Provided by the OEW Group
June 1, 2019
The holiday shortened week started on Tuesday with a rally at the open to SPX 2841 which made the high of the week and then sold off for the rest of the day to 2802. Wednesday gapped down and continued lower into lunchtime hitting 2766, then rallied into the close finishing the day at 2783. Thursday rallied through the first hour and reached a high of 2799, pulled back in the afternoon to 2777, then rallied into the close at 2789. Friday saw another gap down, triggered by yet another Tariff Man threat on Mexico to stop illegal immigration flow, which hit the low of the week at 2751 within the first hour of trading, rallied up to 2769 by noon, then reversed in the afternoon to retest the low and close just one point above to finish the week at 2752.
For the week, the SPX/Dow lost 2.62% while the NDX/NAZ lost 2.41%
Economic news this week had positive results for Consumer Confidence and Case Shiller Home Price Index, while MBA Mortgage Applications declined.
Next week, economic news comes from Chicago PMI, ISM Manufacturing, Construction Spending and Factory Orders.
LONG TERM: Uptrend
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
The current downtrend, Minor 2 has been ongoing for nearly the entire month of May. This Minor wave has subdivided into three Minute waves. Minute waves a and b ended around mid-month at 2801 and 2892 respectively, and Minute c has been underway since then. Using our short term technique, Minute a appears to have subdivided into 3 smaller waves and we’re expecting Minute c to do the same. The next Fibonacci target is 2739 where Minute c equal a. Medium term support is at the 2731 pivot and the 2722 March low, with resistance at the 2780 and 2798 pivots.
As mentioned, we’re counting three Minute waves down for Minor 2. Minute a consisted of nine waves total, five down to 2836 for Micro a, three up to 2891 with an irregular b wave structure for Micro b, followed by one wave down to 2801 for Micro c. Minute b was three waves up to 2892 and Minute c has been ongoing ever since. So far we can count Minute c as nine waves down to Friday’s low, for a potentially completed Micro a. From there, or maybe slightly lower levels, we would expect at least two more waves to complete an overall double three pattern for Minor 2. Although these short term counts are speculative, so we will be watching the next rally for signs of a potential bottom.
Short term support is at the 2731 pivot and the 2722 March low. Resistance is at 2780 and 2798 pivots. The SPX 60-minute chart reached the most oversold this week since Feb and closed the week with a positive divergence, which suggests a short term bounce should be forthcoming.
Asian markets (using AAXJ as a proxy) gained 0.61%.
European markets (using FEZ as a proxy) lost 2.66%.
The DJ World index lost 1.85%, and the NYSE lost 2.52%.
Bonds are in an uptrend and gained 1.27%
Crude oil is in a downtrend and lost 8.75%
Gold is in a uptrend and gained 2.14%
GBTC is in an uptrend and gained 3.36%.
The USD is in an uptrend and gained 0.19%.
Have a good week!