Weekend update

REVIEW

The market started the week at SPX 2786. After a Monday holiday, the market gapped up on Tuesday to new highs (2808), then pulled back to 2769 before rebounding in the afternoon. Wednesday had another gap up opening, but the high was only 2807. Thursday the market traded above/below SPX 2800 all day with little upside progress. Friday had another gap up opening, pulled back, and then closed at an all-time high SPX 2810. For the week the SPX/DOW gained 0.95%, and the NDX/NAZ gained 1.05%. Economic reports were mostly lower. On the downtick: NY/Philly FED, home builders index, housing starts, building permits, and consumer sentiment. On the uptick: industrial production, capacity utilization, plus weekly jobless claims improved. Next week’s reports will be highlighted by the Q4 GDP report.

LONG TERM: uptrend

Back in 2016, with the SPX trading around 2000-2100 very few expected a SPX 3000 in the next couple of years. Our analysis, at that time, suggested a SPX 3000-3600 in the next 2-4 years. With the SPX hitting 2800 this week, a 1000 points above the 2016 low, SPX 3000 is no longer that far away.

The count remains the same. A Major 1 bull market underway with five Intermediate waves. Intermediate waves i and ii completed in the spring of 2016. Intermediate iii then started to divide. 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 has been underway since then.

MEDIUM TERM: uptrend

The current uptrend, Minor wave 5, is one of the longest uptrends, without a correction, in many years. In fact, the last time the market had an uptrend this long was in the early 1980’s. The internal structure of a Minor wave 5 is quite naturally five Minute waves. Minute waves i and ii completed in June/July, and Minute iii and iv completed in November. Minute v of Minor 5 has been underway since then.

Reviewing the daily chart above, you will note the RSI/MACD negative divergences at every significant short wave during this uptrend. You will also note that the Micro waves (org.) were previously quite clear. But not so for this Minute v rally yet. In fact, the SPX has rallied 200 points without one quantifiable short term reversal. Quite a strong market! Medium term support is at 2798 and 2780 pivot, with resistance at the 2835 pivot.

SHORT TERM

As noted above. This rally has been so strong that it has failed to leave behind the normal short term quantifiable wave markers of this bull market. We have some, then more on a shorter timeframe, then a few that look like they should fit. The puzzle; basic: 2590-2578-2658-2606; shorter 2665-2625-2672-2652-2695-2674; fit: 2759-2736-2808-2769-2810.

A number of wave counts can fit the above price pattern. It is not about short term wave counts at this time. Think it more about the wave pattern, 15-waves, and the technical indicators. Both suggest higher prices ahead before a significant correction. Nevertheless we can count five up to 2665, a decline to 2625, then nine up to 2810 so far. And have posted this count. Short term support is at the 2798 and 2780 pivots, with resistance at the 2835 pivot. Short term momentum ended the week overbought. Best to your trading!

FOREIGN MARKETS

Asian markets were mostly higher and gained 0.9%.

European markets were mostly higher and gained 0.3%.

The DJ World index gained 0.9%, and the NYSE gained 0.7%.

COMMODITIES

Bonds continue to downtrend and lost 0.6%.

Crude remains in an uptrend but lost 1.5%.

Gold is also in an uptrend but lost 0.1%.

The USD remains in downtrend and lost 0.5%.

NEXT WEEK

Wednesday: existing home sales. Thursday: jobless claims, new home sales and leading indicators. Friday: Q4 GDP (est. 3.0%) and durable goods.

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

About tony caldaro

Investor
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217 Responses to Weekend update

  1. lunker1 says:

    Tony added pivots 2858 2884

  2. sellers trying to push it down, but when they cant, they will cover there short into the close and it will ramp higher and we will have a gap opening tomorrow.

  3. Looked at the SP500 chart, and the only conclusion I can see it….

    This Bull market will last a very vary, long time. Clearly, the rest of 2018.

    Your view…

    • SPYtrader says:

      Bud, do you think the Bear market you were calling for last week is over?
      I’m thinking we get to 30000 on the Dow this year

  4. amittsite says:

    Hello Tony,
    Namastey
    Namastey everyone..
    Good to see you back as wave 1 of 3rd in life..😊
    I think with this overlapping structure..an ending diagonal could be forming(exhausting pattern)also doubling as intermediate 4th wave which should take spx to 5 percent correction from 2900 odd to 2750….then final fifth spurt to 3000+
    Thanks for being there..

  5. 2844 close, gap it up 10 in the morning fade to 2821 then up another 60 points

  6. lunker1 says:

    Hi Tony hope you’re getting back into the swing of things. Hit 2842. 2835+7. At these large numbers have you expanded the + or -7 pivot range or still sticking with it? TY

  7. gary61b says:

    spx might me draining the RSI to around 60-80 on short term chart then vroooom once again shooting for 100..or close to it. ES 2850 on the horizon.

  8. captbara says:

    DXY crash confirmed? Still H&S target of 88’s.

  9. learnedmylesson25 says:

    I was going to mention last night that it was “Turnaround Tuesday” and it may be yet for SPX.I saw an article that claimed a certain chart pattern,that GDX is showing now,is imminently bearish.We’ll see.If no breakdown–and a push through 24 occurs,more upside to 25.60 is likely.Good luck all.

