Weekend update

REVIEW

The market started this holiday shortened week at SPX 2736. The market opened lower on Monday, traded down to SPX 2681, then gapped down on Tuesday carrying the market to SPX 2632 near the close. Wednesday was a gap up opening as the SPX rallied to 2671. Then during Friday’s half-day session the market gapped down, hit SPX 2631, then closed at 2633. For the week the SPX/DOW lost 4.10%, and the NDX/NAZ lost 4.65%. Economic reports for the week mostly lower. On the downtick: the NAHB, building permits, durable goods, consumer sentiment, plus jobless claims moved higher. On the uptick: housing starts, existing homes sales, and the leading indicators. Next week’s reports will be highlighted by Q3 GDP, the FOMC minutes and personal income/spending. Best to your week!

LONG TERM: downtrend probable

As we noted in our Wednesday update, the market took a turn for the worse this week deviating from the projected path we had been tracking for a couple of months. We were expecting a rally back to the SPX 2800’s. But the market gapped down on Monday, then never looked back as the SPX came within 1% of the October lows. As a result, the medium term downtrend that started after the bull market top has extended. We thought it had ended in October, but apparently that was only part of it. The ECRI continues to slip.

Longer term our count remains unchanged. Primary I ended in 2015, Primary II ended in early-2016, and Major wave 1 of Primary III just ended in the fall of 2018. Primary I was five Major waves up with many subdivisions. Major wave 1 was five Intermediate waves up with a subdividing Intermediate iii. Currently the market appears to be in a Major wave 2 bear market, with the first wave down still underway. When the bear market concludes a Major wave 3 bull market will be underway to new all time highs.

MEDIUM TERM: downtrend continues

As noted, we had thought the first downtrend of this bear market could have ended in October at SPX 2604. There was a good rally to SPX 2815 in November. But that rally has nearly been completely retraced. Meanwhile the NDX/NAZ have already made lower lows in November. It is likely the SPX/DOW will make lower lows before this downtrend ends. This brings us to an interesting situation.

When reviewing the longer term NAZ charts we find the daily MACD is already more oversold than the 2016 and 2008 lows, and is as oversold as it was in the year 2001. The weekly chart is already as oversold as 2016, but not as oversold as 2009 and 2001. This suggests there is already a lot of bearishness in the growth sector. Which suggests it could be a lot closer to a bear market low than many think. We have also noticed the NAZ has done 5 waves down from its September all-time high. While the other three indices have been moving in a-b-c’s. A good counter-rally, then a solid decline into the lower 6,000’s may be all that is required to end its bear market. Something to keep an eye on in the coming weeks.

In the SPX we are displaying this type of scenario on the daily chart. If the NAZ does follow the above scenario, then the SPX is also closer to the end of the bear market than most think. As a result, on the daily charts, we have posted an Intermediate wave A and B completed, with Intermediate wave C underway. The hourly chart has a less aggressive labeling.

SHORT TERM

The SPX hourly chart is the same count we are carrying on the DOW and NDX. Here the first decline to SPX 2604 is only Minor A of Int. A. The rally to SPX 2815 is Minor B. And Minor C of Intermediate wave A is currently underway. This count would suggest that Intermediate wave B will be an uptrend. And then a new downtrend for Int. C will end the bear market. It will be interesting to see how it all unfolds.

We don’t have much to add to the short term pattern. Three waves down to SPX 2604, three waves up to SPX 2815, and now three waves down to 2631 so far. Next logical support level appears to be around SPX 2554. Short term support is at the 2632 and 2594 pivots, with resistance at the 2656 and 2731 pivots. Short term momentum ended the week with a positive divergence. Best to your trading!

FOREIGN MARKETS

Asian markets were all lower on the week losing 1.4%.

Europeans markets were also all lower losing 1.7%.

The DJ World index lost 2.6%, and the NYSE lost 2.9%.

COMMODITIES

Bonds continue to uptrend but ended flat on the week.

Crude continues to downtrend and lost 11.0% on the week.

Gold continues to uptrend but ended flat as well.

The USD remains in an uptrend and gained 0.3%.

NEXT WEEK

Tuesday: Case-Shiller and consumer confidence. Wednesday: Q3 GDP and new homes sales. Thursday: personal income/spending, FOMC minutes, pending home sales, and weekly jobless claims. Friday: the Chicago PMI.

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

About tony caldaro

Investor
This entry was posted in weekend update and tagged , , , . Bookmark the permalink.

389 Responses to Weekend update

  1. Jack Lad says:

    This chart has been sent to wikileaks via fake email from Vladimir Putin so now it is no longer Top Secret and we all know who is to blame…
    https://wavecount.blogspot.com/2018/12/s-500-30th-nov-2018.html

  2. lunker1 says:

    ES Dec anchors 2626 -> 2684.25
    .50 entry 2655.25 (twice)

    targets
    1.236/1.272 2698/2700 hit
    1.618 2720 hit (support 2723)
    2.00 2743 hit
    2.618 2779

  3. Page says:

    All time high next … to be or not to be?

