Weekend Report

Weekend Update

 Provided by the OEW Group

May 11, 2019

Tariff Man and volatility came back this week!  After a Sunday night tweet threatening additional tariffs on China, the SPX gapped down to 2898 on Monday.  Buyers drove price back up to 2937 by the close, but Tuesday saw another gap down and trend day falling to 2863 before a late day ramp into the close.  A small rally continued on Wednesday pushing the SPX near 2900.  Traders sold into the close and another gap down open occurred on Thursday with the SPX falling to 2836.  An oversold rally to 2876 led to another gap down on Friday to the week’s low of 2825.  The markets rallied again with news that the US is giving China 3-4 weeks to come to an agreement or face new tariffs.  The SPX rallied to 2891 and closed at 2882.

For the week, the SPX/Dow lost 2.2% while the NDX/NAS lost 3.2%.

Economic news was light this week with positive reports from JOLTS – Job Openings and negative reports from PPI, core CPI and CPI.

LONG TERM: Uptrend

spxwkly

In the US, the long-term count remains unchanged with the Super Cycle SC2 low in March 2009.  The Primary I high occurred in May 2015 and Primary II low in February 2016.  Major wave 1 high occurred in October 2018 and Major wave 2 low in December 2018.  Intermediate wave i of Major 3 is now underway.

MEDIUM TERM: Downtrend inflection point

spxdaily

This week DOW led the weakness with a confirmed downtrend, but was the only one of our four main US indices to do so.  We would normally expect at least SPX to follow, but until that happens, markets remain at an inflection point.  As a result, we updated the charts to show our primary and alternate counts on SPX and DOW respectively.  Our primary count remains a subdividing Minor 3 wave in progress, with Minute i at the recent high.  We can count 5 waves up from the March low to a slightly failed double top.  Notice the failure is on an intraday basis, but the close is equal.  Minute ii is ongoing and may have found bottom with a nice reversal on Friday.

indudaily

Our alternate count is a subdivided Minor 2 wave, with Minute a at the March low, an irregular Minute b at the April high and Minute c in progress.  If DOW can sustain the reversal and hold above March lows, then this alternate count may be eliminated.  There is another variation of this alternate that’s on our watch list.  We will report on it in the future if/when price dictates.

SHORT TERM

spxhourly

As mentioned, we’re counting Minute i from the 2722 March low as 5 waves up to the slightly failed intraday top.  This suggests the Minute i impulse subdivided into 5 Micro waves 2852>2788>2954>2901>2948.  From there, Minute ii is underway and can be counted as 7 waves down which gives a double 3 pattern into a divergent low, 2898>2937>2863>2898>2836>2876>2825.  This signals possibility of a significant rally to follow.  Pending resolution of the inflection point, this could be just another b wave or the beginning of Minute iii.

Short term support is at the 2858 and 2835 pivots, 2825 and 2800.  Resistance is at 2900 and the 2884 and 2929 pivots.  The SPX 60-minute chart shows a positive divergence at today’s low and resulted in a 50-point rally.  The daily chart still shows price as oversold.

FOREIGN MARKETS

Asian markets (using AAXJ as a proxy) lost 5.8%.

European markets (using FEZ as a proxy) lost 2.4%.

The DJ World index lost 2.7%, and the NYSE lost 1.9%.

COMMODITIES

Bonds are in an uptrend and gained 0.5%

Crude oil is in a downtrend and lost 0.4%

Gold is in a downtrend but gained 0.3%%

GBTC is in an uptrend and gained 17%.

The USD is in an uptrend but lost 0.1%.

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

Have a good week!

 

 

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797 Responses to Weekend Report

  1. Atlanta Federal Reserve GDP-Now at 1.6% and Jeff Gundlach talks about the probability of a Recession in the next 2 years…

    The odds of a Fed rate cut in the next 12 months are about 70%.

    The Fed is now “policy fluid” under Chairman Jerome Powell, who has repeatedly changed his comments about plans for interest-rate changes.

    The economy has been growing largely because of a debt scheme as the U.S. increases spending and fuels deficits beyond expansion in output.

    The bond market is “extremely exposed” to a downturn in the U.S. dollar, because some foreign buyers have been purchasing Treasuries without currency hedges.

