Weekend Report

Weekend Report

Provided by the OEW Group

September 7 2019

SPX opened the week lower on Tuesday (post Labor Day Holiday) and made the low of the week at 2892 within the first hour of trading, then proceeded to rally back and finish the day at 2906, down from last weeks close at 2926.  Wednesday had a gap up at the open to retest last weeks close and continued to rally for the rest of the day to reach the highest close since August 8th at 2938.  Thursday saw an even larger gap up to make the high of the week at 2986 within the first hour of trade, then consolidated in a narrow trading range for the rest of the day and finish at 2976.  Friday had a quiet open and continued to stay in that same narrow range for the remainder of the day before closing the week at 2979.

For the week, SPX/DOW gained 1.79%/1.49% while NDX/NAZ gained 2.10%/1.76%.

On the economic front, ISM non-Manufacturing increased and accelerated, while ISM-Manufacturing declined below 50%.  Factory Orders, Unit Labor Costs, Payrolls, Hourly Earnings and Labor Force Participation Rate were all higher, while the rate of job growth slowed.  Unemployment rate held steady at 3.7%.

Investor Confidence declined to the lowest reading since December, just below the bullish line and into the neutral range as we read the data.  The ECRI growth indicator declined and is now extending the previous low further negative.

ecriweekly

LONG TERM: Uptrend may be weakening

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 and the Major wave 1 high of Primary wave III occurred in October 2018.  We continue to track our alternate count on DOW in the public chart list.  No change to our long term count on SPX, as Intermediate wave i of Major wave 3 is underway from the Major wave 2 low in December 2018 and continues to subdivide into Minor and Minute waves.

MEDIUM TERM: Uptrend

spxdaily.png

SPX broke out on Thursday with a large gap over prior resistance established during the August trading range and reached the high of 2986, before settling in to close the week at 2979, which was sufficient to confirm a new uptrend is underway.  We’ve updated the medium term status accordingly, which suggests Minute wave ii bottom has finally been established.  Our cautionary posture proved wrong, as the favorable close mentioned last week turned out to be the correct signal that the downtrend was over.  We have confirmed uptrends now on all four key US markets that we track as well as 5 of 9 US sectors and China too.  However, there are notable laggards including RUT, TRAN, XLE, XLF, as well as some in Asia and Europe.  We would expect most of these to confirm in the near future for our long term view to remain intact.  There was much discussion and some disagreement within the group over various choices for counting the sideways chop in August.  Regardless of the differences, there was strong consensus that Minute wave ii bottom occurred at one of the three lows, 2822, 2826 or 2835 and Minute wave iii is now underway.  For now, we’re tracking that price action as a leading diagonal for Micro wave 1 of Minute wave iii from 2822 to 2940, followed by Micro wave 2 pullback to 2892, with Micro wave 3 in progress to 2986 so far.  This price structure projects our nominal target for Minute wave iii at around 3200.

SHORT TERM

spxhourly

As mentioned last week, the group has come up with several counts to resolve the choppy price action in August, but all of these have various pros and cons relative to our OEW methodology.  Some generate odd patterns and others don’t fit with our short term tracking techniques.  Yet they all suggest the same basic outcome, which is that Micro waves 1 and 2 are complete and Micro wave 3 of Minute wave iii is underway with possibility of some small wave subdivisions developing.  We’ve chosen the one that seems to fit best with our short term tracking techniques and will continue to monitor the other options as the trend evolves.  We counted three corrective rallies off each of the August lows as Nano wave a = 2943, Nano wave c = 2939 and Nano wave e = 2940, which suggests the leading diagonal pattern shown for Micro wave 1.  Then Micro wave 2 = 2892, which is pretty close to fib 38.2% retracement of the entire diagonal pattern.  Micro wave 3 found resistance at our 2984 pivot and has consolidated just below there for the time being.  We’re now watching for impulsive price action to continue.  If it remains corrective, then something else may be in play.  Our initial target for Micro wave 3 is up around 3080.

Short term support is at the 2957 and 2929 pivots.  Resistance is at the 2984 and 2995 pivots.  Short term RSI ended the week neutral after reaching overbought levels at the high.

