Weekend update

REVIEW

The week started at SPX 2743. On Monday/Tuesday the market made new highs. Then after a pullback into Wednesday morning the market made higher highs into Friday’s close. For the week the SPX/DOW gained 1.6%, and the NDX/NAZ gained 1.5%. Economic reports were mostly positive. On the d0wntick: the PPI, plus jobless claims rose. On the uptick: consumer credit, export/import prices, business/wholesale inventories, the CPI, retail sales, plus the budget deficit declined. Next week’s economic highlights include the FED’s beige book and industrial production.

LONG TERM: uptrend

As this market continues to surge forward into unchartered new-high territory, the DOW uptrend from April 2017 has stretched into 9 months. Despite bull markets in the 1990’s, 2000’s, and mid-2010’s, none of those bull markets had an uptrend this lengthy. The last time this occurred was between Sept., 85 and June, 86, when the DOW rose 50% in just those 9 months. No big percentage gain this time around. The DOW is up 26% over the past 9 months.

Naturally, with a lengthy uptrend the count has not change for many months. A Major wave 1, of Primary III, bull market underway. Intermediate waves i and ii completed in the spring of 2016. Intermediate iii then subdivided. Minor waves 1 and 2 competed in the fall of 2016, and Minor waves 3 and 4 completed in the spring of 2017. A lengthy Minor wave 5, as noted on the chart, has been underway since then.

MEDIUM TERM: uptrend

As noted above, this Minor wave 5 uptrend is now 9 months long and takes up nearly all of the daily chart. We divided Minor 5 into five Minute waves. Minute i and ii completed in June/July, and Minute iii and iv completed in November. Minute v of Minor 5 has been underway since SPX 2557.

The rising Minute waves i and iii divided into five Micro waves (orange) which were fairly clear. Minute wave v, however, has been a bit vague since it began. We do have five waves up from the Minute iv SPX 2557 low: 2590-2578-2658-2606-2788. But the third/fourth waves look more like another 1-2, as we have labeled on the hourly chart, than a 3-4. On a short timeframe we have 11 waves up from the SPX 2557 low. Which would suggest this uptrend has more to go to the upside. Medium term support is at the 2780 and 2731 pivots, with resistance at the 2798 and 2835 pivots.

SHORT TERM

Again we’re trying to squeeze the uptrend into the hourly chart and the labeling is getting quite congested. Nevertheless Minute i, ii, iii, and iv look quite clear and only Minute v looks a bit odd with those Nano waves i and ii (gray). Not sure it is the right count at this point, as the rally from SPX 2606 has now unfolded for nearly 1 1/2 months without one quantifiable wave reversal.

When we go to a lower timeframe we do see 11 quantified waves from SPX 2557. Which suggests there is more to go on the upside regardless of the short term count. Short term support is at the 2780 and 2731 pivots, with resistance at the 2798 an 2835 pivots. Short term momentum ended the week extremely overbought. Best to your trading!

FOREIGN MARKETS

Asian markets were mostly higher and gained 0.5%.

European markets were mostly higher and also gained 0.5%.

The DJ WORLD index gained 1.4%, and the NYSE gained 1.4%.

COMMODITIES

Bonds continue to downtrend and lost 0.5%.

Crude remains in an uptrend and gained 4.7%.

Gold is also in an uptrend and gained 1.0%.

The USD continues to downtrend and lost 1.0%.

NEXT WEEK

Monday: national holiday. Tuesday: NY FED index. Wednesday: industrial production, home builders index, and the Beige book. Thursday: jobless claims, housing starts, building permits, the Philly FED. Friday: consumer sentiment.

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

About tony caldaro

Investor
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246 Responses to Weekend update

  1. stockop says:

    flat out wrong on bitcoin. looks like a gigantic bear flag broke down last night… thankfully gold and natgas have been good to me.

    against my better judgment i bought some uvxy calls this morning, and then added near the highs (lol clearly NOT the close, still up on the day tho). small position like my original bitcoin position…all or nothing here… first market short in 8 months we shall see how this goes. think a lot is in favor of a minor crash (people on the Internets called the 2% pullback in december a “tech crash”, 5-10% to me is a crash at this point, for reference)…

    I am NOT calling an end to the bull market, just a healthy little shakedown.

  2. STEPHEN BARTLETT says:

    I am still long HSCEI. Up 2.5% today. I cut a 1/3 off the uk miners. Went short S&P yesterday. Will add if we trade below 2772 cash and come back for a retest. Stop at 2796.

  3. lcd00 says:

    Nice Bearish Engulfing Daily candle on Transports. Last one on 10-13-2017 led to 6.5% decline in Transports avg. See what happens this time

  4. learnedmylesson25 says:

    That was a 30 min S&P chart selloff.Broke embedded and nosedived.Hit the lower bb and bounced.Middle resistance 2790ish.If there’s more selling to come;,should stop there on a continued rebound.that’s currently in progress.Otherwise,the daily embedded will keep this from falling apart.Later.

