Weekend update

REVIEW

The week started at SPX 2656. After gap up openings on Monday and Tuesday the SPX rallied to 2717 by Wednesday morning. Then over the next two days the SPX came within 5 points of giving it all back when hitting 2661 late Friday, before bouncing to end the week at 2670. For the week the SPX/DOW gained 0.45%, and the NDX/NAZ gained 0.60%. Economic reports for the week were quite positive. On the downtick: the NY FED and the NAHB. On the uptick: retail sales, business inventories, housing starts, building permits, industrial production, the Philly FED, leading indicators, plus weekly jobless claims declined. Next week’s reports will be highlighted by Q1 GDP and housing.

LONG TERM: uptrend

In the early stages of this bull market we suggested it could last 2 – 4 years and travel to SPX 3000+. It has been a bit more than 2 years now, and the high has been SPX 2873. Was that it? Not, according to the counts the have on the major US indices, some foreign indices, and some leading stocks. At minimum we should see another leg up to new highs. But where is it? All the market has produced, for nearly 3 months, is volatility and range bound corrective waves. It looks like it is waiting for a positive catalyst.

In the meantime the long term wave count continues to unfold as expected. A Major wave 1 bull market dividing in to five Intermediate waves. Intermediate waves i and ii completed in the spring of 2016. Intermediate iii then divided into five Minor waves. Minor waves 1 and 2 completed in the fall of 2016, and Minor waves 3 and 4 completed in the spring of 2017. Recently, in January 2018, Minor wave 5 completed, along with Intermediate wave iii, and an Intermediate wave iv correction began. After this weeks action, it appears it is still underway.

MEDIUM TERM: downtrend

Intermediate wave iv could have completed in February, after a 12% selloff ended with positive RSI divergences everywhere. The market rallied about 10% into March, did not make a new high and then failed. A retest of the low occurred right on the first trading day of April. Again with positive divergences. But the market has again failed to sustain an impulsive rally off those lows.

Some have speculated this correction could be a fourth wave triangle: A 2533, B 2802, C 2554, D 2717?, with E to follow. It could also be a double three: a-b-c zigzag to 2533, x wave to 2802, now another a-b-c (flat or zigzag) underway to retest the lows? Regardless of the final outcome we are still expecting at least one more uptrend, and series of new all-time highs. Medium term support remains at the 2656 and 2632 pivots, with resistance at the 2731 and 2780 pivots.

SHORT TERM

We were tracking the rally from SPX 2554 with a potential impulsive count. We had Minor waves 1 and 2 at SPX 2673 and 2586. Then a Minor 3 underway. Minor 3 divided into three Minutes waves: 2665, 2645, 2717. Then it blew up on Friday, when the market dropped below 2665. Now all we have is a lot of corrective activity from the high at SPX 2672 in early April. This potential uptrend no longer looks to have any chance of being impulsive.

Under the market we can see three potentials levels of medium term support: 2586, 2554, and 2533. Let’s see what the technicals looks like as these levels are hit. Short term support is at the 2656 and 2632 pivots, with resistance at the 2731 and 2780 pivots. Short term momentum ended the week oversold. Best to your trading this volatile market!

FOREIGN MARKETS

Asian markets were mostly higher and gained 0.3%.

European markets were all higher and gained 1.7%.

The DJ World index gained 0.4%, and the NYSE gained 0.5%.

COMMODITIES

Bonds are now in a downtrend and lost 0.8%.

Crude remains in an uptrend and gained 1.5%.

Gold is also in an uptrend but lost 0.7%.

The USD is in an uptrend and gained 0.6%.

NEXT WEEK

Monday: Chicago PMI and existing home sales. Tuesday: Case-Shiller, consumer confidence and new home sales. Thursday: weekly jobless claims, and durable goods. Friday: Q1 GDP (est. 2.1%) and consumer sentiment.

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

About tony caldaro

Investor
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374 Responses to Weekend update

  1. Lee X says:

    SPX hourly ema 34

    http://stockcharts.com/public/1269446/
    Never the same but middle of March and April’s price action similar,
    3 waves up from today’s low then another hit ?

  2. gary61b says:

    ES, then up over night to my magnets at 2637.25 and 2642.25
    https://gyazo.com/8a6af1e84535acf445581499ca9bce4c

    • phil1247 says:

      if above 2643
      expect squeeze up to 52 to 61

      • gary61b says:

        I am thinking just a slight push into the next volume cluster which is at 2642.25, then rejected back down… but will see. but if not rejected, I can see that to 2660

  3. Holly Silver says:

    Took a gamble closed when 45 down, reentered when 35 down. All for next week now. All at 254 on SPY.

    • Ashley says:

      Is it a fractal of the first down wave or the second, or does it matter??? We aren’t seeing the down volume of the last 2 thats for sure but tomorrow is another day =)

    • Holly Silver says:

      Looking at 3/12 to 3/16 the first 2 waves down were almost identical in length. Who knows if it continues BUT the drop is definitely NOT finished. if similar pattern sill exists expect a one or even two day flat move followed by the largest move yet. Still see 4 or 5 days for first bottom attempt at low 250’s. .

