Thanks goes to the OEW Group for Providing this weekend update!
This week saw the SPX/DOW/NAS/NDX all move higher. The SPX gapped up on Monday to open the week at 2849 and moved higher for the rest of the day. Tuesday saw a pullback from 2873 to 2859, then the rally continued with the SPX hitting 2885 early on Wednesday but fell to 2865 later in the day. Thursday saw consolidation between Wednesdays range. Friday the market moved higher to 2893 and closed there at the weeks high.
For the week, the SPX/Dow gained 2% and the NAS/NDX was up 2.7%.
On the economic front, we saw an uptick in the ISM Manufacturing Index, auto sales, truck sales and Nonfarm Payrolls. There were negative reports for retail sales, construction spending, durable order, ADP Employment Change, and ISM Non-Manufacturing Index.
Next week’s report will highlight factory orders, NFIB Small Business Optimism Index, JOLTS – job openings, CPI, PPI, the FOMC minutes, and the University of Michigan Sentiment Index.
LONG TERM: Uptrend
Most of the foreign indices we track had a strong week, with China, Germany and Greece showing the largest gains.
China SSEC up 5.0%
Greece ATG up 4.6%
German DAX up 4.2%
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 is now underway.
MEDIUM TERM: Uptrend
We’ve been tracking three high probability counts waiting for the markets to give direction, noting the divergence between the Dow and other major indices. This week gave us the answer as the Dow rallied to new recovery highs, the SPX continued higher, and the NAS/NDX continued to lead the way higher. Thus, we updated the charts aligning the Dow with the SPX wave count showing the Minor 1 top at 2817 with Minor 2 ending at 2722 with Minor 3 underway. We expect Minor 3 will extend higher to all time highs in the coming weeks.
We’ve noted the strength in the Nasdaq and Nasdaq 100 indices. Today, we’d like to highlight the strength of the Semiconductor Index. This is a key industry sector as it often leads the general market. The SOX topped in early 2018, well before the general markets top in late September/early October. We’ve been anticipating December as a possible 2 year cycle low and a tentative B wave completed. This week we got confirmation of that as SOX rallied to a new all-time high.
From the Minor 2 low at SPX 2722, we count a single trend rally to 2852 followed by an irregular B wave correction (2812>2860>2785). We are counting the high at 2852 as Minute i and the low at 2785 as Minute ii. The rally off the Minute ii low also appears to be subdividing into Micro waves as shown on the 60 minute SPX chart.
Short term support is at the 2884 and 2858 pivots, with resistance at the 2929 and 2995 pivots. The week ended with a negative divergence on the 60 minute SPX chart.
Asian markets were up as much as 5.0%.
European markets were up from 2.3 to 4.6%.
The DJ World index gained 2.1%, and the NYSE gained 1.8%.
Bonds are in an uptrend with the 10 year treasury losing 0.45%.
Crude remains in an uptrend and gained 4.9%.
Gold is in a downtrend and lost 0.2%.
Bitcoin is in an uptrend and gained 22.4%.
The USD is in a downtrend and lost 0.37%.
Best wishes to all