    • Anything is possible. Call it a truncated minor C c wave. Powell Put and nice stick save to possibly close the month positive

      Have no idea. wrong twice shorted from yesterdays close lost 10 SP points long to 2724 for 31 points short from 2725 lost 18 points. net 3 sp points today, but holding short. see what tomorrow brings.

      • There was a guy on CNBC 1:00 hour, Mark Zandi
        He said the FED has no intention of handing over any authority to the White House, or any body else (I.e. Jim Cramer?). The FED is in control.
        Zandi says the FED is still planning 5 rate increases between now and end of 2019.
        “Double talk” today by the FED was probably used to cover for exigencies e.g. the Trade War goes badly, in which case the FED will scale back dramatically the rate increases. But in that case, the market will already be substantially lower.

        I think quite a few “bag holders” were located today.
        Such is the nature of bear market rallies.

  4. phil1247 says:

    T ravis

    if thru 39.5 target look for 46

  5. fotis2 says:

    Gift daily 3BR trade there Mon Tues perfect pullback and of to the races but ya all knew that right?So we have another HWB what now brown cow?

  6. well, lets see if we can close at 2714

  7. lunker1 says:

    ES Dec anchors 2626 -> 2684.25
    .50 entry 2655.25 (twice)

    targets
    1.236/1.272 2698/2700 hit
    1.618 2720 hit
    2.00 2743
    2.618 2779

  8. Now this is odd…..,large traders are selling into that ramp…..see if this changes…

    https://gyazo.com/dff162d97e2c65c6f065c1b33514b367

    • fionamargaret says:

      …selling into strength, and buying VXX / TVIX as hedges into tariff talks…

      • fionamargaret says:

        …and short oil…DWT…. is doing very nicely

        • Frank Rizzo says:

          Was there news that made crude spike down at 2:30?

          • fionamargaret says:

            Frank, it was the 10th weekly rise on oil stockpiles (but that was announced in the morning). There was a bunch of resistance we barrelled through….good day for short oil…so far so good…short from 72….
            I am using TVIX to catch the moves…nice after Powell…but not a buy and hold.
            I thought we were going to get the thud first and then up…oh well…we will get our thud in due time…nice to have your company x

  9. Page says:

    This rally looks fishy perhaps mostly short covering. May be it will be sold by end of the day.

  10. Hey phil…that’s 2 Internet beers you owe me.

    asaraniti (@asaraniti) says:
    November 28, 2018 at 8:19 am
    make that about 12:00 noon for the Powell speech. 11:30 EU will announce stress test results.

    Take a look any just about any asset class around 12:00 noon +/- 30 minutes. Powell was scheduled to speak at 12:00 noon, the press gets a copy of the speech 30 minutes before …BUT IT IS SUPPOSED TO BE EMBARGOED TILL THE SPEECH.

    Look at the long term bonds, the $USD, equities.

    • phil1247 says:

      yes .. es moved
      i sold upro too soon but i got back in at 12:01
      missed the first 10 points up but still 20 points are good for me

      bonds were a nothing burger
      not much reaction

  11. Lee x says:

    There’s the pivot

    Heading your way Tony for the warm weekend

    • travis01 says:

      There is always a pivot, problem is that it was supposed to be a much lower pivot for 2 weeks now. But hey it’s a pivot

      • lunker1 says:

        Tony never said “supposed to be”

        • travis01 says:

          Obviously he is why I try to learn his methods, and obviously there is never a guarantee…but multiple straight wrong directions is a concern to me if I want to adopt a method to trade my money. How about “ is currently under way” does that make it sound better? Just an observation…I don’t have a better method myself or wouldn’t be here for many yrs. But this doesn’t help me make better decisions based on recent misses. And no I’m not salty, I am in cash

          • lunker1 says:

            I haven’t seen multiple straight wrong directions because I know that Tony isn’t concerned with short term counts/trades. Tony called 3000 along time ago and then he called for a 15% bear market. What happens in between is just guessing.

      • Lee x says:

        Sorry Travis
        Just ignore me like everyone else haha
        Just do what you do , nobody knows you better than you

        • travis01 says:

          Lol i dont ignore ya…one of my favs.
          Just squawking cause frustrated over the missed opps due to folllowing this dang blog too much lately. I do better on my own but I invest a crapload of time and energy into EW and a few other methods. Maybe its only meant to be helpful 60% of time. To me direction is more important than magnitude, and we seem to miss direction but eventually hit a pivot and call it good. Sometimes like flipping a damn coin. Flip flopping posters dont help either.

