Weekend update

REVIEW

This roller coaster week started at SPX 2755. After a gap down opening on Monday the SPX hit 2699 before rebounding in the afternoon. A gap up opening on Tuesday carried the SPX to 2746 by Wednesday morning. After that the market headed right back down and hit SPX 2692 by Thursday morning. Friday’s gap up opening carried the SPX to 2743, before retreating late in the day to end the week at 2718. For the week the SPX/DOW lost 1.3%, and the NDX/NAZ lost 2.3%. Economic reports for the week were mixed. On the downtick: consumer confidence/sentiment, durable goods, pending home sales, Q1 GDP and weekly jobless claims rose. On the uptick: personal income/spending, Chicago PMI, Case-Shiller, and new home sales. Next week’s reports will be highlighted by Payrolls, the ISMs, and the FOMC minutes. Best to your week, and happy Independence Day!

LONG TERM: uptrend

Nothing has changed long term. A Super cycle low in 2009. Leading to a Primary I bull market high in 2015. Then a short and quick Primary II bear market low into 2016. And currently, a Major wave 1, of Primary III, bull market into 2018.

Major wave bull markets divide into five Intermediate waves. Intermediate waves i and ii completed in the spring of 2016. Then Intermediate wave iii started to subdivide into five Minor waves . 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, to complete Intermediate wave iii, stretched out into January 2018. Since then, it appears, Intermediate wave iv has been underway. Still expecting SPX 3000+ by 2018+ before this bull market ends.

MEDIUM TERM: downtrend may be underway

The market has been in an uptrend since early April at SPX 2554. The uptrend, as we have noted, has been internally choppy and unlike previous uptrends of this bull market. Nevertheless, we gave it the benefit of doubt while its larger waves unfolded. This week the SPX broke through support levels, turning even this last rally (2677-2791) into a choppy corrective affair.

As a result we added the Intermediate wave iv triangle scenario back to the SPX daily chart. It’s been that type of market activity for most of this year. Triangles are created by five corrective waves that form a wedge. In this case it looks like a contracting wedge, with waves a, b, c, and d already completed. All that is required is a downtrend confirmation to move the e wave close to completion. Keep in mind, the e wave does not have to reach the lower trend line.

SHORT TERM

We were tracking this uptrend, despite the internal choppiness, as an impulse wave until this week. This week the SPX broke below 2742, and then traded below that for most of the week. We now have three overlapping larger waves from the uptrend low in early April. Certainly looks corrective. Unless, the market is unfolding in this new count posted on the hourly chart. It has a low probability at this time, and we’ll leave it at that for now.

Should the triangle scenario continue to unfold, a likely low would occur in the low – mid 2600’s. There are OEW pivots at 2632 and 2656. Also the low could come as early as this week. If it looks like this is occurring we will post a daily update. Short term support is at the 2656 and 2632 pivots, with resistance at the 2731 and 2780 pivots. Short term momentum ended the week nearly oversold. Best to your trading!

FOREIGN MARKETS

Asian markets were all lower for a loss of 1.1% for the week.

European markets were all lower for a loss of 1.4%.

The DJ World index lost 1.3%, and the NYSE lost 1.1%.

COMMODITIES

Bonds confirmed an uptrend and gained 0.2% on the week.

Crude confirmed an uptrend too and gained 8.1%.

Gold remains in a downtrend and lost 1.3%.

The USD is still in an uptrend and gained 1.0%.

NEXT WEEK

Monday: ISM and construction spending at 10am. Tuesday: auto sales and factory orders. Wednesday: holiday! Thursday: ADP, ISM services, jobless claims, and the FOMC minutes. Friday: monthly payrolls.

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

About tony caldaro

Investor
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391 Responses to Weekend update

  1. xpto31 says:

    Happy birthday Tony!!

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  2. wildmarkets says:

    123abc – If you have time can you throw in some wave counts on TSLA stock? I see the counts on Tony’s list of stocks but would also like to see what your counts are.

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  3. 123 abc says:

    Happy Birthday Tony! Happy Independence Day!

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  4. Page says:

    To all English jolly good fellows…. Congratulations on your teams victory today. I never liked any team winning on penalty kicks, it’s just not fair but win is a win.

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    • torehund says:

      England won in 1966, but never thereafter. If they win now it will be very close to 6 pi cycles of 8,6 years equals 51,6. 52 years is as good as math ever gets. A sure bet😜
      Happy indpendence day to all of you, and especially Tony our excellent market guide.

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      • Interesting thought. I’ve always wondered what light the field of socionomics could shine on the rise and fall of organized team sports, club or international. Do you have any examples of this playing out in other championships?

