Weekend update

REVIEW

The week started at SPX 2833. After a slightly higher open on Monday the SPX rallied to 2843, dropped down to 2820 in the afternoon, and then rallied back to 2843 on Tuesday. Wednesday’s gap down opening took the SPX to 2802. Then a Wednesday rebound and gap up opening on Thursday took the SPX to 2850. Friday the market opened a bit lower on options expiration. The market dipped to SPX 2834, then rallied to 2856, before ending the week at 2850. For the week the SPX/DOW gained 1.0%, and the NDX/NAZ lost 0.35%. Economic reports for the week were plentiful and mostly higher. On the downtick: the Philly FED, the NAHB and consumer sentiment. On the uptick: import prices, retail sales, the NY FED, industrial production, business inventories, housing starts, building permits, leading indicators, plus weekly jobless claims declined. Next week’s reports will be highlighted by the FOMC minutes and Jackson Hole.

LONG TERM: uptrend

The following is a follow up to last week’s write up on the US – China trade dispute. A Chinese delegation will discuss trade with the US on Tuesday and Wednesday in Washington DC this week. This is just before another round of tariffs are scheduled to kick in on Thursday. Meanwhile, the SSEC continues to makes new lows for the year after hitting a 2 year high in January. It is down 25% for the year. In the charts that follow you will observe that the SPX also made a 2 year high in January, sold off in February, doubled bottomed in April, and is now only 1% below its all-time high.

The Major wave 1 bull market continues to unfold. Intermediate waves i and ii completed in the spring of 2016, and Intermediate waves iii and iv completed in the spring of 2018. Int. wave i was simple, and Int. wave iii subdivided into five Minor waves. Int. wave ii was a zigzag, and Int. wave iv was a flat. Textbook Elliott Wave. Intermediate wave v, of Major wave 1, has been underway since early-April. When it concludes the bull market could end with a Major wave 2 bear market. We are still expecting SPX 3000+ by 2018+ before this bull market ends.

MEDIUM TERM: uptrend

After the April SPX 2554 low the market rallied to SPX 2791 by June. We labeled this Minor wave 1 of the Intermediate wave v uptrend. The pullback to SPX 2692 that followed into late June we labeled Minor wave 2. Minor wave 3 has been underway since then. Early last week the SPX made a new uptrend high at 2863, we saw five waves up from the Minor 2 low, and expected a significant pullback if the market declined more than 7 points. The pullback started last Thursday, and continued into Wednesday of this week when the SPX hit 2802. At that low the DOW displayed clear positive divergences. While the SPX was just oversold. The market then rallied for the rest of the week.

At the recent SPX 2863 high we decided to label that high Minute wave i of Minor 3. We did this because it was a simple five waves up, and similar in length to the three previous Minute degree rallies during Minor 1. The low that followed, SPX 2802, was quite naturally labeled Minute wave ii.

At Wednesday’s SPX 2802 low the SPX was 2.5% away from its all-time high. What makes this important is that not only does the SPX need to make at least all-time highs to end its bull market. The DOW, NYSE and DJ World index need to do so as well. And they were much further way than SPX 2.5%: DOW 6%, NYSE 8%, and DJW 9%. If the SPX were to rally 9% from Wednesday’s 2802 low, it could hit 3054 when the DJW makes new highs. We don’t see this bull market ending until all four of these indices make new highs.

SHORT TERM

After the SPX 2692 low in late June, we were expecting to observe a nice clear impulse wave to continue the uptrend. And we got it: 2743-2699-2848-2796-2863. Then we expected a pullback to the lower-upper SPX 2790’s, and the 2798 pivot range. That concluded on Wednesday at SPX 2802. From Wednesday’s low the market has now rallied straight up to SPX 2856. It appears the SPX is heading to all-time new highs (2873) in the coming weeks. The NDX/NAZ hit all-time new highs in this uptrend back in June, and are still rising.

If Minute iii, of Minor 3, equals Minute i, then the SPX should hit 2973 in the next few weeks. Short term support is at the 2835 and 2798 pivots, with resistance at the 2858 and 2884 pivots. Short term momentum ended the week just below overbought. Best to your trading!

FOREIGN INDICES

The Asian markets were mostly lower on the week for a net loss of 1.6%.

The European markets were all lower and lost 1.9%.

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

COMMODITIES

Bonds are uptrending again but lost 0.1% on the week.

Crude remains in a downtrend and lost 3.6%.