          • Lee x says:

            Those that yap the most know and do the least
            It’s science haha

            I’ve got people I listen to and people I fade and they’re pretty consistent

            These markets are not easy , I know that

            I over posted , see what you made me do 😉

          • H D says:

            travis, the pivots were 2656 and 2731. too wide for me personally but we did open this week at the 2656 pivot and rallied. Surely you see the value there. 2666 was HWB the weeks range yesterday and price again stayed above almost all day, 2683 is the SPX open this year. Gapped over today but came right back to it….. If you were watching closely,,, SPX pulled back exactly 10 handles from 10AM…. that’s 4 entry opportunities.

            I don’t do set ups very often anymore. Posted those for years though….

            Pivots are just one layer of probability. Add another layer.

            Be well amigo.

  12. Page says:

    Buy Buy Buy …. 😀

  13. lml25 says:

    Powell talking–a quick 120 Dow points up.

  14. fionamargaret says:

    $WTIC (oil) down to 34
    DWT up to 24.25
    TVIX
    Individual stocks given most days ….scroll back…or ask me

  15. Tonight’s headline
    Dow closes up 500 points after Fed changes tone under pressure from Trump.
    Closed short lets be up 50SP points cant fight it

  16. lunker1 says:

    Tony thanks for the updated SPX counts.
    r u considering 2631 is A of Int C?

  17. alexhartley1 says:

    Hi Tony is there still a reasonable chance that we’re in intermediate b on the S&P and we have further to go to the upside (2800+ perhaps) during Dec (taking advantage of typical bullish seasonality)? Thank you

  18. Jordi G says:

    Hi. I still have 7 invitations. If anyone is interested, here is the link:
    https://initiativeq.com/invite/Heu2JJA6Q

  19. mcgcapital says:

    Said it before but the best part of the rallies during 2011, 2015 and 2016 (and Feb) corrections were off the lows, then it struggled the higher it went. This market struggles off the lows and the best part (or the bit that feels most bullish) is at the end. This could be the end of this retrace higher

  20. Mark Smith says:

    Recent gap down on DIA, SPY, etc. now filled with gap-up open. Will this morph into a gap-and-go? DIA now has the look of an island reversal, so no need to fill this morning’s gap, if bullish.

    • valunvstr says:

      Gaps gaps. Love this gaps. Morning gap will get filled. Just a matter of whether market comes down to get it and then head higher or if it goes right through it. High 2682

  21. torehund says:

    Markets eating last stop loss orders ?

  22. Lee x says:

    3 post limit

    Believe it or not you’re just not that interesting to have 4 or more.

    • allen kimble says:

      WoW! youre expecting a crash next week? delusion can be managed but not cured i guess lol

      • mcgcapital says:

        How did December 2014 and 2015 fit with your seasonality? Big event driven drops after OPEC and ECB meetings.. what if there’s no deal this weekend?

        • allen kimble says:

          MCGone- There will be a deal. If you have learned one thing over your mediocre investing(guess work)life, it should be to expect the opposite the masses believe. Most reports now are coming out that there will be a no deal or just a hand shake on some agreements. There will be a perceived major breakthrough this upcoming weekend. The SPX will be atleast 2815 or higher by 7th of December. Count on it.

          Seasonality works. Your constant bearishness is very bad for ones portfolio. I would change that view immediately. You got lucky in October, nothing more.

          Cheers,

          • mcgcapital says:

            Ha.. we’ll see what happens. But think they’re a long way apart still on most of the key issues. Wouldn’t surprise me to see Trump on one hand say he values the relationship with Xi, constructive meeting etc. Then after go ahead with tariffs increase anyway

            Xmas time is probably one of the only times seasonality does work and it’s because institutional minimise trading in late December. It’s just where it rallies from, seen big drawdowns before and the Santa rally doesn’t even retrace them

      • Bradley Hoffmockel says:

        Hey redragon, not sure your link is working. It’s not for me anyway.

        • reddragonleo says:

          Sorry… my hosting company must be having issues. I’m contacting them now. Try again later.

        • swamper1 says:

          Brad, don’t waste your time.

          • mcgcapital says:

            Bit harsh.. he’s sharing his analysis for free, you don’t have to agree with it. What have you ever posted? Don’t know what it is about this site but the people with the most to share are the ones that get attacked the most for no reason. Should just leave all the numpties with zero understanding about financial markets to it lol

          • Bradley Hoffmockel says:

            I personally like the false prints Leo shares. I’ve learned not to blow them off. I also like to hear rationals from both the bulls and bears. Helps me to keep open minded when my biases kick in. Finally there’s a lot to learn from many of the posters on this board ☺

  23. phil1247 says:

    lunker

    target almost hit at es 2698.25
    well 10 points of reward won out over 40 points of risk
    but i couldnt hold overnite with that ratio
    you still long from last nite ??

    ok back in the game again

  24. Good job bulls. Did what you needed to. Pushed it up 5 points last few minutes into the close yesterday and starting aroun 1 am started gappng up futures. Ball is in your court. Opening up near 2700. Fed speaks at 10. Assume we hang out at 2700 until then. Then either push thru and close up 50 sp points or drop to 2650. If over 2702, straight up to 2744 and see what happens there. Lots going on next 4 days. Fed, end of month, g20. Jus to list a few. Wish I would of waited to short til this morning instead of at the close.
    Best of luck everyone.

