The market started the week/year at SPX 2674. After the Monday holiday the market gapped up at the open on Tuesday, rallied Wednesday and Thursday, then gapped up again on Friday. Ending the week at the new all-time high of SPX 2743. Economic reports for the week were slightly positive. On the downtick: monthly payrolls, ISM services, plus weekly jobless claims and the trade deficit rose. On the uptick: ISM manufacturing, construction spending, auto sales, ADP, and factory orders rose. Next week’s reports will be highlighted by retail sales and the CPI/PPI. Best to your week!
LONG TERM: uptrend
The long term count remains unchanged since mid-2016. Primary waves I and II completed in 2015 and 2016 respectively. And Primary wave III has been underway since the SPX 1810 February 2016 low.
The current bull market is being labeled as Major wave 1 of Primary III. It is expected to last 2 – 4 years, while Primary III is expected to last about 15 years. Major wave 1 is dividing into five Intermediate waves. Int. i and ii completed in the spring of 2016. Int. iii then start to subdivide it into five Minor waves. Minor waves 1 and 2 ended in the fall of 2016, Minor waves 3 and 4 ended in the spring of 2017, Minor wave 5 has been underway since then.
MEDIUM TERM: uptrend
The current medium term uptrend, Minor 5, has been underway since April. Quite a long and complicated uptrend indeed. We have been labeling this uptrend, with some success, with five Minute waves and their subdivisions. Minute waves i and ii ended in June/July, and Minute waves iii and iv ended in November. Since that SPX 2557 low in mid-November Minor wave 5 has been underway.
When this uptrend does end. We should see about a 5% correction for Int. iv. Then new all-time highs during Int. v. Medium term support is at the 2731 and 2656 pivots, with resistance at the 2780 pivot.
Minute v started off a bit choppy, but has spent most of the past four weeks just climbing higher and higher. During the choppiness we were able to quantify four waves: 2590-2578-2658-2606. Since then, despite a few decent pullbacks, only one upwave has quantified from SPX 2606.
This activity suggests SPX 2590 and 2578 might be Micro waves 1 and 2, and SPX 2658-2606-2743 might be a subdividing Micro 3. We labeled this on the chart with the orange 1-2 and the gray i-ii-iii underway. With the market sailing through another pivot this week OEW 2780 appears to be the next target. Short term support at 2731 and 2656, with resistance at 2780. Short term momentum ended with a potential negative divergence. Best to your trading in the New Year!
Asian markets were all higher and gained 2.2%.
European markets were also all higher and gained 2.7%.
The DJ World index gained 2.7%, and the NYSE gained 2.3%.
Bonds are in a downtrend and lost 0.4% on the week.
Crude remains in an uptrend and gained 1.7% on the week.
Gold is in an uptrend and gained 1.6%.
The USD remains in a downtrend and lost 0.2% on the week.
Monday: consumer credit at 3pm. Wednesday: export/import prices and wholesale inventories. Thursday: weekly jobless claims, thee PPI and the budget deficit. Friday: the CPI, business inventories, and retail sales.