bull market, thus far, have been about 120 points.

MEDIUM TERM: uptrend

This Minor wave 5 uptrend began in mid-April with a failed flat (sign of strength) at SPX 2329. Thus far it has completed Minute i at SPX 2406, Minute wave ii at SPX 2353, and Minute wave iii is currently underway. Minute i subdivided into five waves on one timeframe, and nine waves on a lesser timeframe. Minute iii has not subdivided at all on one timeframe, and displays three waves on the lesser timeframe.

Minute iii has already surpassed the length of Minute i (87 pts. v 77 pts.). Should Minute iii subdivide like Minute i, this uptrend has a long way to go. This does not have to occur, but it could. Let’s just take it one pivot at a time and see what the short term wave structure looks like as we approach each pivot. Medium term support is at the 2428 and 2411 pivots, with resistance at the 2444 and 2479 pivots.

SHORT TERM

On the hourly chart we labeled five Micro waves (orange) during Minute wave i. These Micro waves were the subdivisions of the larger timeframe we use to track the short term waves. Since there have not been any subdivisions during Minute iii, on this timeframe, we have not offered any labeling yet.

We did note earlier, however, there has been one subdivision (three waves) on the shortest timeframe, and we tracking that for now. Applying this subdivision we have: wave one (2353-2419), a wave two pullback, then wave three underway (2404-2440). The third wave will equal the first wave at SPX 2470. Short term support is at the 2428 and 2411 pivots, with resistance at the 2444 and 2479 pivots. Short term momentum ended the week quite overbought. Best to your trading!

FOREIGN MARKETS

Asian markets were mostly higher on the week and gained 0.8%.

Europe was quite mixed and gained 0.1%.

The DJ World index gained 1.1%, and the NYSE gained 0.8%.

COMMODITIES

Bonds confirmed an uptrend and gained 0.6%.

Crude remains in a downtrend and lost 4.3%.

Gold confirmed an uptrend and gained 1.0%.

The USD remains in a downtrend and lost 0.7%.

NEXT WEEK

Monday: ISM services and factory orders at 10am. Wednesday: consumer credit. Thursday: weekly jobless claims. Friday: wholesale inventories.

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

About tony caldaro

Investor
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126 Responses to weekend update

  1. captbara says:

    Bears betting on a big crash 😁

    • pooch77 says:

      Maybe just a correction

    • kvilia says:

      Interesting. Would the calls drive the price up? Just curious how this correlates with VIX record lows.

      • tommyboys says:

        I see this as bulls betting. Call volume way up over put volume. These are bulls buying and possible bears hedging. Too much of this can lead to a sell off but its not bear betting. Just the opposite.

        • tommyboys says:

          OH! Its the VIX and NOT the markets! You are correct !! Bears betting on sell off…my apologies…

  2. scottycj1 says:

    GC looks to test near 1287 today –tomorrow
    Tues is CIT UUP has Pos D on Daily

  3. gtoptions says:

    Thanks Tony
    SPY~ Comey Pivot R Zone @ 245 ~ Next 247
    https://www.tradingview.com/x/YB1LZ6ct/

    Some observations, not trading advice. 😉
    CL ~ https://www.tradingview.com/x/cNLffzOY/
    GC ~ https://www.tradingview.com/x/ipI0nQCE/
    Potential Breakout trade on tap ~
    VIRT (Criminality) ~ https://www.tradingview.com/x/cCj0R1zd/

  4. Normal GDX underperformance.At least you can blame it on bonds,to some extent.3-5% move down today would show its intentions,imho.Good luck all.

  5. H D says:

    Did you guys see Lee in the news this weekend? Always mowing his lawn.

  6. phil1247 says:

    TBT
    starting to look good to me if bonds extension long fails

  7. phil1247 says:

    /es 2443 next target

  8. fionamargaret says:

  9. mjtplayer says:

    Important area of oil, Brent broke support at $50 and is now backtesting. Failure to regain $50 and a breakdown from here would target $46 or just under (roughly $43-$44 WTI)

    https://www.tradingview.com/x/AU145sGg/

    • Fiona, thanks for sharing and the kind words a day or two ago.

