Weekend update

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.

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

About tony caldaro

Investor
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275 Responses to Weekend update

  1. lunker1 says:

    Tony put up the blue 3

  2. Poor reaction to the FED announcements.
    Market is high.

  3. lunker1 says:

    es 36 perfect short at .618 until it isn’t

  4. Dex T says:

    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”

    https://techcrunch.com/2018/09/26/daimler-names-new-ceo-to-lead-push-into-electric-autonomous-vehicles/

    • Dex T says:

      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.

  5. quickrick38 says:

    Well, it’s official folks…Gary gets the prize for calling and NAILING the ‘B’ wave high at 2936(es).
    Way to go Gary61b.!!!

  6. Dex T says:

    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.

    • Dex T says:

      The UN should have its headquarters relocated to Kabul in Afghanistan. If they really want to do something send all of them there.

      • H D says:

        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?

        • Dex T says:

          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.

  7. phil1247 says:

    gary

    straight up or not at all

    see ya!

  8. phil1247 says:

    clx8

    71.32 next
    extension long kaput

  9. Page says:

    Watch Gold to collapse. SPX will also sell off.

  10. phil1247 says:

    gary how about a post triangle thrust up to new highs ?

  11. fxaprendiz says:

    My areas of interest for the rest of the week are depicted by the two yellow rectangles and especially the red strip.

    Still expecting a medium term low in the 2864-02 area though, even in the event of a marginal new high above 2942.

  12. Looks like the SPX wants to do the very bare minimum in corrections.
    Looks like it will not even close that small gap from a few weeks ago.

    What President Trump said at the U.N. yesterday is probably a game changer.
    He has been talking like that for some time, but never said it at that forum.

    GLTA

    • H D says:

      Agree, the entire world laughed at him. Then Germany laughed at him again. Game changer. Losing our world influence by the minute.

      • Yeah, Germany laughed at him.
        That’s rich

        • mcgcapital says:

          Dax is mainly an index of global exporters.. Little to do with the German economy just as the SPX isn’t totally linked to the US economy. Investors in both indices are all over the world, not just those two countries

          Globalisation is here to stay whether people like it or not, it’s too difficult to reverse… 30-40 years of growth has been built on the back of it so reversing it likely sees a massive GDP contraction

      • Page says:

        This is the first time in UN history that the world laughed at US president, we are so proud of our president he makes the world laugh 😀

  13. lml25 says:

    GDX is sitting on its 10 and 20d averages (18.62).Also could bullishly embed if the Fed is even slightly dovish.If they are,the dollar continues down–like it should–with a H&S breakdown,and GDX reverses todays 1% losses.So a big break of 18.60 (after 2pm)is bearish and a rally up from here is bullish.It’s all up to Janet Powell.GL all.

  14. fxaprendiz says:

    When I used to trade the forex market most NFP and FOMC days were wild rides, on top of that the brokers would not honor one’s SL or pull tricks like freezing their trading platforms, so I learned to avoid trading those days.
    Trading the stocks market is much easier as reactions to those events are much more subdued, therefore I’m keeping my SPX 2915 long but raising my SL to BE just as a precaution. In any event, if there’s an initial jerk reaction to the downside it should be brief and shallow, to around 2910-05 and then the real move to the upside. Either that or we already had the low for the day and there may be only one move up after the announcement. In either case I expect today and tomorrow to end in the green. Friday/Monday though it may be a different story.

  15. tough call on were we are at.
    if in minor 4 camp, Maybe A finished yesterday working on 3 small waves up for B then C down can only guess at this point. I had thought we would hit the 2900 level for A bounce to 2930 then down to 2870 area. Anyway will have to see. I believe that 2930 should hold for the B wave if in fact thats the correct count

    Good luck all

    • gary61b says:

      I would agree, but make it a little difficult and use 2936 as the top of B. but with the ES it could go either way still in micro 5 or in minor 4?

      • phil1247 says:

        gary

        step back and look at january

        gap down…. three sideways days … then swoosh

        now we cant get above 38% retrace from high
        could top be in and swoosh ahead ?

        • gary61b says:

          2935/18 is the range, yes so far every long SU has failed but none of the short SU have completed either. above 29 and look for a LSU then over 36 and this is over.

      • Either way risk is to the downside. If in micro 5 up at the moment. Max upside is 2956. were micro 5 equals micro 1. how ever most 5th wave are weak. so i would say max risk to the up side is 2950. then a .38 retrace brings you back down to 2856 area. . so max upside from here is 27 points before 50-100 point lower.
        Or if 2924 cant be taken out as phil just mentioned something else may be going on.

    • fxaprendiz says:

      tryingto, I like how you are capable of seeing both sides of the market. And I appreciate the fact that you are unemotional about your trades/views, unlike a few others in here.

