Weekend Report

Weekend Report

Provided by the OEW Group

June 22, 2019

The week began quietly as Monday continued the consolidation from last week.  The SPX gapped higher on Tuesday, rose to 2931, and then traded in a narrow range in front of the FOMC announcement on Wednesday.  The dovish Fed pushed the SPX higher with a gap up on Thursday.  The weekly high was reached mid-day on Friday at 2964, and the SPX closed at 2950 with late day volatility associated with Quadruple Witching options expiration.

For the week, the SPX/Dow gained 2.3% while the NDX/NAZ gained 3.15%.

The economic news for the week was negative, including the Empire State Manufacturing, NAHB Housing Market Index, Philadelphia Fed Index, and Leading Indicators.  The FOMC held rate constant and signalled future rate cuts possible.

The ECRI Weekly Leading Index Growth moved back below zero over the last few weeks.


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 and is subdividing into Minor waves.  Minor waves 1 and 2 completed by the first trading day in June and Minor wave 3 has been ongoing since then.  Interesting to note that the DOW subdivided with an irregular Minor 2 from its Minor 1 rally high in February and consequently became more oversold this month at the Minor 2 low than the Major-2 low in December (see weekly chart below).




As discussed in the previous report, we were expecting an uptrend and this week both Dow and SPX delivered on that outcome.  As a result, the status of Minor 2 has been updated from tentative to confirmed.  We are expecting NAZ and NDX to follow in the coming days, as these indices have a much larger % decline to overcome from their Minor 2 lows (10-12%).  This suggests that Minor 2 bottomed on the first trading day this month at 2729 and Minor 3 has been in progress ever since.  The Minor 3 rally has been quite strong, achieving 235 points so far to the high on Friday of 2964, without any medium term subdivision.  Our first logical target for Minor 3 completion would be equal to Minor 1, which projects approximately 600 points up to over the 3300 level.  We’re now watching for a potential impulsive subdivision of Minute waves using our short term tracking techniques.



As mentioned, we have Minor 2 confirmed at 2729 and can count three small waves up so far from the low using our short term techniques.  Micro 1 at 2911, Micro 2 at 2875 and Micro 3 at 2964, with a negative divergence now building at the high.  This suggests another small pullback around 30-40 points may be forthcoming in the near term.  There are several options under consideration for this rally depending on the timing and depth of the next pullback.  Most likely would be either a small Micro 3 wave near completion or a possible subdivision to include Nano waves.  We need more price action to sort that out.

Short term support is at the 2929 and 2884 pivots.  Resistance remains at the prior high of 2954 and above at the 2957 and 2984 pivots.  Short term RSI got overbought at the gap up on Thursday, then set up a negative divergence into the high on Friday.


Asian markets (using AAXJ as a proxy) gained 4.9%.

European markets (using FEZ as a proxy) gained 3.5%.

The DJ World index gained 2.5%, and the NYSE gained 2.0%.


Bonds are in an uptrend and gained 0.7%

Crude oil is in a downtrend and gained 8.7%

Gold is in an uptrend and gained 3.9%

GBTC is in an uptrend and gained 25.0%.

The USD is in a downtrend and lost 1.0%.

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


Have a good week!  Good luck trading the G-20 meeting!

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51 Responses to Weekend Report

  1. M Wags says:

    The Medical Diagnostics sector continues to Scream higher!

    Adaptive Biotechnologies (ADPT) does an IPO at $20 a share on Thursday (selling 15 million shares) and raising $300 million. The first trade of the day was $39 and it closed +$8.00 on Friday at $48.30

    Illumina (ILMN) continues its massive run from $305 at the beginning of June to close at $368 on the month. Meanwhile, gene therapy leader SRPT looks to have busted out of a massive Wave 4 base, surging from $110 to $155 on Friday as PFE issued a failed Phase 1 read-out of a competing Duchenne Muscular Dystrophy gene therapy.

    EXAS also closed at a New All-Time High on Friday at $118.04
    Up from $85 just six weeks ago!

    Exact has submitted an application to the FDA to extend approval for the use of Cologuard to people in the 45 – 49 age group. Such an approval would increase the total addressable market by another 20 million people. Combined with the 87 million Americansage 50 and over who are of average risk, that raises the potential patients for Cologuard to 106 million. The Company’s stated goal is to reach 40% market share.

    On Wednesday, the company celebrated the opening of their 2nd lab that will allow them annual testing capacity of 7 million tests.


  2. sixpack says:

    It should really start to get exciting now. Retesting the old highs with a beautiful cup n handle. Primary 3, Major 3, minor 3….maybe even intermediate 3.

