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

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…

  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%

  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?

  4. 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

    • phil1247 says:

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

      • gary61b says:

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

        • phil1247 says:

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

          • 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.

            • 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.

  5. Gregory Ewanizky says:

    What was the other big event? Thanks

  6. riderbobo says:

    Does anyone know why the semis are up so strongly today?

    Company-specific?
    Industry data/news?

  7. fionamargaret says:

    UGAZ
    FAS
    TVIX
    ERX

  8. scottycj1 says:

    Seems almost everyone is looking higher……a LOT of
    complacency here as the Old Newbie would say

  9. ATM, we’re down 4 points on the /ES.
    0.14%
    Dips are being bought.
    You may need to copy/paste this irrationality into a notepad document and repost when we hit 2800, Gary.

    (when clicking POST COMMENT, 2 points down. 0.07%)

  10. CampFreddie says:

    All still Cool for the Bulls, Shorting or closing of longs not required. Aimho Glta.
    Es futz 5 x min cont

  11. only way i know how to count this is that was an A down in B up to fail around 2741 then down big. Agree with Phill if over 2741 on our way to 2780. so we shall see shortly i suppose

  12. johnnymagicmoney says:

    Still a BTFD market……buyers see a small drop as a great opportunity….more and more tech stocks hitting all time highs. Doesn’t seem like it wants to go down…..see it moving to 2800 range now…..we could be seeing another V

  13. gary61b says:

    ES headed to possible pivot above the 2724 level and make it all good again. or this consolidation just sucks to trade at the moment.

  14. travis01 says:

    2724 bounced twice to the tick

  15. lunker1 says:

    Tony -D on the 60?

  16. mcgcapital says:

    FTSE I’m heavy short again now.. basically 7200 is the limit for the bear, below there and this is likely just a retrace. Needs to break 7070-7110 area to confirm. Above 7200 I would have to be bullish until proven otherwise

    • If Mohammed took the effort to push the mountain this far I don’t see why he would not use the apparently trivial effort it would take him to push it with one finger to 2775-2780+ because the real drama will be at 2800-2820.

      The only issue is time.

      Okay. I’m using the Mohamed and the mountain metaphor, and not pushing religion (just so the church-goers understand 🙂 ).

      Somehow I don’t think the market has a “let’s oblige shorts” rule in effect all the time. That would defeat its purpose — which is to annoy everybody. Call it Leibowitzopathy. 🙂

      • mcgcapital says:

        FTSE has already done the equivalent retrace which is why it’s a low risk swing short entry.. tomorrow will tell, Bank of England meeting and needs to break 7200 to turn things positive

  17. phil1247 says:

    es

    2743 then 2751 targets

    bull above 2728
    2724 extension long support .. red flag if broken

  18. Good morning all. Interesting trading in the overnight session. There was an old anchor at /ES 2716 that this algorithm attached itself to….after the fact? You can think of this as a new extension long setup…but might be playing semantics here. It’s not really part of this set up and that’s why I often state, knowing what anchors to use is an art and a science. If it trades and it defends, you have to use it until the setup breaks.

    Anyway, as you can see in the chart, if we use the low anchor at 2716 and yesterday’s high as the high anchor, a 61.8% long at 2724.31 was tested and defended to the tick. As long as /ES stays above 2724.31, the target for this set up is the profit target at /ES 2742.88. Conversely, if /ES trades below 2724.31, I expect additional decline to the next 50% long setup.

    Bottom line /ES 2724.31…bullish above and bearish below.

    • Thanks, ASA.
      Interestingly, there’s nothing on my charts at the /ES 2724 level.
      It is either in no-man’s land (away from moving averages; BB) on some timeframes or spiking through the 40pma and BB on other timeframes.
      Therefore, “to the tick” hit indicates that someone’s watching the ext fib DH levels. 😀

  19. I appreciate Tony’s views, always good guidance..btw, did anyone see these STATS from OddSTATS on Twitter…wow.

    OH, HELLO BULLS

    17 of the first 23 $SPX trading days of 2019 have been positive.

    That (or better) hasn’t happened since 1976.

    Want to know how every year did (since 1923) with at least 17 positive days out of the first 23?

    Sorry, bears.

  20. vipulm555 (buy the fear) - Risk On says:

    Bought dips with 20 points today

    • fionamargaret says:

    • fionamargaret says:

      This work by Mahler has been recorded by Bernstein, von Karajan and others, but no recording beats this one by Klemperer in my opinion.
      Christa Ludwig and Fritz Wunderlich are outstanding, made all the more poignant with the death of Wunderlich a few months later.
      The fact that Klemperer bears a passing resemblance to my father is purely coincidental..x

  21. Trader Sal says:

    Tony, If todays high on es holds then we could be headed to 2370s. This is a significant level.

