Weekend Report

Weekend Report

Provided by the OEW Group

July 13, 2019

This week started off with gaps down both Monday and Tuesday, which hit the low of the week at SPX 2963 within the first hour of trading Tuesday morning.  SPX closed last week at 2991.  From there, the market rallied for the rest of the week, seeming fueled by Fed Chairman Powell’s testimony of a “very likely” rate cut next month.  Wednesday began with a gap up and rally to 3003 within the first hour, then pulled back and traded in a range the rest of the day to close at 2993.  Thursday had another small gap up to 3002, then traded in a range and closed at an all-time high of 3000.  Friday had another small gap up and then proceeded to rally all day to close on the high of the week at 3014.

For the week, SPX/DOW gained 0.78%/1.52% while NDX/NAZ gained 1.30%/1.01%.

On the economic front, Consumer Credit increased.  The NFIB Small Business Optimism Index, JOLTS and MBA Mortgage Application Index all declined, while Wholesale Inventories increased.

Next week economic news comes from Empire State Manufacturing, Retail Sales, Import Prices and Export Prices.

LONG TERM: Uptrend

spxwkly

In the US, the long-term count remains unchanged with the Super Cycle SC2 low in March 2009.  The Primary wave I high occurred in May 2015 and Primary wave II low in February 2016.  Primary wave III has been underway ever since.  Major wave 1 high of Primary wave III 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

Not much has changed this week as the uptrend continues to extend reaching all-time highs now at 3014.  The small pullback early in the week was insufficient to trigger any medium term subdivision, so we continue to count this rally as Minute wave i of Minor wave 3, which has been in progress since the Minor wave 2 low at 2729 on June 3rd.  This wave has now achieved 285 points in 28 trading days and has become the longest such rally of our Primary wave III bull market since the exponential rise from Dec 2017 to the Intermediate wave iii top in January 2018. We’re still cautious that a more significant pullback could occur at any time, but the market keeps pushing through our short term targets and pivots.  The first logical target for Minor wave 3 completion remains at 3300.

SHORT TERM

spxhourly

Using our short term tracking, we can now count seven waves up from the Minor wave 2 low [2729]> 2911> 2875> 2964> 2913> 2996> 2963> 3014, which sets a short term inflection point.  The 33 point pullback to Tuesday’s low at 2963 completed the impulsive pattern of five Micro waves as previously reported.  However, the subsequent rally beyond our 3002 target to new highs created an ambiguity.  We can’t yet rule out the possibility of an irregular Minute wave i top.  After much discussion within the OEW group, we decided to track the irregular scenario till the market dictates otherwise.  This suggests Micro wave 5 completed at 2996 and Minute wave ii is subdividing into three waves, Micro wave a = 2963, Micro wave b = 3014 so far, with Micro wave c to follow.  Above 3016, Micro wave b would be greater than 1.618x Micro wave a, which exceeds our limit for this count and suggests something else may be in play.  We have a couple of alternative counts under consideration and will report on those when the time comes.  Friday’s close got within 2 points of our limit, while sitting at another short term divergence at the high.

Short term support is at the 2995 and 2984 pivots.  Resistance is at the 3033 pivot.  Short and medium term RSI both have negative divergences.

FOREIGN MARKETS

Asian markets (using AAXJ as a proxy) lost 0.72%.

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

The DJ World index gained 0.16%, and the NYSE gained 0.18%.

COMMODITIES

Bonds are in an uptrend and lost 0.34%

Crude oil is in an uptrend and gained 4.69%

Gold is in an uptrend and gained 0.86%

GBTC is in an uptrend and gained 2.45%.

The USD is in a downtrend and lost 0.48%.

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

 

Have a good week!

 

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143 Responses to Weekend Report

  1. M Wags says:

    Too bad that Iranian news about the Tankers “tanked” the SPX in the last hour.

    Like

    • torehund says:

      Difficult to trade just about anyting in this x -chop, one tweet is enough to turn the ship in another direction…Markets are being molded into the snap chat environment…

      Like

    • phil1247 says:

      unfortunately
      if you wait to trade news …………. you lose

      short SPX was already given at 12:51 PM

      ie 2 HOURS earlier than NEWS …

      news never matters
      the market makes the news

      Liked by 1 person

      • torehund says:

        They drop news right at inflection points, almost seems deliberate as they are playing it according to their agenda. If rates runs, then govs are toast, something to keep in mind as to which direction manipulation is the strongest.

