Weekend update

REVIEW

The week started off at SPX 2553. The market opened higher on Monday, nudged higher Tuesday, then hit a new high at SPX 2564 on Wednesday. On Thursday the market gapped down at the open to SPX 2548, but quickly recovered to close positive on the day. Then on Friday the market gapped up at the open and ended the week right at the OEW 2575 pivot. For the week the SPX/DOW gained 1.45%, and the NDX/NAZ gained 0.35%. Economic reports were mostly positive. On the downtick: housing starts, building permits, and the leading indicators. On the uptick: the NY/Philly FED, export/import prices, industrial production, capacity utilization, the NAHB, existing homes sales, plus weekly jobless claims hit a multi-decade low. Next week: the first report on Q3 GDP (est. +2.6%), durable goods, and more housing reports. Best to your week!

LONG TERM: uptrend

Saeculum, Secular and Cyclical. In past decades the latter two terms were used quite frequently in the financial markets. Nowadays, however, they seem all but forgotten. This week the market celebrated the 30-year anniversary of the 1987 stock market crash. When one looks around at the people involved in the markets these days, very few were even adults when that event occurred. Not surprising then, those terms, along with many others, have been forgotten.

The Saeculum is a repetitive four-generational cycle lasting 75-80 years. It unfolds in four turnings, phases, or as we term it in the financial markets, Secular cycles. A term derived from Saeculum. Each of the four Secular cycles last about 15-20 years, and unfold in a repetitive sequence. The Secular cycle sequence is termed: growth, protest, unraveling and crisis. The best times to own equities is during a growth or unraveling Secular cycle. The worse time to own equities, but the best to own commodities, is during a protest or crisis Secular cycle.

Recent historical examples. Secular crisis cycles (1929-1949 and 2000-2016). Secular protest cycle (1966-1982). Secular unraveling cycle (1982-2000). Secular growth cycles (1949-1966 and 2016-xxxx). This is where we believe the market is today. In the early stages of a Secular growth cycle that will last into the early 2030’s. Certainly there will be cyclical bull/bear markets along the way. Just as there are cyclical bull/bear markets within every Secular cycle. But the big gains in equities occur during the Secular bullish growth and unraveling cycles. Check the chart.

In OEW terms Secular bull cycles occur during Primary wave III. Primary waves I and II occur from mid-point to end of a Secular bear cycle. And Primary waves IV and V occur from the beginning to mid-point of the next Secular bear cycle. Primary wave III’s create the entire Secular bull cycle. This is how social cycles combine with economic cycles in quantifiable terms.

This Secular bull market, and Primary III, began at the Primary II low in February 2016 at SPX 1810. The current cyclical bull market is being labeled as Major wave 1 of Primary III. Major wave 1 should divide into five Intermediate waves. Intermediate waves i and ii completed in the spring of 2016. Intermediate wave iii then started to subdivide into five Minor waves. Minor waves 1 and 2 completed in the fall of 2016, and Minor waves 3 and 4 completed in the spring of 2017. Minor wave 5, of Int. iii, had been underway since the Minor 4 low in April.

MEDIUM TERM: uptrend

The current Minor 5 uptrend began in April at SPX 2329. It is by far the longest uptrend in this bull market, and the most complex. As an impulse uptrend it is dividing into five waves: Minute waves i thru v. Minute waves i and ii completed in June/July at SPX 2454 and 2408 respectively. Minute iii has been underway since then.

Minute i divided into five Micro waves 1 thru 5 (orange). Minute iii is naturally doing the same exact thing. Micro 1 of Minute iii topped at SPX 2491, and Micro 2 bottomed at SPX 2417 – both in August. Micro 3, of Minute iii, has been underway since then.

For the past two months we have been tracking the smaller waves that create Micro 3. This week, after many weeks of patience, Micro 3 looks like it could have competed, or be nearly completed, as it has now risen five waves from that SPX 2417 Micro 2 low. Micro 3 has also hit out OEW 2575 pivot target. And, there are negative RSI/MACD divergences on the daily chart. Let’s see what next week brings. Medium term support is at the 2525 and 2479 pivots, with resistance at the 2575 and 2594 pivots.

