Weekend update

REVIEW

The market started the week at SPX 2461. After a gap up opening on Monday the market rallied to an ATH on Tuesday. After that it did something quite odd. For three days, which included a Thursday/Friday options expiration. The SPX traded in a 9-point trading range, ending the week at the ATH SPX 2500. For the week the SPX/DOW gained 1.90%, and the NDX/NAZ gained 1.35%. Economic reports for the week were on the negative side. On the downtick: retail sales, the NY FED, industrial production, capacity utilization, consumer sentiment, the Q3 GDP estimate, plus the budget deficit increased. On the uptick: the CPI/PPI, business inventories, plus weekly jobless claims declined. Next week is FOMC week and mostly housing reports. Best to your week!

LONG TERM: uptrend

Continuing with our monitoring of potential long-term headwinds. This week the market resolved its multi-week inflection point to the upside, as the SPX broke out to new highs on Tuesday.

The bullish DOW continued to extend its Minor wave 5, as it made new ATHs as well. Very little chance of a bear market any time soon, as long as the DOW remains in the middle of its 5/9 wave bull market. One side note. The XLE sector confirmed an uptrend this week after a nasty 8-month downtrend (Dec.-Aug.). It is possible the cyclicals will assume leadership for a while.

The Transports also turned in a positive performance, gaining 1.7% on the week and confirming an uptrend. With the recent downtrend ending much above the 8744 level, this suggests the possibility of an extending Major wave 5. This type of event would extend the general bull market in time. New highs, above 9764, would suggest an extension is underway. Note the updated labeling on the chart.

The SPX chart looks quite similar to the DOW chart now. With Intermediate waves i and ii completed in the spring of 2016. Then five Minor waves, with Minor 5 still underway, creating Int. wave iii. When this uptrend does end, it will end Int. iii, then an Int. iv correction, similar to Int. ii, would be underway. After that an Int. v uptrend, or subdividing wave, will take the market to higher ATHs. Should the TRAN enter an extension to its bull market, the SPX will probably do so as well.

MEDIUM TERM: uptrend

With the breakout to new highs this week we updated the SPX daily chart to reflect the more positive count that was posted on the SPX hourly chart. From the Minor wave 4 low at SPX 2329 in April, we are tracking/labeling a subdividing Minor wave 5. Minute wave i completed at SPX 2454 with five Micro waves (orange). Then a Minute ii decline ended at SPX 2406/2408 in July. Minute iii of Minor 5 has been underway since then.

Thus far Minute iii looks like a bigger version of Minute i. Strong rally for Micro 1, big decline for Micro 2, then Micro 3 starts working its way higher. During Minute i, Micro 3 was longer than Micro 1 (93 v 77). With Micro 1, of Minute iii, 86-points, this suggests Micro 3 should hit the 2525 pivot range before any significant Micro 4 pullback occurs. Medium term support is at the 2479 and 2456 pivots, with resistance at the 2525 pivot.

SHORT TERM

Micro wave 3, which we think will reach the 2525 pivot range before a Micro 4 pullback, continues to work its way higher. The count we have been tracking for the sub-waves of Micro 3 remains unchanged: (1) 2455, (2) 2428, (3) 2480-2447-2500 so far. At Friday’s close the third wave of (3) is now longer than the first (53 v 52), setting up for a potential 10+ point pullback to occur at any time.

Short term support is at the 2479 and 2456 pivots, with resistance at the 2525 pivot. Short term momentum ended the week slightly overbought. Best to your trading!

FOREIGN MARKETS

Asian markets were mostly higher for a net gained of 0.8%.

European markets were also mostly higher and gained 0.9%.

The DJ World index gained 1.1%, and the NYSE gained 1.6%.

COMMODITIES

Bonds looks like they have rolled over into a downtrend losing 1.9% on the week.

Crude is uptrending again, gaining 5.1% on the week.

Gold is still in an uptrend but lost 1.9%.

The USD remains in a prolonged downtrend but gained 0.4%.

NEXT WEEK

Monday: the NAHB at 10am. Tuesday: housing starts, building permits and import prices. Wednesday: existing home sales, and the FOMC concludes with a speech from the FED chair. Thursday: jobless claims, the Philly FED and leading indicators.

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

About tony caldaro

Investor
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200 Responses to Weekend update

  1. locanbbs says:

    UPDATE 2: Spx chart with my (simplified) wave count:
    https://imgur.com/a/eaAZ8

  2. SPYtrader says:

    All of this analysis will not matter after September 23rd. The World Ends!!!

  3. Bud Fox says:

    Did we just see an SP top above 2508 ? or at 2508….

  4. johnnymagicmoney says:

    on a fundamental/long term net paradigm shift idea

    has anyone looked at STMP stamps.com ???? relatively low valuation for a tech/net stock with a great story behind it…..high ROE for a tech company too

    seems like a real long term winner and something to buy on a pullback

  5. mcgcapital says:

    Bulls seem quite seem quite excitable today. Pattern since March has been to go up 3% and down 2%. Odds aren’t good that it just keeps extending higher so a pullback is due. It’s a buy the dips and sell the rips market as there’s push and pull between various things.. tax reform being the main positive and geopolitics and valuations the main negatives. This is a rip higher since start of last week so the next move in the pattern is a dip?