      In this week’s installment of the Fat Pitch, Urban Carmel shares a considerable amount of data mining and speaks to work done by Ryan Detrick who found:

      “Similarly, when SPX has been up at least 7.5% on the 100th trading day of the year (which was this week), it has added to those gains during the remainder of the year 20 of 23 times (86%). The average and median additional gain through year-end has been 9%. There was only one major failure, in 1987; the other two closed just 0.4% lower (from Ryan Detrick).”

      I have been following Urban, Ryan and Dana Lyons for years and will say their parametric studies of historical data usually play out in a manner fairly consistent with historical outcomes, making for a possibly breath taking year.

      http://fat-pitch.blogspot.com/2017/06/weekly-market-summary.html#more

  10. fotis2 says:

    Deutsche Bank ignores U.S. Trump/Russia query: Democratic staffer

    So basically an American citizen-Trump can get a loan from one of the largest banks in the world based in Germany and said loan is guaranteed by the Russian Goverment?????really???

  11. bouraq says:

    Chart of the weekend is #GOLD at http://www.tradingchannels.uk

  12. vivelaamo says:

    I been thinking about the bears on here pointing at the state of US economy to justify a potential crash. I wonder how much they have traveled.

    Just watching fargo 3 and I see how a motel has ice storage. It looks like it’s standard. Do all motels have this as standard? If so that’s amazing!

    • Jimbo says:

      You’re saying exactly what i want to hear right now…! Good luck pal

    • Viv, what are the bears saying about the US economy? I see weaknesses at the edges (light vehicle sales, the trade deficit, core capital goods) and, possibly, two core weakness: disappointing Q1 growth and slowing growth in the rate of employment expansion which occasioned the Atlanta Fed to trim its estimate for Q2 growth from 4% to 3.4%. But Q1 weakness is not unusual and is being attributed to seasonality modeling, making it a non issue. The economy is not falling apart. More interestingly, with core inflation remaining below 2% the Fed will (perhaps reluctantly) proceed to increase rates next week but is certain to say something about inflation and its impact upon the timing of the widely expected third hike for 2017. Based upon what I have been told, bond traders who have been driving yields down are betting that even if the Fed goes ahead with a rate increase this month, it will think twice about further moves in the second half of the year.

    • fotis2 says:

      What a crash looks like
      https://invst.ly/41w9b

  13. phil1247 says:

    Tony
    ………ext long -23% target hit at 2425……….your pivot.. 2428
    next ext long target is 2449…………………….your pivot.. 2444

    pretty close eh?

  14. phil1247 says:

    http://tos.mx/tosmx/item?id=BnqJw7&image

    SPX

    in rally or die mode
    bullish above 2416
    target 2449.5
    if extension fails at 2416 …. support drops to 2385

  15. Jimbo says:

    Hi Tony, Is there any chance that minor wave 4 completed at 2322 in March and everything since then has been an ending diagonal with wave 5 just completed?

  16. vivelaamo says:

    Tony what happened to my gold post? What did I miss?

  17. Tony:
    Thanks for yet another excellent weekend update. But I have a question about the following paragraphs at the end of your post:

    “Micro waves were the subdivisions of the larger timeframe we use to track the short term waves. Since there have not been any subdivisions during Minute iii, on this timeframe, we have not offered any labeling yet.
    We did note earlier, however, there has been one subdivision (three waves) on the shortest timeframe, and we tracking that for now. Applying this subdivision we have: wave one (2353-2419), a wave two pullback, then wave three underway (2404-2440). The third wave will equal the first wave at SPX 2470. Short term support is at the 2428 and 2411 pivots, with resistance at the 2444 and 2479 pivots. Short term momentum ended the week quite overbought. Best to your trading!”

    How is the time frame that has 3 unlabeled waves in Minute 3 different from the time frame which has the 5 orange Micro waves labeled in Minute 1?