    • Trying….in my post above, I was trying to say the outcome of the G-20 meeting where China and US will try to come to an agreement, will be a market moving event. An agreement….markets rocket higher. No agreement a significant pullback. Between now and the G-20 meeting, equity markets will move secondary to news announcements. To give a shout out to Phil….yes, the markets could move, potentially significantly but capped by…..either a 50% long/ short or a 38 special…LOL.

      Therefore, IMHO, investment of new funds now is gambling not investing.

  25. torehund says:

    https://www.armstrongeconomics.com/world-news/climate/scientists-want-to-synthetically-create-a-volcanic-winter-are-they-just-nuts/

    ..they want it colder. Just remarkable that scientists works alongside volcanoes in the current trend of cooling. Well they are part of nature too😜 Amazing.

  26. vivelaamo says:

    No new low for spx is very healthy. Once Above the 200 daily ma it’s off to the races!

  27. ipman1893 says:

    https://initiativeq.com/invite/BVVtFoR6Q

    I got 7 invites more if anyone interested = )

  28. kvilia says:

    Get some Qs! Initiative Q:
    https://initiativeq.com/invite/rG3p7NyR7
    Running out of invitations.

    • fionamargaret says:

      Mitsuko Uchida plays and conducts Mozart in this piece….quite beautifully.

      Einstein said he practiced physics with his whole body to understand what connects matter to the universe, but for him to feel the connection he had to be the connection.
      Somehow this fits well here…..x

  29. One other thing to consider. Recent rallies of the lows have been fierce. 70 points up in 3 hours. This one is two days 51 points. Unless it can get over 2702 heading down and this is just an oversold bounce.

  30. phil1247 says:

    CL
    crude oil is straight down while below 52.96

    stochastics embedded still
    when it loses embed and breaks above ext short at 52.96

    then look for rally …. not before

  31. millswing says:

    I`ve got 10 new

    If you dodn`t sign up yet, her are some more invite`s

    Initiative Q is an attempt by ex-PayPal guys to create a new payment system instead of credit cards that were designed in the 1950s. The system uses its own currency, the Q, and to get people to start using the system once it’s ready they are allocating Qs for free to people that sign up now (the amount drops as more people join – so better to join early). Signing up is free and they only ask for your name and an email address. There’s nothing to lose but if this payment system becomes a world leading payment method your Qs can be worth a lot. If you missed getting bitcoin seven years ago, you wouldn’t want to miss this.
    Here is my invite link: https://initiativeq.com/invite/BM_dsyQ07
    This link will stop working once I’m out of invites. Let me know after you registered, because I need to verify you on my end.

  32. allen kimble says:

    Well! Well! Well! Look who is looking mighty smart right now? Yep..Allen Kimble!!!

    Last friday I said buy! I would say the consensus here was a crash and or at least a restest. I explained the seasonality etc. And people here tore me apart. I am owed an apology. Who will be first to give one to me?

    • 7dayyss says:

      Everything you two posted is true, but out of respect for Tony and his blog, we need to keep it civil. This guy comes around every year at this time spouting the same thing.
      Let’s not have the blog degenerate like a few years ago and have Tony shut it down again. He’s got more important things to worry about.

    • Tim Waters says:

      You are such a nice person. Congratulations!

    • stcoleridge says:

      James Hunt.

  33. phil1247 says:

    SPX …. Cave man analysis

    people looking for the market to plunge after friday
    just were not listening to Ms Market
    and were perhaps biased negatively

    even a cave man could see there was just no power to the down move
    it could not even reach the lower bollinger band

    look how powerful the intial move down in oct was ….
    getting outside the band and pushing the band down
    and if they cant take it down …….
    …. well you know what is going to happen 😉

    ergo i was only willing to hold token shorts over the weekend
    despite all the crash hoopla

  34. lunker1 says:

    ES Dec anchors 2626 -> 2684.25
    .50 entry 2655.25 (twice)

    targets
    1.236/1.272 2698/2700
    1.618 2720
    2.618 2779

    • phil1247 says:

      lunker … to me the long position in spx looks like 10 points of reward
      and 40 points of risk

      its a no brainer … no holding overnite
      i am still hoping for a spike up to target before 8 pm …..lol

Comments are closed.