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. raymond e kalenda says:

    HI there, well just a quick word on SPX.
    I feel, that the pattern will be ito a strong top pattern,
    soon enough…..my suggestion is to beign, using tighter stops
    on all long positions……..Bud

    Like

    • raymond e kalenda says:

      I respect, your comments, Gary. Yet, we can still easily make a new price high above 3027. Yet, my “guess”, is. We not only move to new price highs, above 3027,
      But, move on to test the 3100 resistance level to follow up….ok, that’s all I have….Bud

      Like

  2. bob623 says:

    Hey! Let’s be nice! After all, we are adults and we should model “good behavior.”

    Like

  3. phil1247 says:

    rogues
    consider taking more profit
    if 2998.75 es is not blown out to the upside

    Liked by 1 person

  4. Current price action forces one to consider a more Bullish count short-term, which could trace out a nice diagonal pattern into later this month. There are some larger cycles coming to a close around now (+/- 2 weeks): Gann 60yr, 90yr, 120yr and 150yr. Will be interesting to see how that resolves the currently developing price pattern.

    https://imgur.com/a/qahBNpT

    trade safe!

    Liked by 1 person

  5. gary leibowitz says:

    Sold all Puts for a 60% loss. This is one ugly chart pattern but clearly I can see 3020 plus as the next and possibly final move up. it also means the next opportunity i see for a reversal i will double my bet since i conclude it will be a very steep drop and fast. Always assumed we were not near the top yet but now it seems logical that October have another crash possibility. I am calling for the end of the whole decade long run to be started in October. If I change my mind i will let you know. I was fooled badly here.

    Good luck all.

    Liked by 5 people

    • gary leibowitz says:

      The current pattern should extend to 3040-60 and do so by the close of tomorrow. Some sort of blow-off after is expected but have no clue how deep. Will likely play the next expected reversal point IF we extend into close tomorrow.

      Liked by 1 person

  6. phil1247 says:

    2992 es target 1 point away
    blast thru would be good

    Like

  7. kvilia says:

    CL hwb possible long entry@56.81. Target – $59.68.

    Like

  8. kvilia says:

    Sixpack,
    To elaborate further on your question:

    50% is normal retrace, usually in the beginning of the trend several of them occur. Once the trend picks up, extensions@38% retrace serve as entry points.

    Few ticks outside 61.8% and the trend is broken.

    Keep in mind that CL contrary to ES/SPX likes to dip in into the 61.8% line when changing trend.

    Monday and Friday are not very technical, so trends can be broken back and forth. This also happens during a trending range so until broken out outside the range, fibs become irrelevant.

    Hope it helps.

    Like

  9. fionamargaret says:

    UUP up to 36
    EUO…think it may collapse…
    GLD up to 199
    TLT up to 225…yields down
    TVIX, UVXY
    $SPX down to 2137.76
    Use tight stops…and see what your charts suggest….

    Like

  10. Nobody posts any wave counts here anymore.
    So, something different.

    Liked by 2 people

Comments are closed.