  16. scottycj1 says:

    Smackdown….. post FOMC

  17. phil1247 says:

    CLX8

    profits should have been taken at 72.72 target (oval)

    now waiting for inventory number shakeout
    the number does not matter
    then we see if extension at 71.67 holds
    if so … we continue straight up
    if not support drops to 69
    with possible failed breakout above yellow line at 71.12

        • quickrick38 says:

          Thanks for sharing all that work jobjas, especially crude…good job 🙂
          Also, I wanted to mention that while our counts are usually pretty close, if not identical, this time there is a difference with the S&P count. You have all 5 waves of wave 3 completing using the SPX cash. My counts are usually based on the ES, and I have only wave 3 of 5 waves completed. What that impacts mostly is the depth of the wave 4 retracement. Based on the same fib (0.382) your target is below 2850 while mine is targeting 2888. We’ll just have to wait and see how that plays out. Just an FYI. Best of luck to you.

      • purplember says:

        jobjas you really have bitcoin going to a new high? you don’t think it’s a dead man walking

        • jobjas says:

          that is what the charts are saying .
          If you want some fundamentals scan through some crypto sites
          Agreed most cryptos are worthless but few will survive and use it as a trading asset rather than buying and holding .

    • torehund says:

      Maybe there is increasing deflation in Canada and to such an extent that the currency chooses to rise ?

      • fionamargaret says:

        Inflation went down from 3% in July to 2.8% last month.

        I think there are so many questions regarding Canada..NAFTA, a pipeline that is back to stage one for obtaining legal authority to even build/complete (indigenous groups v government /oil companies) with considerations to be given to port traffic, endangered species, water, transportation etc.
        And if this isn’t enough, you could also take into consideration the $CAD is supposedly considered a petro currency…higher oil prices Tore…I knew you would like this conclusion the best…x

        • torehund says:

          Fiona yes I have to admit I am an oil bug…and not a trader, look for larger setups to unfold…Its amazing that ex US countries experiences deflation with near zero percent rates, or is it ? Time for FED to rethink their strategy, when you cant make it with no interest expenditure what happens when rates suddenly rise significanly. Point is the inflation Numbers are all phony. And politicians only talk for their sick mother, the bureaucracy, themselves. The longer they all lack introspection enough to som their spenning the larger the hit when private sector Oozes passed them. Swamp time is running thin.

          • fionamargaret says:

            Thanks Fotis…more interesting work…..now let’s see if oil can go to 83.
            Lovely baby…more cleverness….x

        • fionamargaret says:

          Tore, I do have oil going to 83….

  18. torehund says:

    Considering oil; looked at Exxon and after a bottom in 2015/2016 it made a pyramid x wave with high tilt or positive price divergeneces. Macd on daily and weekly very bullish too.
    The latter say even more than spot oil alone, or confirms the pattern indicating a possibility for higher oil prices also near term. Cheasapeake, a large nat gas play isnt as convincing as oil…

  19. stan911 says:

    Looking for 2907 spx gap fill

  20. fionamargaret says:

    TVIX might be a good idea….

  21. scottycj1 says:

    b of the C wave down should be done

  22. jhjoyner says:

    Hopefully we get 5 nano waves from 2912 to complete micro 5. 2912 and 2914 looks similar to 2864 and 2866 setup.
    Just saying!

  23. interesting day, Last time i saw this tyoe of action.SP closed down 5 percent that day. Dow futures implied open plus 120 then drop 150 then up 50 is a sign of a sick Bull.whip sawing everyone long and short. Will see. not saying we drop 5 percent today but interesting a mini crash set up , will it follow thru IDK

  24. fxaprendiz says:

    SPX 2016 was probably the low for the day.
    I told you guys the SPX isn’t going anywhere fast before the FOMC meeting tomorrow.

  25. torehund says:

    Day of the dogs, there is hope for Venezuela and Greece, oil and shipping 🙂

  26. fxaprendiz says:

    SPX: close of the 2930 gap: check. Test of the 2942 high: still to be seen.
    Will move my 2917 long SL to BE on a move above 2930.

  27. gary61b says:

    ES, off of the 2917.75 low. I see a 1,2 and above 2934 again possible dividing 3. below 2924 shorts have got it.

  28. phil1247 says:

    CLX8

    straight up while above 71.89
    73.07 is next

    note beautiful successful tests of extension long fibs ( ovals )

    on the way up

    • phil1247 says:

      BONDS /ZB

      Theo and Tony Teo

      more free money given away this am in bonds

      hope you took it
      .. i am very skittish about shorting now

      • floyd drummer says:

        thx for the chart, …phil.

        …worked from the long side this morning. …also not liking the short side so much.

        any recollection on how ZB trades post a rate raise?

        • phil1247 says:

          correlation floyd? me ? lol

          • phil1247 says:

            but seriously floyd…..
            should the dollar spike after the rate hike
            i am looking to short it

            “sell into any dollar rally” is the new mantra

            “sell into any bond rally ” has probably run its course

            • phil1247 says:

              es not very interesting but 27.5 up series failed
              advantage bears …
              if long from lows gives way
              bears in charge

            • floyd drummer says:

              phil,

              …very cool spot for the lower anchor. …it makes a big difference! i had different ones, …mine worked, …though were sloppy on the target.
              DH mentions you should see participation, …and my addition would be if you don’t see participation at the important numbers, your anchors are wrong. …and you just might need to reevaluate your anchor selection. …again, it makes a big difference.
              thx

      • torehund says:

        Sometimes a short stride cant be short enough, on the long side. Tbt is in angry modus, i play it geared through shipping and some oil.

