Weekend update

REVIEW

The week started at SPX 2787. After rallying to SPX 2802 by Tuesday morning the market headed lower into Thursday. Then after a SPX 2741 Thursday low the market hit 2762 on Friday. But closed at SPX 2752 for the week. For the week the SPX/DOW lost 1.35%, and the NDX/NAZ lost 1.05%. Economic reports for the week were positive. On the downtick: retail sales, Philly FED, NAHB, housing starts, building permits, plus the federal budget deficit expanded. On the uptick: the CPI/PPI, business inventories, export/import prices, the NY FED, industrial production, capacity utilization, consumer sentiment, plus weekly jobless claims declined. Next week’s highlights are the FOMC meeting, durable goods, and existing/new home sales. Best to your week!

LONG TERM: uptrend

After a January all-time high of SPX 2873, ending a strong 10-month uptrend. A drop of nearly 12% in two weeks followed. The perma-bears were back out in force. The crash they keep calling for has already occurred: 2007-2009. Those types of events only occur once in a lifetime. There will be bear markets in the future. But nothing like that for a very long time.

The long-term count remains unchanged. A Major wave 1 bull market has been underway since early-2016. Intermediate waves i and ii completed in the spring of 2016. Intermediate iii then began to subdivide. Minor waves 1 and 2 completed in the fall of 2016. Minor waves 3 and 4 completed in the spring of 2017. Then Minor wave 5 and Int. wave iii completed in January 2018 at SPX 2873. After that Int. wave iv appears to have completed in February at SPX 2533. Intermediate wave v should currently be underway.

MEDIUM TERM: probable uptrend

After making a low at SPX 2533 in February, the market has rallied to 2802 this week. The advance, however, has been quite choppy. And nothing like the NDX/NAZ, which have already confirmed an uptrend and made new all-time highs. The DOW has been the weaker of the two, (SPX/DOW), and appears to have formed a potential Intermediate wave iv triangle.

Despite the choppiness in the SPX its pattern from the February low still looks somewhat impulsive, as noted on the hourly chart. However it is quickly approaching make or break time. For an impulsive uptrend to continue the SPX needs to rally quite soon. Medium term support is at the 2731 and 2656 pivots, with resistance at the 2780 and 2798 pivots.

SHORT TERM

We continue to label the SPX with Minor waves 1 and 2 at SPX 2754 and 2647 respectively. Then a subdividing Minor 3: Minute i 2732, Minute ii 2702, Minute iii 2802, Minute iv 2741. Notice to keep this count alive the SPX cannot drop below 2732.

Lots of starts and stops since the February low. This week, for example, the SPX was up over 10 points in the morning of every day this week. Then every day sold off into the afternoon to close negative. Except on Friday when it was up 5-points. Short term support is at the 2731 and 2656 pivots, with resistance at the 2780 and 2798 pivots. Short term momentum ended the week at neutral, after a positive divergence. Best to your trading!

FOREIGN MARKETS

The Asian markets were mixed and gained 0.3%.

European markets were mostly higher and gained 0.2%.

The DJ World index lost 0.5%, and the NYSE lost 1.0%.

COMMODITIES

Bonds appear to be uptrending and gained 0.3% on the week.

Crude remains in a downtrend but gained 0.6%.

Gold remains in a downtrend and lost 0.9%.

The USD is still in a downtrend and lost 0.3%.

NEXT WEEK

Wednesday: existing home sales, and the FOMC statement. Thursday: jobless claims and leading indicators. Friday: durable good s and new home sales.

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