Weekend Report

Weekend Report

Provided by the OEW Group

June 29, 2019

The week opened lower as the SPX gradually declined all day Monday to a low of 2944.  Last week’s close was at 2949.  On Tuesday the decline accelerated and continued throughout the day to a low of 2916 within the final hour of trading.  On Wednesday the SPX bounced up to 2933 at the open, but quickly reversed and proceeded to decline for the rest of the day to find the low of the week in the late afternoon at 2913.  Thursday and Friday saw a steady rally up to a high of 2944 within the last hour of trading and closed the week at 2942.

For the week, SPX/DOW lost 0.29/0.45% while NDX/NAZ lost 0.75/0.32%.

The economic news was mostly negative, with Consumer Confidence, New Home Sales and Case Shiller Home Price Index all lower.  FHFA Housing Price Index and Mortgage Applications were higher.

Next week economic news comes from Chicago PMI, ISM Manufacturing, Construction Spending, and Auto and Truck sales.

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.

 

MEDIUM TERM: Uptrend

spxdaily

This week the market paused as SPX generated a 51 point pullback to the low of the week at 2913 on Wednesday, then rallied on Friday to close at 2942, which regained most of the ground lost.  Although NAZ and NDX were still unable to confirm an uptrend, most share markets and sectors we watch have confirmed, except for a few non-US markets.  No change in status this week and we’re still expecting NAZ and NDX to follow in the coming days.  The Minor 3 wave rally continues to hold at 235 points to last week’s high of 2964 and has yet to generate any medium term subdivision.   First logical target for Minor 3 wave completion remains at the 3300 level.  Still watching for a potential impulsive subdivision of Minute waves using our short term tracking techniques.

SHORT TERM

spxhourly

As mentioned in last week’s report, we were expecting another small pullback for the Minor 3 rally and this week delivered that outcome.  Although the 51 point decline was a little larger than expected, it wasn’t sufficient to generate an overlap.  So we now can count four waves up from the Minor 2 low [2729]>2911>2875>2964>2912, with the fifth wave in progress of a potential impulsive structure.  We also mentioned the two most likely options for this rally and as shown, we’re favouring the small Micro 3 wave scenario until the market proves otherwise.  This suggests an upper limit for Minute-i of 273 points, to a high of 3002, since the third wave of a valid impulse can’t be the smallest.  The Nano wave subdivision option remains on the table as an alternate count, if/when this next rally can exceed the Micro 3 rally of 89 points.

Short term support is at the 2929 and 2884 pivots.  Resistance is at the 2957 and 2984 pivots.  Short term RSI got extremely oversold on Tuesday and set up a nice positive divergence at the Micro 4 low.

FOREIGN MARKETS

Asian markets (using AAXJ as a proxy) gained 0.75%.

European markets (using FEZ as a proxy) gained 0.60%.

The DJ World index lost 0.06%, and the NYSE gained 0.02%.

COMMODITIES

Bonds are in an uptrend and gained 0.38%

Crude oil is in a downtrend and gained 1.81%

Gold is in an uptrend and gained 0.97%

GBTC is in an uptrend and gained 21.46%.

The USD is in a downtrend and lost 0.05%.

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

 

Have a good week!

This entry was posted in Updates. Bookmark the permalink.

144 Responses to Weekend Report

  1. cj32 says:

    Cr. to CBZ

    Like

    • phil1247 says:

      yes Tore

      exited TMF triple long bond etf at target of TYX and throwover wednesday

      could be 5th wave ending diagonal
      until proven otherwise
      bond rally is kaput

      still not ready to short via TBT but time could be near
      with everyone looking for rate cuts

      buy on cannons …..
      sell on trumpets 😉

      Liked by 2 people

      • torehund says:

        Think it was a small slowing in the economy that created fed murmurs about lowering rates. But markets snapped up higher employment rates and went with it….

        Like

  2. sixpack says:

    There you have it. Two good success stories. One using fundamentals and one using technicals. Congrats on those big winners! Both styles can work. Now lets move on.

    Phil, the point is there is no definite right or wrong. If your fed chart doesnt work for you then dont use it.

    Liked by 2 people

  3. jobjas says:

    Expecting big gap down opening – first target 2910

    Like

    • elmer510 says:

      It’s gonna be a decline from Minute 1 of Minor 3. Minute 2 is approaching rapidly, but exactly when it starts, nobody knows for sure.
      You seem to have a very different count from the OEW-group.

