Weekend update

REVIEW

The week started at SPX 2930. After a gap down opening on Monday the market hit SPX 2913. Then it rallied to 2931 right after the FED raised rates on Wednesday. Immediately after that the SPX dropped to 2903 before a 2906 close. On Thursday the market gapped up and rallied to SPX 2927, before heading down in the afternoon. Friday the market hit SPX 2908, before ending the week at 2914. For the week the SPX/DOW lost 0.8%, and the NDX/NAZ gained 1.0%. On the economic front positive reports were even with negative ones. On the downtick: Case-Shiller, pending home sales, Chicago PMI, consumer sentiment, plus jobless claims rose. On the uptick: consumer confidence, new home sales, durable goods, and personal income/spending. Next week’s highlights: monthly payrolls, the ISMs and auto sales. Best to your week!

LONG TERM: uptrend inflection point

Last weekend we discussed why we feel this bull market is in its late stages. While our target all along has been SPX 3000+ by 2018+, and it still may get there, we’re not one to try and pick the exact top. We scale in when we think a bull market is underway, and scale out when we think it is close to ending.

Since the low in early-April, Intermediate wave iv, the market has struggled to make new highs. It was not until August that the SPX made new highs, and September for the DOW. Typically this is a sign of a weakening trend and impending top. With four Intermediate waves already in the books, and this Intermediate wave v up entering its late stages, a bull market high may occur in the next few weeks/months.

MEDIUM TERM: uptrend

This Intermediate wave v uptrend began in early-April at SPX 2554. Minor waves 1 and 2 completed in June at SPX 2791 and SPX 2692 respectively. Minor wave 3 appears to have completed less than two weeks ago at SPX 2941. And, Minor wave 4, which could drop about 60-100 points, should be underway. Normal support is the previous 4th wave near the low 2860’s, and the 2858 pivot. Once Minor 4 concludes, Minor wave 5 should take the market to new highs to complete Int. v and the Major 1 bull market. After that we are expecting a short-lived, and moderate, bear market to unfold.

Supporting this potential scenario are the negative RSI/MACD divergences in several US indices. A negative divergence on the NYAD breadth. US sectors that look like they have already topped, i.e. NDX/NAZ and R2K. Foreign markets that have already turned down, 12 of the 14 we track, with 3 of them already in confirmed bear markets. It is quite odd that the US has been making new highs, while the rest of the world is heading lower.

SHORT TERM

The recent Minor wave 3 unfolded in five Minute waves: 2863-2802-2917-2864-2941. Notice the third wave was shorter than the first, which limited the upside potential for the fifth wave. If you review the entire uptrend you will observe pullbacks have ranged from 53 to 100+ points. With three of the five pullbacks around 50+ to 60+ points. This is why we expect Minor 4 to range from 60-100 points.

Also of note, the NDX/NAZ have confirmed downtrends. We believe the recent highs were the high for their bull market. However, some in our group prefer the count posted on the NDX charts, suggesting one more bull market uptrend. Either way these two indices are looking toppish as well. Short term support is at the 2884 and 2858 pivots, with resistance at the 2929 and 2995 pivots. Short term momentum ended the week around neutral. Best to your trading!

FOREIGN MARKETS

Asian markets were mostly higher on the week but gained only 0.1%.

European markets were mostly lower and lost 0.7%.

The DJ World index lost 0.7%, and the NYSE lost 1.2%.

COMMODITIES

Bonds continue to downtrend but gained 0.1%.

Crude is still in an uptrend and gained 3.5%.

Gold is in an uptrend too but lost 0.4%.

The USD remains in a downtrend but gained 0.8%.

NEXT WEEK

Monday: ISM and construction spending at 10am. Tuesday: auto sales. Wednesday: ADP and ISM services. Thursday: jobless claims and factory orders. Friday: monthly payrolls, the trade deficit and consumer credit.