      If it’s more like 1/29 drop, different pattern and a more pronounced drop. Expect the 3/13 pattern for now.

      Pure speculation if followed any of the last 2 drops.

  4. mcgcapital says:

    Just gone long FTSE.. seems like a decent set up for the gap close attempt tomorrow AM. Stop under 7350

  5. stan911 says:

    Looking for 2590 and 23612 for a bounce

  6. gary61b says:

    ES 2616.5 then to 2628 PB to HWB then long set up I have a magnet at 2634.75 and 41 possible top for continuation down or up for wave ending at 2616.

  7. phil1247 says:

    almost impossible to go thru 2619

    gary are you still in ?

  8. stan911 says:

    2gap done 1to go if where lucky

  9. vivelaamo says:

    Kudos to those that called the drop.

  10. stan911 says:

    Gaps at 2624 2617 and 2606

  11. H D says:

    Hope you all were safe today, 55 point hit. Kudos CN for getting up early and posting the set up.
    2632 pivot has been more like 2626 JMHO

  12. Jack kendo says:

    HWB 2636 defended, also 2632 pivot strong.
    cheers!

  13. travis01 says:

    Market is tough. We are all amateurs. With that said, everyone makes good and bad calls. Wouldn’t it be great if the constant “you’re crazy the market is going up or down precisely to my number” posts would go away all day long? 100 posts yesterday with a definite up target with no reasoning other than each’s proprietary method, and all wrong. No one can trade that, or learn from that. In the end, you are here to learn better methods to make money not to show others how smart you are. If you tell us why, then we can try to learn and decide if we want to follow that line of thinking. Ie, that’s what TC does for us. Carry on

    • The price targets (support/resistance $) are all just based on historical volume and price action. Nothing is guaranteed as we’ve all seen price levels slashed right through without a pause. Therefore, you/we/dumb money cannot trade off of them. I’ve tried and lost time after time. The market has it’s own mind without that insider information/computer algorithms.

      That said, there are price indicators that do show direction. If you stick to that you should be fine in trading the trend except in sideways markets. I’ve seen maybe 10% variance where the “trend” abruptly changes because of “news” (i.e., the long hands have given up, and the Smart Money is ready to take the market in the opposite direction). In those cases, you have to be quick to pivot or set those Trailing Stops. The move lower has been forecasted by the trend indicator. It has said that we’re going lower (until it says otherwise) and if I traded against it, I would have lost money. How much lower? Anyone’s guess. ATM, it’s 2630, and the indicator is still showing down, so until that changes, I do not go long.

      People trading off of oscillators are crazy BTW. The oscillator will defy “odds” longer than you can stay solvent. I remember hearing about a Stochastics oscillator that stayed oversold for MONTHS. Price is the name of the game. You don’t make money on oscillators. We make money buying low and selling high on PRICE.

    • vivelaamo says:

      Good post. I got my long setup horribly wrong but then that’s why we have stops. On the sidelines now until back above 200 dma.

      Large caps selling a lot more than RUT which seems odd if this was the start of a larger move down.

      Still be surprised if we make new lows. Let the professionals on here decide. All the best.

  14. learnedmylesson25 says:

    No support for HYG at 85.64.DXY hit the upper bb and is pulling back slightly,with a slight bounce in PMs and GDX.it was either/or with HYG(which equals equities in my book)and next stop appears to be 85 again.Not what I expected at the 100d,but it’s yelling loud and clear,what its intentions are with that break of 85.64.Good luck all.

  15. stan911 says:

    We have 2632 pivot which should around 24k line in the sand 23974 break that we head lower 23630-610 then we see

  16. mcgcapital says:

    Have a feeling we won’t go straight down and this frustrating sideways movement will go on. Definitely prefer selling rallies to buying dips though as it’s kind of inevitable which way this thing breaks

  17. traderlucas says:

    Hi all from Vietnam. I’m not sure if anyone remember me even fotis2 and H D who i talked to on 19 april 🙂 But it does not matter, what matters is spx is still targeting 2550s as my last post. Still too early to tell, but the sky is falling that way. Hope you all trade well today! (I’m sorry, the previous post i use my personal blog’s account. This is my trading blog account)

  18. Lucas says:

    Hi all from Vietnam. I’m not sure if anyone remember me even fotis2 and H D who i talked to on 19 april 🙂 But it does not matter, what matters is spx is still targeting 2550s as my last post. Still too early to tell, but the sky is falling that way. Hope you all trade well today!

  19. may get to 2606 today

    • gary61b says:

      could, but I think 2616 will slow it down.

      • would like to see this over sooner then latter. A down took 14 days. This B topped on the 16th hoping C down is as quick if not quicker then A ending this friday or Monday the 30th. going to be quicker then some here believe. a bottom near 2600 then 25 point pop then down another 80-100 and its all over. then rocket higher. will see.
        symetry shows this correction over by 4-30

  20. Page says:

    Finally Bears got their wish. Looks bad, very bad. SPX 2500sh is written all over (2530sh).

  21. vivelaamo says:

    Ouch. 200 dma needs to hold.

  22. cj32 says:

    Cr. to CBZ

  23. gary61b says:

    ES target 2642.5, then that level will be below the parallel channel, possible retest of that channel.

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