SHORT TERM

We tracked the waves for Micro 3 with the following completed, or nearly completed, pattern: 1) 2455, 2) 2428, 3) 2480-2447-2509-2488-2564, 4) 2548, and 5) 2575? A very nice 6% rally for a wave of such a small degree. But as noted above, negative divergences are beginning to setup on the daily charts. Similar to recent Micro wave highs. A Micro 4 pullback from current levels would not be a surprise.

When we compare Minute iii to Minute i. We find similar steep declines for Micro 2, but a shallow decline for Micro 4 during Minute i. We would therefore expect the upcoming Micro 4 to be also shallow, i.e. 20-30 points. Then Micro 5 should reach at least the OEW 2594 pivot before it concludes. Let’s see how this unfolds. Short term support is at SPX 2548 and the 2525 pivot, with resistance at the 2575 and 2594 pivots. Short term momentum ended the week quite overbought. Best to your trading!

FOREIGN MARKETS

Asian markets were mostly higher and gained 0.6%.

European markets were mixed and lost 0.2%.

The DJ World index gained 0.2%, while the NYSE gained 0.6%.

COMMODITIES

Bonds continue to downtrend and lost 0.8%.

Crude continues to uptrend and gained 0.8%.

Gold remains in a downtrend and lost 1.9%.

The USD remains in an uptrend and gained 0.2%.

NEXT WEEK

Friday night: a speech from FED chair Yellen: https://www.federalreserve.gov/newsevents/speech/yellen20171020a.htm. Wednesday: durable goods orders, and new home sales. Thursday: weekly jobless claims and pending home sales. Friday: Q3 GDP (est. 2.6%) and consumer sentiment. Best to your weekend and week!

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

About tony caldaro

Investor
This entry was posted in special report, weekend update and tagged , , , . Bookmark the permalink.

157 Responses to Weekend update

  1. mcgcapital says:

    I’m going to add my voice to the longer term bearish camp here. I’m not sure about this saeculum cycle to start with, but if I assume it broadly works I would place us as close to finishing the crisis phase with one more major crash to come before the growth phase. The post WW2 period was a time of rising living standards and narrowing inequality. Now living standards are stagnating for the many and wealth inequality is at a 100 year high. And that’s a function of low interest rates stoking asset price bubbles everywhere you look and low taxes favouring capital gains over income. Only going to get worse once Trump is done enacting his reforms. The whole system is fundamentally unbalanced, and the central banks seem to just try and kick the can with more stimulus everytime something goes wrong.

    So to me, the way I see it, the debt bubble bursts. Huge wave of corporate and personal defaults, governments either monetise their own debt or raise taxes significantly on the top 1% to pay for it. Then we start a new with more income equality. The poor spend their money rather than investing it so the imbalance of all that extra capital sloshing around look for a return would be removed and instead money would be flowing around the real economy. 3-5% GDP growth would be achievable at that point. That leads to higher yields, lower stock valuations etc. A painful readjustment for asset holders almost across the board.

    It’s so obvious to me that this is the way it goes I just can’t quite understand how euphoric some people are about this bull run. Twitter is literally going into overload with smug bulls lol. I think in our lifetime the economy keeps growing and the Dow keeps rising but until the debt situation is resolved it’s massively deflationary. Write off debt and see some redistribution of wealth and I would turn majorly bullish.

    We’re currently pushing on a string.. eventually this thing snaps and the process begins. However, the trend is still up until it does and it should be fairly obvious when it changes as volatility should pick up significantly near the top.

    The below is well worth a watch:

    • tommyboys says:

      Hey Mc, responded to your post late Friday if you missed it – one page back. Good day all.

      • mcgcapital says:

        Thanks Tommy. Respect your view but would expect you to disagree with me on this. I read the Barron’s article, sounds like puts were more in demand than calls (bullish). Not sure whether that was before or after the 2-3% rally we’ve just had. The points I’m making here are longer term than how people are currently positioned. The reflation viewpoint is currently winning out in the market but I see that failing at some point, just not sure when. Price will tell us if it’s weakening, no signs at all yet

  2. NEWBIE says:

    2570 area is make it or break it for longs

  3. NEWBIE says:

    Looks like big boys want one more wave up to 2580’s.

  4. JK1987 says:

    Tony thanks,
    the Saeculum cycle numbers does not added up.
    should the cycle oew presented be called four-generational cycle of the Saeculum, or just oew cycle?
    or current crisis cycle is not finished yet, still has 8-13 years (oew full cycle), or 13-23 years (saeculum authors’ full cycle) to go? if true, we have a hell of crises coming up for a long long time.