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

About tony caldaro

Investor
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239 Responses to Weekend update

  1. Hi Tony, you might want to repeat your pivot points….they are damn good.

  2. fotis2 says:

    Unemployment at record lows, wage increases,Market booming, solid international confidence in the US and yet the media discussing spilled drinks LOL

  3. gary61b says:

    ES is in short extensions all the way down or not at all. https://gyazo.com/d22ede06192c9b57fe15500bc2070c7e

  4. kvilia says:

    Good call on CL inventory Phil!
    8ml build vs. 1.1 expected, and then boom – short squeeze to the target! I noticed that initial reaction on the inventory numbers has been opposite to the next move last few times.

  5. fotis2 says:

    DIIIIING!.He Who Waits Wins
    fotis2 says:
    September 12, 2018 at 7:09 am

    R/R=1:2
    https://invst.ly/8l78b

    https://invst.ly/8s4f-

    • kvilia says:

      Good call, Fotis! Now a pullback and run to the top of the hill until Fed is done. I think 90-95?

      • fotis2 says:

        Tx W. I’m out now don’t have a pattern to count further upside although there is a gap at 90s CL is very tricky at the best of times the moment you think you’ve worked it out is when it turns and tears a chunk out..

    • Lee x says:

      Good call fotis and well done

  6. phil1247 says:

    kvilia

    CL got within 7 cents of 76.97 target

    how badly do you want that last 7 cents ?
    close enough for rouges
    i am out of all longs now

    see ya!

  7. Page says:

    This rally will also fade.

  8. phil1247 says:

    kvilia

    CL straight up
    ‘ hope you got on board

    was the inventory number bullish or bearish ??
    i STILL dont know

  9. Pure perfection! 10 year target 3.32, US Dollar 96.05, ESZ18 2,949.50

    ALL look to hit around the same time. All should fail to exceed that target. Exciting times coming. A BIG drop is more than possible now. And the bullish crowd questioned this whole run recently? Enjoy it while you can.

  10. hey guys has the spx cup and handle pattern on the hourly that started from 9/21 until today triggered? because we surpassed the 10/1 high today. or do we still need to pass 9/21 high for it to trigger?

  11. phil1247 says:

    floyd

    hope you took profits on bond shorts a bit ago at target
    almost impossible to go down much more right now

    • phil1247 says:

      the bounce stopped at 38 % of ext short
      if thats all there is … lower targets will be seen quickly
      thinking this is wave 3 of 5 down now

      • phil1247 says:

        39.73 next target for TBT

        • fionamargaret says:

          TBT is now in a sequence to 51..

          • fionamargaret says:

            UWT is still up to 57

            • fionamargaret says:

              I give the sequence to show you don’t need to sell every few hours, but I shall get on my high horse to suggest perhaps credit where credit is due…occasionally…so oil has gone higher after hours…oil has been 83 from the beginning, and UWT to 57…should I be taking curtain calls…
              Actually a really interesting thing about oil is the way the variables are setting up..after 83, since folks wonder what is next…I think we have a really good chance of going to the 20’s, but I am front running the actual figures…x

          • fionamargaret says:

            I mentioned TBT in a sequence to 51……after “almost impossible to go down much more”
            ….check the market’s reaction after my remark….

  12. mjtplayer says:

    Oh boy, potential break out in bond yields. A close here in the $115’s on TLT this Friday would be very bearish; even a daily close would be a major warning

  13. torehund says:

    Elevated oil AS a peace-keeper: Come November hopefully even the most stubborn neocon vil decipher is an economical suicide to attack Iran. Let revolutions be lefl out to play out internally not externally like the globalists wants✌️Trump might say,, I told you😝

  14. mcgcapital says:

    SPX obviously a sell into 2940 still, but don’t have much conviction it will go down very far at all. I remember when price action like we’ve had where it gaps up then spends the rest of the day going down to close flat was a bearish forecurser, but this is potentially the 3rd day in a row of that and it still hasn’t gone down. Also can’t remember the last time a bearish outside reversal day saw any follow through.. the day after is nearly always up when the TA textbook is down. Just shows how bubbly the US market is. Probably will set up another February style drop if it carries on without having proper breathers to reset

  15. torehund says:

    A little stop loss mayhem in Brent oil. These limited fall-outs are always excluded in the print as they violate the count. Modern thievery…

  16. lml25 says:

    GDX hit close to upper bb at 19.13(upper bb at 19.17),turned around (as usual)Support at 18.68 (20d).SPX?There hasn’t been REAL support or resistance lines for equities in a long time.BBs don’t reject SPX moves like other financial instruments.Pivots are momentary stop signs.Reversals,unpredictable.Mostly straight up for years.GDX at least,gives some clues you can somewhat rely on.GL all.

