Weekend update

REVIEW

The week started at SPX 2519. After a higher opened on Monday the market rallied everyday until hitting SPX 2553 on Thursday. On Friday monthly NFP surprisingly was reported negative, and the market pulled back to SPX 2544. Then a bounce into the close ended the week at SPX 2549. For the week the SPX/DOW gained 1.45%, and the NDX/NAZ gained 1.45%. Economic reports for the week were mostly higher. On the downtick: the ADP, NFP, consumer credit and the Q3 GDP estimate. On the uptick: ISM manufacturing/services, construction spending, auto sales, factory orders, wholesale inventories, plus, jobless claims, trade deficit, and unemployment rate all improved. Next week’s reports will be highlighted by the FOMC minutes and the CPI/PPI. Best to your week!

LONG TERM: uptrend

Back in August we were closely monitoring the TRANsports, and the NDX/NYSE. The TRAN had potentially ended its bull market in July, and was currently in a downtrend. Generally this index is a leading/coincident indicator for the general market. In September it found support above a critical level, and entered an uptrend. Now in October it is making all time new highs, along with the NDX/NYSE, as its bull market is now subdividing and extending.

The SPX, along with the DOW/NAZ, all appear to have the same bull market wave count. This Major wave 1 bull market should unfold in five Intermediate waves. Intermediate waves i and ii ended in the spring of 2016. Then Intermediate iii started to subdivide. Minor waves 1 and 2 ended in the fall of 2016. Minor waves 3 and 4 completed in the spring of 2017. Minor wave 5 has been underway since April. Longest uptrend, in time, of the entire bull market. When it concludes, Int. iii should end, and the market could experience its largest correction since 2016. After that the bull market will resume.

MEDIUM TERM: uptrend

As noted above this uptrend is the longest uptrend, in time, since the bull market began. The other three uptrends were 2 months, 2 months, and 4 months respectively. Normally, the longest and strongest uptrend in a bull market is the third of a third wave. Not a fifth wave as we are counting it. Something to keep in mind going forward.

Minor 5 began in April at SPX 2329. It first unfolded in the five Micro waves (orange) to complete Minute wave i at SPX 2454 in June. Then after a small decline to SPX 2408 in July for Minute ii, Minute iii was underway. Thus far, Minute iii has completed Micro waves 1 and 2, with 3 underway since the August 2417 low. This week Micro 3 easily cleared previous highs as it hit SPX 2553. Next target the OEW 2575 pivot. Medium term support is at the 2525 and 2479 pivots, with resistance at the 2575 and 2594 pivots.

SHORT TERM

We have been tracking the nano and pico waves quantitatively that create each of the Micro waves as they unfold. We have not added this labeling to the hourly chart, to avoid clutter. But we do discuss the wave pattern of each unfolding Micro wave in the daily/weekly write up.

Micro wave 3 from the SPX 2417 low has continued to unfold in a relatively simple pattern. Nano 1. 2455, Nano 2. 2428, Nano 3. 2480-2447-2509-2488-2553 so far. We still need to see an end to Nano 3. Then after a Nano 4 pullback, another push to new highs to complete Nan0 5 and Micro 3. But this still doesn’t end the Minor 5 uptrend. We continue to take it just one wave at a time. Short term support is at the 2525 and 2479 pivots, with resistance at the 2575 and 2594 pivots. Short term momentum spent 5-days  extremely overbought, then broke below neutral on Friday. Best to your trading!

FOREIGN MARKETS

The Asian markets were all higher this week, especially H.K. +3.3%, for a net gain of 1.4%.

The European markets were mixed and ended the week mixed.

The DJ World index gained 0.9%, and the NYSE also gained 0.9%.

COMMODITIES

Bonds are in a downtrend and lost 0.2%.

Crude is still in an uptrend but lost 4.5% on the week.

Gold is in a downtrend and lost 0.8%.

The USD is in an uptrend and gained 1.0%.

NEXT WEEK

Monday: bank holiday markets open. Wednesday: the FOMC minutes. Thursday: jobless claims and the PPI. Friday: the CPI, consumer sentiment, retail sales and business inventories. Best to your extended weekend, if you have one.