  29. Bud Fox says:

    Fiona, I am looking at Buy “F” as a Buy…Buying at 9.35 and again
    should there be any further weakness. But, do not think we break hard below 9.35…
    Thanks for you help….Bud

    • Bud Fox says:

      we did break that 9.35 level by pennies – 9.22 low…
      I am still Buliish on F. Fairly certain the we are making some
      critical price lows right here….Oh, I ma only sharing what I am doing,
      vs suggesting you follow me…thanks Tony

    • fionamargaret says:

      Bud, the permutation suggests F could go to 8, so be careful….

  30. I shouldn’t be surprised futures are up, but I am. Surprised 2923 was taken out. Now have to see if 2930 is taken out, if so new highs. Good luck all

  31. Trader Sal says:

    Tony,
    I was wrong. This is a freakin B wave up from early may low. This move up is almost finished if not already done. There are enough waves as it is after last ath. I do hope there is one more slightly higher high.

  32. torehund says:

    https://www.investing.com/indices/baltic-clean-tanker

    Abc down from march 2017 until now. Could be it as far as downturn is concerned. A petro bet.

  33. lml25 says:

    Mr.C,what effect,if any,does the merger of Randgold and Barrick have on other mining stocks?Thanks.

  34. purplember says:

    I’m counting Minute wave 5 as follows:
    micro 1 2908
    micro 2 2886
    micro 3 2940
    micro 4 2912

    one more wave up to complete min 5 / minor 3

  35. fxaprendiz says:

    SPX tactical 2915 long taken an hour ago with a 5 point SL.
    Expecting an eventual close of the 2930 gap and a test of the 2942 high, besides the SPX won’t pick up a defined direction until after the FOMC meeting on Wed afternoon.
    This is a trade for only a few days. Still expecting a bigger pullback to 2864-2802 in the next 2-3 weeks to finish current daily cycle.

  36. 2923 then 2890-0894 tomorrow
    See ya all tomorrow

  37. lml25 says:

    According to ZH,Randgold and Barrick (ABX)will merge.

  38. Jack Lad says:

    One day a cigar will fly through the air and hit me in the face…
    https://wavecount.blogspot.com/2018/09/s-500-index_24.html

  39. lunker1 says:

    Hi Tony how many waves do you see from 2864? Thx

  40. kvilia says:

    jobjas, any update on CL by any chance?

  41. H D says:

    GM Tony, all. Lots of SSEC conversation. It wasn’t but a few weeks ago we were using the markets optics to define who was winning the trade war. “China is the clear loser in any trade war with the US.” July 7. Those optics may get interesting over the next few weeks/ months IMO.

    • fotis2 says:

      Think we could see lots of volatility either way losing money is secondary to losing face in China interesting year ahead.

      • Jack kendo says:

        cycle:

        Donald Trump vs. Ronald Reagan
        (D)onald – (R)onald

        2017 – Trump: “Tax Cuts and Jobs Act”
        1986 – Reagan: “The Tax Reform Act of 1986”

        2018 – trade war with China – Donald Trump, 2018
        1987 – “Mr. Gorbachev – tear down this wall.” – Ronald Reagan, Berlin, 1987

        2018 – start of the collapsing of the communist China
        1987 – start of the collapsing of the Soviet Union

        2018 – market top
        1987 – market top

        2018 Oct – Dow Jones Ind. crashed 40% (check)
        1987 Oct – Dow Jones Ind. crashed 40%

        cheers!

      • H D says:

        Fotis. Charts will keep us objective. Optics are interesting though.

        • captbara says:

          China to win the trade wars?

          • torehund says:

            ..more than just trade..

          • H D says:

            I’m no economist and to be honest I don’t know what a WIN in this trade war means for Trump. To win do we have to have a trade surplus? So far it’s only translating to higher prices and that translates to lower sales and job losses, in time.

            We are better at charts and the original post, topic from Tony in July, was about the optics of the trade war and how the charts reflect who is winning.

            • kingfrogcash says:

              The phrase “Don’t fight the Fed” has been around a long time. It’s not Trump. It’s the Fed raising interest rates that will cause the charts to role over. It’s politics that will define the narrative. But it has always been about the Fed and interest rates.

          • ttsden says:

            China has won, by firing blanks. These tariffs merely speeder up their own massive restructuring in every aspect of their economy. Study their GDP & Economic Reports including econometric applications. They are streaks ahead of EU SA & other global technocrats, except USA. Before Japan was the greatest copy cat after ww2. Since 1988 China instituted fast track programs in every field , including corruption methodology. Since the new regime came into power they have introduced in their Constitution an everlasting Presidential position. President for life. To enable uninterruptible regime of anti corruption n progress. Explicitly for the long term Cohesive good of the country and all ethinc peoples but prominently Anti Islam-ification. Which every western country seems too indolent sensitive or whatever to implement.
            China is Resolutely working towards greater world power. Not , but when. They cannot wait. Their oppression in history by previous western & eastern powers will not let them regress nor rest. Tkanks

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