  17. gary61b says:

    ES, is in ext long all the way up or not at all t1,t2 hit now waiting t3 to be hit or not.
    and spx 60 minute is starting to show neg. D. https://gyazo.com/b886dfb3f533114511b5ce8f08cb4583

  18. phil1247 says:

    SPX….

    … dont get ” white line fever ” at the white line

    as warned the last time

  19. floyd drummer says:

    thx, …tony

    ….for your insight and for your forum

    best

  20. emuntrader says:

    A good Keynesian economic joke.

    Our friend the late Milton Friedman once told us a story of being in India in the 1960s and watching thousands of workers build a canal with shovels. Milton asked the lead engineer, Why don’t you have tractors to help build this canal? The engineer replied: “You don’t understand, Mr. Friedman, this canal is a jobs program to provide work for as many men as possible.” Milton responded with his classic wit, “Oh, I see. I thought you were trying to build a canal. If you really want to create jobs, then by all means give these men spoons, not shovels.”

  21. tony caldaro says:

    Okay guys enough with the politics

  22. quickrick38 says:

    Since there haven’t been very many wave counts for the S&P lately, I’m gonna stick my neck out and take a shot…noting that wave 4’s are notoriously difficult.

    Please note that my overall count is not the same as Tony’s nor jobjas’ counts. I have that we’ve completed only wave 3 of 3 not 5 of 3…so bear that in mind. For my current count I have the target at 2888 but no guarantees of course. Two other possibilities; If their count is correct we could see a deeper drop. On the other hand there is a small chance that we’re done and we head up from here. It won’t take long now to get the answer to the latter. Good luck all.

  23. quickrick38 says:

    Read back over most of the posts this am. 🙂 Starting to sound like the TV…well, no – not THAT bad. 🙂 It sounds like the politics is starting to get to everyone – indeed! I also noticed not as many S&P charts lately…yes folks we are here AGAIN with a typically ugly wave 4. Face it, wave 4’s are what they are…no point forcing the issue and losing money. Incidentally, I’ve been told by some really good traders that they never trade wave 4’s. Something to consider. Nevertheless, I’ve made a little money trading this wave 4. It has provided so many opportunities for shorting. In fact, I’ve shorted the same territory three times now. Of course, as with all wave 4’s I get out when I even think the drop might end soon. Those quick reversals will kill you.
    As for both the uncertainty of a typically ugly wave 4 and the ugly politics, relax folks, you are on one of the most calming financial web sites there is. It’s not ‘just’ Tony’s ‘more reliable than most’ wave counts…it’s also his incredible demeanor. And yes, I do really like that. So relax. Mr. Market will tell us when it is time to ‘get back in’.
    Good luck to all.

  24. Jack Lad says:

    My Physician prescribed Opioids to protect me from the outbreak of political diphtheria. Looks like an epidemic. Maybe some cannabis will also help me not to lose any more common sense. Now the crude oil chart is in my face and insisting that it is right… am I hallucinating?
    https://wavecount.blogspot.com/2018/10/crude-oil-us.html

    • torehund says:

      I think the current price of oil is a base level, and it needs to go beyond to attract investments in the sector. As the price stands of today it may fall to 40 all of a sudden, then new investments arent justified.

    • quickrick38 says:

      Jack, I’m not even sure we’ve completed wave 3 of 5 just yet. Take a good look at the internal wave structure of wave 5…especially after (iv), still more to come. Best of luck…that includes trying to deal with the politics of the day…insanity.

      • Jack Lad says:

        My view of the (v) of the 5 here…
        https://tinyurl.com/y93l6l2t
        But beware – this chart hypnotized me and made me sign a subscription to Time magazine !!!
        Now I worry that when it arrives I will also have also been hypnotized to actually read it !!!

        • torehund says:

          I think your 3 RD waves tend to be a bit short. Well EW is difficult and Tonys OEW is even more difficult, but keep on trying, exercise makes a master.