    If tariffs put on hold and talks resume….should be good. Could blast thru the highs next week. Im all in.

    Thanks OEW and good luck all!

    Liked by 1 person

  3. E. George Schaeffer says:

    Philippe, Page, McgCapital: You folks have an overdeveloped sense of entitlement and a lack of appreciation for the value of the blog itself. Tony was extraordinarily generous and tolerant at a great expense of work and stress to himself. To expect Christine to inflict the same upon herself is preposterous. Sixpack and fxaprendiz see the issues very clearly.
    There were always the 10% of posts that were useful, but one had to wade through the other 90% to find them. The Int 3 Minor 3 count is struggling in terms of the NASDAQ. But the NYSE A-D line and Riohard Russell’s PTI have both recorded ATH’s. The Transports have been slowly regaining their strength and the interest rate background is highly favorable.

    Liked by 3 people

    • E. George Schaeffer says:

      Correction: Correction: Int 1 Minor 3


    • mcgcapital says:

      Sense of entitlement? Lol. I want this place to be a success… it won’t be if the community disappears. What I said should be pretty stress free for a blog owner to implement, its not onerous to let people have their say unless you want to control peoples views. It’s the nature of the business that people have different opinions on stuff

      If you don’t find any value in the comments section then there’s an obvious solution to that, and it’s just ignore them. Some folks just want to be reassured that markets will rise forever and there’ll never be a bear market again

      Liked by 1 person

      • E. George Schaeffer says:

        The chaotic, self-indulgent, and self-serving rantings that used to infest this blog were not the measure of any kind of success and Tony did not view them as such. But his laissez-faire philosophy allowed the cancer to metastasize into a stage 4 condition from which it was impossible to extirpate the diseased tissue without the treatment killing the patient. Christine has learned from that terminal illness and is determined to excise the tumors as soon as they appear so that the patient does not progress to a condition where all choices of action still result in a terminal outcome.

        Liked by 1 person

        • mcgcapital says:

          Those kinds of posts were in the minority.. I’m sure if Tony had wanted to he could have deleted posts or blocked certain people. Got no idea what you’re on about with the rest of this reply tbh


          • E. George Schaeffer says:

            Perhaps I did get carried away with my cancer metaphor, but many of the posts here are mainly for self validation rather than to impart information or understanding, even if they might contain some value. There is a serious lack of self discipline by a large plurality of posters here in that they never bothered to learn decent expository writing skills and even trying to comprehend the literal meaning of what they are saying is often a challenge. If elucidating the issues they were discussing was their primary motivation, I think they would have expended more effort in learning to communicate clearly. Of course, most people who have that deficiency don’t even realize it and furthermore have little interest in finding out.
            Tony had to wade through this morass everyday to try to sift out the more egregious examples while giving the benefit of the doubt to many marginal posts. Numerous posters made no effort whatsoever to stay within the 3-post limit and in fact regularly posted multiples of that limit each day. I even violated it numerous times myself, but not by such a wide margin and not so frequently. Even as he played the role of blog monitor, Tony also had to find the time and energy, in co-ordination with the OEW group, to produce an excellent analytic product.
            You, sir, seem to possess very little understanding of the effort and time this struggle entails and have blithely made several remarks minimizing that fact. On your behalf, although I have sometimes disagreed with your financial opinions, I will certainly concede that your writing is very clear and understandable. People from Britain are generally much more coherent and articulate in their use of the English language than Americans. Canadians and Australians fall somewhere in between, and British South Africans speak and write at a level close to educated Britons. Americans seem to aggregate at the bottom of this pyramid, as I am quite sure that the most verbally incompetent posters on this blog are Americans.
            I can certainly and easily understand why Christine would want to prevent this blog from spiraling into a time and energy draining vortex again. She in no way owes it to us to continue publishing Tony’s blog, let alone policing blog “contributors” who make far too little effort to comply with the standards of the blog and with the general standards of effective written communication.


        • mcgcapital says:

          George, will try and keep this short as I think generally readers don’t like this kind of thread where there’s lots of back and forth with little market relevance. I’m well aware of how much effort must go in to producing a blog post, in fact I see it as a strength that this blog has consistently managed to turn out content over the years even during spells where the count has been wrong, or when the blog owner was ill or sadly no longer with us. So much respect for that. I clearly don’t agree with the current count and haven’t for a while, but I don’t think that should be viewed as dissent… diversity of opinion is important here. In some ways I feel that what we’re witnessing at the moment is pretty historic, lots don’t see that they just see it as business as usual but I’ll point it out if I see it.