  18. stockop says:

    Still having trouble believing this is wave 5 with the way the Russell looks, Dow’s inability to hit new highs while the S&P is rocketing off, the financial sector, and the outright condescending nature of many bulls (tho one could argue this is the exact psychological state of wave 5s). Not to mention all of the negative divergences and harmonic resistance around these areas for all indices. With that said, I’ve decided to step back and view the market from a different lens and if there does turn out to be a C wave to come, I believe it will be sector rotation occurring with the tech stocks everyone is waiting to correct taking a lot longer to take off than planned, and thus they will miss out on the next big gains from other sectors. While some might still be great buys, stocks like NFLX, AMZN, and GOOGL are due for some big time distribution by the boys before they continue at the pace they are going. The big funds need to turn paper gains into realized gains at some point. If you don’t believe oil is going to $10 in the next 6 months, some energy stocks look about ready to take off in what I think is a C wave tho it could just as well be wave 3. Either way, big gains potentially to come. The way I’m viewing the market is we’re most likely headed for around 2800 to finish off P5, regardless of the current situation, because I know I’m not the only one who is going to buy the next legitimate dip bigly. For those in the same camp as me who have missed these ridiculous gains while getting annoyed at missing out, this market looks to be setting up for a major sector rotation into energy and financials to potentially lead either the rest of this wave 5 or the hypothetical alternative wave 5 after a C down. Thoughts, especially those with real experience/knowledge, appreciated.

    • tony caldaro says:

      If the tax cuts ever get passed, value stocks will be back in vogue.
      Wouldn’t be concerned about the R2K, wave 5 is only A of a larger rising ABC.

    • phil1247 says:

      The way I’m viewing the market is we’re most likely headed for around 2800 to finish off P5, regardless of the current situation, because I know I’m not the only one who is going to buy the next legitimate dip bigly.

      hmmmmmmmmmmmmmmmmm….

      this is ” happy talk ” often heard near market peaks

    • tommyboys says:

      FWIW…Tend to think it keeps moving higher for a Wave 5 top sometime between last week of June and second week of July around 2500 +/- then a larger Wave 2 taking us down 5-10% into July – Sept – but who knows no one can predict the future… EW, Astrology, Technicals – divergences either way etc… Market MUST keep everyone guessing all the time. This is the nature of the beast and what my 2 decades has taught me. Also have learned Fundamentals ALWAYS win out over Technicals long term – at least at the company level. All the divergences in the world don’t mean squat if Fundies bullish. Bias-less and accurate interpretation of Fundies is paramount. Started out as purely technical trader and have slowly converted using technicals to simply support or refute fundamentals.

      • tommyboys says:

        errr… and sentiment as well. Sentiment may be the number one indicator in my book.

  19. fionamargaret says:


    Thanks Chris Kimble

    http://tradingdiary.incrediblecharts.com/
    Thanks Colin Twiggs

    https://raymondjames.bluematrix.com/sellside/EmailDocViewer?encrypt=0fc8b080-491e-414c-9dac-ddea4555c605&mime=pdf&co=RaymondJames&id=Jeffrey.Saut@RaymondJames.com&source=mail
    Thanks Raymond James

    Thanks Tony,……and everyone. XX
    Yes, the Kimble chart you have seen before, but seeing we are discussing the idea again…..
    And how hopeless was I in my picks for the Derby….hope you did better..



    • fionamargaret says:

      I did write the story of the Derby in my Friday Update….and if you like fairy tales, then this is for you….x

      • fionamargaret says:

        On another note, there is a 2Trillion company wishing to list on the FTSE..Saudi Aramco.
        The FTSE rules are such that 25% of shares should be offered, but the Saudi Royal Family say they are prepared to only allow 5% as they suggest because of the size of the offering, 5% is still worth 100 billion.
        Also, the Saudis want to be listed without having to disclose the true state (and worth) of the country’s oil reserves.
        Now you can imagine there are a few fund managers disagreeing with the rules being bent to oblige, and suggest tracker funds would have to buy, with fewer shares being overpriced from the start.
        Does any of this matter…and why again is Saudi our new best friend…

  20. Two news items tonight.
    Of course the latest terrorist attack in London–which the markets don’t worry about anymore.Why should they?Localized.
    The second item is the report that DJTrump might invoke “executive privilege” to prevent Comey from testifying.That would give the markets another free pass to rally some more.Longer term,might not be good for Trump,but the markets only care about right now.It’s vision is probably 20/300 at this point.I would hazard a guess that equities can only read the E,on the eye chart–and that’s about all.Later everyone.

