Weekend Report

Weekend Report

Provided by the OEW Group

August 10 2019

SPX started out the week with a large gap down and continued lower till late afternoon, to make the low of the week at 2822, before a brief rally to finish Monday down at 2845.  Last week’s close was 2932.  Tuesday gapped down again and retested within a few points off the low in the first 20 minutes of trading, then made a strong rally for the rest of the day with only one small pullback along the way, to finish higher at 2884.  Thursday gapped higher and continued to rally straight up with no pullbacks to finish the day just off the high at 2938.   Friday opened lower and continued down to 2900 by noon, then reversed course and rallied back to close the week at 2919.  A consecutive week of volatility!

For the week, SPX/DOW lost 0.46%/0.034% while NDX/NAZ lost 0.60%/0.56%.

On the economic front, Crude Oil Inventories, Consumer Credit and MBA Mortgage Application Index increased, while ISM non-Manufacturing Index decreased.  JOLTS were little changed.

Next week economic news comes from the Treasury Budget, CPI, Core CPI and Import 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 and Minute waves.  Despite the recent volatility and calls by some for the end of this bull market, we see no evidence yet to suggest these subdivisions are anything more than typical medium term downtrends in context of an overall bull market profile.  We will update the long term status, if/when anything develops to change this view.

MEDIUM TERM: Downtrend

spxdaily

SPX opened lower for the second week in a row and accelerated down, but seemed to find a near term bottom on Monday at 2822.  This gives 200+ points so far for this Minute wave ii downtrend that we believe has been underway since mid-July at the 3018 early top.  Although it’s exceeded the typical 5% decline mentioned last week, the 6.5% decline so far is still within the norm for this bull market.  SPX retested the low on Wednesday for an apparent double bottom, then rallied back above the 50% retracement zone, but ran into resistance there.  Consequently, we updated our medium term status to reflect a potential Minute wave ii bottom with the possibility of another retest before it’s complete.  A rally above 2950 or so will further confirm the Minute wave ii bottom.  If SPX breaks lower, then we will revaluate.

Some in our group pointed out a possible correlation of this downtrend with prior declines triggered by Tariff Man Tweets (TMT).  We’ve had three occurrences of these tariff threats since December and each time the market sold off in the 200+ point range.  We’ve annotated the medium term chart to show this effect.  The May selloff bottomed after a 200+ point decline.  The Dec selloff paused at 200+ points, but then continued lower after Fed autopilot comments (PAP on chart), which likely contributed to that extension.

SPX followed the DOW profile from last week and got extremely oversold at the low, the most so since Major wave 2 last December.  We will be watching the short term waves for direction of the pending rally.  Although we still expect Minor wave 3 to exceed the 3300 level, our medium target for Minute wave iii will be updated after it becomes clear that a new uptrend is underway.

Medium term, RSI is in the neutral zone and MACD is turning back up.  DOW generated a positive divergence off the low on Wednesday.

SHORT TERM

spxhourly

SPX gapped down and blew right through our support targets mentioned last week to reach beyond the 61.8% retrace level of Minute wave i, but was able to close above that level at 2845.  From there, SPX rallied to fill the gap and close the week back above the 38.2% retrace level at 2919.  We noticed a pattern developing this week based on our qualified small waves and short term tracking techniques, so we adjusted the count accordingly.  We continue to track the irregular Minute wave ii previously discussed, but have rescaled the count to reflect a double three pattern.  That gives an irregular zig-zag for Micro wave a, [3018]-2973-3028-2958, followed by Micro wave b single wave rally to 3014.  Micro wave c then suggests a potentially complete zig-zag pattern at the low [3014]-2914-2944-2822.  We can also make a case for an elongated flat into the higher low at 2826, but either one suggests a completed double three pattern from the Minute wave i top.  From there, we can count two waves up from the failed bottom, [2826]-2939-2900, with a potential third wave still developing.  There’s still a possibility of another retest of the low as shown with the optional ii/a label on the chart.  We’re waiting to see if this rally can impulse or is going to fade into another b-wave.

Short term support is at the 2884 and 2858 pivots.  Resistance is at 2929 and 2957 pivots.

FOREIGN MARKETS

Asian markets (using AAXJ as a proxy) lost 2.07%.

European markets (using FEZ as a proxy) lost 0.36%.

The DJ World index lost 0.90%, and the NYSE lost 0.71%.

COMMODITIES

Bonds are in an uptrend and gained 0.64%

Crude oil is in a downtrend and lost 2.08%

Gold is in an uptrend and gained 3.50%

GBTC is in a downtrend and gained 0.20%.