          As for your generalisations on command of the English language, maybe there’s an element of truth in what you’ve written, but I don’t think its for the reasons you might think. There are lots of articulate Americans on here (yourself included). If there are lots of less well informed comments from Americans it’s more a function of the fact that culturally the stock market is important to your average American in a way that it’s not in other countries. That means you get a wider cross section of American people commenting on here who don’t necessarily have a financial background but are interested in markets. Most international comments come from people who are involved in financial services to some degree. Your average person in the UK or other countries you mention has zero interest in markets so they don’t show up and comment. So I don’t think it’s a reflection on the US generally, more a reflection that there’s a wider demographic involved other than investment professionals. Anyway, although that probably means they don’t have the experience required to write something deep, I don’t think that should mean they should be excluded from sharing their view or interacting to learn from others. We all know which comments are written in the wrong spirit but I think they’re a handful rather than being the bulk of them


  4. jobjas says:

    Classical EW projection


  5. fxaprendiz says:

    Very unfortunate.
    There were some greats mind in here.

    But how people puts the blame on Christine is beyond me. She said very clearly from the start that she wouldn’t tolerate trolls and childish behavior, and that she would close the comments when people insisted in breaking the rules. So for me each time she shuts down the comments she’s simply being consistent and congruent.
    And every single time she reopens the section, without fail someone will give her flak or pushback. So who’s to blame?
    And for you genius who only care about the weekly report, have you ever considered she might as well just stop it altogether. At some point it has to be considered how much it is worth to keep things going considering all the work involved, for such an ungrateful response.

    I know the vast majority of readers are thankful to Christine for her efforts and it’s only a few sour apples that ruin it for everyone, but is precisely those apples that stand out each time.

    As for me, I’m glad I left before things go worse. Thanks Christine and I’m sorry about those haters.

    Liked by 4 people

    • mcgcapital says:

      I’m sure people would come back if it was consistently open for comments. I’ve only just seen that comments are open again as I haven’t visited in a few weeks since they closed down. For me the value is in the different viewpoints expressed and exchange of ideas rather than the weekly report which I already know will say wave 3 of 3 up and which I already know doesn’t make a whole lot of sense at this point of the cycle.

      Have to think about what has made this such a successful blog throughout the years, and for me it’s the following:
      1. Being consistently open 24/7, 365 days a year. As a regular poster it was a part of my trading day that I logged on here to see what people were saying. It was even open when Tony was ill. I can’t see much reason for shutting down the comments as it doesn’t achieve anything. If people are being critical or whatever, then let them be.. it’s freedom of speech and readers can form their own opinions. Would imagine that interest and views in the main report are way down when there’s no comments open, so it’s kind of a two way thing where the site needs the community and the community needs the site.
      2. Consistently posting updates – used to be daily, but still worked well when Tony was ill and the post frequency dropped to two or three times a week. I’d suggest at a minimum, there needs to be some kind of consistent weekend update so people know to expect it and can log on to view on a Saturday. At the mo there’s just a few ad hoc reports here and there. Appreciate we don’t know the full situation around who’s writing them for Christine and how much time they can devote to it, but just saying consistent output is a key part of a successful blog.
      3. Allowing all kinds of different viewpoints with very little censorship. Bulls, bears, long term, short term, different methods, posts on market moving news flow, links to relevant websites have always been welcome here. As soon as you start saying you don’t like one particular type of post you’re opening it up for people to say they don’t like other types pf posts. Everyone has a preference and there’s no right or wrong. If you look at the other site where some of the regulars are posting now, there’s a high level of censorship where it’s deemed irrelevant to talk about market moving newsflow and there’s a long list of words filtered out. The quality of posts is much lower as a result.
      4. Quality of the market view. OEW has has a reputation for being right more than being wrong over the years. A key part of this was Tony quickly switching views when wrong and being open to criticism, plus answering people’s questions on the count. There needs to be more interactivity between the OEW group and the site otherwise it’s just like any other blog. Some blog owners can be quite touchy about people having differing views but Tony never came across that way.

      Not criticising, just giving some feedback on some of the issues. Tony ran this place for 12 years successfully, feel like he deserves this to continue as a legacy and would be a shame to kill it off when a lot of the issues are easily dealt with.

      Liked by 6 people

    • torehund says:

      Lets come together again…my Peru experience is ending soon. Will post charts when I go back, upping my participation. Think that would have been Tonys wish..It has been tough for all of us after he passed, such a great person, sharing a wealth of OEW knowledge and offering calm wisdom.

      Liked by 3 people

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