Weekend Report

Weekend Update

Provided by the OEW Group

June 8, 2019

The week started at SPX 2751, had a small bounce to 2763 but then hit 2729 by early afternoon, which was to be the low for the week, then closed at 2744.  Tuesday saw a large gap up opening at 2763 and went straight into rally mode throughout Tuesday, Wednesday, Thursday and Friday as the SPX hit 2885, with nothing more than a 19pt pullback at most along the way.  Friday afternoon saw a small drift off the highs to close the week at 2873.

For the week, the SPX/Dow gained 4.41% while the NDX/NAZ gained 4.06%

Economic news this week had positive results for Factory Orders, ADP Non-Farm Employment Change and ISM Non-Manufacturing PMI, while ISM Manufacturing and Non-Farm Payrolls declined.

Next week, economic news comes from PPI, Core CPI, Retail Sales and Core Retail Sales.

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: Uptrend likely

We’ve been tracking the current Minor 2 downtrend as three Minute waves and have been looking for the Minute c completion of that pattern.  This week gave us the answer.  After the decline on Monday to 2729, which was right in range of our support target at the 2731 pivot, SPX abruptly reversed and achieved a significant rally of 156 pts to a high 0f 2885 by early Friday.  The strength of this rally was sufficient to trigger our WROC signal, which places high probability that a new uptrend is underway.  Consequently, we upgraded the medium term status and added the tentative marking for a potential Minor 2 bottom.  Although, some near term caution is advised since the rally has already reached logical resistance at the 2884 pivot and the Minute b rally high 2892.  Medium term RSI is overbought as well.  We are now watching the short term waves to see if this rally can impulse in a sustainable fashion.

SHORT TERM

As mentioned, Minor 2 most likely completed at 2729.  We have Minute a at 2801 and Minute b at 2892.  Minute a and Minute c completed with similar size and structure, which resulted in a fairly symmetrical three pattern.  As you can see from the 60min chart, the pivots have done well, with Minor 1, Minute a, Minute b and Minor 2 all having turning points within those ranges.  From 2729, the SPX rallied to 2885 without any meaningful pullback.  After such a sizeable move, it would not be unexpected to get a significant pullback in the near term.  So far, our short term tracking can count only one wave up to 2885, so we’ll need more price action to assess this rally further.

Short term support is at the 2858 and 2835 pivots.  Resistance is at the 2884 and 2929 pivots.  Short term RSI got extremely overbought at the high, then pulled back within the neutral zone by the close.

FOREIGN MARKETS

Asian markets (using AAXJ as a proxy) gained 1.34%.

European markets (using FEZ as a proxy) gained 4.49%.

The DJ World index gained 3.39%, and the NYSE gained 4.09%.

COMMODITIES

Bonds are in an uptrend and gained 0.35%

Crude oil is in a downtrend and gained 0.92%

Gold is in a uptrend and gained 0.25%

GBTC is in an uptrend and lost 4.79%.

The USD is in an uptrend and lost 1.2%.

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

 

Have a good week!