    Liked by 1 person

  2. Silly charts and diagrams here. market move up for ONE REASON TODAY. Delaying the EU tariffs set for this Saturday!

    Like

  3. Asaraniti….

    EXAS now trading in the $94 handle and yet another +7% move since Monday.
    Terrific trading stock…. and if you want to learn more about what they’re doing, simply tune in today to their presentation at the BofA / Merrill Health Care Conference in Las Vegas, at 4PM Eastern.

    http://investor.exactsciences.com/investor-relations/events-and-presentations/event-details/2019/Bank-of-America-Merrill-Lynch-Health-Care-Conference/default.aspx

    Cheers!

    Like

    • Anthony Saraniti says:

      Blue…EXAS will have s moon shot when an earnings report will prove profitability in 2020, perhaps earlier. Tight now kind of expensive

      Like

      • M Wags says:

        Anthony, the Street is clearly not concerned about their Op-Ex or not being profitable right now.

        They have a ton of “levers” that they can push, and pull…as they spend money creating a BRAND with no other non-invasive screening competition.

        They’ll go profitable in 2021.

        Like

  4. fionamargaret says:

    TLT up to 155
    UUP up to 36
    GBTC (bitcoin) up to 24.95….yes, not a misprint…much higher outlook
    $WTIC up to 79….using UWT,.but it is choppy….use precautions….not since high school you say…..
    TVIX as needed

    Like

  5. fxaprendiz says:

    And the cause for so much choppiness is all the embedded B waves within the big wave 4.
    In case my chart posted yesterday wasn’t clear enough, this is my current count, starting from the Sep 2018 high:

    Primary 4, started @2942
    Intermediate B, started @2334
    Minor B, started @2959
    Minute B, started @2798

    So instead of being in the middle of a 3 of 3 up, we are in the middle of a bunch of BS within a complex Primary degree w4. Hence all the bouncing and apparently random moves.

    Once this Minute wave B is done things should go in a little more straight lines again, as the C waves start to unravel.

    Like

    • fxaprendiz says:

      Should read “in the middle of a bunch of Bs” as in B waves.
      Autocorrect such a pain sometimes

      Like

      • phil1247 says:

        no you were right the first time
        its BS as in bull sheet
        very tricky trading now without a larger extension
        as we had on the way up to the peak …
        the only reason i am messing with es / spx now is because the swings are large

        Liked by 1 person

        • fxaprendiz says:

          Actually I thought you’d like this environment better, Phil.
          With all the quick ups and downs your system is better equipped to capture all those points on both sides.

          Like

        • fxaprendiz says:

          Actually I thought you’d like this environment better, Phil.
          With all the quick ups and downs your system is better equipped to capture all those points on both sides.

          Like

          • phil1247 says:

            its a mixed bag fx
            yes you get a lot of points but you have to work for it

            on the way up you had daily extensions
            here they are intra day so they dont last long
            you can see that by the massive overlapping each day

            bottom line
            i liked it better when it was straight up 🙂
            straight down would be fine also if the coming C wave allows it

            Liked by 2 people

    • phil1247 says:

      actually the chart was very clear
      some people dont understand that a pic is worth 1000 words
      those people like to criticize and talk
      but never post a chart

      Liked by 1 person

  6. xEVAx says:

    I don’t like the short below 2873-2884 and above 2835….

    Liked by 1 person

  7. fxaprendiz says:

    Chop chop it was indeed.
    Thankfully I count on my Harmonics to help me with direction clues in the mist of corrections.
    Expect some more days of chop with an up leaning, as the new daily cycle has just started with day 1 today, and you can’t start a new cycle with an immediate down under the lows.

    Liked by 2 people

  8. maxcherry12 says:

    looks like an ABC with “B” in progress
    and the great depression was not caused by Smoot Hawley the DOW had dropped 50% before it went into effect and Smoot Hawley only raised already high tariffs, the primary cause was the Gold Standard and the French using it as a weapon against the US in retaliation to the Dawes plan

    Liked by 2 people

  9. Thank you buy the dippers. Went long into the close yesterday. Took some heat. But they rallied it. I’m out with a profit , looking for a place to short

    Liked by 2 people

  10. lml25 says:

    It looks to me like the ECB gave Euro stocks an “infusion”–we either followed or did the same.Will it last,is the question.

    Like

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