  22. travis01 says:

    Ended the day on a 38% line. Does anyone ever trade off of SOTU addresses? I’m feeling a pullback is due but would assume positive spins tonight and buyers tomorrow. Just wondering

  23. Anthony Saraniti says:

    Good evening all. Just saw Phil’s chart and I am in agreement with him. DH is using a slightly different low anchor so I have the 50% long at /ES 2707.75. It’s just a bit more conservative… I will keep both setups in mind tomorrow.

    Currently/ES is again trading in no mans land (getting to sound like a broken record please no off color remarks…LOL), in between a long profit target at 2751 and a 50% long at 2707.75.

    This time I slightly favor a pullback for a number of reasons:
    1. Trading around Tony’s pivot.
    2. Looks like a double top or dial “M” for murder.
    3. Looks like a 5 wave pattern may have completed. So a 50% pullback of this 5 wave pattern could materialize.
    4. /ES hasn’t tested of a larger 50% measured move long recently.
    5. This afternoons pullback broke a small extension long.
    6. Tony’s 10 minute chart looks like micro 3 it’s close to completing if it hasn’t done so already.

    Bottom line /ES 2700.67 bullish above and bearish below. Trade the tape you get, not what you hope for.

    • Anthony Saraniti says:

      Forgot #7 /VX May have found temp, minor support at $15.95 and has started a counter trend rally which is bearish for stocks, at least on a short term basis. If /VX rallies to it’s 50% short at $16.93, I expect /ES to test it’s 50% long or perhaps a Phil 38 special. DH chart my analysis?

  24. phil1247 says:

    SPX
    ….. WAVE 3 = WAVE 1 at 2942

    123 is abc…..
    until it isnt

    pushing the boll band up
    embedded stochastics

    its 3 of 3 … till it isnt

    • phil1247 says:

      2 hour chart

      straight up above 2699 SPX

    • gary61b says:

      Phil, No guessing. Our Main Man Tony, has 1 and 2 already showing and waiting on wave 3 to end. Don’t put your hand over the nail when Tony’s swinging the hammer, your going to get hammered. lol. Just kidding.

      • phil1247 says:

        i understand tonys count gary
        even tho i am an oew novice

        but i see 2677 spx as a complete wave
        so to me this is either wave 1 or wave a

        so either way i am looking for all time highs with a=c or 1=3
        i actually think we will burst thru the high and reach 1.618 level
        but the extension will have to hold at 2699 spx

        until Ms market tells me this is wrong
        its my story and im stickin to it

    • purplember says:

      phil your minor 2 looks too shallow. But what the heck do i know…

  25. Tony, ANyway Micro 3 could be at 2672 micro 4 2624 and now in micro 5 up to 2788?

  26. johnnymagicmoney says:

    I’m thinking we need to put in a higher high right up to the 200 day and create some neg divergence before the pullback

  27. cj32 says:

    Cr to CBZ

    • travis01 says:

      I realize you have to monitor and adjust, but this guy adjusts 180 degrees three times a week on long term outlooks.

      • cj32 says:

        FWIW, since Jan 18th, he is no longer looking for a deep correction, hence bullish. He has been bullish since Mar 2009 Lows in a secular bull market.

      • scottycj1 says:

        Your right, Travis ….but EW is like many other ways to trade….subject to change and whipsaw.
        There are always 4 or 5 different “Counts” floating around. All with a reason while they should have the right one. It is not an exact science ……There are too many computers pushing things around with billions at their disposal……thats what your fighting against.
        The markets are going where the computers push them. Thats what your up against.

  28. lml25 says:

    Al Brooks Thinks a 50% Retrace is Coming
    “After an early trading range, yesterday entered a Small Pullback Bull Trend. Furthermore, Friday was a pause after a 2-day breakout. The odds favor at least a 1 – 2 day rally from there.

    But, the daily chart is in a buy climax. In addition, the Emini is above the December 12 crash high. This is therefore the sell zone. Consequently, the Emini’s month-long rally will probably end this week.

    Since the rally was strong, the bulls will probably buy a 2 – 3 week, 50% selloff. There is support around the February 2018 low and 2,500. The odds favor the pullback starting either this week or next. The first target is the 2,600 – 2,650 trading range from 2 weeks ago.

    Less likely, this rally will continue up to the October – December triple top without much of a pullback.

    Overnight Emini Globex Trading
    The Emini is up 6 points in the Globex session. If there is a small gap up, it will probably close in the 1st hour. The huge bull bar at the end of the day was climactic. That increases the odds of a trading range forming early today.