  21. blackjak100 says:

    NK sticking with B wave count. I will say that shallow 15pt dip last week is more reminiscent of a ‘b wave’ and not a 2nd wave.

  22. blackjak100 says:

    There was a ‘confirmed HO signal’ fired last Wed. Here’s what we know. There have been 2 signals in the last 2 years. The last one occurred in Nov/Dec 2016 and was a completed dud. The market actually rallied after this signal. It was a complete failure which 1 out of 8 are. Basic probability suggests this one will not fail and at least produce a 5% correction within the next 4 months. Will TC’s count prove correct or is Minor 4 still ongoing as an expanded flat with B exceeding 1.382*A? 2468 = 1.618 * Major 1 = Major 3 of P5?

    • mjtplayer says:

      I have almost the same identical count, should top out (next few weeks, maybe a month or so) before a nasty major 4 (Aug – Oct)

  23. H D says:

    Thanks Tony. One more hurdle and then nothing left to stop your multi decade bull count.

  24. alexh110 says:

    Interesting quirk of timing that we have the Comey testimony, and the U.K. General Election on the same day next week!

  25. Thanks Tony. Yesterday 123 abc commented “So assuming Intermediate-iii ends at 2494 (i.e. typically, Intermediate-iii = Intermediate-i * 1.618); then, an approx 5% pullback for Intermediate-iv would be around 2380.” I found this interesting because it squares with my not so terribly original thinking on the next significant correction in terms of wave counts and goes a bit further in suggesting a possible top for Intermediate III. With that in mind, I wanted to ask if 2496 is a legitimate pivot? 2401-2234=167 and 167+2329=2496. If this should be a OEW student question, I fully understand. And should I be wrong, don’t worry about hurting my feelings as I have thick skin and being wrong is sometimes part of the learning process. Finally, with both bonds and stocks rallying we may be in “Goldilocks” territory in which inflation remains subdued, earnings increase, economic growth continues and the Fed likely scales back further rate hikes following the widely expected (96%) increase next week.

  26. Just looked at the COT chart for gold,that came out last night.I can’t say it’s bullish.Open interest fell,commercials rose.If anything,it’s bearish.Nothing like the first half of 2016.Seems like a dormant market actually.

  27. phil1247 says:

    http://tos.mx/tosmx/item?id=YlKcJg&image

    DOLLAR
    collapse continues but probably getting to the end of initial down wave
    ie wave A or wave 1
    extension short breaking will tell us counter trend rally is starting
    if we go thru target at 96.3……..
    . collapse would intensify immediately

  28. captbara says:

    One more GLD chart, breaking out next week. I guess bitcoin was leading the way. Hyperinflation is back

    • mjtplayer says:

      Inflation? Maybe deflation.

      2-10 spread is currently at 0.87; the lowest level since last Oct and just 11bps away from 10 year lows. The 10yr TIPS spread is currently 1.77% and has been steadily declining since Jan.

      Inflation is low and falling, risk is deflation.

      • phil1247 says:

        dollar collapse will give massive inflation and 2400 dollar gold

        see chart

        • mjtplayer says:

          Sorry Phil, the Dollar is just correcting, the longer-term trend is still up.

          Gold will initially decline as the Dollar rallies, but will eventually rally WITH the Dollar as money loses confidence in European government debt, the EU and the Euro. 2018 or 2019 event.

          • phil1247 says:

            sorry mjt
            the dollar has been in a secular decline since 1985 at 160+
            we just saw a cyclical bear rally
            collapse continues until extension short breaks..

            then i may trade it form the long side for a while

            • mjtplayer says:

              Unless of course the bear market completed and we’re now in a secular bull. The problem today is that the Euro is 57% of the DXY, which means you MUST be bullish the Euro to be bearish the Dollar – the other components together just can’t move the needle without the Euro.

              The Euro chart is dreadful, close to completing a wave 4 in a channel move, where wave “E” would be in the 114’s; then wave 5 down to fresh lows, probably to below par.

