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
where does the big down change to a big up I wonder.
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2700 should change to support now..
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consolidated long enough. time to rip into the close and gap it up again tomorrow.
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Good old Bull stampede, wrock just needed to shak off some passengers🔝
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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.
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Bulls are a little hasty to be calling victory (Im enjoying it), not much resolved here.. Still expecting some volatility here at the 50 MA and Im expecting 2731 to stop em in their tracks IF they can get there… Anyone know if Gartman went long??
http://stockcharts.com/h-sc/ui?s=$SPX
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it’s an exhaustion gap.
short at 2708
still with bullish view, just a trade.
cheers!
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I’m suprised Smartz hasn’t reappeared to confirm all is well for the bulls.
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he probably cant remember all of his logins…but he is still here in the fray
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SPX is lagging. When that breaks out too hopefully smartz will return.
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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.
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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.
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Who is RJ?
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Raymond James. Fiona kindly posts their article daily.
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Thanks!
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Jeff Saut of Raymond James, on CNBC
starts @ 2:00 minute
https://www.cnbc.com/video/2018/04/16/closing-bell-exchange-dow-up-315-points-at-its-high.html?play=1
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++
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To be honest we should be indifferent.. stops have to be wider when the vol is higher so shorts are usually lower leverage than longs taken when the market is more stable. I don’t think the rally from 2550s is much of a surprise, it’s more is this going to be sustainable given how it’s been behaving.. and if it’s not going to be, where do we turn from. 2670s looked a decent shout, broke that so on to the next one.. 2730s, 2800? But could end anywhere. Europe looks easier to follow to me, quite confident on the 7300 area holding on FTSE but SPX has outperformed it by 3% since Thursday so nothing stopping it going higher short term even if FTSE has topped
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Looks like a B wave??? Still only 3 big waves .)
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Agreed Vive. I think many are using too short of a time frame to do market analysis on. I can make a count on an intraday chart look like whatever the heck I want it too. To steal from Von Neuman a bit, give me a one hour chart and I can give you an elephant. Give me a 10 minute chart and I can make him wiggle his trunk. Sticking to weekly charts with a dash of daily charts will reduce errors and stress.
I’m saying this to myself just as much as to anyone else.
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Today is last day for this up move, starting tomorrow going down.
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Vive this is why you don’t hear (much) of ultra-wealthy traders but you hear lots of ultra-weathy investors and stockholders – including the richest people on earth.
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Good point. Slow and steady wins the race. Ironically it’s not even that slow in the grand scheme of things. Few weeks, months years to make a lot of money or take big risks to try and make it in days.
Hats off to those that manage it.
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Hi Tony, 2645 looking like irregular flat for Minor 2? TY
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sorry Minute
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+1.6% close on S&P = 2720
VERY possible.
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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.
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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.
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Gary after such a good 2016, don’t blow both 2017 and 2018 because of your hatred of Trump
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TRADE WARS is not political. Made very good money on those mistakes. Next drop over it will easily break the lows. Ignore it at your own risk. I have capitalized on it.
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There’s no risk for me if we break lows. I just won’t make any money.
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Risk here is only 3% of my capital, I can afford to lose it all but I don’t think I will… I made enough on the way down to weather even 3000 SPX .)
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And that’s much more important than being wrong or right. Good Luck pal.
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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.
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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
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6/2012, 5 waves down and then a choppy rally. EW is not perfect. Nothing is, no matter what they post here This is another one of those times.
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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
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per DH..April unfilled gaps…
https://gyazo.com/914d9dd3dcb1310d07833844ce83c61e
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