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.

ecriwkly

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 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).

induwkly

MEDIUM TERM: Uptrend

spxdaily

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.

SHORT TERM

spxhourly

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.

FOREIGN MARKETS

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%.

COMMODITIES

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. Probably another 280 point ud day tomorrow on Dow to 27,000 area. Then a pull back. That pull back will tell if we head to sp 3300 and higher or not.
    Good luck all

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  2. Joe Hiatachi says:

    Somebody help me out here. I am concerned about the negative divergence in the monthly RSI. The very same pattern appears at most bull market peaks. Why is this different? Thanks

    Liked by 1 person

  3. csonkabull39 says:

    The end is nigh. Once 2950 is breached, poof…it’s gone.

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  4. Colin C says:

    To the OEW Group….
    In relation to the SPASX200, can you advise of any Major 3 targets?
    Thanks in advance.

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  5. wavegenius says:

    6.23.19 Elliott Wave Forecast VIDEO for DOW NASDAQ S&P – Best Case/Worst Case scenarios https://wavegenius.com/6-23-19-elliott-wave-forecast-for-spx-djia-compq-best-case-worst-case-scenarios/

    Liked by 1 person

  6. M Wags says:

    EXAS traded to New All-Time Highs last week at $117.98
    Now trading at 20.3x P/S

    https://madison.com/wsj/business/full-speed-ahead-at-exact-sciences-building-hiring-developing-new/article_0356340b-5d8d-5e23-bc62-bc90513b62e0.html

    Their new lab opens this coming Wednesday.
    It will allow them capacity of 7 million tests per year!

    Like

    • fionamargaret says:

      After EXAS reached 115, the numbers suggest 156.
      Do your own due diligence, and use protection.

      Like

  7. torehund says:

    P-III very much alive, it started with “Cash for Clunkers”, now it is “Prosperity for Nukes”. Somehow gov debt has to be eradicated, shouldnt be so difficult to extinguish if they can finance pensions by an alternative route, govs own eachothers debt which can be written down to zero, poof its gone. Then govs have to live within their means….and if they cant, scale down, the private sector might engulf some of the labor force excesses.
    Lets hope it all ends well, we finally have a common sense deal-maker paving the ground (Trump), we humans all have the tendency to choose the pathway of least resistance, at least if the deal is a bit sugar-coated. Thumbs up !

    Liked by 1 person

  8. Thanks Christine and OEW Group. My thoughts:

    Liked by 1 person

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