Weekend update

REVIEW

The week started at SPX 2432. After a decline to SPX 2420 on Monday the market rallied to 2444 by Wednesday. The market dropped to SPX 2419 on Thursday, then rallied to 2433 to end the week. For the week the SPX/DOW gained 0.3%, and the NDX/NAZ lost 1.0%. Economic reports continue to be weak. On the downtick: retail sales, the CPI, business inventories, import prices, the Philly FED, capacity utilization, the NAHB, housing starts, building permits, consumer sentiment, the Q2 GDP estimate, the WLEI, and the budget deficit widened. On the uptick: the NY FED and jobless claims improved. Next week’s reports will be highlighted by leading indicators and more housing.

LONG TERM: uptrend

The long-term wave count we have been tracking had remained unchanged for about a year. There will probably be some minor adjustments as time goes on: project-monitor-adjust. Overall, however, we do expect this to continue to least 2018 and possibly 2020. The longer-term pattern appears more and more probable into the foreseeable future. More on this in a soon to be released special report.

We continue to label the SPX 667 low in 2009 as the end of Super cycle wave 2. Suggesting a Super cycle wave 3, multi-generational bull market began at that time. Primary wave I, of the first of five Cycles waves, began at that time and concluded in 2015 at SPX 2135. Then after a short and swift bear market Primary II bottomed at SPX 1810 in 2016. A Primary wave III bull market began at that time. Currently the market is rising in Major wave 1 of that Primary III. And, if our estimates are correct for SPX 3000+, it appears to be about halfway done at this point in time.

MEDIUM TERM: uptrend may have topped

The NDX/NAZ, which have been leading the SPX/DOW higher in recent months, display indications that their 7-month, 13-wave uptrend may have recently ended. Should this be the case the downside pressure created should eventually pull the general market down as well. The NAZ in particular has a fairly uniform pattern since 2016.

It advanced in 13-waves, 5-trends, 1100+ points over 7-months to complete its Intermediate wave i. Then after a 2-month decline, where it lost 5.8%, it ended Int. wave ii. After that it rallied in 13-waves, one trend, 1300+ points over 7-months for Int. iii.

After last week’s selloff it has rebounded then consolidated into this week’s options expiration. The weekly RSI is displaying a negative divergence, just like it did at the end of Int. i. And, there has been relatively heavy volume during the recent decline. A correction down to NAZ 5900-6000 would not surprise at this time

The SPX has been rising in five Minute waves from its recent downtrend low at 2329 in mid-April. Different count than the NDX/NAZ but both leading to a potential Int. iii conclusion. Minute waves i thru iv have completed: 2406-2353-2446-2416. And, Minute wave v may have already completed this week with a slight failure at 2444. A negative RSI divergence appears on this chart as well. Medium term support is at the 2428 and 2411 pivots, with resistance at the 2444 and 2456 pivots.

SHORT TERM

While Minute i advanced in five Micro waves as displayed in orange on the chart. Minute iii also advanced in five waves, but on a much smaller scale: 2419-2404-2440-2425-2446. Then the decline for Minute iv to SPX 2416, set up the recent rally to 2444, decline to 2419, then rally to 2434. Minute wave iv triangle underway? Or a failed Minute v at SPX 2444?

Either way we have some important levels to watch. For a breakout to continue the uptrend SPX 2444 and 2446. For a breakdown, to join the NDX/NAZ, and potentially enter a downtrend SPX 2416 and 2406. Until one or the other occurs this mixed market continues. Short term support is at the 2428 and 2411 pivots, with resistance at the 2444 and 2456 pivots. Short term momentum ended the week nearing overbought. Trade what’s in front of you!

FOREIGN MARKETS

Asian markets were nearly all lower on the week losing 0.4%.

European markets were also nearly all lower losing 0.5%.

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

COMMODITIES

Bonds continue to uptrend and gained 0.4% on the week. It looks like the 6-month decline in 10YR rates may be coming to an end soon. Long-term rates have been declining while the FED has been raising short term rates 75 bps, (Dec., Mar., and Jun). With the economy weakening some, and inflation rolling over, the likelihood of another rate increase is at best 6 months away.

Crude remains in a downtrend and lost 1.9% on the week. Time for the Saudi’s and Russia to talk it up again.

Gold is in an uptrend but lost 1.2% on the week. If stocks enter a downtrend Gold could catch a bid.

The USD remains in a downtrend but gained 0.1% on the week. The USD has also been in a decline since December. Since the FED started raising rates in December: USD down, Crude down and Bonds up.

NEXT WEEK

Light schedule for economic reports this week. Wednesday: existing home sales. Thursday: jobless claims and leading indicators. Friday: new home sales. Best to your week!

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

About tony caldaro

Investor
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214 Responses to Weekend update

  1. vivelaamo says:

    I’m not a fan of EW but I gotta hand it to Tony for his bullish count. He is the only EW analyst out there calling it correctly!

  2. EL MATADOR says:

    This number appears to be muy importante 2584……it going to turning into a slaughter house near that number….GL and peace out!

