Weekend update

REVIEW

The week started at SPX 2604. After a gap up opening on Monday the market rallied to SPX 2654. Then sold off to SPX 2611 in the last two hours of trading. On Tuesday another gap up opening carried the SPX to 2663. Then a 27 point decline occurred within one hour. But the market recovered to close near the highs of the day. On Wednesday a gap down opening, there were gap openings every day, took the SPX into the low 2640’s where it ended the day. Gap up openings on Thursday and Friday, carried the SPX to 2680. And yes, that was sold too as the SPX ended the week at the 2656 pivot. For the week the SPX/DOW gained 1.9%, and the NDX/NAZ gained 2.9%. Economic reports for the week were mixed. On  the downtick: the CPI, consumer sentiment, plus the budget deficit increased. On the uptick: the PPI, wholesale inventories, plus weekly jobless claims declined. Next week’s reports are highlighted by the Beige book, industrial production, housing and Options expiration.

LONG TERM: uptrend

With many new participants in the blog, some history may be required. Between the early-1700’s and the year 1929 a two century GSC unfolded, topped, and then crashed into the year 1932. After that, with the DOW around 40, a new two century GSC began. The first wave of this GSC was SC1 (super cycle one) from 1932-2007. Then the market had its biggest crash since 1929-1932: 2007-2009 the great recession. In March 2009 the great recession and SC2 ended. From that low a new 70-80 year SC3 began. The first bull market of SC3 was 2009-2015, and first bear market 2015-2016. We have labeled them as Primary waves I and II. The bull market currently underway is part of Primary III. We are counting it as Major wave 1.

With the above background it is easy to see how the Major wave 1 bull market is unfolding. Major waves divide into five Intermediate waves. Intermediate waves i and ii completed in the spring of 2016. Intermediate wave iii then started to divide into five Minor waves. Minor waves 1 and 2 ended in the fall of 2016, and Minor waves 3 and 4 ended in the spring of 2017. Minor wave 5 and Int. iii recently ended in January 2018, and Int. wave iv began at that time. Before this bull market ends, Intermediate wave v should be making new all-time highs. The wave structures of the DOW, the NYSE, and even the DJW index suggest at least one more wave higher.

MEDIUM TERM: downtrend may have bottomed

When we look back at Intermediate wave ii in 2016. We find it lasted two months, and was an irregular zigzag correction [2111]: 2026-2121-1992. The current Intermediate wave iv correction is also three waves [2873] 2533-2802-2554, is just a bit more than two months, and appears to be a flat. The alternation setup, between the significant second and fourth waves of a bull market is clear.

After the SPX 2554 low the market rallied. The first rally looked impulsive (2554-2672) and we labeled it Minor wave 1. The pullback that followed to SPX 2586 we labeled Minor 2. Next we expected a Minor wave 3 liftoff. But all we have seen this week is a lot of choppy, buy the dip-sell the rip activity. Five gap openings, four higher, a 2% weekly gain, but a lot of chop. Medium term support is at the 2656 and 2632, with resistance at the 2731 and 2780 pivots.

SHORT TERM

As noted last weekend, the Minor wave 1 rally looked quite impulsive. Minor wave 2 was steep, but most second waves have been steep in this bull market. The rally from the Minor 2 low looks like a leading diagonal triangle to SPX 2665. After that the rest of the week was quite sloppy: pullback to 2639, three waves to 2680, now another pullback to 2645. A decline to SPX 2639 would make that three days looks like an irregular flat. Lower, an irregular zigzag. Much lower, and the entire advance from SPX 2586 starts looking corrective.

Short term support is at the 2656 and 2632 pivots, with resistance at the 2731 and 2780 pivots. Short term momentum ended the week with an ongoing negative divergence. It has been a day traders market for a couple of months now. Best to your trading!

FOREIGN MARKETS

Asian markets were all higher on the week and gained 1.3%.

European markets were also all higher and gained 1.2%.

The DJ World index  (DJW) gained 1.5%, and the NYSE gained 1.6%.

COMMODITIES

Bonds continue to uptrend but lost 0.5%.

Crude continues to uptrend and gained 8.6%.

Gold is in an uptrend and gained 0.9%.

The USD remains in an uptrend but lost 0.4%.

NEXT WEEK

Monday: retail sales and the NYV FED at 8:30, the NAHB and business inventories at 10am. Tuesday: housing starts, building permits, and industrial production. Wednesday: beige book. Thursday: jobless claims, Philly FED and leading indicators. Friday: options expiration. Plus, lots of FED speeches during the week.