    • fionamargaret says:

      I bought JNUG and NUGT in the last few minutes…at the base of the pattern.. to buy and hold….back in the swirling waters, but huge upside if they work. I don’t want not to be there.
      I have been holding UVXY for a week or so…and TMF I buy at the high 19/low 20, and sell about 23 (pattern has it going to 25).
      The commodities I listed previously I still hold…DBE and DBP are doing the best…

  10. fotis2 says:

    Dollar breaks support Gold pending resistance Oil bout to get stopped out crikey man had 12 loose trades in a series if I don’t break at least even this year on 3rd account packing it in good luck to all of you guys you all seem to be on the right side of the Market no matter up or down.

    • kvilia says:

      Hang in there fotis, no cigar me either this year. Bought 2K shares of UVXY for now – medium term 🙂
      Oil looks strong but although no correlation, I don’t know what its going to do with indices selling off 5-10%. My gut feeling is that it should correct to 59-60 area still.

  11. lunker1 says:

    Tony FYI on your 60 minute and daily charts the blue 2798 and 2835 pivot lines are located at the wrong price levels

  12. plus after any minor pull back you get 3 more up waves from here before completing any top.
    only 161 points till 3,000 Media telling you your dumb if your in cash and stupid if your short. Should hit 3000 by next month

  13. say good bye to 2835 pivot today. train keeps chugging along.

    good luck all

  14. phil1247 says:

    VIX buy signal given yesterday…..
    ie.. bullish for more stock rally

    • phil1247 says:

      bull above new extension long………………………….. 2821
      target ………………………………………………………………..2850

      • purplember says:

        so if breaks thru 2821 then all the down to 2750 ??

        • phil1247 says:

          not necessarily….
          2797 es is .618 of the traditional
          but before you get there you need to see
          15 min shorts from the top that STICK
          and lead you down there

          that has not happened this year yet and until it does…. keep looking up

  15. STEPHEN BARTLETT says:

    Losing money on my S&P short however long HSCEI which is outperforming every index so far this year and going vertical. Will stay long. That could double again mid term.

  16. stockop says:

    well, i hope someone made money fading me. starting to see breaks, but it just doesnt seem to matter. see some stocks that are looking like attractive buys…wonder when the guard will finally change. thought the time was ripe…

    gold goes the way of the dollar, for now. dollar looks to have atleast one more down (gold up) and the euro one more up. don’t like the selling in platinum today…but its not like the parabolic move brought gold with it either. gonna keep watching all the same.

    natgas>>>>everything else. if you don’t have some sort of exposure I think you’re severely mistaken. fundamentals coming into place…this sector is beat down even after recent gains.

  17. learnedmylesson25 says:

    Ira says,”Over 1343 on gold confirms more upside.Consolidating now.”

  18. I see 2840 max for Either nano 3 or micro 3. Should expect a 25-40 point pull back. Then up another 70 to end this monster. Then we should see a 5-10 percent pull back. Int 3 could be approx 850-900 points a .23 retrace is approx 200 points. So eventually we should revisit 2670 before the next 300-500 point up move

  19. phil1247 says:

    chrisk…
    dont understand your question .. fixed ratio of what ?

  20. kvilia says:

    Geez, my head is spinning – Bud again promising not to post, now from two aliases, and yet posting. SPX needs to start falling hard, afraid for Bud’s health.
    I am eyeing to buy UVXY this week. February will be bloody interesting.
    Newbie – hope you’ve been secretly loading your account with volatility instruments.

  21. TONY…Good Bye, ever in Floirda, give me a call. I’m in the
    white pages….Do, wish you a very healthy recovery, great 2019 year.
    Bud Fox

  22. phil1247 says:

    SPIKE up to 2864 at trendline across tops is on tap this week
    good place to exit longs unless it blasts thru

  23. mcgcapital says:

    I don’t get this.. it’s like they’re surprised that earnings are good and tax cuts means raised expectations. But multiples have been expanding for the last 2 years purely because of the tax cuts coming and so called better growth. Was hoping that the market would grow into the valuation but looking unlikely now. This sort of gradient is very difficult to trade.. as Phil said last week, too late to buy and too early to sell. So if you’re not in it’s tough. Anyway.. 6% up for January and another OEW pivot here. See if that can stop it but not expecting it to. FTSE I remain short from 7740 looking for 7610 area, but all I’ve done for the past few days is cover it on the dips as the US close is tending to see huge pops of 20ish points. Not sure on the mechanics as to why they ramp the close everyday but it seems to be becoming more pronounced

  24. ended the week overbought. started the week even more over bought up 1 percent almost. Shorted the close. so expect a gap up. LOL have a great night al

  25. learnedmylesson25 says:

    More -divs destroyed.Massive layoffs coming for Wall street techicians.Not needed anymore.

    • fenster6 says:

      This market defies TA, counts etc. It is a mania market. Shorts covering and bots pushing higher based on momentum. Shorts reshorting at ‘what MUST be the top’ and covering again. as it blasts higher The bots which now account for most of the trading volume do not know about PE ratios, they buy as things move up and keep buying.

    • lunker1 says:

      It’s a big wave 3 you don’t need technicals to tell you that. Technicals will only be good when price starts breaking important supports. Price is the ultimate technical indicator

  26. H D says:

    +10 at 10 traded, HWB traded and Tony’s pivot is currently trading. Very technical day IMO

  27. NEWBIE says:

    Next stop 2700 before any significant bounce. Also, Lunker I still refuse to be intimate with you.

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