Weekend update

REVIEW

Another big down week for the market. The week started at SPX 2752. After a gap down opening on Monday the market traded below key support at SPX 2732, then dropped below 2700. By Wednesday the market had rallied to SPX 2738, then the big decline followed on Thursday/Friday. By late Friday the SPX had hit 2586, then ended the week at 2588. For the week the SPX/DOW lost 5.85%, and the NDX/NAZ lost 6.90%. Economic reports for the week were sparse and mixed. On the downtick: new home sales, plus weekly jobless claims rose. On the uptick: existing home sales, leading indicators and durable goods. Also, the FED raised short term rates, as expected, 25 basis points. Next week’s reports will be highlighted by the Q4 GDP report.

LONG TERM: uptrend

For most of 2017 the market did what was not expected: it continued to uptrend medium term. In fact the uptrend lasted from April 2017 to January 2018. One of the longest uptrends in 30 years. Since that uptrend high was made, in the closing days of January at SPX 2873, the market has been on a roller coaster ride. In fact, the volatility of the past two months has not been seen in 2 years: early 2016. The biggest medium term correction, since early 2016, had been only 5+% until recently. The current correction is close to 12%. In recent months this market has definitely done the unexpected.

The long term count, however, remains unchanged. A Major wave 1 bull market has been unfolding in five Intermediate waves. Intermediate waves i and ii concluded in the spring of 2016. Intermediate wave iii then started to subdivide. 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 , to end Int. iii, completed in January at SPX 2873. Since then, a complex Int. wave iv has been underway.

MEDIUM TERM: downtrend continues

By many OEW parameters this correction has been the exception rather than the rule. For example. All corrections in this bull market had been 5+% or less. This one is an outlier 12%. Then even after such a decline, a perfect technical setup occurred at the lows. All four major indices bottomed, advance strongly triggering a WROC, but only the NDX/NAZ confirm uptrends and make new bull market highs. The SPX/DOW retrace about 80% of the initial decline, and then head lower again. A WROC failure, which had a success rate of 96% over the past 50 years. A strange beginning to 2018.

Overall this Intermediate wave iv downtrend looks like it should end up at a flat configuration. It can also be a triangle, or something more complex, but a flat alternates with Int. wave ii. We can count the first decline, wave A (SPX 2873-2533), as a three wave pattern. Then after a pair of zigzags to SPX 2802 to form wave B, we have what appears to be a five wave decline underway for wave C. A flat is a 3-3-5. Medium term support is at the 2575 and 2525 pivots, with resistance at the 2594 and 2632 pivots.

SHORT TERM

After the Minor wave b high at SPX 2802 the decline started slowly, then picked up momentum as it continued. This is similar to the action from the all-time high at SPX 2873. At the final low for Minor wave ‘a’ a similar RSI +div appeared on the hourly chart as appears today. With an end of quarter and a holiday this week the market could be setting up for a downtrend low.

The quantified five waves down we have noted for Minor c, from Minor b SPX 2802: 2741-2762-2695-2739-2586 so far. The fifth wave is much longer than the first two declines, which are about equal. Fibonacci suggests the OEW 2575 pivot range could act as good support. And if it doesn’t hold a retest of SPX 2533 will likely follow. Best to your trading!

FOREIGN MARKETS

Asian markets were all lower ad lost 3.1%.

Europe markets were all lower and lost 3.7%.

The DJ World index lost 4.3%, and the NYSE lost 4.8%.

COMMODITIES

Bonds remain in a downtrend and lost 0.1%.

Crude appears to be uptrending and gained 5.6%.

Gold appears to be uptrending and gained 2.9%.

The USD also appears to be uptrending but lost 0.9%.

NEXT WEEK

Tuesday: Case-Shiller and consumer confidence. Wednesday: Q4 GDP (est. 2.8%), pending home sales. Thursday: weekly jobless claims, personal income/spending, Chicago PMI, and consumer sentiment. Friday a national holiday.

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

About tony caldaro

Investor
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501 Responses to Weekend update

  1. torehund says:

    Looks like Spx is headed for a retest of the lows, well let the Storm come we are all prepared.