    After any relentless trend, like yesterday, there is a 75% chance of a 2-hour trading range that starts by the end of the 2nd hour. But, there is a 50% chance of follow-through buying in the 1st 2 hours. Even if the bulls buy early, there is only a 25% chance of a 2nd big bull day.

    Last week was the 6th consecutive bull bar on the weekly chart. That is unusual. Therefore, it would be even more unusual for this week to be a 7th bull bar. Consequently, despite yesterday’s rally, there is at least a 50% chance that Friday will close below yesterday’s open. That would create a bear body on the weekly chart.”

    • johnnymagicmoney says:

      Boeing looks like an exhaustion gap if I’ve ever seen one…………..40% move from low……………awesome company but come on

      • Probably going to gap up over the crucial MA and head up to 2775 and give all the equally crucial people some heartburn. 🙂 That might be a point of max pain. But we’ll know soon either way.

        Sentiment seems to be bearish wherever I look.

  29. fionamargaret says:

    UWT (long oil) up to 20….check your charts…stop
    UGAZ…trying it here…bid filled…if it works, quite a bit higher…stop…x

    • fionamargaret says:

      “Contrariwise” continued Tweedledee, if it was so, it might be, and if it were so , it would be, but as it isn’t, it ain’t” That’s logic.

  30. well is it a gap fill and 1 more attempt at a rally? Will soon see

  31. Stocks have been up sharply past several weeks, based on the hugely accepted inference that the FED (Jerome Powell) “pivoted” in his plan to unwind the last 10 years of Quantitative Easing

    Watch here, at 6:15, Former Fed Gov Richard Fisher clearly states that Chairman Powell never said that.

    How these two former Fed officials think Jay Powell is doing as Fed

    Hmm…

    • aahmichael says:

      We won’t have to wait long to find out what the deal is. The tell will be in how much QT the Fed does this month, beginning next Friday. They have enough maturing assets to do the full $50bn this month. If they do the whole thing, then it will be safe to conclude that nothing has changed.

      • FED should just keep “rolling off” the portfolio.

        I am convinced that the single biggest beneficiaries of QE has been officers of public companies. They can borrow money cheaply, buy back their own stock, bragg to the BOD what a great job they are doing. Then they get awarded 144 stock in lieu of the stock just bought back.

        And who gets hurt? Small investors.CD buyers, etc.
        This is a scam and Jim Cramer is the main clown.

        • The FED’s job is
          1) stable dollar
          2) help to maximize employment stats
          Not a FED job:
          1) prevent recessions.

          Let’s just get the recession started, and get it over with.
          Then we will still have a functioning bond market, which Japan has no longer, from doing this nonsense for decades.

        • travis01 says:

          You are not wrong. I left an $8b company last year and they were able to use their cash for buybacks, raised the stock 50%, and sold off huge chunks of stock as execs. My ceo was paid $8m annually in stock options. Another guy retired with 2m shares. I had a little myself but nothing like theirs obviously. All the while cutting costs by eliminating associates and lowering services. I work with F100s and this is pretty common.

  32. xEVAx says:

    I still think lock limit down is coming to an overpriced stock that may be near and dear to you as in we are done with 5 waves up from 1932…. If not we are in the last wave up from 2009…. It can top straight up in the next month or two in a blow off or a grinder ED ending in 2021…. When it ends I think that will be Tonys wave 1 with 2 to come, probably more realistic…. Of course that assumes the last low was P4, maybe….. Maybe just A and we are in B and C will complete a wave 2 complex flat….
    Simple chart, bulls are toast below 2780….

  33. lunker1 says:

    from 2697
    w2 2708/2699 9pts

    now w4?
    2738/2728 10pts
    5=1 is 2739

    watching for -D on 60

  34. scottycj1 says:

    NYAD cumulative went from—- 1151 positive net advances to 125 pos

  35. avkanoi says:

    Markets closing flat / negative. Best day to exit all stocks for me 🙂 huge downside awaiting

  36. johnnymagicmoney says:

    Russell just went red……bonds and gold up…..hmmmm

  37. SPX – looks toppy at 2737

    • Ya know, IF, a Bear market was to begin, or soon begin. I expect Mr C. will define it.
      Both in time and price. Mr C. is the best there is – when it comes to investing in the SP500 market, as well as other market…..I am Bud Fox

  38. johnnymagicmoney says:

    It’s not a bear market nor is this a bullmarket….it has turned into a BTFD market again. Machines are in and are buying every 1 point handle drop …..crazy

  39. mcgcapital says:

    FTSE breaking out… turns me longer term bullish if we see 7200. Needs to hold above 7070-7110 area on pullbacks. Odd with this fundamental backdrop but guess they don’t matter as long as the fed stay easy

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