    1. oew full cycle is missing 8-13 years for the oew listed 75-80 years full cycle.

    growth 17 years + protest 16 years + unraveling 18 years + crisis 16 years = 67 years

    2. oew’s full cycle of 75-80 years is much less than the saeculum authors’ 80-90 years full cycle.

    oew: “The Saeculum is a repetitive four-generational cycle lasting 75-80 years. Recent historical examples. Secular crisis cycles (1929-1949 and 2000-2016). Secular protest cycle (1966-1982). Secular unraveling cycle (1982-2000). Secular growth cycles (1949-1966 and 2016-xxxx).”

    Strauss and Howe: “Four turnings make up a full cycle of about 80 to 90 years,which the authors term a saeculum.”

    • NEWBIE says:

      JK, start listening at 9 minute mark, listen from there for a few minutes. $1.5 trillion dollars (leveraged) short vix.

    • tony caldaro says:

      JK
      OEW confirms the turnings.
      Approached Strauss and Howe in 2006, when they thought the year 2000 started the Crisis, to discuss how EW and the Saeculum align. One was in favor of the discussion, the other not, and nothing was done. Yes, in 2006 they both thought 2000 started the Crisis with the dotcom bust. Strauss died in 2007, and Howe changed the Crisis to 2008 later.
      Central bank intervention has probably shortened the cycles. The FED began in 1913.
      Studied the Saeculum over 20 years ago, and went back to the first dynasty in Egypt. 5000 years ago. Worked then, works now. Cycles vary. Some were over 100 years, others much shorter.

      • JK1987 says:

        Tony,
        “Cycles vary. Some were over 100 years, others much shorter.”
        but don’t you think oew currently listed 67 years for the full cycle is too short for the saeculum full cycle?
        since you went back to the first dynasty in Egypt. 5000 years ago.
        can you list three cycles that is as short as 67 years cycle?

        cutting the cycle so much short is like cutting a person’s life span short.
        reduced from 90 years to 67 years, a 23 years reduction for a person’s life is too much, unless accident or major disaster, and that’s not normal.
        on the contary, i believe FED is prolong the coming Crisis cycle (i see we are not into the Crisis cycle yet). FED and worldwide Central banks created so much debts that never seen or heard in history, a huge price in human history will be paid for generations to come.

        “A saeculum is a length of time roughly equal to the potential lifetime of a person or the equivalent of the complete renewal of a human population. ”
        “A saeculum is not normally used for a fixed amount of time, in common usage it stands for about 90 years. It can be divided into four “seasons” of approximately 22 years each; these seasons represent youth, rising adulthood, midlife, and old age.”

        “Strauss and Howe thought year 2000 started the Crisis, and Howe changed the Crisis to 2008 later.” so there is a disagreement between them.
        imho, Strauss and Howe could have made huge mistakes as when the Crisis started!
        how?
        for example, we all agree that 1929 was the start of the previous Crisis cycle.
        but look, there was The Depression of 1920–21, and DJI plunged 47%.
        we don’t put The Depression of 1920–21 into the Crisis cycle.
        on the contrary, those years are part of the strongest DJI market performance of unraveling cycle (prior to Crisis cycle).
        then how can we have 2000 or 2008 as Crisis cycle? i see Strauss and Howe made mistakes as having either 2000 (DJI -38%), or 2008 (DJI -55%) as Crisis cycle.
        A crisis cycle should be like 1929 DJI crashed 90%. and my personal research is seeing the coming crash to match or greater than 90% DJI crashes.

        NEWBIE, nice found. last couple of days, i’ve consolidated all my positions to two, one of them is vix exposure, because i see what’s coming. i still don’t like GOLD, because GOLD bubble bursting is not done (need to decline at least 70%)
        Jason Burack sum it up on everything bubble.
        i believe, and posted many time, coming will be the biggest Debt Deflation, and Great Deflation worldwide, and could be worst than 1929, because we have much much more debts than 1929. believe or not, prior to 1929 crashes, US GDP is at firm 4%. where are we now?

        post #2
        cheers!