      Like

  4. sixpack says:

    Phil, Thats all you got “see Tony’s treatise”? Seriousely? I mean if your going to keep touting this non sense that fundamentals dont matter, at least have something to back it up other than simply the words investor confidence. That by itself means nothing. Its more complicated than that. There’s things like fear and greed which probably do manifest themselves in price like you say, but that too all evolves around the anticipated fundamental situation.

    Investor confidence is all about their confidence in the future of the fundamentals. Anticipation of worsening future fundamentals relative to current values…….and markets will decline (last december), anticipation of better future fundamentals relative to current values…… and markets will rise (thats whats happening now).

    Investor confidence and future anticipated fundamentals go hand in hand. You cant have one without the other. Thats what investor confidence means…..confidence in the future fundamentals. So please, stop bringing up that argument. Leave it be. If you wanna trade just on price, then do it. Nobody is gonna say you cant do that. If others wanna trade on fundys they can do that too. I personally like to rely on both, but thats just me.

    Oh, and by the way, Blue was not agreeing with you.

    Like

    • You are correct Mr. Six Pack.

      My overt sarcasm in my post yesterday illustrating how fundamentals have driven the share price of EXAS must have gone over people’s heads.

      MGC pretty much summed up why the Fed matters and how the markets “adjust” to their posturing and discount the future . . . “It’s the direction of travel of Fed policy that’s important rather than what’s actually happening at a certain point in time.”

      Very true.

      For some strange reason, people in the “Fed doesnt matter Camp” cant seem to realize that the markets are simply adjusting to what the Fed is communicating. Their “jawboning” gets the markets to move in the direction that they want. When they finally make a rate change, they are merely putting a policy “label” on what has ALREADY happened.

      And as for purely trading off of a technical trend following system and not having a care about any fundamentals or understanding of what a company is facing or doing, I have no doubt that there are technical trend following systems that can make money.

      But I dont know of any trend following system that can tell you how big the total addressable market is for a company’s product (or in this case screening test), which then gives an investor information on what size of a capital commitment (risk) to make.

      In hindsight, its easy to see that EXAS has been a massive performer . . . rallying +800% in 2.5 years. You can “back-test” the move in the shares with whatever trend following system that you use, and I’m fairly certain that it has made some money. But I’m also pretty sure that using such a system did not give you any information about how much capital to commit to such an investment or trade.

      I think its a “reach” for anyone to claim that they could have committed a 7-figure position and/or 55% over their capital base to something like EXAS merely using a technical trend following system, like I did.

      The only way that you are going to be able to do that is to look into the Fundamentals surrounding the company, its technology, its intellectual property, its competition, its management team, and its total addressable market.

      From the very first time that I met the new CEO at the JP Morgan Healthcare Conference in San Francisco in 2010 and offered him my “back of the cocktail” napkin numbers regarding how big the addressable market and potential revenue was (which he confirmed), I knew that EXAS was never gonna just be a “trade”. It was never something that I would look to hit a “double or single” on.

      The Fundamentals told me that there was a more than high probability that once their screening test reached various regulatory milestones. . . the reward would be a Grand Slam. I even documented this in a comprehensive blog post back in Nov. 2016 (easily found using a search) when the stock was trading at $14.00

      To each their own when it comes to style of trading.

      But no one is gonna tell me that they could have . . . and would have made the same kind of bet that I did on EXAS using a trend-following system.

      Like

      • SPYtrader says:

        I am not sure how many people buying stocks have the opportunity to meet the CEO of the company. My guess not many. And trying to figure out the fundamentals can be complicated and then trying to figure out who wants to buy the stock based on those fundamentals equally challenging of course unless you are an insider or have inside information on the company. I made a ton of money on AXSM buying it at $2.82. Maybe more than Blue made on exas. The stock closed today at $27.04. Still no sell signal from the system. I know nothing about this company. As a matter of fact if I receive the proxy and company crap in the mail, into the trash it goes. Could care less about voting for officers in the company. All I care about is that it is going up.

        Like

        • phil1247 says:

          agree SPY

          why would you want to tie up huge amounts of capital in a 100 dollar stock

          when as you say you made 10 fold on a 2 dollar stock ?

          it makes no sense

          KUDOS to you!

