Weekend Report

Weekend Update

Provided by the OEW Group

May 18, 2019

The week started with a large gap down of 41 points to open at SPX 2840 and sold off into lunchtime where the low for the week was made at 2801, before a bounce and then close at 2812. Tuesday gapped up and rose into lunch hitting 2853, then gave back some of those gains into the close finishing at 2834.  Wednesday gave a gap down opening of 14pts and hit 2815 within the first hour, from that point the market then rallied and managed to reach 2892 by Thursday lunchtime with no more than an 8pt pullback along the way, but the afternoon session saw some of those gains given back, hitting 2871 and closing at 2876.  Friday saw a gap down and hit 2854 within the first hour, then rallied to 2885 but gave back nearly all of those gains closing the week at 2860

For the week, the SPX/Dow lost 0.76% while the NDX/NAS lost 1.27%

Economic news this week had positive reports from Building Permits and Philadelphia FED Manufacturing Index and negative reports from Core Retails Sales and Export Price Index.

Next week, economic news comes from Existing Home Sales, FOMC Minutes, New Homes Sales and Core Durable Goods Orders.  In addition, on Monday at 7pm (ET) FED Chair Powell speaks.

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

spxdaily

This week the inflection point was resolved as the SPX, NAZ and NDX did indeed follow the DOW as expected with downtrend confirmations.  For all three of these indices, it’s the first downtrend since the Major 2 low in December.  After this week’s action, the count has become clearer with Minor 1 at the recent high after what looks like an ending diagonal Minute v that has been ongoing since early Feb.  Minor 1 started in late December at 2347 and took just over 4 months to complete, totalling 607pts.  Minor 2 has been underway for the past couple of weeks and made a low at 2801 on Monday.  This could be all of Minor 2 or just Minute a.  The DOW count remains unchanged with an irregular Minor 2 correction as posted last week for our alternate count.  Minor 1 top at the Feb high, Minute a at the March low, an irregular Minute b at the April high and Minute c in progress.  With all 4 indices now aligned, once Minor 2 completes, Minor 3 should carry the markets to new highs once again.

indudaily

 

SHORT TERM

spxhourly

As mentioned, we’re now counting Minute v of Minor 1 as an ending diagonal.  Since Minor 1 topped, Minor 2 has declined 5.2% which is sufficient to satisfy Minor wave degree correction.  Looks like last Friday’s rally turned out to be just another b wave of the ongoing correction from Minor 1 top.  From Monday’s low at 2801, we can count 3 small waves up, 2853>2815>2892, followed by choppy price action on Friday.  This has been the largest rally since Minor 2 began, but it fell short of clearing the 61.8% retracement level at 2896.  More price action is needed before feeling confident Minor 3 is underway.  If 2853 is overlapped before further upside, then the rally remains corrective and suggests Minor 2 may still be unfolding.

Short term support is at the 2858 and 2835 pivots.  Resistance is at 2884 and 2929 pivots.  The SPX 60-minute chart is approaching oversold territory with the daily chart neutral after hitting its most oversold reading this year on Monday.

FOREIGN MARKETS

Asian markets (using AAXJ as a proxy) lost 3.48%.

European markets (using FEZ as a proxy) gained 0.11%.

The DJ World index lost 0.85%, and the NYSE lost 1.02%.

COMMODITIES

Bonds are in an uptrend and gained 0.47%

Crude oil is in a downtrend and gained 1.96%

Gold is in a downtrend and lost 0. 91%

GBTC is in an uptrend and gained 13.02%.

The USD is in an uptrend and gained 0.72%.

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

Have a good week!

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443 Responses to Weekend Report

  1. Good morning all. Not surprised at the rally in the overnight session for 3 reasons:

    1. As I stated last night…the tight 61.8% extension broke, next target is a 50% daily short at /ES 2863.50 and we are coming close to that level.
    2. In corrections (bearish trend) /ES tends to move in 50% shorts….as opposed to extensions…..steady rallies with no major pullbacks, less volatility. Hence wider swings in corrections.
    3. Last night the 3 amigos, /ZB, /ZN and /VX were trading bearishly and far away from support, that is bullish for equities. Currently, all three are trading at support…./VX dipped broke 61.8% long…but that is normal for /VX, why?…..just happens, a trap the bears setup to the bulls? BTW, I erred last night when I stated …”potentially bearish for equities…should have read ….bullish for equities”.