The USD is in an uptrend and lost 0.11%.

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

 

Have a good week!

 

 

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444 Responses to Weekend Report

  1. One of Trump’s go to guys, BAC CEO Brian Moynihan said that slowdown risks are low.

    “We have nothing to fear about a Recession right now except for the fear of recession.”

    I feel so much better now!
    🙂

    Like

  2. lml25 says:

    More “Bullish news”?
    (ZH)After unexpectedly conceding to China last week, when Trump announced he would delay imposing the bulk of the 10% tariffs on $300BN in mostly consumer-focused goods from September 1 until mid-December, a move that surprised analysts as it was not based on any concessions from Beijing but was merely a panicked response to the tumbling stock market, late on Friday Trump made another unexpected concession when the Commerce Department announced it would extend a reprieve given to Huawei permitting the Chinese firm to buy supplies from U.S. companies so that it can service existing customers.”
    I think the T in PPT definitely stands for Trump now…lol.

    Liked by 1 person

  3. torehund says:

    Good weekend all !
    At the verge of something big, either way. I havent given up on nailing the end pattern in Tbt, but finding an elusive bottom is mostly wagging the tail of the dog.It has to be hidden there, somewhere in the future.
    Well if P-III shows up I will book a spa weekend on Greenland when Donald opens a golden shack there…and walk around in flip-flops among fellow Global warming advocates eating whale barbercue 🙂 Happy times ahead !

    Liked by 4 people

    • fionamargaret says:

      TLT up to 181 and TBT down to 5 at the moment….

      Liked by 2 people

      • torehund says:

        Fiona, I just came about another bottoming pattern,I will present the count during the weekend, if re-count still fits, just took a first glance:)

        Liked by 3 people

        • phil1247 says:

          Tore

          remember ….
          you are talking to the same person who said TLT to 165 3 years ago

          at the last peak at 143…

          just before it CRASHED !

          Like

          • torehund says:

            That might be spot on 🙂

            Liked by 1 person

          • schizo1688 says:

            LOL phil, Fiona is only good at playing her music videos .

            Liked by 1 person

          • phil1247 says:

            yes schizo
            if you listened to her 3 years ago with TLT to 165
            you can get out even now LOL

            # keepmakingthesamemistakeoverandover

            Liked by 1 person

          • phil1247 says:

            Home
            Markets
            U.S. & Canada
            30-year Treasury yield jumps after report U.S. Treasury conducts outreach on ultra-long bonds
            Published: Aug 16, 2019 4:41 p.m. ET

            14
            Author photo
            By

            SUNNY
            OH
            Long-term Treasury yields jumped after Bloomberg News reported that the U.S. Treasury Department would reach out to market participants on the possibility of issuing ultra-long bonds. The 30-year Treasury bond yield TMUBMUSD30Y, +0.00% climbed 5.8 basis points to 2.038%. Debt prices move in the opposite direction of yields. The Treasury Department has periodically asked investors about the idea of selling ultra-long bonds with maturities beyond 30 years. Back in 2017, the Treasury asked primary dealers about the potential uptake for bonds ranging between maturities of 40 years to a 100 years.

            >>>>>>>>>>>>>>>>>>>>>>>>>

            tore

            if treasury issues a 100 yr bond
            that will be your clue to load up on TBT

            Like

          • phil1247 says:

            Lisa Abramowicz
            @lisaabramowicz1
            ·
            Aug 12
            Prices on Argentina’s 100-year bonds are in free fall.
            >>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
            Tore …..

            a preview of coming attractions ?
            replace argentina with USA ?

            Liked by 1 person

      • micky says:

        Would be interesting to see if resistance at 148 holds,if not next I got at 153 area.
        It also went a bit past my diagonal line already but of course the trend is still up..

        Liked by 1 person

        • phil1247 says:

          hi micky
          scroll down to see the yellow line on my chart
          its very close to 150
          how do you get 148?

          chart ?

          Like

          • micky says:

            phil yes I see your line, but I dont use lines that way.
            I use a transparent drawing tool I had developed. I stick it to any chart I have open on my pc, so I cant post it as it is not part of my charts.The best I can do is draw a line that approximates the line of my tool as I have done before, especially at LT tops and bottoms over here the last few months and years.

            Like

          • phil1247 says:

            can you show the approximate line now ?

            Like

          • micky says:

            https://imgur.com/a/zDT1rek
            weekly chart, I had to take a pic as my clipboard seems to have a problem with snaggy.
            the 2 horizontal lines are part of the same tool,used differently.