        Like

        • phil1247 says:

          yes tore

          i dont subscribe to conspiracy theories
          but even if some knew this news was coming and acted on it
          you see their fingerprints 2 hours earlier …
          those who cry that the game is rigged
          just dont know how to play the game

          thats why they lose
          and are constantly whamboozeled

          Liked by 1 person

          • torehund says:

            Phil, maybe someone already new what was about to come out, traded it and you saw what was coming. Depends on what degree of resolution one applies too, or if a 50/50 situation occurs at an inflection point one has to pick a side or wait for the move and then trade…but sometimes the moves go too fast.

            Like

          • phil1247 says:

            Tore

            i dont post many charts here any more

            if you are interested in short term moves
            my charts are at lunkers blog

            Liked by 1 person

  2. cj32 says:

    Cr. to CBZ see expanded Tweet

    Like

    • cj32 says:

      Like

    • nyjsec314 says:

      This dude was calling for 3200 on Thursday and 2300 on Friday based on a 25 point pullback. Nobody has a clue

      Like

  3. St. Louis Fed’s James Bullard is speaking right now in NYC at the Central Bank Research Association annual meeting. Here are his comments from an interview yesterday with CNN International:

    https://www.bloomberg.com/news/articles/2019-07-18/fed-s-bullard-says-rate-cut-may-soften-trade-uncertainty-blow?srnd=economics-vp

    Like

  4. mcgcapital says:

    Looks like a decent chance to fade momentum.. stops on swing shorts above 3020. Pretty big drop on European indices post opex

    Like

  5. phil1247 says:

    es

    shorts broken
    new highs ahead
    protect long profits at 2987

    Liked by 2 people

  6. M Wags says:

    First half trading revenue at the Banks is the worst in a decade.

    For example, Morgan Stanley’s trading revenue from equities was down 14% for the quarter and fixed income revenue was down 18%.

    Like

  7. torehund says:

    https://www.investing.com/indices/baltic-dirty-tanker

    ..they stopped the baltic dry index for 3 weeks. They opened it up recently. But the dirty tanker is still closed down, last print is from the 16 of June, this is manipulation…

    Like

    • M Wags says:

      The BDI hit a 5.5 year high on Monday.

      Has tripled since February. Not a very good indicator, for a number of reasons…

      Baltic Dry Index Is Losing Its Predictive Powers for Economy – Bloomberg

      https://www.bloomberg.com/opinion/articles/2019-07-11/baltic-dry-index-is-losing-its-predictive-powers-for-economy

      Liked by 1 person

    • M Wags says:

      Tore,

      The BDI closed at 2064 today.

      Like

      • torehund says:

        They stopped it for 3 weeks at 1085…Maybe traders think it is a temporary elevation, shipping hasnt moved accordingly, thats why its not “predictive”. Well at 10 000 the fed would have to react….market isnt that stupid,or ?

        Like

      • M Wags says:

        FYI:

        The recent gains in the BDI are due to iron-ore shipments resuming from mines run by Vale SA after their fatal accident earlier this year in Brazil when a tailings dam collapsed that left them closed for months.

        The other factor is due to lower vessel availability due to ongoing scrubber installations. New regulations take effect next year that aim to slash the amount of Sulphur in marine fuel. (2020 IMO).

        The IMO’s new regulation will enforce a new 0.5% global sulphur cap on fuel content starting Jan. 1, 2020. The present cap is 3.5%

        Yes, fundamentals matter.
        🙂

        Like

  8. Like the guy says …
    There’s always a bull market somwhere
    … but it doesn’t have to be in the SPX.

    Liked by 3 people

    • Frank Gaggia, Jr. says:

      Timing is everything! Looking at the chart from June 1 to June 15 it appears that the SPX slightly outperformed GLD! SPX +9.xx% vs GLD + 7%.

      Like

  9. fotis2 says:

    Wrong on Gold Wrong on CL too well well can’t win em all lol

    Like

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