        • quickrick38 says:

          Jack, with a little re-labeling:

          • Jack Lad says:

            Yes. I see. I agree. Many thanks.
            I surmise that I was blinkered by an unconscious desire for geometric progression.

          • ttsden says:

            Quickrick38, You are the thinking man’s chartist. CL has taught me lesson in out of the box extrapolation. And I arrived at your wave 3 with 4-5 yet to come. And by extension it should get to the magic $80 zone. Thereafter a decline in alternation down to low $60’s .
            Any takers ?

            • fionamargaret says:

              Still have oil at 83….since the 60’s (price, not year)
              TBT to 51

            • ttsden says:

              QUICKRICK38, clarification please of our labeling : your 3 would be my w, then your 4-5 jibes with my x to y of big C , i.e within a huge multi year triangle. However your 4 vs my x would diverge as I am looking at $60 ish. From thereon my rising y will be a 3 wave uptrend to C at about $100, but not beyond. Thanks

  25. jobjas says:

    DOW may be in an ending diagonal

  26. H D says:

    I think most civilized people are still saying we don’t like rapists. Trump or Kavanaugh. Is it that hard to find a non rapist conservative?

    • fionamargaret says:

      Then there is this (if it opens without a subscription)…some background…

      https://www.telegraph.co.uk/news/my-battle-brett-kavanaugh-over-truth-ambrose-evans-pritchard/

    • purplember says:

      agree. sincerely BILL CLINTON

      • fionamargaret says:

        I didn’t think either candidates in the election were suitable.
        I too suggested surely there was someone out there who embraced good old fashioned values…someone who could represent you, your ideas, and the country at home and abroad with aplomb..

      • ewmarkets says:

        Frankly, people who would call ALL people of a certain type despicable animals are the ones who are truly despicable. And I would not even use the word “animal” on these people because it insults animals.

        • torehund says:

          Better with a unsuitable surgeon that knows his craft than a suitable surgeon that Dont know his craft. The Nice guy is not neccesarily the best qualified. Well let the soap opera continue😏

          • fionamargaret says:

            Actually Tore I posted the Telegraph article for all the legal questions it poses…I am sure I am not the only one interested …x

        • waterstim says:

          You watch the George Soros funded thugs scream and disrupt the hearings, and confront the pitiful Jeff Flake in the elevator. The same people who kneel for the National Anthem. They are all despicable thugs. I fought for this country. My father fought at Normandy, North Africa, and the Pacific for this country. They, and you, if the shoe fits, are despicable Godless, America-hating thugs.

          • ewmarkets says:

            You ARE aware that many who have fought for this country and many who have died for this country are/were Democrats, right? Are they despicable thugs too just because they have different belief system from you?

  27. phil1247 says:

    CLX18

    NOV crude will continue to go straight up
    while above 74.51 extension long support
    caution is advised until 75.54 can be broken above

    inventory number comes out tomorrow and will create volatility
    even though the actual number is not important …..
    just watch the clock and the chart ..
    .. not the tv

  28. Jack kendo says:

    cheers!

  29. emuntrader says:

    a close above 2913.98 will register a TD 9-13 on the $SPX today. The last TD 9-13 setup started selling a day early.
    $COMPQ is sitting on support for an ED.
    Today’s high in the $INDU now has a clear 5 wave structure up from 25754. It may or may not need one more small higher high.
    Still bearish on $SPX. I don’t think we see higher highs here if my preferred count is correct.

  30. fxaprendiz says:

    This is one of the cases when I say that patience pays. Many traders long the SPX would have gotten out with last 3 sessions stabs at the downside. Me, still long from 2907 and looking to take profits above 2950. New daily cycle seems to have started last Thursday so I wouldn’t be surprised if this whole week stays up as even bearish daily cycles start with at least a 4-7 up days move before rolling over. 3 trading days and counting. Target area still 2947-57, now with possibility of an overshot to 2965.

  31. phil1247 says:

    GOLD
    looks ready to attack 1238

    where A=C
    and test of extension short resistance both reside

  32. stcoleridge says:

    NDX uptrend signal looking likely after the close.