Gold continues to downtrend and lost 2.9%.

The USD is still in an uptrend and gained 0.3%.

NEXT WEEK

Wednesday: existing home sales, FOMC minutes, and conclusion to China-US trade meeting. Thursday: weekly jobless claims, and new home sales. Friday: durable good orders.

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

About tony caldaro

Investor
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356 Responses to Weekend update

  1. mcgcapital says:

    Can feel my boredom threshold being tested today with this low vol nonsense.. found it often precedes a big move the following day

  2. $usdbrl ———–> 8th largest GDP…..next disaster
    $ibov headed to 68k rest then 62k
    https://www.tradingview.com/x/FSVzf4Dh/

  3. Page says:

    If you weigh the risk/reward at this juncture, the risk is to the downside, very limited upside and unlimited downside. Also Sep/Oct/Nov will be terrible for the markets.

  4. lunker1 says:

    Hi Tony, from the 2802 low there have been two pull backs of similar size 17 points. Could Micro 1 of Minute iii be complete above 2873?

  5. scottycj1 says:

    Daily QQQ’s at 180.90 or higher close……. Algo says go long—NDX too

  6. Ashley says:

    If we hit 2837 that gap at 2830-20ish comes into play, my target for the first leg down is 2762 (GAP) and 2743…. Still in show me mode, a bull would probably find support at the 50 MA on the 60 minute chart at around 2740 .)

  7. fionamargaret says:

    DWT….short oil ….(UWT down to 29)
    DGLD…short gold….GLD down to 95
    TVIX
    VXX

    • fionamargaret says:

      …and TMF to 24…

    • kvilia says:

      Fiona, CL just broke all short setups. Can you elaborate on UWT perhaps?
      Thanks,

      • fionamargaret says:

        UWT had a low pole reversal to the upside yesterday BUT it is still in a bearish pattern to 28/29. I kept my short, but rented UWT today, and am now out again
        TVIX made a higher low but I just rent for the day.

        • kvilia says:

          Nice work, Fiona. I have to learn to be more agile – could have closed that DWT yesterday …

          • fionamargaret says:

            I have made 2k on TVIX already today Kvilia, so make up some money there…..x

            • fionamargaret says:

              Here is a trick which I use….when I have made money on TVIX, I sell and then put a bid in on the low of the day…usually you get it again….be careful, it is quick moving. x

        • fionamargaret says:

          SaudiAramco supposedly are no longer going ahead with their IPO….so if you think oil prices were supposedly lifted for that, that bodes well for DWT…..still think oil will go to 59/60….I know, in what year…x

          • Lee x says:

            Hahaha

            You know the goal isn’t to break even in this biz Fiona .
            If its going to move I want to know exactly when 😉

            • fionamargaret says:

              Noted..I’ll try.
              Ashley chummed me from oil at 72 down to 66 (that was my previous number), with her charts and commentary. She is good to work with….x

  8. Holly Silver says:

    Handshake is all you need. Seems Trump claiming a handshake deal with Mexico on NAFTA at the same time Mexico is denying it. The street is eating this up. Like the N. Korea deal, China Deal, EU deal? The markets naïve response smacks of desperation. Make no mistake trade wars are killing this economy. A self made crisis instigated by Trump.

    As for the market we didn’t even get an early morning drop. market is now numbed and immune to this until the actual crisis occurs. like the trade war it gets ignored till the obvious result of such action is seen.

    A slow drawdown over next 2 to 3 months or a 2 week crash event that should start in Sept/Oct period. Inability to gain any early morning traction over the Watergate type event with 3 indictments from a congressman to Manafort to Cohen indicates euphoria is here. never before had such a political event NOT caused damage.

    My best guess is a slow draw down that builds momentum over time.

  9. gary61b says:

    those that have TOS for a platform can see price difference of es to spx, using /ES-SPX

  10. Lee x says:

    Morning
    Market let everyone who wanted in or out to get their pull, no need to post doll house trades.
    Appreciate all the opinions and charts , enjoy these last days of summer !

  11. Theodore Lerts says:

    phil

    King $dollar will not be dethroned. He will rise to great heights through the first half of 2019. After that then TBD. Any weakness will conclude by the end of September. Saddle up.

  12. Wave 1 71 points
    .38 retrace 2847
    .50 retrace 2837 my target to sell my short and go long
    .618 2830 below that bulls need to be concerned.

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