Weekend update

REVIEW

The week started at SPX 2707. After a dip to SPX 2699 on Monday the market rallied to an uptrend high of SPX 2725. On Tuesday a quiet open led to another uptrend high at SPX 2739. After that the market started to pullback. After dipping to SPX 2724 on Wednesday, it declined to 2687 on Thursday, and 2682 on Friday. Then the market rallied to SPX 2708 in the afternoon. For the week the SPX/DOW gained 0.15%, and the NDX/NAZ gained 0.55%. On the economic front the sparse reports were mostly negative. On the downtick: factory orders, ISM services, and consumer credit. On the uptick: both the trade deficit and weekly jobless claims improved. Next weeks reports will be highlighted by the CPI/PPI, industrial production and retail sales. The ECRI continues to rebound after hit a low of -6.5% about a month ago.

LONG TERM: uptrend 80% probability

We have been tracking and commenting about the foreign markets for the past several months. This week most made new uptrend highs before getting caught up in the US pullback. The Nifty (India) joined BVSP (Brazil) in its third wave up from their 2018 low. They are obviously slightly ahead of the rest of the financial world having bottomed early.

In the US the long term count remains unchanged. Super cycle SC2 low March 2009. Primary I high May 2015, and Primary II low February 2016. Major wave 1 high October 2018, Major wave 2 low December 2018. Intermediate wave i of Major 3 should be underway now.

MEDIUM TERM: uptrend

We have also been tracking five criteria to determine if this uptrend is a B wave rally, with a retest of the December low to follow. Or, the December low ended the bear market and this uptrend is the first of a new bull market. The five criteria we have been tracking: length of rally, wave structure SPX/DOW, wave structure NDX/NAZ, the percentage gain of the advance, and the NYSE percentage level of stocks above their 200 dma. Over the past few weeks 4 of the 5 have turned positive. The reason we have a long-term 80% uptrend (bull market) probability.

We are still waiting on the SPX/DOW to quantify five waves up from the December low. We now have four waves and a possible fifth wave rally underway from Friday’s low. Should the market continue to rally, and make new uptrend highs, that would seal the deal. If the SPX instead drops below 2520 before making new uptrend highs, the uptrend would be considered a three wave zigzag, and a retest of the lows would eventually follow.

SHORT TERM

For the past few weeks we have been posting what we have called a squiggle chart. It displays all the quantified smaller waves of this uptrend. It ran into a little turbulence on Friday, and in its place we post a simplified hourly chart of the SPX. This represents our quantified short term count. A rally above SPX 2708 would be a positive.

With the three day decline into the end of the week SPX 2739 now looks like it ended Minute iii right in the OEW 2731 pivot range. We had reported on that pivot being a potential short term top on Wednesday. The Thursday/Friday decline has quantified as a Minute wave iv. Now all the market has to do is get back to SPX 2739 and we have a quantified impulse wave. We noted the importance of SPX 2520 in the previous section.

Short term support is at SPX 2682 and the 2656 pivot, with resistance at the 2731 and 2780 pivots. Short term momentum formed a positive divergence at today’s low then ended the day nearly overbought. Best to your trading!

FOREIGN MARKETS

Asian markets were mixed on the week and gained 0.2%.

European markets were mixed as well but lost 0.8%.

The DJ World index lost 0.5%, and the NYSE lost 0.3%.

COMMODITIES

Bonds remain in an uptrend and gained 0.4%.

Crude remains in an uptrend as well but lost 4.6%.

Gold is also in an uptrend but lost 0.3%.

Bitcoin is in a downtrend and lost 0.7%.

The USD may be back in an uptrend and gained 1.2%.

NEXT WEEK

Wednesday: the CPI and budget deficit. Thursday: weekly jobless claims, retail sales, the PPI, and business inventories. Friday: industrial production, export/import prices, the NY FED, and business inventories.

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

Added the DJ Utilities to the Charts, and moved the VIX to the last page.

About tony caldaro

Investor
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671 Responses to Weekend update

  1. soulsurfer says:

    Thanks Tony! NAS/NDX support this count as well. NAS has 200% Fib-extensions for two wave degrees at around $7450; right at the 200d SMA 🙂 One more push up would set up nice – div on daily technicals to usher in next larger “back-up-the-truck” pullback. Trade safe folks.

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  2. geno0010 says:

    I clearly see 5 waves up from the low. A wave is complete now we head down in B

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  3. torehund says:

    Thanks Tony !
    The macd hock on weekly is needle sharp…..no more info needed 🙂

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  4. Very clear and concise Tony.
    Much appreciated. And thanks for including EXAS in your charting section! 🙂

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  5. Arthur Knopf says:

    SENTIMENT UPDATE: What, No More Happy Talk?
    http://sentimentsignals.blogspot.com

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  6. Thanks, Tony….wonderful analysis and a little different view than what I had, I see that overhead resistance at the 200 day and above that the “wall” at 2800….I would really like to see 2875 which you mentioned in one of your comments…andiamo!

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  7. 123 abc says:

    An excellent OEW weekend update, thank you Tony.
    Some observations from a traditional EW approach…

    In regards to the SPX index, Minute-iii is 1.618 times the length of Minute-i wave. A typical 23.6% or 38.2% Fibonacci retracement for Minute-iv would be around the 2656 or 2632 OEW pivot ranges. From then on, should Minute-v equal Minute-i wave, then the overall Minor-1 wave may end at the 2835 pivot range.

    However, the NAS index may suggest five Minute waves have already completed, and hence, Minor-1 is complete. This may suggest the final fifth Minute-v wave in the SPX may be short-lived. If not, then the NAS may eke out a potentially irregular b-wave high whilst the SPX completes its final Minute-v wave…

    SPX

    NAS

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  8. phil1247 says:

    asa

    update…. rasi at 899 now

    per tom…………………. its a GO!

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  9. Tony, Is it possible that the correction from Jan. 18 -23 was the minute iv? And the high 2738 was minute v?

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