            Like

          • phil1247 says:

            could you take a pic of where the line comes from on the left side ?

            Like

          • micky says:

            Phil
            Take my word,it has nothing to do with the left as you think, but all to do with geometry and space.Lets see whether the area between those 3 lines provide resistance or not as it is not 100% certain but a high probability resistance will be over there.

            Like

      • fionamargaret says:

        Triple Top Breakout on 13 August ….3 days ago for TLT
        Phil sold all his TLT and TMF numerous times, so no worries there…

        https://stockcharts.com/freecharts/gallery.html?TLT

        Liked by 3 people

        • phil1247 says:

          # lookupthedefinitionofdaytrading
          # hotpotato

          Like

        • aahmichael says:

          Fiona, Phil has been dead wrong on bonds since mid-April when the 10-yr was at 2.60 and he told everyone to sell all of their bonds. At that point he said he had sold 80% of his bonds, and by the time the 10-yr came down to 2.40 he said he had sold them all, and then for good measure he spammed the blog with his “top secret bond guru newsletter” that said shorting bonds at that time would be the trade of the century.

          Phil’s bond call this year would have gone down as the worst call on any market in this blog’s history, except for the fact that he’s had so many others that were even worse. For example, you only have to go back to the beginning of February of this year when bitcoin was trading at 3250 and Phil said it was going to zero. So what happened next? 3250 was the dead low and bitcoin went straight up 325% over the next 5 months.Throughout that entire monster rally of 10,500 points, Phil kept saying to “sell it, sell it, sell it.” He never once said to buy it.

          Liked by 2 people

  4. lml25 says:

    Just a quick heads up on GDX–which dropped below the 10d ema aat 28.55.A drop below the 20d at 28.15–which is only 13 cents away–would be a decent warning of more correction.Hardly ever fails for GDX,unless it’s a fakeout.Just saying be prepared.G’night all.

    Liked by 2 people

    • kvilia says:

      Looking for a sharp correction in miners accompanied by a mild correction in metals. I’d like to see all the way down to 61.8% line miners ETFs to load up – C up is going to be fun and ballistic.

      Like

  5. cj32 says:

    Cr. to CBZ

    Like

  6. Luc Joseph R. LeBlanc says:

    Thank you for the answers!

    Like

  7. lml25 says:

    (ZH)”Amid the drop in US equity markets on Wednesday – culminating in a ‘Markets In Turmoil’ special on CNBC – President Trump appears to have hit the panic button and grabbed the big red Plunge Protection Team bat-phone.

    As The Dow dropped 800 points, the 4th largest point drop in history, Bloomberg reports that Trump held a conference call with three of Wall Street’s top executives – JPMorgan Chase & Co.’s Jamie Dimon, Bank of America Corp.’s Brian Moynihanand Citigroup Inc.’s Michael Corbat.

    The three chief executives were in Washington for a previously scheduled meeting with Treasury Secretary Steven Mnuchin on banking secrecy and money laundering, according to people familiar with the matter. On a conference call, they briefed the president, who was at his resort in Bedminster, New Jersey.”
    LML25:Can the opposition to Trump,orchestrate a bear market,to put a stake in his re-election chances?

    Liked by 1 person

    • fionamargaret says:

      Interesting coincidence it being on money laundering, but in the meeting you mention, I found the most pertinent point (and one that was quickly dismissed) was when the tariff talk leading to loss of confidence was suggested as the real problem.
      If one does not like the answer, do not ask the question

      Liked by 2 people

    • M Wags says:

      I bet that not a single one of those bank CEO’s said anything about the Trade War slowing economic growth.

      Not a one.

      Liked by 1 person

  8. Where are the high 1-min TICK readings!?

    Neither any real big-boy call buying on my scanners, and I don’t get any buy signals either. Thus treating today as (part of) a bounce until proven other wise

    Liked by 3 people

  9. lml25 says:

    Here’s the problem with the rally:Transports are deeply embedded at 10 on stochastics–even with this rally today. If “THEY” can move DJT out over 20 on stochastics–another 200 points (?)up,it’s a probable all clear.Until that happens,DJT can roll over again and take the rest of the market with it down.Keep watching ’em.Have a good weekend .

    Liked by 2 people

  10. phil1247 says:

    TLT ….

    IF you didnt sell 3 years ago
    when my mantra was ” sell into any bond rally ”
    you have gotten back to even now

    still think the yellow line can be hit for the 5th time at 150
    if so you have a gift to get out

    Liked by 2 people

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