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

About tony caldaro

Investor
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94 Responses to Weekend update

  1. llerias7 says:

    Will micro 4 test the breakout line at 2495/2500?

  2. phil1247 says:

    .. Lee

    gold ready for 1295

  3. asaraniti says:

    6 more ticks in /ES and IMHO we are in Nano wave 4

      • asaraniti says:

        one caveat..today was, slow, choppy, low volume day ….. Holiday trading. The 61.8% measured move LONG on the 15 minute chart just broke. What will happen next/soon probably in the overnight session is a CTT and as long as 2549.36 holds, the profit target is 2536.54. /ES is bearish on the 15 minute chart. IMHO, Tony may label the chart Nano wave 4.

        • gary61b says:

          ES is either done or it has a 4 and a 5 down yet to come. 2532 is significant support. A break of 2547 and where done going down.

          • asaraniti says:

            Not sure I am following you. I doubt that Nano wave 4 would complete in less than 2 days. As long as /ES stays below 2546.36 (mistake on top post) I believe SPX traded wave “a” down at the low, the CCT will be wave “b” and targets for wave “c” are /ES 2532.14 and 2530. This analysis is all based upon the break of the 15 minute long.
            Lets not get ahead of ourselves, lets see if Tony C. updates the wave count tonight or tomorrow.

  4. Lee X says:

    Thanks Tony

    Great job sir !

  5. Bud Fox says:

    Starting to realize, just much the SP has risen. That said, the Coming, bear market. Should be a horendous (sp), event at its end…Maybe, I am to premature to being up the subject.

  6. fionamargaret says:

    http://stockcharts.com/freecharts/pnf.php?c=UWT,PWTADANRBO%5BPA%5D%5BD%5D%5BF1!3!!!2!20%5D&listNum=1

    Still like UWT, UGLD, JNUG, NUGT, ERX….maybe some VXX….and FCX

  7. torehund says:

    According to Martins models of volatility, Crude oil should escalate all the way from Sept and peaking in December. Hold on to your hats 🙂

    • fionamargaret says:

      Interesting Tore…I was playing around with Bernoulli’s numbers at the weekend..oil and gold still are the best bets…

  8. Good morning all.
    /ES continues to be bullish on both the 15 minute and daily charts. The 50% entry into the LONG was Friday morning. Because the profit target has been tested, the highest probability is that /ES fills it’s gap, tests the 50% micro long and rally to the profit target. If the 50% micro long is defended, profit targets are noted above. If the 61.8% micro long breaks the 50% measured move will be tested.
    Ideally, the entry into the LONG will be a test of the 50% micro LONG with the tick >-400 and you see the arrow pointing up on the tick chart. If you take it, your stop is 2-4 ticks below the 61.8% micro long. BTW, looking at this chart at 8:20 AM, EST, IMHO, if SPX is trading in NANO wave 3, the probability of the SPX trading in NANO wave 4 increases upon the break of the 61.8% measured move long.
    Notes on chart..
    https://gyazo.com/ecb2fdfb7e7f1f66ad903ae9ccf7f445

  9. I hope this doesn’t jinx it but gold is up 10 early on.Keep buying,China.Good night all.

  10. torehund says:

    https://www.investing.com/currencies/usd-try

    The Turkish lira, one step away from runaway hyperinflation.

  11. soulsurfer says:

    Thanks Tony! Great calls, and great to stay the course!

    Quite the wave-extensions, but everything still on track:

    https://investingintelligent.com/2017/10/08/sp-500-update-is-the-market-still-on-track-for-2600/

    Trade Safe Folks!

