Weekend update

REVIEW

The week started at SPX 2872. After a gap up opening Monday to SPX 2887, the market headed lower and a gap down opening took it to SPX 2867 Tuesday morning. After that the market rallied, helped by a gap up opening on Thursday, into the end of the week. For the week the SPX/DOW gained 1.05%, and the NDX/NAZ gained 1.50%. Economic reports were mostly positive. On the downtick: the PPI and the budget deficit increased. On the uptick: consumer credit, the NFIB, wholesale inventories, the CPI, retail sales, industrial production, capacity utilization, consumer sentiment, business inventories, plus jobless claims declined. Next week’s reports will be highlighted by the NY/Philly FED and housing. And, it’s quarterly options expiration.

LONG TERM: uptrend

For the past two weeks the bull market had seemed to stall after the SPX hit 2917. The indices we are focused on all pulled back, and the SPX lost 54 points. Tuesday the SPX retested last weeks’ low. Then the market rallied, and the DOW was making new highs for the uptrend by Thursday. It looks like the uptrend has resumed.

 

The Major wave 1 bull market count remains unchanged. Intermediate waves i and ii completed in the spring of 2016. Intermediate waves iii and iv completed in the spring of 2018. Intermediate wave v has been underway since that Int. iv April low. We are still expecting SPX 3000+ by 2018+ before the bull market ends. And the DOW, NYSE and DJ World to all make new highs too.

MEDIUM TERM: uptrend inflection point

The count we have been tracking for this uptrend remains: Minor wave 1 SPX 2791, Minor 2 SPX 2692, Minute i of Minor 3 SPX 2863, Minute ii of Minor 3 SPX 2802, then Micro 1 of Minute iii SPX 2917. This count is posted on the SPX hourly chart in the short term section.

Last weekend we noted the possibility that the SPX 2917 high may not have been a Micro wave 1, but a Minute wave iii. This would suggest the current pullback to SPX 2864 was Minute wave iv. As long as the pullback does not drop below SPX 2863, the high of Minute i, this count remains possible. This count is also posted on the SPX hourly chart with the “or iii” labeling.

On Wednesday we added another count into the fray. Just trying to be objective as the market passes through another inflection point. This count suggests the entire uptrend is not Intermediate wave v, but only Minor wave 1 of Int. v. This count is posted above. If the SPX makes new all-time highs this count will be eliminated. Another interesting juncture in this 2+ year bull market.

SHORT TERM

While this uptrend continues to unfold a potential three short term counts have emerged. These three counts were described in the above section. And, none of them suggest a bull market top is near. Br-exit, Trump, Macron and even Tariff events have occurred in the past 2+ years, and still the bull market continues.

Currently the SPX/NDX/NAZ/TRAN and R2K have all recently made new all-time highs. The DOW/NYSE/DJW and SOX have yet to do so. Until the latter group does make new highs, the former group will continue to rise. Short term support is at the 2884 and 2858 pivots, with resistance at the 2929 pivot. Short term momentum ending the week at neutral. Best to your trading!

FOREIGN MARKETS

Asian markets were mixed on the week but gained 0.7%.

European markets were also mixed and gained 0.4%.

The DJ World index gained 1.2%, and the NYSE gained 1.1%.

COMMODITIES

Bonds appear to be in a downtrend and lost 0.5% on the week.

Crude is in an uptrend and gained 1.8% on the week.

Gold appears to be in an uptrend and gained 0.1% on the week.

The USD appears to be in a downtrend and lost 0.4% on the week.

NEXT WEEK:

Monday: NY FED at 8:30. Tuesday: the NAHB. Wednesday: housing starts and building permits. Thursday: weekly jobless claims, the Philly FED, existing home sales, and leading indicators. Friday: options expiration.

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