              Sentiment is very bearish the Dollar right now and hedge funds have their largest net-long positions in the Euro in 4 years – all as we enter to turn window and major Bradley turn dates in late June; just 2-3 weeks away. If the Euro fails in the 114’s and gold fails to close above $1,297 for the month of June then both are toast heading into the July – Oct period.

              https://www.tradingview.com/x/FvUvlDbt/

        • captbara says:

          Dollar looks very bad here, we’ll see if the weakness continues next week. I have 1500 first target for gold if we get that breakout.

        • H D says:

          phil, you have really changed your view on metals? Last month you were looking for $14 silver and now you think gold will double. What changed?

          • phil1247 says:

            HD
            i dont look at ” the metals ”
            there is gold …and there is silver
            they couldnt be more different
            if you recall i posted that gold had probably made it bear market low
            but the same was not true for silver or the miners
            look at silver from its dec low…
            …it traded the short from 18.50 then fell in its DOOZIE decline ( if you remember) to 16.00 target which broke the long from lows… now it is trading the next short in the series .. target is 14.30….nothing changed there

            GOLD is a totally different animal …it broke the short at1280..then fell back and held support at 1210 and is now breaking the short again validating the 1339 target

            i couldnt care less what the dollar is doing related to gold because the correlation is not obvious until we are at extremes… believe me ..when the dollar is in all out collapse and gold is soaring the correlation police will be out in full force..
            basically just trade each entity on its own merits
            because correlations go from positive to negative to nonexistant

      • scottycj1 says:

        If GC stops here and holds Monday….Tuesday should be a cit.

  29. captbara says:

    One more time. Tony can you clean up some of this? thanks

    • fotis2 says:

      4th test? Very possible it breaks thru.

      • captbara says:

        4th time usually works, but you can wait for the breakout first to confirm of course.

      • Dollar PO on H&S was about 95.75.Ira had the downtrend line on the weekly gold around 1300.It may or may not break through.Should have done it already with this dollar decline.This feels like “manual labor”,watching GDX and gold trudge up the charts like elephants.
        Anyways,on S&P–the simplest analysis is the best for me.I like the amatuer investor charts Fiona posts,as they get to the point.Vix hitting the bottom line of a channel usually means a selloff in equities.Is Vix going to bust through THAT on the way to a 7 handle?Since its never happened,can we count on that?The VIX and Mr C’s counts(for much further upside)are not compatible–unless VIX breaks 9–heading to 7,6,5,4,3,2,1…liftoff.
        That’s about the only question for me.Have a good weekend all.

  30. stormchaser80llc says:

    My complete blog post today is open to the public to read. If you like the post, you can sign up for a FREE subscription to view this analysis daily at the bottom of today’s blog post!

    The bullish trend continued Friday as expected. Breadth has become strong once again, including a new All Time High on the SPX A-D line today to match the new All Time High for SPX price. Internals show the small caps are looking better than SPX, however.

    With as much excitement for the BULLS, its easy to lose sight of what’s going on behind the curtain. The yield curve continues to weaken (but I am watching positive divergences) and oil had 2 down days on strong market days Thursday and Friday (and has had a terrible Spring when its supposed to be the strongest). TLT:TIP is accelerating meaning deflation risk needs to be monitored. HYG:IEF made significant losses today, highlighting a shift to safer instruments which has been occurring since March 1st. Speaking of March 1st, significant negative divergences on all technical indicators are in place on both the Weekly and Daily charts. On the hourly scale, SPX made negative divergences on all indicators meaning a pullback in the short term is likely. And finally, 4 negative divergences on my proprietary Technicals Model have occurred vs. SPX since mid April, a sign that a significant change in trend may occur soon.

    Both my trading indicators remain BULLISH, though mounting evidence suggests it’d be wise to take some profits next week.

    Supporting charts and much more FREE analysis at my site (http://navigatethemarketstorm.com) However be advised that I do ask folks to take a few seconds to register for a log-in, making sure you agree to my legal documents. On my site, be sure to check out the real-time Trading Platform (look for it on the top menu). I am taking feedback!

  31. llerias7 says:

    Thanks, TC.
    The train keeps rolling!…Hard to believe this would only be Major 1!! Are you sure of it?

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