  5. phil1247 says:

    es 2826 is next

    as long as 2763 holds

    • gary61b says:

      Phil, what would that anchor be called( I see where your at)

      • phil1247 says:

        its just from the double bottom low at 2736 to high traditional long
        daily ext broke and even tho it is retesting at 2778.5
        i dont really trust it

    • phil, yes, but permit me to add 1 qualifier to your call…the probability of testing /ES 2826….is “conformed” once /ES breaks 2793.51. I at that because today’s action could be wave 4 enough in terms of points…time frame of a few hours seems a bit too short. Also, the $VIX has been defending it’s 61.8% LONG all YEAR during this rally…NOT NORMAL….and finally broke to the upside today and tested/exceeded it’s profit target.
      Bottom line watch /ES 2793.51……IMHO the overnight session will determine whether the SPX is trading in wave 5 up or trading in a wave “B” of 4 currently with wave “C” on deck.

      • phil1247 says:

        LOL…………….. look above !

      • travis01 says:

        Asa, great info as usual. I don’t get as precise on my turn points as you and Phil can but my number was 2781. Took a position in vix last few days (I only trade it a few times a year but when I buy it I buy alot; net long in most accounts) when it looked consolidated. I’m looking at lower SP still before next up. Shall see. I come here for yours and Phil’s often.

  6. H D says:

    So if I was trying to learn this fancy “DH” method I can recap from the 20 posts on it today. Gap up! I get super bullish on 5 points up. “2858 may trade today”. It rolls over and I hear ‘swooshing’ but still BTFD at fancy DH level (that nobody can explain how to find) and then get chewed up long again as SPX gets a 40 point reversal….oh and then I finally get short when 2778 fails….. Any questions?

  7. fotis2 says:

    CAD/JPY nice bearflag example
    https://invst.ly/6c-ht

  8. fotis2 says:

    Someone did post a month ago long till the 2nd week of Jan and than short to the day looks like forget who it was.

  9. micky says:

    hit vst 1st support..

  10. gary61b says:

    ES this should work as a iv above 81 and see ya.

    • well below so today an interesting update for sure: iv with new highs to follow or the beginning of a decent correction [7% or so perhaps] today. Thinking iv still even with this move. Tony, very interested in your take today of course.

  11. H D says:

    SPX -10 handles

  12. NEWBIE says:

    a 2695 b 2740 c 2600

  13. phil1247 says:

    NEWBIE………….

    nice job !……….. you must be up about $ 5,000.00 today eh?

  14. fionamargaret says:

    GE has a target of 4.50..actually the numbers say 4 even, but I think they are worth more…
    COW has had a bid for 2 days…huge upside…maybe pick up some cows on the way home…
    Wonder if Soc Gen are right with the Euro going to 1.30…they are really good…

    • Thanks fiona..
      GE @$4.00….that would be some hell of a dividend yield….assuming they don’t lower their dividend, which would be suicide. I’ve been watching GE since that big negative news announcement about 3 weeks ago. Haven’t pulled the trigger. Will wait till their earnings report.

    • fionamargaret says:

      Now the numbers say YANG is a buy at 4.50…so I bought…is China going to correct..

      • fionamargaret says:

        The numbers said $SPX was to reach 2609, so perhaps a correction back to that level…then..
        Does posting 100 or so times make you more correct…

  15. My .02 is that large traders (i.e. hedge funds), seeing a parabolic move got out the way by covering their shorts they had on for portfolio insurance. So, they are naked going into today’s highs. What we might be seeing today, is traders putting on shorts, not necessarily because they are bearish but just for portfolio insurance.

    Now if/ES trades below 2778.53 I think the algorithms will trigger additional sell orders. In English, 2778.53 is my bull/bear line in the sand. Bullish above and bearish below (from a trading perspective).

  16. scottycj1 says:

    We soon might hear words not spoken in a long time “Profit Taking”

  17. Lee X says:

    Nobody rang the bell here this morning

  18. learnedmylesson25 says:

    Red today?lol.Watching the Nasdaq.Later all.

  19. Per DH…61.8% 15 minute long broke and the GAP just filled. There are 6 open, unfilled gaps this year!
    On deck is a CTT to a 50% SHORT, from whatever low is printed to this mornings high. Could go straight down to target but that is a low probability. Target is the full measured move LONG (daily)at 2784.25. If the CTT trades above the 61.8% SHORT, initial target is new highs.

  20. amittsite says:

    Namaste Tony..
    Namaste Everyone..
    Good to know you are recovering well.
    Looks like minute 5 is ended or ending..and large degree corrective started…should head to 2650 on spx..

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