  12. bouraq says:

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

  13. phil1247 says:

    Stephen…..

    people can speculate all they want about
    the fed will raise rates…………..
    the fed wont raise rates…………….

    the fed will do what the market tells it to do
    and what is the market telling the fed to do ?

    http://stockcharts.com/public/1269446/chartbook/118829680;

    • Phil,

      With measures of financial conditions easing and signs of credit easing, I think the market is telling the Fed to tighten. Federal funds rates are 1.00% to 1.25% (1.125%) and one year yields are close to 1.35%, giving the Fed ample space for one more rate 25bp hike this year likely in December. CME odds are 89% we will see such an increase. And at the end of of this month the Fed will likely formally implement its widely telegraphed plan to begin normalizing its balance sheet which will likely follow the plan agreed to and announced at its June meeting.

  14. phil1247 says:

    .JK1987 says:
    October 8, 2017 at 12:02 am
    i do have many TLT chart analysis, wrote a 13-page report before i invested.
    equity market has a strong rally from early Sep, so does 10y t. yield, they are co-related. 10y t. yield is the cause.
    look at the chart pattern between tnx and rut, should be quite clear what’s going on about the rate, hence TLT/TMF and equity market.

    http://stockcharts.com/public/1092905/tenpp/6

    For the last time………………….>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>

    there is NO consistent correlation between SPX and TNX
    13 pages of nonsense will not change that
    look at the TNX chart with CORR,, TNX/SPX at the bottom

  15. Though I dipped a toe into GDX,looking at the COT chart this week,things don’t look encouraging.May have to do a quick reversal on that move,though Trump is trying his best to stoke things with NK.COT charts look 4 to 5 weeks away from getting bearish enough to be bullish.China coming back Sunday night into the gold trade will tell a lot.A selloff with that happening will be bearish.Will wait a couple days to see if China starts propping gold up a bit.I’ll stop by Sunday night with a quick report on that.Later.

  16. fionamargaret says:
  17. Thanks Tony
    I hope everything is going well with you now
    For the Dollar index,bear market means no new highs in the medium term(1 year)?thanks

    DOW
    https://invst.ly/5dil6
    https://invst.ly/5dim7
    https://invst.ly/5dl2-
    OIL
    https://invst.ly/5din7
    DXY
    https://invst.ly/5dip9
    https://invst.ly/5dl87

  18. fotis2 says:

    JK…. THIS is what faith is all about.
    http://www.dailymail.co.uk/news/article-4955614/Two-Russian-mercenaries-executed-ISIS.html
    Roman Zabolotny, 39, and Grigory Tsurkanu, 38, held in Syria, refused to read out a statement saying they rejected their Christian faith and had become Muslim.

    • JK1987 says:

      fotis, they are mercenaries. they probably killed lots of their enemies before captured.
      when involved in a war, either kill or be killed, one way or another, sooner or later. they should already have prepared for the moment.
      they already got beaten up badly. even if they read out the statement, they would still die by a different way, just later than sooner. it’s unavoidable.

      market is so strong, like a run away train.
      i prepared an alternate scenario with 2 historical cases, they matched well during this seasonality.
      current $SPX $INDU
      https://gyazo.com/659a86e1b5f5b6ffcc1917f94b0e409b

      past case 1 & 2
      https://gyazo.com/776ed80c6b0f225ba4f46048fcd097d4

      i am prepared for the worst case for the run away train for my portfolio.
      1. TMF largest holding. ~40%, with STOP limit.
      2. ndx short (6060), second largest holding. ~30%
      3. rut short (1511), third. ~15%
      4. spx short (2532), fourth. ~10%
      5. uvxy (21.8), smallest holding. ~5%
      except TMF, no stop for the remaining 4 holdings. no necessary, because i am confident of what i am seeing, and knows where they are going.
      let the run away train go go go … faster the better, just make sure don’t run off the track.

      i do not recommend anyone to follow my approach. needs a strong mentality.
      when warren buffett invested AAPL at 110, did he have stop when the price was 15~20 % against him?
      before Jim Rogers had +4200% gain, his investment was also down a good size. did he have a stop?
      they have strong mentality, know what they are doing and confident of what they saw, and they can afford, both the cost and time.

      cheers!