          Like

        • M Wags says:

          I would agree that it can be difficult obtaining access to a management team, unless you are an institutional portfolio manager.

          But assuming that such access gives you access to “inside” information is absurd.

          No CEO who is worth anything to his shareholders (or management team ) is ever going to share “material” information with someone that isnt already public. There are obvious reasons for this, including Regulation FD.

          And even more importantly, one has to be working from a pretty extensive knowledge base in order to know WHAT QUESTIONS ARE OF VALUE TO ASK when speaking to a management team.

          They dont just “offer” you information about their business, or seek to raise expectations via hype.

          For starters, ( for me ), taking a fundamental “approach” means listening to every quarterly conference call and investor presentation… seeing if management is consistent in what they are telling investors and evaluating whether or not the business plan is realistic and is being executed. This is for starters.

          If the Company has no earnings (like EXAS) and is a growth name, sizung up its P/S ratio and whether it trades at a discount or premium to its peers is obviously important. So is the IP and the total addressable market and who the competition is.

          Again, Im not saying that its not possible to make money off of technical analysis for trading. My point all along is that I seriously doubt that anyone will ever commit and RISK a substantial amount of their capital investing and accumulating shares in a company that they know nothing fundamentally about.

          And Im not talking about merely knowing who the Board of Directors are, or receiving proxy material in the mail.

          I’ve never met anyone that has taken the Stanley Druckenmiller “approach” to making money in individual stocks…doing so consistently with large sums of money…by simply looking at a chart, counting “waves”, or drawing a trendline or two.

          There’s a reason why its rare on an EW blog to come across posters talking about trading/investing in individual stocks.

          It requires a lot of capital.

          And it usually requires actually knowing something about what the company is doing…what guidance is, etc.

          Otherwise, there would be a lot more people who could say that they doubled their money in EXAS since Xmas buying it at $56.00

          🙂

          Like

          • M Wags says:

            And not people trying to compare a $65 million dollar market cap company with that of a $7.32 Billion market cap company from late last December.

            And in case people are unclear about what I have been consistently posting (because some posters just keep seeing EXAS…. EXAS)…. it has to do with coming up with a METHODOLOGY that one can use to swing for the fences, as opposed to picking up nickles and dimes.

            All this, coming from someone that spent 10 years as a successful stock-index futures floor trader in NYC…. trading technically.

            It took me awhile to figure out how Big Money is made.
            And it comes from taking the Stanley Druckenmiller approach.

            Hope some here have enjoyed the “value” of my posts.
            But then again, it seems pretty rare to come across any stock traders/investors here.
            🙂

            Like

      • phil1247 says:

        totally incorrect about fed

        look at any chart to see how incorrect you are

        Liked by 1 person

  5. phil1247 says:

    es

    short broken
    3028 is next
    bull above 2979

    keep looking for 3050 then 3100
    then we will see whats what

    good weekend all!

    Liked by 2 people

  6. wavegenius says:

    7.05.19 Elliott Wave Midday Update VIDEO For S&P DOW NASDAQ – 2 before 3 targets https://wavegenius.com/7-05-19-elliott-wave-midday-update-video-for-spx-djia-compq-2-before-3-targets/

    Liked by 3 people

  7. lml25 says:

    The first three letters in confidence is…CON.The con used to be (before 2009),banks and brokerages like Chase,Wells,Merrill “con”ning the little investor into joining the party–then a crash–as in 2000 and 2008-before starting it all over again.Since that scheme backfired in 2008 and these crooks had to go crawling to Paulson for survival,the con has changed.The result cannot be determined.If CBs continue to dominate/manipulate equities,bonds and gold,the only question is how far does the rubber band get stretched–before it breaks.THAT’S
    the con game today–not investor CONfidence.

    Liked by 1 person

  8. Joe Hiatachi says:

    The Value Line Geometric index, $XVG, is an equally weighted, broad based index that is now showing mainly lower peaks in past 18 months, as weighted indices like sp500, Nasdaq are making new highs. The REAL stock market is getting much weaker here.

    Like

  9. fionamargaret says:

    UUP ($US) up to 36
    TLT up to 183….TMF (3x TLT) up to 29.5
    GLD up to 163
    $INDU down to 22401
    TVIX…if we go down, will pay off in spades…

    Use protection and do your own due diligence. Inflection points.

    Liked by 1 person

Comments are closed.