Weekend update

REVIEW

The week started at SPX 2665. After a gap down opening on Monday the market hit SPX 2624. After that it rebounded, and continued to work its way higher for the rest of the week. Tuesday hit a high of SPX 2651, Wednesday SPX 2690, Thursday SPX 2709 and Friday SPX 2717. For the week the SPX/DOW gained 1.5%, and the NDX/NAZ gained 1.5%. On the economic front reports for the week were mixed. On the downtick: Case-Shiller, consumer confidence, ADP, pending home sales, Chicago PMI, plus the unemployment rate rose. On the uptick: new home sales, monthly payrolls, ISM, consumer sentiment, wholesale inventories and weekly jobless claims improved. Next week’s highlights: SOTU address and ISM services. Plus the ECRI continued to rebound for the third week in a row, after a low of -6.5%. Best to your week!

LONG TERM: 80% uptrend probability

As noted in previous weekend reports going back to September, we have been tracking several selected foreign markets. We had noted they had turned bearish well ahead of the US market. Then when the US market turned bearish in October they were all aligned. As the US market was selling off in December, for the worse December since 1931, these markets were displaying signs of being in their last bear market downtrend. In January some were confirming uptrends off that low. Now we have Australia, China, Hong Kong, Singapore and S. Korea all in confirmed uptrends. We concentrated on Asia for obvious reasons.

We have a data base of DOW weekly charts, labeled in OEW terms, going back to the year 1900. It has been a great reference over the years. I actually first did this work back in the early 1980’s. Recently we uncovered an interesting long term wave relationship. In recent times, between the end of one Primary III and the beginning of the next Primary III has been exactly 16 years. In example; 1933-1949, 1966-1982 and 2000-2016. The previous set, and we question the DOW data prior to 1921, was 1916-1933 – 17 years. There should no longer be any doubt we are in Primary III.

The weekly chart remains unchanged except for the update of a tentative green Major 2 to a standard black Major 2 labeling. That positive RSI divergence looks fairly compelling right now. A Super cycle wave 2 ended in 2009. Then a Primary I bull market lasted from 2009-2015. The Primary II bear market that followed was relatively short and bottomed in 2016. After that we had a five wave Major 1 bull market to 2018. And recently a Major 2 bear market from October – December 2018. An Intermediate wave i of Major wave III bull market should now be underway.

MEDIUM TERM: uptrend

We have been tracking five criteria to help us determine if the Xmas low was the bottom, or a retest of that low will be required. The five criteria were detailed in last weekends update. Currently four of the five criteria are positive: largest rally since bear market began, NDX/NAZ impulse wave, 14+% advance of the lows, and this week NYAD above 37%. The only factor left is an impulsive SPX/DOW. It looks impulsive, but it has not been quantified as five waves just yet – still three. This is the reason for the 80% probable long term uptrend.

The medium term uptrend was confirmed this week. As a result we have labeled the Xmas low at SPX 2347 as Major wave 2. This uptrend should be Minor wave 1 of an Intermediate wave i bull market. We have only labeled two waves thus far, with a third underway: 2520-2444-2717. This chart is where we are looking to quantify five waves in this uptrend.

One last note. We have been tracking the SOX index nearly from inception – 1994. We first wrote about this index on the blog in 2010: https://caldaro.wordpress.com/2010/12/02/sox-index-update/. It appears, yet again, a 2-year cycle low bottomed for the SOX in December 2018. Often this leads to an explosive move in this index to the upside, i.e. 2016-2018. Sometimes it doesn’t make much of a move at all, i.e. as noted on the chart in that writeup. In either case a 2-year cycle low for the Semi’s is often a good sign for growth stocks.

SHORT TERM

The short term count doesn’t look much different on the hourly chart from last week to this – except for higher prices. The reason, as we noted above, is that we have not been able to quantify more than three waves. We have been able to quantify the very short term movements on what we call the squiggle chart – first presented last weekend.

