Weekend update

REVIEW

The week started at SPX 2602. After a quiet open on Monday the market started making new highs every day. Aided by a gap up opening on Thursday, the SPX reached 2658. Then the market experienced a sharp  pullback to SPX 2606 Friday morning, before rebounding to end the week at SPX 2642. For the week the SPX/DOW gained 2.2%, but the NDX/NAZ lost 0.85%. Economic reports for the week were mostly positive. On the downtick: Chicago PMI, auto sales and ISM. On the uptick: new/pending home sales, Case-Shiller, consumer confidence, Q3 GDP, personal income/spending, the CPI, construction spending, plus weekly jobless claims improved. Next week will be highlighted by monthly Payrolls.

LONG TERM: uptrend

The Major wave 1, of Primary wave III, bull market continues to make upside progress. In fact, the SPX is now up 18% for the year and 47% since the February 2016 low. Best market performance since 2013.

The wave count from the February 2016 SPX 1810 low remains unchanged. Intermediate waves i and ii ended in the spring of 2016. Then Intermediate wave iii subdivided. Minor waves 1 and 2 ended in the fall of 2016, and Minor waves 3 and 4 ended in the spring of 2017. Minor wave 5, of Int. iii, has been underway since then. When Minor 5/Int. iii does conclude, there will be an Int. iv correction. After that, Int. v will carry the market to new highs.

MEDIUM TERM: uptrend

This lengthy Minor 5 uptrend began in April at SPX 2329, and has been quite complex. Naturally it divided into five Minute waves, and was not that difficult to track until Micro wave 3 of Minute iii, which lasted two months. Thus far, as noted on the chart, Minute waves i through iv have completed: Minute i and ii in June/July and Minute iii and iv in November. Minute v  has been underway since the SPX 2557 low.

Last weekend we discussed the possibility of the market running into resistance in the SPX 2630’s. We used three parameters: wave relationships within the trend, the overall length of uptrends in this bull market, and a Fibonacci cluster (2632, 2646, 2656). This week the market paused at the 2632 pivot for a day, then ran right through the 2646 pivot to the 2656 pivot. This relentless uptrend is now the longest of the bull market. Medium term support is at the 2632 and 2594 pivots, with resistance at the 2646 and 2656 pivots.

SHORT TERM

The short term count heading into last week was three waves up from the SPX 2557 low: 2590-2578-2604 thus far. This week the SPX rallied to 2635, pulled back to 2620 on Wednesday, and then rose to 2658 on Thursday. Five waves? It’s possible. That Wednesday pullback, however, did not quantify as a wave. Quantified waves suggest: 2590-2578-2658-2606-2642 thus far. Another new high to complete five? Regardless of the outcome the possibility of an Int. iii top has occurred.

Short term support is at the 2632 pivot and SPX 2606, with resistance at the 2646 and 2656 pivots. Short term momentum ended the week around neutral.

FOREIGN MARKETS

Asian markets were mixed and lost 0.9%.

European markets were mostly lower and lost 1.0%.

The DJ World index gained 0.2%, and the NYSE gained 1.6%.

COMMODITIES

Bonds are in an uptrend but lost 0.2% on the week.

Crude is also in an uptrend and lost -1.0%.

Gold remains in a downtrend and lost 0.4%.

The USD is in a downtrend but gained 0.1%.

NEXT WEEK

Monday: factory orders at 10am. Tuesday: ISM services. Wednesday: the ADP. Thursday: jobless claims and consumer credit. Friday: monthly payrolls (est. +195k), consumer sentiment and wholesale inventories.

FOOTNOTE

While posting this daily blog for over 12 years, I was proud of rarely missing a post and having only one period (4-days) without a post. This year, however, some medical complications have arisen. Not getting any younger. Hopefully things will settle down in the weeks/months ahead. In the meantime, don’t be surprised if I miss a few more posts every now and then. Thank you all for your concern and well wishes.

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