        • tony caldaro says:

          US Crisis cycles start with a Major trigger event.
          Revolutionary War … Boston Tea Party
          Civil War … John Brown’s Raid
          WW II … stock market crash and depression
          War on Terror … 911, 911, 911

          • H D says:

            Interesting debate. I’m still on the fence but have decided that it’s insignificant to equities this time. Crisis vs growth. If you remove equities and US politics it’s an even more interesting debate- globally. Regardless, crisis cycle saw an equities rally of over 50%. Part of which has been the last 8 year bull market, possibly overlapping the growth cycle, that has nearly equaled the entire equities rally of the previous growth cycle. History doesn’t repeat itself but often rhymes.
            This cycle is unique is my conclusion.

          • JK1987 says:

            none of Saeculum has such a short cycle of 67 years, that short cycle of 67 years violated the theory of Saeculum, simply not possble

            Reformation Saeculum (107) 1497 – 1594
            New World Saeculum (110) 1594 – 1704
            Revolutionary Saeculum (90) 1704 – 1794
            Civil War Saeculum (71) 1794 – 1865
            Great Power Saeculum (81) 1865 – 1946
            Millennial Saeculum (age 74) 1946 – present: 4th Turning: Crisis: Great Recession/War on Terror/Sustainability 2008 – present

            with averaging 20-22 for the 4th Turning Crisis, the current Crisis cycle will last into 2028-2030

            my personal researches believe and see, 100% certainty, spx will be below 1800 a lot in a not too distant future, hence there will be no doubt that we are into the Crisis cycle. and i see Crisis cycle starts 2017, not 2008 or 2000. that mans Crisis into 2037-2039

            market, economy, deflation (not inflation) will speak for the truth shortly as what should be correct.

            post #3, done for posting

  5. asaraniti says:

    Don’t like trading this tape. NQ dove straight down to it’s 50% LONG to the tick and is defending …so far. YM (DOW) doesn’t want to go down in sympathy with NQ and /ES and /ES filled the GAP and is dancing around it. Looks like it also wants to test it’s 50% LONG at 2566.00 but is getting support via YM and NQ.. If/ES trades below it’s 61.8% LONG @2563.34 things get interesting in terms of SPX completing micro 3

  6. Good mornig traders. /ES trading in no mans land. The high was a 6 ticks above the profit target…right on the threshold between the 2 analyses I posted last night. After the high last night, /ES had a small pullback and now retesting last night’s high, that’s BULLISH. There is a gap that usually fills 70% of the time, that fights /ES from rallying to it’s profit target. Need more data to make the call but the higher probability favors a Gap fill and a rally to the profit target at /ES2582.56, not necessarily in that order..

    Updated chart, siince last nights posts…

  7. fotis2 says:

    Kimble on GOLD


  8. Elroy’s gdx forecast

    • allen kimble says:

      No way…The Yen is about to collapse\…..No bounce for the metals complex until New Year. Until then, Metals are in trouble here. Elroy needs to look at the YEN

      • $USD test it’s 50% LONG @113.61 against the YEN in the overnight session….That’s bullish for the $USD and BEARISH for GOLD. The profit target of the $USD rally is 114.31
        which should be additional downside activity for GOLD.

        • allen kimble says:

          Strong resistance right around the $114 range like you have suggested taking profits. But I think this time it breaks through within the next few weeks and then $119 will be seen on fresh breakout buying and short covering. This should be a very swift up move coming soon.

          Sadly for the metals it will be the typical sell-off into the the Christmas season. When will they ever break away from the Yen? That is the question.

          Full disclosure-I took a small loss in Gold that I purchased from last week. The Yen was the determining factor here. On top of all that, the Fed raising rates will be positive for the dollar. The obvious inverse h and s on the dollar. Seasonality etc…..’

          Cheers

    • fionamargaret says:

      Bought NUGT, UWT….

  9. Chart #2 assumes that /ES rallies over the profit target by 4-6 ticks. I will relabel the high anchor to low anchor, the high anchor is the overnight high and then, I would expect a pullback into the 50% EXTENSION LONG. This is potentially more bullish than analysis #1, and thus NANO 5 has further room to rally, before it completes. I only dew the 50% LONGS, if the 61.8% longs break then I expect /ES to test the original 50% micro LONG at /ES 2563.25

    Chart…https://gyazo.com/636abf763ff9761235271cdf70afd4db

  10. Good evening traders. 2 charts tonight…..
    Chart #1 Is an analysis that assumes /ES rallies to the profit target, /ES 2575.75 BUT does not exceed it by more than 4-6 ticks. Of the 2 charts/analyses, if there is any hope of NANO 5 of micro 3 complete, this analysis has the higher probability of prevailing.

