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. Frank Gaggia, Jr. says:

    Let’s all remember that this is primarily a technical trading blog, and more specifically an Elliott Wave method based on Tony Caldaro’s years of work. Let’s not do or say things that would encourage Christine to shut it down. I think she’s been incredibly patient so far. If one looks at the TMT arrows on the OEW charts, you can see the reaction to the “news”. However, it’s interesting that they come when the particular wave is looking to end anyway. So you could go either way on this argument. Thanks Christine and OEW group!

    Liked by 1 person

  2. randomacts4 says:

    I’m guessing at some point Christine may simply tire of all the BS and juvenile back-and-forth crap going on here and close the site down. Trying to sift through it all is getting more than tiresome. Grow up folks, please, and let’s return to some state of normalcy.

    Liked by 6 people

    • M Wags says:

      To be brutally honest..

      If people repeatedly make posts claiming that NEWS has no impact on the market ( today being a prime example )…then there really isnt much value to the comment section here.

      As it is, the majority of posts seem to revolve around Phil’s market calls…regardless of whether they appear here… or at Lunker’s blog. And for some bizarre reason, posters here are supposed to keep track. Really?

      Mcg posted one of the more valuable posts yesterday, and he got “slammed” for it with a (moronic) comment by someone that sounded like a kid playing on the Internet.

      Im going to take a “break” from this blog just as Mcg is.

      Good luck to those who dont think NEWS impacts the market. Try telling that to investors in Argentina whose market collapsed 46% Sunday night on NEWS.

      Liked by 1 person

      • torehund says:

        By the time news are out for the public to read its already to late to trade on them. So its more important to see what the market does technically, as this reflects what news will be released later on. Nowadays short term moves are gaining popularity, as the visibility for longer range is a bit obscure and gap up, gap down is what we are dealing with. We have had periods when long range analysis was very important, but even a P-III has its choppy periods. I think the blog is fine as it is, minus some grumpiness thats not needed 🙂

        Liked by 3 people

  3. kjb0 says:

    Does anyone except me wonder how Phil could post at 12:00 pm that at 11:36 am today he bot longs at 2917 two minutes earlier which would be 11:34 am., but somehow posted at 11:28 am that the trade he did not make for 6 minutes yet was looking good……what am I missing…….

    Like

  4. Frank Gaggia, Jr. says:

    SPX negative D on all time frames now.

    Liked by 1 person

    • iamnotviv says:

      @phil1247 does this mean buy more?

      Like

    • Arlan0410 says:

      On the 60 minute there’s no divergence. Divergence resets when the value goes below 30 and hasn’t made a higher high since going back over 70 again.
      No divergence on the daily as it has to go back over 70 before negative divergence is considered.

      Liked by 1 person

      • Frank Gaggia, Jr. says:

        Thanks Arlan! I understand what you’re saying, but to my old chart reading eyes it looks like divergence. We’ll see!

        Like

    • fionamargaret says:

      If you scroll down Frank to where I posted this morning, you will find my suggestions for some of the other world markets. It is not showing under “recent comments” yet.

      I am glad to see you posting after your mentioning your COPD…..keep well.

      Like

  5. mcgcapital says:

    Phil.. last one on this then going to take a break from posting until the market breaks out of the range. But how can the daily downtrend be negated when it’s trading in the same place as last Thursday? Was the downtrend broken last Thursday.. I don’t think you’re saying it was. Nothing has changed so how can the trend have changed

    Liked by 1 person

  6. maxcherry12 says:

    if you’re wondering money maker, bluehorseshow, m wags, is all the same, an agitator from danerics

    Liked by 3 people

  7. mcgcapital says:

    That was brutal just after the open.. trailing stops got hit. Again another example of news moving markets, can’t deny it it’s that obvious. Resold at 2930 now things have steadied. Absolutely no change to the technicals or outlook, just the kind of rallies you can get in bear markets

    Liked by 1 person

    • phil1247 says:

      mark

      daily trend has turned up in SPX
      bulls still need to do more to put the hurt on bears
      todays close will show their resolve

      Liked by 2 people

      • mcgcapital says:

        No it hasn’t, the trend is down lol. It’s obvious. Market is still in the range since last Monday’s sell off so no idea why that would be bullish. We’re at the top end of the range too, so this is where you fade it

        Liked by 2 people

        • phil1247 says:

          ira epstien and i disagree mark
          maybe thats why you have been having such a difficult time this year

          you cant tell an uptrend from a down trend 😉

          Liked by 1 person

          • phil1247 says:

            look at 3 min mark mark …. pun intended

            Like

          • mcgcapital says:

            I’ve not had a difficult year, it’s been pretty good. January was bad but good after that, and awesome in May and August. A downtrend is one in which the market makes lower highs and lows… we have that in place since late July so not sure what you’re seeing to suggest thats ended. But I guess it doesn’t matter if you’re long at the top because you’ll just post that you’re cashing shorts after it sells off lol

            Like

          • phil1247 says:

            mark i hope you look at iras video so you can see there is no daily downtrend now
            it has been negated

            if you cant get the trend right you are in big trouble

            Liked by 1 person

        • argento77 says:

          Agree with mcg…downtrend not done yet!Still need C wave down..all tariff tweet downtrends followed same pattern,why will this be different?

          A

          Like

    • Yup MCG.

      It’s been awhile since I’ve seen the R2 get taken out by nearly 1.50 points in the SPY within 20 minutes of the market open.

      Just goes to show that you are right.
      NEWS does move the markets!

      Like

    • courtesyoftc says:

      mcg ,this is nothing but hot air balloon ,driven by few stock which they got impact on index and a bit of oversold recovery , these figure show underlying market hasn’t changed :
      NYSE Composite Index: :New Highs 167 new lows 211
      Russell 2000 Index : new highs 31 new lows 59

      Liked by 1 person

    • SPYtrader says:

      mcg,
      The SPY hit a high of 294.15 this morning and then sold off to 294.49, a decent 27 point move in the ES. Would you know what news caused that. I need to learn this news trading stuff. Thanks.

      Liked by 1 person

      • mcgcapital says:

        Not saying that you should trade the news, nor am I saying every move is caused by news. Merely questioning the false assumption that news flow doesn’t impact markets

        Like

  8. lunker1 says:

    blue should create his own blog where he can talk to himself all day.

    Liked by 4 people

  9. phil1247 says:

    rebuy at 2917 is looking good
    protect profits now

    thats all folks
    see ya !

    Liked by 2 people

  10. So after 13 days….. Trump blinks!

    I guess he didnt like seeing that Goldman Sachs put a “1” in front of their Q4 GDP estimate yesterday (1.8%). 😀

    Like

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