Just two new waves this week. The selloff to SPX 2624 on Monday, then the uptrend high at SPX 2717 on Friday. Thus far it looks like we have completed Minute waves i and ii, Micro waves 1 and 2, and Nano waves i, ii, iii and iv, with v underway. When Nano wave v (gray) concludes, it will also end Micro wave 3 (orange). Then we should see a sizeable pullback for Micro 4 before the SPX rallies to a higher high to complete Micro 5 and Minute iii (green). After that we should see even a larger pullback for Minute iv before the uptrend ends at higher highs to complete Minor wave 1.

Short term support is at the 2656 and 2632 pivots, with resistance at the 2731 and 2780 pivot. Short term momentum ended the week at neutral after putting in a negative divergence at the SPX 2717 high. Best to your trading the Rock Star FED speak week!

FOREIGN MARKETS

Asian market for the week were mostly higher and gained 0.6%.

European markets were mixed and gained 0.3%.

The DJ World index gained 1.3%, and the NYSE gained 1.7%.

COMMODITIES

Bonds continue to uptrend and gained 0.4%.

Crude remains in an uptrend and gained 2.9%.

Gold also remains in an uptrend and gained 1.9%.

Bitcoin is in a choppy uptrend but lost 3.3%.

The USD is in a downtrend and lost 0.2%.

NEXT WEEK

Monday: factory orders. Tuesday: ISM services. Wednesday: trade deficit. Thursday: weekly jobless claims and consumer credit. Friday: wholesale inventories. Plus there are five FED governor speeches and the State of the Union address.

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

Added four more charts to stock charts: CRON, DELL, EXAS and HYRE.

About tony caldaro

Investor
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444 Responses to Weekend update

  1. Number of Trading Days it took from the start of each Bear Market for the Nasdaq to erase a 20% decline…

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  2. Investor’s Intelligence Sentiment as of 2/5:

    Bulls: 48.6% vs 45.8%

    Bears: 20.6% vs 20.6%

    Correction Camp: 30.8% vs 33.6%

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  3. fxaprendiz says:

    Tony you told us to remind you when we see political posts so you can take care of it. Don’t the last 2 posts by Gary Leibowitz qualify as such for deletion?

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  4. Jack Lad says:

    S&P 500 Index – the long and the short of it…
    https://wavecount.blogspot.com/2019/02/s-500-index.html

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  5. gary61b says:

    ES 60 minute chart showing the largest 50 limit orders at price, as of this pic in time. and what is the markets function… to facilitate orders. real heavy in blue above price. https://gyazo.com/fd81843b3d6738a1d06b2d06cac9f238

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    • phil1247 says:

      does that mean they are stop loss buy orders above the market ?

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      • gary61b says:

        Phil, Limit orders, It does not matter if they are buy or sell. the market does both..lol

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        • phil1247 says:

          how does knowing this help you
          if you dont know if they are to buy or sell?

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          • gary61b says:

            You know when there is a buyer of a contract at the same there is a seller its equal. its when the large volume of buyer or sellers at a price level that moves the market. If you will a pressure or attraction. when you zoom into the single price level that has a large order standing it will act as resistance or support first.

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          • gary61b says:

            That is what moves a market, buyer and sellers. that is why I have volume on my chart that is showing me the volume that was purchased at that price level, that interest or lack of interest determines support and resistance.

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          • phil1247 says:

            ok thanks

            gary
            the only thing that matters to me is 2742.5 es
            because until that is hit
            i am in limbo and cant move the chains forward
            for another set of downs and push stops up

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          • gary61b says:

            1597 tic chart of ES, case in point price is hanging out at the POC. Point of control it is the largest volume of price of this cluster of volume at a given time. until there is an attraction or pressure to move it away it hovers there. https://gyazo.com/d29b884da58711c5eb049c1d1409d95d

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  6. Gregory Ewanizky says:

    What was the other big event? Thanks

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