    Chart…https://gyazo.com/12689d8f0e6cab92873a057fc2f22f65

  11. Richard Glackin says:

    Microstructure count indicates peak at 2576.50…if that turns out to be the peak, then the most common wave 4 is 0,382 of wave 3 (which I have as 156pts). That would give us close to a 2520(ES) target. However, as Tony indicated, there is the distinct possibility of a smaller wave 4. So, a 0,236 would give us a 2540(ES) target. Good luck to all.

  12. fotis2 says:

    Long $ Short Gold Short Oil Short pending Euro

  13. Baseball trivia:This year is the first time in history that two national league teams are playing in the World Series.Or conversely,the first time no American League teams were involved. (Houston in not AL,no matter what they say.).

  14. bouraq says:

    Chart of the weekend is $ES at http://www.tradingchannels.uk

    • Hello bouraq. The percentage of stocks above their 50sma has dropped from 80% to 71% in the last 14 trading days. Notably, they retreat from the 80% level, and bounce generally about the 30% level. No time frame on how log it takes to get there, but something to watch.

  15. Thank you very much Tony. Loved your very long-term historical chart and market analysis this week. My thoughts:

  16. Before Tony started treating pivots as strictly proprietary, I asked a few questions and he publicly provided a few answers. And he has made numerous comments about the general nature of pivots. That said, 2575 should have the stopping power of the .470 Nitro Express, a caliber used in big game hunting, owing to the unique characteristics of its origin. Tony is it your view the “stopping power” of pivots may vary? Stopping power might be defined as keeping the market below the pivot for an undetermined period of time and/or encouraging minor pb’s and larger pb’s when aligned with counts.

  17. J.Wenger says:

    Thanks Tony. The trend is your friend…until it isn’t. Wondering when/how BTC et. al. get regulated…
    http://www.invest-safely.com/stock-market-outlook-2017-10-22.html

  18. cj32 says:

    Cr. to CBZ

  19. Hi tony, once I try to simplify the road map. hope this is the right interpretation!
    beginning of october we were looking for minute 3 to complete at 2531(ish) but got way extended…

    Major 1 * early 2016
    Int 1 & 2 * Spring 2016
    Int 3
    Minor 1 &2 * Completed Fall 2016 (trump elections)
    Minor 3 & 4 * Completed April 2017 @ 2329
    Minor 5
    Minute 1 2329-2454 125 points
    Minute 2 2454-2407 47 points
    Minute 3 -168 points if completed
    Micro 1 2407-2491 -84 points
    Micro 2 2491-2417 74 points
    Micro 3 2417-2575 -158 points completed?
    w1 2417-2455
    w2 2455-2428
    w3 2480-2447-2509-2488-2564
    w4 2548
    w5 2575 ? Completed
    Micro 4 expect 20-30 pullback down to 2548?
    Micro 5 new ATHs ?2600+

    Minute 4 2600-2490 ? 110 points
    Minute 5 2490-2650 ? -160 points
    Int 4 correction
    int 5 3000+ ?

    many thanks

  20. torehund says:

    Close on friday was ” banged” gap up on Monday🚀🚀🚀

    • JK1987 says:

      even though i took minor loss on my largest holding of TMF, but TMF is at point 8 compared to the correlated security.
      we all know what happened thereafter, lots of upsides.
      with the fund, i am into vix play because i know this kind wave structure must have a large scale crash, no other alternate, 100% true, it’s my specialty.
      after review, my previous vix 100 target is too conservative. vix should be much much higher at the Crash, that’s why i sold out TMF and into vix.
      https://gyazo.com/e8eb533f68a9664378e4a87a65a92a90

