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.
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!
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%.
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%.
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.