    /ES is currently trading bullishly on the 15 MINUTE TREND .BUT is coming close to testing a DAILY 50% short at 2863.50, as I write this post. Next bullish target above is the corresponding 61.8% short at 2870.7. Conversely, if the short at 2863.50 is defended, I would expect to fill today’s gap (short dotted red line) and retest the 15 minute long setup…the levels are all close together. DH chart.

    Liked by 2 people

    • Finished my first cup of coffee…forgot to mention reason #4…for the rally. Yesterday afternoon, Trump announced an easing of “sanctions” against Huawei….. to help U.S. high tech corps. More importantly, this may be interpreted as an olive branch to China …not to escalate the trade war.

      Global Markets A “Sea Of Green” After Trump Temporarily Eases Huawei Restrictions.

      Like

      • chrisk44342 says:

        2835 is 61.8 long support and ’70 is bearish last stance until 2900. lots of cross currents. Summer trading. The easiest trade would be a break of 35, which probably means we won’t get it. https://invst.ly/auhan

        Like

        • Amazing how 2 great minds think alike..but I hope you are wrong as I want to scale into longs at lower levels….heck, I would be happy to see and settle for 2799 again….LOL

          asaraniti (@asaraniti) says:
          May 20, 2019 at 8:22 am
          OBSERVATION…/ES 2836 is the 61.8% LONG from last weeks low at 2799 and last weeks high. So far defending…lets see what happens at the open.

          Like

    • vixguru says:

      Thank you asaraniti. Great update!

      Like

  2. xEVAx says:

    Very short term count is invalidated with micro 1-4 overlap at about 25830ish, as long as the evenings high holds in the futures it’s still alive…..

    There is no overlap on SPX and it’s dirty, NDX is clearer, and it can be a little leading diagonal on the DOW or they will just be mixed but stay below 2873, can also do a C wave up to finish P2 up to 2900 before the elusive big down…..

    Liked by 1 person

    • xEVAx says:

      Gotta keep looking at the impulse down if you’re a Bear, keep in mind though the overlapping waves have to stop on the next decline otherwise it signals a possible c wave down for a possible bottom for 2….. And of course we still have the Schizo Trump Triangle count which would be an E wave that might get weird but still hit 2250 though it can truncate and hold the weekly 200 at 2417ish THEN start big V UP…..

      Like

  3. fionamargaret says:

    https://www.iris.xyz/

    Thanks Chris Kimble, JPM, Christine, OEW Group…and everyone.

    Like

  4. Hi all. Today went pretty much as I expected…when /ES defends 50% shorts, that is. Tonight’s setup is pretty similar to last night. With one exception and that is the 3 amigos don’t look as bullish as last night…potentially bearish for equities. There are 3 short setups. The first one like last night will probably break as Asia/Europe will want their fill. If so, /ES will continue to rally to the next 50% short. There are 2 profit targets of the short setups below. High probability is that there will be a counter trend rally off one of those 2 targets. DH chart.

    Bottom line…/ES 2999.56…bullish above and bearish below.

    Like

    • thower05 says:

      2899

      Liked by 4 people

    • lml25 says:

      IF Spx rallies over 2900 does that mean DH was wrong?After breaking 2853,what a great time to punish the shorts again.Absolutely no rhyme or reason to this market,except PPT is right around the corner when you least expect it.

      Like

      • Thank you thrower, yes, 2899. lml..there are only 2 large daily 61.8% measured move shorts between current trading levels and all time highs. If 2999 i is exceeded, that would be an amber warning sign for the bears….the only 61.8% short remaining from memory is 2909…break that and the short trend on all time frames is invalidated and the long is confirmed with a rally to all time highs would be expected.

        Like

  5. fionamargaret says:

    If you are long $WTIC using UWT, you would like to see 21.044….breakout…x

    Liked by 3 people

  6. gary61b says:

    Both Gold and Silver, I have in long term shorts… If gold stays below 1324, target @ 1264…. If silver stays below 16.015, target @ 13.029.