      Saeculum cycle, i studied and have different reading than oew’s.
      i know oew will monitor-adjust, but if adjust from growth cycle to crisis cycle would be too overwhelming.
      i am certain that Saeculum turn is into the crisis cycle, charted details.
      mainly because four turnings comprise a full cycle of about 80 to 90 years. starting 1929.9, here is the end of the life cycle, and other details. which also coincides with into Kondratieff winter cycle.
      last week, i did verify from many aspects that spx P II at 1810 is not probable.
      got a response of “opinion make markets”.
      now i also use two fundamentals to conclude P II at 1810 is not possible at all.
      previous two P II were at jobless peak of 7.9 & 10.8, with current P II at non-peaked 5.0 simply is not right. current 4.2 is at trend line of three previous major market top, 69′, 00′, 07′, then followed with market crisis. this 4.2 reading agrees with the coming crisis cycle. growth from 4.2 simply is not possible. all details charted.
      also 2009 for SC2 is not probable even though the percentage decline is 55%, that’s because of the large percentage gain over the years deserve large decline, only a correction, not crisis. plus, ndx 2009 low was 32% above 2002’s low, certainly not SC degree. it’s non consistency in indices.
      https://gyazo.com/e8eb533f68a9664378e4a87a65a92a91
      cheers!

      • hohoho598 says:

        Can you tell me what the weather is doing tomorrow?? Perhaps you can use your saecu-scrotum cycle theory to tell me, or better still can you tell us if the market closes green or red tomorrow??

        • Bud Fox says:

          was going to make a point, but. “hohoho, beat me to it….
          Ho, predicting the weather tommorow. Often much
          easier than forecasting the stock market. IMO…

      • phil1247 says:

        your links show……………….

        page not found

  21. stormchaser80 says:

    Great analysis Tony. Its amazing and comforting that we are both expecting a turn south, utilizing completely different analysis techniques!

    • torehund says:

      Storm, thats what makes stocktrading like reading the plans of God. Mastery is first achieved by taking all aspects of human endavours into account. We will never Get there, but every day is Brand new. Fot that we have to be thankful.

      • hohoho598 says:

        Ok, I change my view on the market, yesterday I said it’s going a lot higher, now I read how God is involved. Its must be another bubble . Time to get out before the revolving door’s bearings crap themselves.

        If anyone thinks God is involved in this rigged game they are delusional.

        From Bo “Boloney”, to JK’s scripture rantings, Tore I thought you had more of a grip on what is going on in the world.

        Can we leave God out of this, He made the world, we have changed it to this point, so lets see if we can grow to live as a cohesive peaceful society where technology thrives to help us achieve better outcomes for all, not just rape and pillage (the financial markets) and say God must be guiding me. Please!!

        PS. I am starting to receive a higher volume of spam mail re how the “energy of the universe will give me everything” as long as I ask I will receive. Of course “many” have to get poor for me to get rich, but hey that’s a little detail that gets swept under the table.

  22. 123 abc says:

    Tony, what do you think of the following BTCUSD count?
    i.e. Currently in: Cycle-3 > Primary-III > Major-5 > Intermediate-iii > Minor-5


  23. amittsite says:

    Hello Everyone..Namaste
    Uncle Donald Trump with his military exercises..
    https://ibb.co/kvqNT6
    HAPPY Sunday

  24. The debt is being inflated away by financial repression ie global central banks have been printing money and buying bonds pinning the yield curve down below inflation ie negative real interest rates. In the meantime real gdp has been growing for 8 years, any sign of interest rates rising to fast in the short run , the Fed will likely stop its balance sheet sell bond down and start printing money / credit and buying bonds again. Reflation is the game. Anothwr factor is the productivity growth that will come from biotechnology, robots, ai, semi conductors boosting GDP growth. Its hard to argue against Tony’s long term OEW count unless you think central banks will tighten monetary policy very aggressively like 1937.

  25. stormchaser80llc says:

    Hello everyone! My complete blog post is open to the public each weekend. If you like the post, you can sign up for a FREE subscription to view this analysis daily at the bottom my blog post! To concentrate my efforts on my development, posting to this blog will only be done twice weekly, each Wednesday and for the Weekend.

    My best swing trade signal went Bearish on Tuesday, joining the other one based on my Technicals Model. As a result, I exited my stock position in my 401k Wednesday and have been building up my position in SPY 29 Dec 256P. Recall, earlier this month I sold my SPY calls for a 100% profit.

    My proprietary Technicals Model was higher for the 38th day in a row, with a positive divergence at 9/1’s peak vs. SPX, foretelling of this bullish run. The Model made a nominal new high in early October which could be counted as a double top. The Cumulative version of the Technicals Model made a new All Time High 10/20. My statistically driven Volatility Model was historically low, broadcasting a big move developing which has certainly occurred both Thursday and Friday.