    • mcgcapital says:

      Is it (has it been) in a downtrend? Can’t see one on the weekly unless we also count downtends in April, June and July as they were similar magnitude pullbacks. Way this is acting it feels like the best chance since June of a more sizeable drop

      • stcoleridge says:

        OEW has a proprietary way of confirming uptrends/downtrends that aren’t particularly obvious. I’m interested in the near 2.5% outperformance vs the RUT this month. It’s about 4.5% since it’s ( RUT’s) high in late August. Looks like beginning of the month activity and expect at least half of that to be given back in the next week or so.

      • stcoleridge says:

        Sorry McG, to answer your question,
        Yes it has been in a downtrend for a couple of days.

        • mcgcapital says:

          US markets look like they’re going to be in a holding pattern now until the mid term elections to me. Could have a deeper pullback the closer we get to that. And doesn’t really feel like we’re going to shoot much higher again imminently.

          On the trend confirmations, the ones where OEW gets a downtrend confirmation on a 2% drop then we go up again look no different to me vs the pullbacks in an uptrend so do find it a bit confusing.

          I’d say with RUT, it’s very US centric in terms of earnings so has been heavily bid vs large caps which have more overseas exposure/trade dependency. That positioning has kind of been unwound the last few weeks as we’ve had some positive trade newsflow. Overall markets globally are still in rotation mode.. FTSE and Dax still not fully retraced a decline leg just as SPX hasn’t fully retraced a rally leg. Liquidity still looks to be a problem and probably gets worse with the Fed stepping it up.

          Interested to see whether at any points all markets can rally simultaneously or whether this is just going to continue until they all go down together. Last few weeks looked encouraging for an upside recoupling but it’s run out of steam before confirming anything

          • stcoleridge says:

            Second day in a row that the NDX has reversed back down. No uptrend confirmation today by the look of it.

  33. phil1247 says:

    DOLLAR

    is still a short
    even a rally to retest the BIG SHORT at 96
    wouldnt change anything
    this has been my story since june

    and im stickin to it 🙂

  34. gary61b says:

    ES if 2922 breaks then down we go. but its possible for a long up to 2937 just for an added distraction..

  35. fionamargaret says:

    UWT to 57
    $WTIC to 83
    Once we get to there I think we short oil and long gold…I shall tell you when I have the exact gold numbers….just a visualization at the moment…

    • mjtplayer says:

      Gold could be coming into a major low in Dec/Jan around year end. PM’s will avoid gold like the plague for performance chasing and window dressing purposes, potentially creating a capitulation low.

      Also, the Euro is teetering on a breakdown here. A surge in the Dollar will help put in a low for gold

      Stay patient….

      • fionamargaret says:

        The permutation is 950 for GLD, but would have to analyze the numbers once oil hits 83.
        Thanks MJT. x

        • Anonymous says:

          sorry 60 before 80 not even 83

          • fionamargaret says:

            ….there is resistance around 78/78.5 in $WTIC, but we might go through that today…
            The old algorithm was 60, but that changed around the hurricane to a new algorithm to 83, before going down if it doesn’t extend….x

            • Anonymous says:

              Cushing filling up 4 week in row now “Inventories at the Cushing, Oklahoma, site increased this week by 2.018 million barrels in the largest build since March” clues are there you just have to put it together.

          • ttsden says:

            Anonymous we are n the same song sheet but different sequence,
            mine says 80+ first then 60′ ish says my choir mistress.

  36. lml25 says:

    Gold up as Euro gets sold and DXY rises.If the +div on weekly GDX is the cause,would mean a lot more to go.PM instruments up when DXY is up HAS to be bullish…doesn’t it?We’ll find out.GL all.

  37. gary61b says:

    ES, I have a magnet at 2929.50 and .75, and Its inside Tony’s Pivot range on spx.