    Liked by 1 person

  7. lml25 says:

    Because of the overlap,I lightened up on SPX finally,but imho,there’s not any real kind of reaction to the drop below support.We’ll see if that number is any big deal or not in due time.

    Like

  8. Who says that news doesn’t drive share prices?

    EXAS releases early data on Pancreatic Cancer detection via liquid biopsy at Digestive Disease Week over the weekend.

    Half of all pancreatic patients are diagnosed in later stages when the 5-year median survival rate is only 3%.

    http://www.kake.com/story/40502478/exact-sciences-advances-pipeline-capabilities-with-mayo-clinic

    Stage 1: 79%
    Stage 2: 82%
    Stage 3: 94%
    Stage 4: 99%

    At a Specificity of 92%

    Like

    • phil1247 says:

      exas rally to 98.25 on NEWS
      was a gift to exit at short entry
      steve miller says
      take the money and run if you got it

      Like

    • Frank Gaggia, Jr. says:

      I’ve lost three friends to Pancreatic Cancer in the last two years, the latest in February. I also have one friend who, so far, has beat it. One report I saw said that by the time it causes any symptoms you’ve already had it for 20 years! It seems like this disease is on the rise, but maybe it’s just because I’m getting older? I hope the liquid biopsy works!

      Like

      • phil1247 says:

        frank
        these are wonderful technologies
        and hopefully will be helpful to patients in the future ….
        sorry to hear about your friends

        i am just looking at the stock price
        which is a totally different animal

        Like

      • Frank, the data is very early… but definitely promising.

        I’ve watched the Mayo Clinic and EXAS partnership over the last 10 years and their collaboration is gonna wind up coming up with a simple blood draw (called liquid biopsy) to detect early stage cancer for the Top 10 cancers. In their recent Q1 earnings call, they states that their goal is to come out with 1 liquid biopsy cancer test per year.

        Pancreatic cancer is very difficult to detect for a number of reasons…. one of which is the simple fact that the pancreas is deep inside the body. Moreover, there are roughly 8 different types of tumors when it comes to pancreatic cancer. Some are more likely to be benign, while others are more aggressive.

        Liquid Biopsy is the new frontier in diagnostics sector.

        It will not only be used for early detection, but also for monitoring reoccurrence via circulating tumor DNA (ctDNA) in plasma. This kind of a test has tremendous advantages (and lead times) over the typical standard of care which is to use periodic radiological scans. This is a $20 Billion dollar market alone!

        Like

        • It’s also interesting to note that the U.S. Preventative Services Task Force (USPSTF has just finalized their draft research plan for colon cancer guidelines. This is the same primary care panel of physicians who meet once every 5 years to put out screening guidelines, which insurance companies are mandated to follow when it comes to reimbursement.

          Their inclusion of Exact’s Cologuard in their CRC Guidelines in June of 2016 is what sent the stock ballistic from $7.50 per share. Who says that news doesn’t move shares in the diagnostics sector?

          Interestingly enough, the current screening guidelines draft is looking into first recommending colon cancer screening at age 40 vs the current recommendation of 50… given that cancer incidence for the #2 killer of Americans over the age of 50 is now growing in the 40 – 49 age group.

          Should this recommendation become final, EXAS will be looking at a total addressable market that just increased by over 40 million Americans.

          Simple math tells you how beneficial this would be to Cologuard sales.

          🙂

          Like

    • PS. I must say that I find it rather humorous that there are people that continue claim that news doesnt have anything to do with driving the shares of stock prices like EXAS.

      They post about how EXAS was down nearly $10 earlier this month on Friday, May 10th and yet have no clue about the news out of GH that drove EXAS shares lower in after-hours the previous day, thus producing a $4.00 opening gap lower on that Friday.

      They never mentioned anything about GH and their earnings call.
      Never mentioned anything about the proposed clinical study that clearly impacted shares of EXAS in a negative manner. Why?

      Because they were never aware of the GH earnings call in the first place, or what was said.

      It’s funny to continue to hear the same old mantra time after time about how news doesnt matter. It’s not just funny. It’s downright bizarre.

      🙂

      Liked by 1 person

  9. xEVAx says:

    Went with a small short again at about 2851…..

    Like

  10. phil1247 says:

    TLT

    keep selling those spikes up every day

    works every time !

    Like

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