    SPX daily is above all major moving averages, though negative divergences are set from the March 1st high. At the hourly scale, at today’s highs, negative divergences were strengthened across the board (for the past 12 days), so SPX is likely setting up to head lower in the not too distant future.

    VIX finished slightly lower today, on a hourly MACD SELL signal. Drilling down to its 15-min chart, positive divergences formed across the board at today’s lows, setting the stage for higher VIX at least in the very short term. Notice that recent VIX lows are higher than those made in the summer despite the markets being at All Time Highs.

    Market Internals, participation and breadth indicators were mainly higher today. Many of these are in positive territory, yet are well off peaks from earlier in the year. SPX A-D line made a new All Time High on 10/20, obviously above its 20 dma which is ascending. SPX McClellan made its 2nd positive reading in a row.

    Oil may have ended its extended consolidation with a large gain Monday, though negative divergences at the recent top mean a new high is not for certain.

    HYG:IEF made new uptrend highs, but is diverging negatively with most indicators which may end up being bearish.

    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.

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    • fdr609 says:

      I more than realize that OEW is a technical analysis and outcome of equities based upon the technicals. So please bear with me when I state that fundamentally the OEW is full of canal water when the author mentions that currently we are in growth cycle. We are in a debt bomb cycle. PERIOD. Everywhere on the good ship Mother Earth there is record debt. How can an economy grow when there is record debt? It can’t.

      Thx for reading.

      Signed,

      A fundamentalist that reads the technicians for additional information and consideration.

  26. torehund says:

    Another trend: FBI/CIA/NSA are currently in a bear market, opposed by alternative news and conspirator theories. Latest rumor is that Trump may release the Kennedy files, maybe truth is in a bull-market too, political correctness surely has entered a bear phase after Obama left office.

  27. Arthur Knopf says:

    SENTIMENT UPDATE: Bubble Dynamics Continue
    http://sentimentsignals.blogspot.com/

  28. phil1247 says:

    Tony….

    when you were talking about SPX 3000 …..
    were you just using that as a round number
    or an actual target ?

    because shouldnt primary 3
    be at least 3280
    and more likely 4200 ?

  29. Mary773 says:

    WASHINGTON—Federal Reserve Chairwoman Janet Yellen warned of an “uncomfortably high” likelihood that future policy makers would have to return to the unconventional monetary policy tools deployed to fight the last crisis, although she said the central bank is now making “good progress” in scaling them back…Such tools included forward guidance on monetary policy, large-scale asset purchases and the payment of interest on excess reserves.

    https://cdn1.jigidi.com/thumbs/5WEJR9RT/l

    • Interesting but not surprising. At the outset I gave Bernanke the benefit of the doubt and subscribed to the idea the first phase of QE was necessary but disagreed with subsequent phases out of two fears: effectiveness and inability to restore the Fed balance sheet to where it had been prior to QE. Most economists agree Japan’s program of QE has fallen far short of its goals and St. Louis Fed economist Stephen D. Williamson wrote: “With respect to QE, there are good reasons to be skeptical that it works as advertised, and some economists have made a good case that QE is actually detrimental.” After Japan determined QE to be ineffective and nearly terminated in 2006, it was resumed in 2010 and put on steroids in 2013 providing a basis for my fear the Fed balance sheet will never be reduced to levels prior to QE. It reminds me of particular lyrics in the Eagles Hotel California:”Relax,” said the night man, “We are programmed to receive. You can checkout any time you like, but you can never leave!”

      • Mary773 says:

        It should give you a Peaceful Easy Feeling that the chances for a bear market are Already Gone. The market will rise in The Long Run so you can Take It Easy.

        Best Of My Love,
        Mary

      • phil1247 says:

        Stephen …………..
        they are not going to stop until they

        “take it to the limit ….. one more time “

  30. Thanks Tony for your always keen insight.

    I’m either fornunate or cursed to recieve more market insights than I can read with the attention they deserve. A meme among several of the letters is the length of the current rally with the market increasing six weeks in a row which is not common.

    Urban Carmel has also noticed this and recently commented on this fact on Twitter.