  38. phil1247 says:

    CLX18

    straight up above 74.61

    will they let you in this time ?
    or will it take off on another front run ?
    rogues initial rebuy at 75.33

  39. Anonymous says:

    Amazing how the most oil bears turned bullish lol classic capitulation I remember a year ago analyst swore we won’t see oil above 50$ in their lifetime/ now I hear calls to 100$…of course they will justify it by some chart and count and known ” news” Iran sanctions /Venezuela hmmm what about Russia production just broke a record? what about IRAQ and LIBYA back pumping like tomorrow? here is another for SA and Kuwait will start 500K BBL a day shared fields that stopped production in 2014 and 2015…and can go on and on here in the US we are pumping 11 million a day wink wink Iran can and will sell their oil in black market they can simply transfer to IRAQ and Turkey..when cushing start filling up ( happening as we speak) 70$ will look like a pipe dream…so much oil out there that in Texas is selling for 18$ below spot….NG picture even worse did you know waha hub gas prices touched 0.61 cents in Sep/25/2018 google it 🙂 when oil crash thru 60 level I’ll post again 🙂

  40. phil1247 says:

    es longs and shorts failing since the high = choprama
    have fun …

  41. mcgcapital says:

    FTSE failed at 7560 so still another lower high, and broken 7480-90 support down conclusively now. Trend is down, not saying it fully retraces the rally of the last few weeks but the possibility has opened up until we see some supportive price action.. 7440, 7380, 7300 pivots between here and the lows. Back above 7500 and immediate downside probably averted

    • floyd drummer says:

      mcg,

      do you trade ES (SPX) as well as the FTSE?

      • mcgcapital says:

        Yes but not everyday, FTSE is my primary market. Find SPX too frustrating to trade everyday as there are frequent periods with literally zero volatility intraday. Have that as bearish under 2940 for now… still waiting for a rally leg to fully retrace on it otherwise it just carries on with the choppy higher highs and lows, and probably finds support between 2870-2900. So under 2860s would get interesting.. full retrace of rally leg and losing the breakout above Jan highs

        • floyd drummer says:

          curious, …do you trade just London, ..or New York as well?
          …if yes on NY, …do you stop trading with the London close? …or do you trade through to the NY close?

          it is a very different trade depending upon the clock.

          • mcgcapital says:

            I tend to go to bed around 1.30am and up around 7-7.30am in the week and monitor what’s going on all day. Bulk of my trades are in London cash hours, so 8am to 4.30pm. New York closes at 9pm here. The spread is much wider between 9pm and 7am, so I don’t usually initiate new positions then unless there’s a reason like something newsflow driven and a price gap. I tend to find that the market is much more balanced pre US open, nice for trading both directions 8am until 2.30pm. Then after Wall Street opens it often trends.. either dip on the open for 10-30 mins then rally all day, or pop higher and sell off. There’s just less opportunities to enter and exit generally when the US is open. I’m not sure why that would be, but just what I’ve observed. Probably more participants shorting volatility and happy to pin price for long periods. So usually stop entering trades at London’s close, but depends on whether the US market is moving between 5pm-9pm

            • floyd drummer says:

              ” I tend to find that the market is much more balanced pre US open, nice for trading both directions”
              …my best time to trade. …much cleaner than NY.
              …except an hour or so before the NY opening.

              i have traded all hours on the ES, …obviously, it trades very differently, …and it seems with a different purpose for each time period.
              i tend to trade a bit differently then according to where i am on the clock. …some risks might be ok in London, …but not in asia or NY.
              …interesting to hear other perspectives.

              “The spread is much wider between 9pm and 7am,” …on the ES?

              • mcgcapital says:

                I trade with IG on their spreadbetting platform. They make cash equivalent prices 24/7, so there’s no ES, just an implied SPX price which I assume follows ES out of hours anyway. Spread on that is 0.4 points in hours, 0.6 out of hours, and 1.5 when ES is closed between 9.15pm-11pm London time. FTSE is 4 points overnight vs 1 point in hours.. that makes a big difference when I’m using 10-15 stop so can’t day trade it overnight

  42. CampFreddie says:

    Ftse-100 still looks like it is setting up to break sharply higher, and I am still expecting 8000+ by year end and I am adding here @7463.7 Aimho Glta.
    (Currently positioned Long Ftse-100@ 7276 – Dax@11949 – HSI@86261- Stops trailed and locking in gains)

  43. fotis2 says:

    EUR/USD Last chance long for IHS close bellow 1.15 retest of lows likely after that 1.06 coming your way.Who’s laughing now?
    https://invst.ly/8rjec

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