  3. NEWBIE says:

    Dow will be down at least -300 tomorrow or Wednesday

  4. 2480 tomorrow anyone. No reason to be short. They just keep destroying bears. Unreal.
    wave 3 up up and away

  5. kvilia says:

    Fotis – taking apart my sink to put it to work 🙂

  6. gary61b says:

    ES has reached 2450 as a w 1 and now is in an expanded flat, thinking c will end at 2444.75 – 2443. then w 3. https://gyazo.com/e5142bdf1b1fda96d39e76164d23df30

    • gary61b says:

      I thought the old minor 4B wave had a max. allowable at 2452…almost at rejection level.

    • gary61b says:

      wow, looks to be a running flat, c never made it past a….If wave 3 beginning measure move to 2492ish.

  7. micky says:

    Allrighty, as we have entered the high area of 2400 to 2500 I mentioned a while ago I am happy to start scaling out of my LT longs and will keep about a third to ride out the next bigger W4 whenever it happens and will scale in the longs when I feel we have progressed well into W4.

  8. Dex T says:

    Amazon Said to Plan Cuts to Shed Whole Foods’ Pricey Image

    “When Amazon.com Inc. completes its acquisition of Whole Foods Market Inc., Chief Executive OfficerJeff Bezos will try to keep the grocer’s reputation for premium fresh foods while cutting prices to shed its “Whole Paycheck” image.

    Amazon expects to reduce headcount and change inventory to lower prices and make Whole Foods competitive withWal-Mart Stores Inc. and other big-box retailers, according to a person with knowledge of the company’s grocery plans. ”

    https://finance.yahoo.com/news/amazon-said-plan-cuts-shed-022041587.html

    • Dex T says:

      AMZN is going to turn whole foods into another regular grocery store as I argued on Friday

      By “changing inventory” they are going to reduce quality that set Whole Foods apart and built their brand on.

      • captbara says:

        Unless you are a hipster/millennial who enjoyed grossly overpaying for their groceries it shouldn’t be terribly missed.

        • Dex T says:

          No, but AMZN likely isn’t going to be making much from this is the point I was arguing

          Whole Foods survived/established itself as an upscale store and if it turns into another grocery then what’s the advantage?

          • captbara says:

            To attach themselves to something with a recognized name brand and get their foot in the door I guess. It just has to be as good or slightly better than Walmart and it’ll do well with pushing their Prime subscriptions.

            • Dex T says:

              Those points are essentially the arguments AMZN is making.

              It remains to be seen if they will hold on to the more upscale clients that Whole Foods attracted. Every store is located in an area that has massive competition from numerous chains and Whole Foods distinguished themselves on being the more upscale end (yes they are very pricey but that attracts certain people)

              Also, AMZN paid a shitload for it and adding huge debt load. I know finances have rarely mattered with this company but still….

              • captbara says:

                They don’t need to hold on to those well off hipsters anymore 🙂

                People that buy on Amazon are people that value price and convenience above all and that online market is going to be far bigger.

              • Dex T says:

                Maybe but AMZN is still keeping it’s locations open so someone has to visit.

                Food is a very different industry to electronics and AMZN has little room for cuts. All of the major grocery chains are already operating on razor thin margins.

                Rotten and meat and wilted vegetables from an AMZN distribution center- not for me thanks.

  9. Another hundred points on Nasdaq and a triple -div on the weekly shaping up.Whoever is moving this market has no regard for any of that stuff anymore.
    Old school:Sell triple -divs
    New school:Bust that – div.Force bearish people to cover.
    if that happens this time,ladies and gentleman,it’s a whole new stock market.

  10. mcgcapital says:

    https://mobile.twitter.com/ukarlewitz/status/876842067497897984

    Other instances where hourly RSI got above 90 this year led to pullbacks

  11. Nazdaq not looking week anymore, could close up 100 today

  12. fotis2 says:

    Guy just drove car into police van in France boot full AK47s and a gas bomb being described as an attempted suicide attack.

  13. stcoleridge says:

    First time I’ve ever seen the second month volatility futures trade below 12 before the front month expiration.

  14. vivelaamo says:

    Last one. Have a nice day folks 😊

  15. today is a trend up day. Up all day.

  16. scottycj1 says:

    Sell your Gold Doubloons me Mateys….
    Theres a better way to make lucre
    ya see there’s a Tulip mania in the USA

  17. gtoptions says:

    Thanks Tony
    Where are the EWers on this EW blog. lol
    FYI ~ SPX Minor 5 = .618 M1 @ 2454
    GL All

  18. captbara says:

    I saw some people had SP as a triangle last week. I think it’s more likely to be yet another running flat.

    And now we’re clearly beyond the top of the channel on ES from 2016 lows. Acceleration is coming

  19. bolderbob says:

    Tony…now that the SPX has made a new high in minute 5 what are your thoughts about how high it will go before ending?

  20. GDX is acting pretty impressively so far.

  21. mjtplayer says:

    The gold bulls are desperately trying to hold and defend the $1,250 area

  22. pooch77 says:

    Phil call of the day 2452

Comments are closed.