FOREIGN MARKETS

Asian markets (using AAXJ as a proxy) gained 2.93%.

European markets (using FEZ as a proxy) gained 1.91%.

The DJ World index gained 1.89%, and the NYSE gained 1.54%.

COMMODITIES

Bonds are in an uptrend and lost 0.25%

Crude oil is in a downtrend and gained 2.58%

Gold is in an uptrend and lost 0.91%

GBTC is in a downtrend and gained 9.99%.

The USD is in an uptrend and lost 0.50%.

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

 

Have a good week!

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416 Responses to Weekend Report

  1. gtoptions says:

    Gold failed at the YTFZ and monthly R and dropped below the monthly pivot, if price remains < MP then monthly S @ 1444 would be the most logical first support. It is possible they push it back up into MR once again to trap some more fools. GL
    GC ~ Daily ~ https://www.tradingview.com/x/mJGWCpih/
    GC ~ Weekly ~ https://www.tradingview.com/x/zOz3CD4z/

    Liked by 1 person

  2. phil1247 says:

    kvilia

    shorts broken at 2979es
    broken extension retested at 2962 and held
    still no position in spx
    bonds are much easier

    Liked by 1 person

  3. M Wags says:

    The SPY rallied a full point in the last 15 minutes right up to the S2 at 298.20

    EXAS closed at $109.01 and nearly $6.00 off the intra-day low.

    Anyone get long EXAS today?

    Like

  4. phil1247 says:

    Tore
    got to take profits on bond shorts here

    38 special hit

    Like

  5. M Wags says:

    Looks like SPY held the S2 low down at 296.12 just as EXAS held the S1 low around 103.92
    $103.00 was the spike low.

    Currently trading 297.30 and 108.15 just a few minutes before the close.

    Like

  6. M Wags says:

    Gold will break the “runaway” pattern if it were to break $1482 in CASH Gold.

    The corrections on the way up have been very minor.
    – 4.0%, – 3,7%, and – 3.5%

    According to Gann analyst James Flanagan, if the latest pullback exceeds these minor corrections by 20%, the runaway pattern is broken and a bigger corrective pattern will take place, before yet another entry for purchase.

    Flanagan has 3 corrections that could offer a road map.
    1987 saw 8%, 1993 saw -17%, and 2010 saw – 9%.

    He’s sees a time window coming up between Oct. 7th and Oct. 31st.

    Liked by 2 people

  7. gary leibowitz says:

    Old theme but one most here finally realizes has a direct correlation to market movement. China is not the only country that is seeing a dramatic hit due to trade wars. It will be front and center over next 2 months. Odds of China conceding to change their plans for high tech dominance is ZERO. the contract between nations demands this. It will never happen. Only solution is a watered down, fake agreement like the Mexico, Canada deal which has minuscule differences to the original deal or we fight on. I strongly suspect within the next 2 months we throw in the white flag. tha’s the only way we get one more glorious rally after.

    At 3:15 only down 13 SPX points. Need to see a close below 2950 for the odds to greatly increase that this is the drop i am waiting for. My guess is we do not break below today and have to wait till tomorrow. This is like waiting for GODOT! Never seems to come.

    Liked by 1 person

    • gary leibowitz says:

      Never saw a 3 day flat plateau before. Strange times, impossible chart direction, Back to the drawing board. Seems market is easily held up so far despite the strong candlestick patterns on weekly and monthly.

      What gives? Elliot wave anyone? It no longer looks like it will drop fast and steep. I thought i saw a great setup. now it is vanishing.

      Like

  8. Mary773 says:

    Many semis are on the verge of weekly breakouts. If/when that occurs, Naz will soar.

    Liked by 4 people

  9. sixpack says:

    One other thing too. Ya all better watch your gold longs. The market has retraced 50% back to the all-time highs 8 years after the old high in an abc rally. Same thing happened in 1980-1988. That was all she wrote. The 4yr cycle high to high too is due any time, then the 8 yr low to low may start pulling down. Could get rocked hard if the stock market and the economy pick up. Look out below.

    Liked by 2 people

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