REVIEW
The week started off at SPX 2905. After a dip down to SPX 2886 by Monday afternoon the market started to rally. Higher opens took the SPX to 2911 on Tuesday, 2912 on Wednesday, a new all-time high of 2935 on Thursday, and 2941 on Friday. For the week the SPX/DOW gained 1.6%, and the NDX/NAZ lost 0.25%. Economic reports for the week were mostly positive. On the downtick: the NY FED and building permits. On the uptick: the Philly FED, housing starts, leading indicators, plus weekly jobless claims and the account deficit both improved. Next weeks reports will be highlighted by the FOMC meeting, Q2 GDP and more housing. Another rate hike on Wednesday probable.
LONG TERM: uptrend inflection point
The Major wave 1 bull market extended into its 31st month for the DOW this week, as it made all-time new highs on Thursday. The SPX made all-time new highs as well. The NDX and NAZ had made their new highs in August. Now that the four major indices have registered five Intermediate waves up from the February 2016 low, it’s time to review the technicals.
The first observation is the building negative divergences on the SPX/DOW weekly and monthly RSI. Not a problem until new highs were hit. Now that they have, it’s a potential warning of a bull market high in the making. We can add that the R2K may also be in its last uptrend of its bull market.
Typically nearing a bull market top various sectors begin to displays negative divergences as well. The banking index BKX, and the housing index HGX are doing just that. Plus, the four major indices breadth, as measured by the percentage of stocks above their 200 dma, are all displaying negative divergences. As well as the NYAD.
Last, the weakness in the foreign markets. Which most have been noticing for a while. Eleven of the fourteen indices we track appear to have topped. Three have already confirmed bear markets: China, Spain and Switzerland. And we know Switzerland usually tops within a year of an SPX top. After more than two years of riding the bull we think its time to get cautious.
MEDIUM TERM: uptrend
For the past couple of weeks the SPX has had a short term inflection point to resolve. There were three possible counts. With this week’s new high one count was totally eliminated, one downgraded, and the other made the primary count. That count is on the daily chart below. This suggests the uptrend is in Minor wave 3 of Intermediate wave v, with Minor waves 4 and 5 still to unfold.
The NDX/NAZ continue to display weakness as the cyclicals make new high. In fact if they do not make new highs next week they will likely confirm a downtrend. And that might be it for their bull market. The only other thing that would alter this scenario is if Intermediate wave v were to subdivide into five Minor wave trends. Just like Int. iii. Other than that we continue to believe this is the last uptrend of the 2016-2018 bull market.
SHORT TERM
We have been labeling this Int. v uptrend, from the early-April low, with five Minor waves. Minor waves 1 and 2 completed at 2791 and 2692 in June. Minor wave 3 has been underway since that low. Minor 3 has been labeled with five Minute waves: 2863-2802-2917-2864-2941 so far. Since Minute iii is shorter than Minute i, Minute v has to be the shortest up wave. This give us a maximum for Minor 3 at SPX 2979.
We have a similar situation with the DOW. You can check the hourly chart using the link below for that. Short term support is at the 2929 and 2884 pivots, with resistance at the 2995 pivot. Short term momentum ended the week at neutral. Best to your week!
FOREIGN MARKETS
Asian markets were mostly higher on the week and gained 1.3%.
European markets were all higher on the week and gained 2.1%.
The DJ World index gained 1.6%, while the NYSE gained 1.4%.
COMMODITIES
Bonds are downtrending and lost 0.5% on the week.
Crude is uptrending and gained 2.6%.
Gold looks like its uptrending but ended flat.
The USD is downtrending and lost 1.5% during the week.
NEXT WEEK
Tuesday: Case-Shiller and consumer confidence. Wednesday: FOMC statement and new home sales. Thursday: Q2 GDP (est. 4.3%), weekly jobless claims, durable goods, and pending home sales. Friday: personal income/spending, consumer sentiment, and the Chicago PMI.
Tony put up the blue 3
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Poor reaction to the FED announcements.
Market is high.
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es 36 perfect short at .618 until it isn’t
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and 2929.75 too at .50…. 😉
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that looked like 5 waves down from 36 es to me lunker ..lol
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2907.75 Possible .618 long from low
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fooling around 2911 es profit target
possible extension but take profits when ya got em !
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1.382 target 2906.5
2907.5 close enough for a hit?
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possible extension …. keep some lotto tickets in case
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spx a=c perfectly now
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Daimler names new CEO to lead push into electric, autonomous vehicles
“Earlier this month, Mercedes-Benz unveiled the EQC, an all-electric crossover that kicks off the German automaker’s plans to invest more than $12 billion to produce a line of battery-powered models under its new EQ brand. Daimler plans to invest another $1.2 billion in global battery production”
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With the mass production of electric vehicles coming out in the next 5 years from major automakers the price of oil is going to tumble and so will the influence of the oil dependent economies.
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The Guardian
”the road to a promised land of zero-emission vehicles is littered with speed bumps and red lights that threaten to seriously slow the progress of the electric car. Battery makers are struggling to secure supplies of key ingredients in these large power packs – mainly cobalt and lithium. The hopes of both battery and vehicle manufacturers hang on the mining sector finding more deposits of these precious minerals.
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It remains to be seen. Even if the deposits are not discovered there is a high probability that further engineering breakthroughs will overcome these obstacles.
A number of startups are developing different technology that don’t require cobalt
https://www.greentechmedia.com/articles/read/11-lithium-ion-battery-makers-that-dont-need-cobalt#gs.ITpZXtE
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Well, it’s official folks…Gary gets the prize for calling and NAILING the ‘B’ wave high at 2936(es).
Way to go Gary61b.!!!
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ya, Tony should put a pivot at 2929 for everyone to know about well in advance!
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😀
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People can laugh at Trump at all they want to. It’s an empty gesture. U.S. funding to the U.N. should be cut as should our NATO funding.
As far as U.S. influence…please we foot the lions share of the bills and our military has been acting as global policeman for far too long. We should withdraw and watch as half the world collapses back into chaos.
The U.N. is a paper tiger full of worthless self important bureaucrats who fuck around on the U.S. taxpayers dime.
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The UN should have its headquarters relocated to Kabul in Afghanistan. If they really want to do something send all of them there.
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good grief, we just gave $1.5T to corp to buy back their own stock and you’re worried about $1B to command the world’s attention?
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I’m not worried about it all and don’t care anything about the attention from the rest of the world.
But there is no reason to throw away additional billions of dollars.
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gary
straight up or not at all
see ya!
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