  2. pooch77 says:

    Sprial calendar had top today and down to 4-3

    • phil1247 says:

      nothing to see there pooch……………
      move along …… 😉

      ps .. rally into april 11th too………….. please ignore 😉

  3. rabbittrader1 says:

    THIS IS RIDICULOUS! The S&P 5oo e-mini and the S&P cash, trade like commodities or derivitives. Why doesnt the CFTC and the NYSE step in to put stability into these markets with trading limits (limit up or down) ,then halt trading until the excess selling or buying comes in to balance ,then commence trading again. This BS is not good for the markets or in the best interest of all investors. IMHO. Rabbit..

    • Lee X says:

      I humbly disagree sir

      I selfishly think it’s awesome and hope it continues forever

    • Jim B. says:

      This thing is finally trading like a free market. If you cant take the heat, stay out of the kitchen. I’m currently enjoying 123 ABC’s cooking!!
      Keep it up!!
      He’s like that hot roller at a vegas craps table. Ya gotta ride the streak hard while it lasts.

    • aahmichael says:

      The S&P markets do have limits. Of course, they’re only on the downside, though. Last year the market went straight up non-stop at a slow leisurely pace, with zero volatility. That was not normal. That was a sick market. The exception to the rule. In contrast, this is a normal market in corrective mode. However, if it becomes a bear market, then you’ll really see some action. People forget that in the fall of 2008, in the midst of relentless carnage, there were many one day rallies of between 4%-7%. The most vicious, though, occurred on 10/13/08 which was +11.58%, and on 10/28/08 which was +10.79%. All of those rallies were completely erased the next day. Now that was some serious action.

    • makiori says:

      Limits already exist and are actively in place…as we are still trading between boundaries of low volatility and those limits have not been touched lately.
      May I suggest you familiarise yourself with the specs of any instrument you may wish to trade/invest, before actually trading?
      If it helps please use the link below for the s&p
      http://www.cmegroup.com/trading/equity-index/faq-sp-500-price-limits.html

  4. vivelaamo says:

    I’m glad we filled the gap today. Such a large gap was never going to stay open for long.

    Good night all.

  5. Holly Silver says:

    If all people see is sex and not treason, cronyism, ethics violations, obstruction, government for sale and destroying honorable government workers that get in his way than I must be reading a years work of fiction.

    But most here seem to dismiss history and the fact that a TRADE WAR has always been very destructive to the stock markets. ALWAYS! I guess you can pretend there is no trade war but the market can’t.

    Fact: Mueller has enough evidence on all three major avenues of charges. I know it because of just the leaked version. I make money in this market because of the slow realization of cause and affect. People would always rather see things in a positive light and excuse the inevitable. Once China does announce real retaliatory measures its all over. Until trump backs out that is.

    This is the third time i bet on big swings. using people like 123abc that validate the EW technical possibilities I can COMBINE the two for great results. If 123 is ever in NYC I would be glad to buy him dinner at his restaurant choice.

    I am tired of people that keep blinders on and attack those they don’t agree with or understand. I have not attacked anyone yet if it isn’t my politics (which is the mover of markets today), or my non-technical bets, I get ridiculed for making more money than anyone here. I guess that’s par for the discussion on illogic here. How many have made real money in both bull and bear markets? I made it in early 2016 betting for a HUGE rally. I am making it here on HUGE drops. that’s called doing something right.

    Tired of defending myself. I will give it a rest for 2 months. no posts, no politics. now you can blame someone else or something else.

  6. Lee X says:

    Nice call 123 & El Matt !

    • fionamargaret says:

      Maybe take a look at my post of 12.48 this afternoon…and yes,I also said 2609 when we were over 2800 and we went even lower (and broke the VIX).

  7. micky says:

    Line still intact,will see tmr.

  8. H D says:

    “This is as good of a traders market as we may see for a long time. Use it wisely.”

    It simply isn’t trading like a bull market anymore…. SPX rallied 89 off the lows and BOTs hammered it.

  9. stan911 says:

    Need to break Friday’s low convincingly otherwise we could be up the same tomorrow with a sandwich pattern on the daily

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