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

 

About tony caldaro

Investor
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457 Responses to Weekend update

  1. Bud Fox says:

    Any estimates, as to how High the SP will travel, above 2872 ???
    Or, did Tony already post that info..??? I’ll check myself, but wondering
    if there was an “official market call?

  2. Bud Fox says:

    Tony C. Just wish to thank you, For your many years, of hard work,
    steady growth, of the OEW investment system. As you know. I have followed
    your work for many (many), years. Your investment program, is the best.
    Bud E FOX i, Spring Hill, Fl. Currently, it is 7 am in Hangzhou, China
    where my temp home is located. I often come here to China, to relax
    and visit old friends, and good food…..your friend, Bud

  3. tommyboys says:

    Nice collapse in VIX today – bullish. Insiders have been buying right through the correction.

  4. NEWBIE says:

    They didn’t want to break 2700 because they know their will sellers. They will gap this pig down tomorrow. Crash Alert!!!!

  5. Gary Lewis says:

    618 Fib hit on SPY. Let’s see if we can keep going, or if this is it!

  6. micky says:

    where does the big down change to a big up I wonder.

  7. consolidated long enough. time to rip into the close and gap it up again tomorrow.

  8. E says:

    I still feel something is wrong, but I also agree we will most likely be bullish through earnings season now. Adjusting positions to better match such a scenario. Thanks all.

  9. Jack kendo says:

    it’s an exhaustion gap.
    short at 2708
    still with bullish view, just a trade.
    cheers!

  10. SPX easliy passes through the 50day SMA today, now by almost 20 points.
    Although the market swoosh down February to April 2 seemed unannounced,
    that’s now water over the dam.
    Few if any negative divs were seen at the top in Jan (except some Russ and NDX -divs).
    Both RSI (5) and MACD looking good from this past winter, both strong pushes.
    $SPXA200R is back up to 61.40%. Somewhat respectable.
    Treasuries were supposed to be going north of 3.00%, give some competition to stocks.
    But nothing happening.

    The Monthly SPX shows good strength.

    I’m with others on this board (and of course Tony).
    New highs coming.

  11. vivelaamo says:

    There seems to be a perception that it’s better to catch the fast moves down than the slow grind up. We’ve rallied nearly 6% in two weeks while people have said the whole move looked corrective. These moves up aren’t as slow as it seems and there many examples of it since Feb 2016. Tony C and RJ should be listened to more often.

    Good luck all.

  12. lunker1 says:

    Hi Tony, 2645 looking like irregular flat for Minor 2? TY

  13. +1.6% close on S&P = 2720
    VERY possible.

  14. Holly Silver says:

    DOW reached and broke above 24,837 decisively. Next target is 24,977 and the final one is 25,449. The last one I strongly suspect will not get taken out. Target date for final high of this current run on Friday.

    • Holly Silver says:

      New sanctions on both sides being added as we speak. Full blown Trade War is most likely starting and will be the number one topic on wall street by end of week. The race is on. How high and fast can this market go before it gets slammed by sanctions.

      Trade War will not be ignored by wall street. Market was hoping for the rhetoric to subside but it’s now getting implemented. I have my momentum targets and hopefully it coincides.

  15. H D says:

    Another April gap. Every session. Some noted R. HWB the entire move at 2703, gap R 2712, symmetry from 2554 at 2704. Think we get a resolution to the impulse vs corrective at this level.

    • mcgcapital says:

      Do you have any other examples where the market started off looking corrective then morphed into something impulsive? During corrections it seems we often do the opposite, like with the rally off the Feb low. I can’t find any others but I only really know post 2009 well

      • H D says:

        6/2012, 5 waves down and then a choppy rally. EW is not perfect. Nothing is, no matter what they post here :mrgreen: This is another one of those times.

        • mcgcapital says:

          Good call.. that was the one where we had the Draghi ‘I’ll do whatever it takes…’ in the July and a surprise QE3 in September. I guess this time around there’s no immediate prospect of more stimulus. You’d think good earnings and data would be enough, but we’re still not acting right.. last few days have been better but it’s on shaky foundations so interesting to see if it can carry on

  16. tommyboys says:

    A/D – pretty much new ATH have to see closing numbers tonight, but right there.

  17. NEWBIE says:

    No more mom and pop tax return money to buy from the banksters, Bulls are once again convinced we are headed to new highs = BULL Party is over.

    • if we ever get back to 2690 i will jump back on the bear train. Only 17 point lower. until then im ridding the long bus higher. good luck newbie.