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        • torehund says:

          Think we are ending a depression, and most certainly Europe where Germany has imposed plan-economy, coerced south of Europe and extorted them financially. Moreover the grip extends further inflicting with the soverein rights of Nations. Futility of suprastructures is nothing new, here in Norway a little region wanted to exit the kommune, as the only benefit they attained was 3 speed-bumps. Bureaucracy changes from a helping hand to a slapping hand as it matures. And you have to pay for it🤐
          England took an important step in the right direction, and restored some sense of dignity by choosing to exist within a smaller structure.
          The pi model is Martin Armstrongs invention and he has done well over the years hitting the turns, think he also uses the model out of stocks too; just for fun. But if I make a home run on this prediction, well its a bit scary….what happened to Free will then😁😁😁

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  5. vivelaamo says:

    To the very few English posters on here.

    Just remember that regardless of what happens in the stock market…….ITS COMING HOME!!! 😉

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  6. E says:

    GDOW has broken support. Canada… Mexico… China… Brazil… France… Italy… Spain… Germany… South Korea… Japan… India… Australia… the UK have all simultaneously entered downtrends. Does not look bullish to me, unless this is the biggest bear trap the world has ever seen.

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  7. phil1247 says:

    ES

    despite retesting the short twice which was delineated in advance
    it could not be broken
    we are wedging sideways ..
    could be a triangle ..
    doesnt really matter what you call it
    we are stuck between the short and its target at 2678

    until one side wins… this could go on a while longer
    frustrating both bulls and bears

    but that is a story for thursday
    Happy 4th !

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  8. E says:

    We are at the edge of the cliff now. It took a few days longer than I expected but 2667-2592 should begin unfolding after the holiday. Have a good one everyone!

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  9. aahmichael says:

    Despite the choppiness of the past few days, nothing has changed in the count that I posted on Friday. The trend remains down from 2791. The initial wave down ended on 6/25. That was either wave A or wave 1. Today’s high was either wave B or wave 2. (if it was wave B, then it was a triangle; if it was wave 2, then it was a double 3.) The H&S formation remains intact. My stop on the daily short setup that I posted on 6/13 remains at 2760, and will be lowered to 2735 if and when we have a daily close below 2699.

    The daily pivot nailed the top again today. Today’s DR1 was 2736.33. HOD was 2736.58.

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    • xuwu992000 says:

      @ I agree with the W-A part, but I am hesitant to count the current range bound as a triangle W-B–in addition to the indicator mismatch, it just looks too good to be true.
      @ Besides, my short-term calendar points to a strong & bullish Monday. So, my take is that Thursday would be a down day, but that is a bear trap. If every trader is worried about the potential 7/6 trade war ignition, that won’t happen as planned, or people suddenly don’t take it as seriously as it should be. Like I mentioned earlier, the market need to shake off the majority of the bears and then dive. In my chart, the 2755 gap would be filled early next week before the real down move.
      @ EW-wise, the W-B would be a complex flat [flat w-a, zigzag w-b, & impulsive w-c to 2755].

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      • aahmichael says:

        Both RUT and NDX have 5 down and 3 up. It’s always possible that the correction upwards will subdivide more, but the trend is down. I normally can always find valid bullish and bearish counts simultaneaously, however, I honestly can not come up with 1 single valid bullish count from the 2/9 low.

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        • aah: always appreciate your view, but it is also hard for me to attempt to call a range into a trend, so it looks more like a bear trap right now, since the supports have held. I will acknowledge a quick break and reversal would put me as a long. I’m flat here and congrats on your call so far. I thought you had already lowered your stop to 2735 and that it hit that level, albeit you said you were thinking about lowering it to 2735 from 2760/

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          • aahmichael says:

            Hey Steve. ‘Trend’ is obviously a relative term, however, based on the timeframe that I trade, I think the trend changed at the 1/26 high, and I also think the countertrend move ended at the 6/13 high. As I mentioned before, I can not come up with a bullish count from any of the swing lows of 2/9, 4/2, or 5/3. I realize that lots of people have posted bullish counts from those levels, however, all of those counts violate EW rules. None of them are valid. What that means is that none of the swing lows this year were the end of the corrective pattern than began at the 1/26 high.The market can resolve that issue by either doing another leg down, or continuing to chop sideways. Ultimately, though, I have always believed that the 4 most important words in investing are “don’t fight the Fed,” and the Fed changed the ballgame during the last week of January when QT was increased to $20bn per month. Starting this month, QT is now up to $40bn per month. I realize that permabulls are hardwired to think that the market will always go up, but if tax cuts, great earnings, great employment, and a great economy can’t push the market higher in the face of the Fed’s QT, then what will?

            The trade setup I posted at the close of 6/13 was not a market call. It was a trading signal based on daily bars with an entry price and a stop price. Win, lose, or draw, it’s a signal that I always take. I did post on 6/27 that I would probably move the stop down to 2735 the next day, but that was with the assumption that the market would close lower on 6/28. Obviously that didn’t happen, so the stop wasn’t moved. Actually, I’ve gotten 2 intraday signals in the past few days to get temporarily flat and then reshort higher, which I did. That added 42 points of realized profits to the trade, but I don’t post those signals.

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  10. Lee X says:

    And then there’s the pivot

    Man it’s crickets in here, which is good.

    Have a great Holiday everyone, be safe

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