Weekend update

REVIEW

The market started the week at SPX 2502. After pullback to SPX 2488, on another N.K. event, the market rebounded for the rest of the week. By Friday the SPX was making new highs at 2519. For the week the SPX/DOW gained 0.50%, and the NDX/NAZ gained 0.95%. Economic reports for the week were mostly positive. On the downtick: consumer confidence/sentiment, new/pending home sales, and weekly jobless claims rose. On the uptick: Case-Shiller, durable goods, Q2 GDP, personal income/spending, the PCE, the Q3 GDP estimate, and the Chicago PMI. Next week’s economic highlights are the ISMs and monthly Payrolls.

LONG TERM: uptrend

For the past couple of months we have been tracking a few indices, especially the Transports, to determine if the general bull market will run into some trouble in the next few months. The Transports had completed a potential five wave structure at 9764 in July and entered a downtrend. If that downtrend broke below the May 8744 low it would have confirmed the five waves up, and since the Transports is often a leading/coincident indicator, it would have suggested a general bull market top in the next several months.

The downtrend, however, held above that low at 9010, and the Transports started a new uptrend. This week the uptrend rallied to new all-time highs, suggesting Major wave 5 is extending. The labeling was updated during the week to display this extension. For now, we can put the Transports on the back burner until the next potential five wave event occurs.

The Major wave 1 bull market has been underway since early 2016. Intermediate waves i and ii completed in the spring of 2016. Minor waves 1 and 2, of Int. iii, completed in the fall of 2016. Minor waves 3 and 4 completed in 2017. And Minor wave 5, in the SPX/DOW/NAZ, continues to be underway. When it ends Int. wave iii will end as well. Then after an Int. wave iv correction, Int. wave v will carry the market to all-time new highs. We continue to estimate a SPX 3000+ between 2018 and 2020.

MEDIUM TERM: uptrend

With such a lengthy uptrend the wave pattern at times can look a bit complex. We are counting the SPX/DOW Minor 5 uptrend having started in April. From the Minor 4 low at SPX 2329 the market rallied in five Micro waves (orange) to complete Minute wave i at 2454. Then after a Minute ii decline to SPX 2406/08 the market has rallied in a Minute wave iii.

When Minute iii ends, there will be a Minute iv decline. Then a Minute v rally will take the market to new highs before completing Minor5/Int. iii. We’re estimating this will occur around SPX 2650. Medium term support is at the 2479 and 2456 pivots, with resistance at the 2525 pivot.

SHORT TERM

Minute waves i and iii of this Minor 5 uptrend look quite similar. Minute i had a strong Micro 1, a steep Micro 2, a strong Micro 3, then shallow Micro waves 4 and 5. Look how favorably Minute iii compares. In fact, Minute iii will equal Minute i at SPX 2531, (within the 2525 pivot range).

The Micro 3 short term count from SPX 2417: 1. 2455, 2. 2428, 3. 2480-2447-2509-2488-2519 so far. After the current rally ends there should be about a 20 point pullback, then one more rally to new highs to complete Micro wave 3’s five waves. Then after a smallish Micro 4 and Micro 5, Minute wave iii will end. Short term support is at the 2479 and 2456 pivots, with resistance at the 2525 pivot. Short term momentum ended the week quite overbought. Best to your trading!

FOREIGN MARKETS

Asian markets were mostly lower for the week losing 0.4%.

European markets were all higher gaining 0.9%.

The DJ World index gained 0.1%, while the NYSE gained 0.5%.

COMMODITIES

Bonds are in a downtrend and lost 0.6% on the week.

Crude continues to uptrend and gained 2.0%.

Gold appears to be in a downtrend and lost 1.0%.

The USD looks to be uptrending for the first time in many months and gained 1.1%.

NEXT WEEK

Monday: ISM and construction spending at 10am. Tuesday: auto sales. Wednesday: ADP and ISM services. Thursday: jobless claims, the trade deficit and factory orders. Friday: monthly payrolls (+156K), wholesale inventories and consumer credit.

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

About tony caldaro

Investor
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181 Responses to Weekend update

  1. phil1247 says:

    pooch………

    RUT ……… 1503 target bull above 1492 …. 15 min

    1511 target bull above 1470 … … daily

    short it ?? .. fugggeedddaboudddit!

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  2. vivelaamo says:

    I don’t think I’ve ever seen US indices this bullish in my life. It’s crazy!

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  3. mcgcapital says:

    FTSE looking bullish now. Lower low at 7200 then now it’s been fully retraced. Higher lows, higher highs, staying overbought, shallow dips and rallying to close at the highs of the day are characteristics of an uptrend and the last two days that’s how price has acted. I don’t know whether it now goes to new highs at 7600+ but it’s looking like long only for the time being

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  4. EL MATADOR says:

    A few months back I mentioned this number 2584 (+/- 50 pt) to be muy importante, and still is. Price is about to enter stone hard resistance zone, IMO. Time to remove any confirmation bias bullish opinions and ready oneself to act diligently to protect capital. GL and peace out.

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  5. kjb0 says:

    Tony, for those of us that actually follow you ( instead of the daytraders), is it fair to say that anyone who wants to invest a large sum on money in the market should wait for the Int.iv low at about spx 2250 or so as this level will not be seen for a decade or longer ? Of course we will want to get out before the Major 2 drop that may or may not exceed spx 2250 low. Is my homodirectional right?

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  6. pooch77 says:

    Phil time to test the waters a bit iwm short?

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  7. travis01 says:

    Great 2525 pivot TC. Hit and stalled. Time to sell my uvxy shorts and await confirmation to go long uvxy for the 20-25 pt pullback. Appreciate ya

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  8. JK1987 says:

    SPX broke out the trend line from March high, which everybody is watching for.
    but has not broke out of the reflation line i am watching for.
    https://gyazo.com/287171297341442d6ce57a1b0c7fceb7

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  9. H D says:

    Thanks Tony. First look at your 2525 pivot. Thanks for all the work over the years. Your readers can learn something in those updates. I know I have.

    Closing out any analysis.
    GC is -$(89) now
    SPX 2508, resistance turned support.
    CL $52 “big level”

    Flat on all.

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  10. phil1247 says:

    AA michael

    what happened to your SPX b wave count?
    looks like a rocket blast up to me
    little in the way of 2527 ES target
    then to infinity and beyond

    cheers !

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