    • fotis2 says:

      Careful Newb the Sheriff just put out all your dirty laundry…

    • lunker1 says:

      Do you try to make wrong calls or are you just that bad?? The majority of tax refunds come this week and next.

      NEWBIE on April 4, 2018 at 10:21 am
      Phil, congrats but this is countermove, next will be back down to 2530 -2500.

      • NEWBIE says:

        Are you crazy, the market has been extremely volatile. For you to go and cherry pick posts over the last few weeks and post them today- is idiotic. Are you watching the same market that I am that is having monstrous swings in each direction on a regular basis?

        • lunker1 says:

          No, you crazy. Idiotic is calling a crash, Armageddon, whatever multiple times a day since 2550. Now above 2700. If you were smart you maybe made some coin on April 6 otherwise short is way underwater. VIX is pushing its lower BB down. Monstrous swings are past for now.

    • Theodore Lerts says:

      I haven’t been on this forum very long so I mean it when I say forgive me if I’m misunderstanding. I can’t tell if your posts are serious or not. I’m leaning towards the conclusion that you’re just joking/being silly with these posts, right??

      • vivelaamo says:

        Major bull. He only posts when rallying. Goes quiet when we drop. Been that way for years.

        • travis01 says:

          pot, meet kettle lol

          • vivelaamo says:

            Come on Travis that because I’m a bull and I’m posting about bullish setups when they keep appearing. Newbie is a bull calling crash every day to mess with peoples heads. Quite a difference.

            Plus I didn’t go quiet during the past three months even when we were dropping hard. I know I wind you up but I’m not actually that a bad a person you know.

            • travis01 says:

              Just saying you only comment on up days yourself. No offense but you and lunker have a strong desire to show people as wrong. I also don’t see how a crash is the call to retest the 200 ma yet it was only a correction call by Tony earlier from higher levels. Ie, both corrections not crashes or Armageddon. Just my view. Either way, ride the trend and make $ to all.

              • vivelaamo says:

                Non taken. The posts to Newbie are just banter between me and him. Theres no malice or trying to prove him wrong. Even he doesn’t mean the majority of this calls. Its just a wind up.

                I posted throughout the down days. Got stopped out a lot to which I admitted at the time. I always felt 200 would hold though. If i didn’t I would have taken a break until we were back above.

                Agree its all about riding the trend. In the long term it never turned down. Good Luck.

    • Ashley says:

      We got “turn around Tuesday” LOL Looking BLEAK for Uncle Scam…
      https://www.zerohedge.com/news/2018-04-17/irs-tax-payment-site-down

  18. phil1247 says:

    11:30 reversal period

    will it ?

    see ya!

  19. vivelaamo says:

    Hey Newbie. You’re right, don’t need brains to make money in a bull market. But based on your quote from April 6th you might need some brains not to lose it though….

    NEWBIE on April 9, 2018 at 11:12 am
    A touch of 2650 then Armageddon will ensue.

    • NEWBIE says:

      Viv,

      You conveniently forgot to post what I said after that:

      NEWBIE says:
      April 13, 2018 at 12:27 pm
      Big boys may take this up to 2700 first and then crash it.

      • vivelaamo says:

        I didn’t actually see that. Sorry.

        But that’s a near 2% gain you missed out on while calling tops.

        Inverse H&S has traded, clear trendline breakout on Dow. Will soon be embedded for both Dow and s&p. Yes you may get small pb’s on oversold levels or at the upper BB but seriously, why you fighting all the bullish technicals man!

      • lunker1 says:

        NEWBIE you conveniently forgot all these posts

        NEWBIE on April 16, 2018 at 2:49 pm
        Next stop 2590

        NEWBIE says:
        April 11, 2018 at 7:28 pm
        Funny thing is, it seems everyone thinks we go higher but everyone claims everyone else is bearish. LOL! See you guys at 2530.

        NEWBIE on April 9, 2018 at 12:51 pm
        The VIX is telling you, this upmove is phoney Bullsh*t. Market is headed below 2500 from here.

        NEWBIE on April 4, 2018 at 10:21 am
        Phil, congrats but this is countermove, next will be back down to 2530 -2500.

  20. E says:

    Volume still looks like garbage, but I am conservatively entering strong looking long positions. HPQ, MOS, AKAM, CSCO, SBUX, NUAN for those interested.

  21. phil1247 says:

    asa

    this is what i am working with
    prob not the same as David … right ?

  22. NEWBIE says:

    Wheels will come off at 2705-2710. What will Trump do next to be blamed for market drop?