    Urban Carmel‏ @ukarlewitz 15h15 hours ago
    More
    $SPX up 6 weeks in a row. Only 8 cases since 2010. 75% made higher intra-week high next week. All made higher intra-week high w/in 4 wks

    Urban Carmel‏ @ukarlewitz 2h2 hours ago
    More
    Urban Carmel Retweeted Urban Carmel
    Any gains in week 7 given back within a week. No 8 week streaks. Keep in mind if the coming week starts strongly $SPX

    The bottom line is historically it is likely we will make an intra-week high next week, pull back and within several weeks put in a higher high which aligns with Tony’s suggestion Micro 4 in the near term should not be seen as a surprise.

    Another idea floating around is we may see higher volatility in the days/weeks ahead owing to the relationship between bull bear spreads (declining) seen in private surveys and others and VIX.

    Some cut and paste:

    For the 10-year Treasury yield, Powell could spark a five basis point drop, while Taylor would cause a 10 basis point leap, according to Priya Misra at TD Securities. The yield curve from two to 10 years may flatten by 20 basis points in short order with a Taylor nomination, said Michael Schumacher at Wells Fargo Securities. Currency traders are on edge too: The dollar could gain as much as 3 percent with a Taylor pick, while sinking 0.5 percent under Powell, said Steven Englander at Rafiki Capital Management.

    Hedge funds are finding betting on West Texas Intermediate crude more attractive again, with total positioning on the U.S. benchmark increasing to the highest in almost a year. The surge comes as oil prices have held steady above $50 a barrel — a key psychological level — for about two weeks. “In general, people are more willing to get into oil right now,” said Ashley Petersen, lead oil analyst at Stratas Advisors in New York, in a telephone interview. “Overall there’s been a real belief that the industry has sort of stabilized the boat and is on the upswing.”

  31. blackjak100 says:

    Watch ITB which hit 52 wk hi yesterday. As long as US home construction is robust, market will continue higher.

  32. vivelaamo says:

    Brilliant work. Many thanks Tony. Staying bullish.

  33. gtoptions says:

    Thanks Tony
    SPX ~ https://www.tradingview.com/x/GRSY9Njo/
    DJI ~ https://www.tradingview.com/x/a8Nhg0xH/
    IWM ~ Consolidation Complete? https://www.tradingview.com/x/QKIGChmQ/

    Bitcoin (FibCoin) ~ 5waves Complete @ Fib Pivot 8.618 😉
    Monthly Pivot Pattern 3rd Wave Launch Pad..(highlighted)
    https://www.tradingview.com/x/dlZCeSAV/

    • llerias7 says:

      Very good material, Mr. Also a good work – I have been following it. In line with Tony´s EW count, wich is good.

  34. mjtplayer says:

    Hey Tony – question:

    Regarding the DOW & SPX, have you ever seen the RSI’s this overbought? Daily, weekly, monthly. I see the DOW monthly RSI at over 97, is that an all-time record if we close here?

  35. Question on the saeculum cycle.Judging from the explosion upwards of stocks in 2009,and the decline of gold shortly after,the growth cycle would seem to have started in that year–which leads to my next question:These are all rough estimates and outliers can occur in time(or anything for that matter).Nothing written in stone.One cycle lasts 20 years,another 17.If the last crisis cycle lasted only from 2000 to 2009,then we can take nothing for granted that the current growth cycle will last “x” amount of years.Past performance etc….Thanks Mr C.Hope your feeling better.

  36. llerias7 says:

    Will the minute v wich ends minor 5 of Major 1coincide with the xmas rally? should end close of spx of 2700!

  37. Bud Fox says:

    Tony, simply fantastic work on the long term charts. Simply, great…..

  38. Richard Glackin says:

    Exceptional work…thank you Tony.

    • Mary773 says:

      Exceptional work indeed. Tony called for a fifteen point pullback and the pullback was sixteen points. He then called for a rally to 2575 and the high for the week was 2575.44. Truly outstanding.

  39. Beautiful morning in CT. Drinking a cup of freshly brewed coffee, eating a warm bagel and reading your weekend update…it doesn’t get any better than this!

    Great analysis! I appreciate your publishing targets/levels to watch in the short-term section of the update. Short, concise to the point. Great roadmap to the medium/long-term outlook as well.

  40. Xy Z says:

    Another excellent weekend update. Thank you very much, Tony.

    From a follower on that little rock on the other side of the pond (UK)

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