      • fionamargaret says:

        Jack, if we are going to analyze TLT/TMF, it makes no sense for it to be bullish on the chart with rate hikes supposedly around the corner, unless it sees a situation where folks turn to bonds for security….probably NK …which would also make gold and oil do well.
        (Does oil price do well in tricky situations….supplies disrupted, or at a standstill …I really don’t know).
        There are a lot of shorts (TBT).
        Just be careful Jack and protect your money. x

        • JK1987 says:

          fiona, never be so sure about TLT/TMF, let’s why i make it my main. i put a large sum in the investment, i can joke around about things, but i never ever kidding with my investment.

          from many charts, i don’t think there would be any rate hike in December, or even any rate hike in 2018. it’s all done. news, talks are just noise. FED has no power to do so, they will be forced to tie their hands. or even further, they would be forced to reduce the rates down the road, not now or soon though.
          i know, it’s a bold statement that no one would say or believe. all my basis are 10y t. yield, and other considerations.
          did you watch the tape on Friday? the dramatic reversal of 10y t. yield and TLT, it’s saying it’s done and with the sharp wedge. i do have many TLT chart analysis, wrote a 13-page report before i invested.
          equity market has a strong rally from early Sep, so does 10y t. yield, they are co-related. 10y t. yield is the cause.
          look at the chart pattern between tnx and rut, should be quite clear what’s going on about the rate, hence TLT/TMF and equity market.
          https://gyazo.com/f2b961f8495c994936295b2327fb3a9b
          for equity market, the pattern says the ending will not only be bad, will be very very bad(JS also said something about it today). i should not say further or any show chart to upset people here while most are celebrating the rally. if they want to buy, let them buy.
          i have been saying Debt Deflation many times, i do mean it. and it’s coming.
          oil and gold will be affected too. i do like gold, but not here, and i do mean gold would be cut in half from here, and that could still be the best performer against other equities.
          TLT/TMF will become bubble at certain point, and will implode. i know about the bubble pattern, and it’s making the bubble now, will exit TLT/TMF around the bubble top. do you know most of the bond funds already made new ATH early Sep, and having a correction now.for example, PTTRX
          post #2

      • stcoleridge says:

        That’s convenient. When you first posted your UVXY position at 21.80 it was 25% of your portfolio. Did I miss your post where you dramatically scaled back in UVXY or are you a congenital BSer?

  19. torehund says:

    Euro in a state of peril, AS posted on the friday update. Also rumours of an impending Financial crisis erupting from Germany, they just Dont know what the cause may be. I have a large Pi date tomorrow 51,6. 6 cycles of 8,6( 3141) days. Celebrating it here with friends and some Cold ones. Lets see if the cycle of Armstrong works 💥

  20. phil1247 says:

    Lee

    Re : your post on gold speculation

    the latest from Mr Gold………………

    http://40yearcycle.com/uncategorized/xau-hui-reversing-daily-trends/

    i am ready to buy…………. but i need to see a little more
    looking for another “cheap long ”
    like the one i gave you at 1227… did you take it?

    • Lee X says:

      Thx Phil

      I don’t give or act on trade recommendations on blogs , call me crazy 😉
      I appreciate the chart and continued success !

  21. Thanks Tony. Go Dodgers.

  22. gtoptions says:

    Thanks Tony
    SPX ~ 13rsi > 60 Strong Bull 😉
    https://www.tradingview.com/x/lftIIC9E/

  23. Just a couple notes today.
    http://www.zerohedge.com/news/2017-10-06/bls-caught-fabricating-data
    (which speaks for itself)
    Plus,while reading through all the Stephen Paddock stuff today (which a few are saying was Isis inspired,a CIA arms deal gone wrong etc.)well known alarmist Jim Rickards is predicting a US attack of NK on Oct 10th.FWI.Of course he throws predictions out like darts at a dartboard tourneyment.
    Lets see if gold sniffs out something in NK next week.Good luck all.

  24. Tony C.

    Just thinking outside the box, when you hinted, “Normally, the longest and strongest uptrend in a bull market is the third of a third wave. Not a fifth wave as we are counting it. Something to keep in mind going forward.” Were you giving any thought to this count?

    chart…
    https://gyazo.com/08da2a77165f2381ffd1987ce7f988cf

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