    • Newbie…next profit target is /ES 2709.60. Update line in the sand as of 11:04 AM, EST is 2700.20. If profit target is hit adjust by approx. 3 points or approx. 2703 for the next extension LIS

  23. Daily IHS will develop to 2740/2800

  24. fotis2 says:

    Crude H&S 1hour for 64.55 short term trade
    https://invst.ly/770u5

  25. Holly Silver says:

    Next resistance based on momentum indicators are DOW 24,837. If it manages to break above we have a more important target of 25,449. I expect a retrace after the first target is hit. How much is up in the air. Still anticipating a failure and breakdown below the SPY 258 range. The highs should be seen this Friday. If it breaks above the 2 levels i mentioned all bets are off.

  26. good job Bulls. Looks like a grind up all day. Down 2-3 point up 5 rinse and repeat

    dow closes up 500 Naz up 140 Sp up 48

  27. gary61b says:

    ES from the 2878.5 to 2529 leg down and all legs have been inside of this leg so possible HWB is 2703.75. Then 2709 is next overhead. then 2745-47.5

    • phil1247 says:

      hourly esm8 nicked ext at 92
      outside up hourly bar
      failure at 92 could initiate swoosh

      any bad NEWS coming out to support this ? 🙂

      • phil1247 says:

        exiting now at 2700 even to see if a tape bomb hits

      • Hi phil /ES should be trading in extensions now. DH has 61.8% LIS at 2698.58. DH also brought up an interesting factoid…/VX April contract expires tomorrow. The continuous contract has been dancing around the 78.6% level. Are investors selling /VX to cover their long position? Will they buy /VX soon for portfolio insurance? Last month it did the same thing and there was a “swoooosh” the next day. Full disclosure I am bullish, and I think Tony C. is smack on target once again.

    • gary61b says:

      ES from 2552.25 as 1 or a, 2 or b at 2672.25, 3 or c =a at 2704. If its a 3 it most likely will continue up.

  28. mcgcapital says:

    http://money.cnn.com/data/fear-and-greed/

    Does anyone know exactly how the fear and greed index is calculated? I see it quoted widely as a reason for pessimistic positioning and hence why we’re going to go higher. But when I read about it, I understand that the overall score is some sort of composite based on the individual inputs. And the narratives around these mention ‘xyz being at the bottom of its range for the last two years’. Issue is, between Brexit in June 2016 and January 2018, we had only one notable 5% dip around the US election, the rest of the time we went up in pretty much a straight line. So if a F&G index of 25 means that the indicators were weaker 25% of the time and stronger 75% of the time, then that’s going to be expected given the comparison period was so strong. In fact, we will struggle to get a score of above 50 unless conditions go back to how they were last year

  29. Jack kendo says:

    2698, look at the chart, we are into the twilight zone, took profits, all off.
    http://stockcharts.com/public/1269446/chartbook/67036679;
    cheers!

  30. quickrick38 says:

    Note well, since Friday WTI dropped $2.00. That’s contrary to most prognosticators AND, in particular all the news and political forecasters. The COUNT however, said otherwise which is why as noted earlier I bought USO Puts on Friday. News and Politics has no place in trading. Some of you may figure that out…sooner or later.

    • mm4398 says:

      Agreed Rick. Crude launched from 62 to 67.40ish in a hurry. It butted right up against its uptrend line and reversed. Having said all that, I don’t know that we go much lower. 64 to 65 should provide pretty good support here.

      • quickrick38 says:

        Yeh, I know mm…the 5 waves up (‘C’ wave) from 42 looks complete though. I say that even though wave 5 was rather short. So, I’m not real certain about this but my guess is that we see a small retrace and continue south. Good luck to you.

        • mm4398 says:

          Count wise I favor being in int c of major c. 67.76 could have been a minor a top though. The count you propose is my number 2 count and I’ll be in your camp if ~62 gets taken out. I have no position as I took everything off the table at 67.40 on Friday. Still bullish, but sideways and choppy downward action for a few weeks wouldn’t shock me here.

  31. Gap and go (short squeeze) … or will they let some of us day traders in?

  32. phil1247 says:

    bada bing !

    2700 esm8 target hit !

    • quickrick38 says:

      I take it the next 10 pts should tell the story…one way or the other?

      • phil1247 says:

        next 10 points or next 110 points

        as DH would say ……………. its straight up or not at all

        ie its ” rally or die” mode now

    • phil1247 says:

      its the 2700 ” profit ” target
      ie take at least some profits on longs 😉

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