  6. locanbbs says:

    UPDATE: Attempt to extend ATHs even further seems to have failed for now (higher interest rates). Except for Rut (tax reform). We will need a few more days of consolidation, it looks like (Tues.-Wed. last market cycle lows for a while).


  7. This is Elroys idea on GDX.Down to 21…up to 30.

    • “The gold miners ETF (GDX) is also likely to trade a range, and I will simply re-post July’s chart which is working well.”
      –Elroy’s timing is off,but he thinks his numbers are still in sync.

  8. Mary773 says:

    Richard Dennis once said that he became wealthy by never catching a top or bottom. He would just ride the primary trend until it stopped him out. I see that several analysts are now calling for SPX to top imminently between 2500-2510. Maybe they will be right, but forecasting highs in a bull market requires almost superhuman precision.

  9. vivelaamo says:

    Small caps leading the way now. This is tax reform. The big boys know where it’s going. 1600+ inverse weekly h&s target back on the cards 🙂

    My 1600 or Jk’s 900 (can’t remember his exact figure but it was extreme. Lets see which one we get to first.

    Have a good evening all.

    • JK1987 says:

      $RUT out-performing major markets in recent days, almost matched my tza cost base, still holding, won’t give it up no matter what happen.
      add a sizable position to another security today.

      https://gyazo.com/4cff850595deb6cb7a68f17ab16c9498

      • vivelaamo says:

        Fair enough Jk. Nice chart too. But RUT is a few points from new highs. Expect it by the end of the week. You can’t beat the bull my friend!

        • Cant believe we were trying to short the little monster last week but I did make a few $$ shorting 1425

          • vivelaamo says:

            Tell me about it! Just when the technicals get bearish we get a parabolic up move. Happens over and over again! Plus there seems to be a misconception that the moves up take months and the drops take days.

            I’m just lucky I had my Euro/gbp trade otherwise it would have been hard to stomach RUT losses.

        • JK1987 says:

          vive, maybe you are a few years older than me. 🙂
          from what i am seeing, we are entering a bear market that few people want to trade the market, people will hate the market, for its depth and duration of the bear market.

          yesterday we talked about the percentage of decline to qualify for a bear market.
          Yardeni and Tom McClellan had their definition of a bear market of 20% decline.
          i see both Yardeni and Tom McClellan are herd mentality, they do not understand the bear market at all.
          yesterday i even disqualified decline less than 30%, less than one year as a bear market, but that still not it.

          from the cycle point of view, in the last 100 years, there are only two bear markets with different characteristics.
          we are about to enter the third bear market in the last 100 years. the depth and the time duration will have nobody doubt as a bear market.

          2008 market plunge, even though it’s deep, but not qualified as a bear market (in my view). the time was too short for only 2 years, and it was savable by CBs.
          the coming one can not be saved by CBs or any force.

          debt deflation
          deflate all classes of assets

          that’s my research and my money is on it.
          cheers!

          • vivelaamo says:

            Were you hear when Cristine used to post?You too would have got on well.

            • JK1987 says:

              Cristine ? never heard of.
              all above posted are my original researches, not hinted or listened from anybody.
              you don’t know what i have seen.
              the main thing is the Long Term cycle, we are only into the third bear market in the last 100 years. and should start in this September. the exact date is hard to pin point as it’s such a long cycle.

        • stcoleridge says:

          If Sir Darkness were here he might say the RUT was going down with the Palace.

      • mcgcapital says:

        This is the post of a gambler not a trader.. ‘won’t give it up no matter what happens’. I’m with you on the macro, the time since last bear market and one being due and also the reasons why it will go down. But the technicals aren’t aligned that way. Say today was the ultimate price high.. why not wait for a reaction then sell rallies using the ATH as a stop? Every single bear move in history starts with a decline and failed rally.. so there’s no point in calling for a huge decline when we’ve still not even had a dip yet. Nothing wrong with shorting on the shorter timeframes but no point trying to trade a bull market top as it isn’t profitable. Since you started saying this it’s been going up and up.. it will come but who knows where the ultimate decline will start from. Market can always go higher so need a trading set up to trade against before entering something like that

  10. H D says:

    Somewhere buried in the 500 comments Friday I showed a W3 support fractal for bitcoin. Nice reaction! +37%, 15% today alone. OK I am over the limit. Lot’s of opportunities.

  11. fionamargaret says:

    UWT, UGAZ, ERX….and bought VXX, SQQQ, TMF…check your own charts…

  12. H D says:

    Easy study for anyone. Look left on SPX chart and count how many times you could have bot a Tony Caldaro pivot this year alone.

    There are harder methods.

Comments are closed.