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. phil1247 says:

    phil1247 says:
    September 11, 2019 at 10:13 am
    gary
    the most bullish thing a market can do is go up
    bear trap about to be sprung
    panic buying ahead

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

    keep looking for news
    this was all the news you needed

    Liked by 1 person

  2. phil1247 says:

    bada BING
    bada BOOM !

    poetry in motion…..

    Liked by 1 person

    • aahmichael says:

      You’re celebrating the fact that you exited half your position at 2993 and the other half at 3002, and therefore missed the entire “poetry in motion” move to 3020? People who trade real money don’t celebrate their mistakes.

      Liked by 3 people

      • phil1247 says:

        sold at 3002 “except for lotto tix overnite ” which you forgot to mention

        never mind that
        i rebot this am at 3005 es

        if you want to challenge me on that you can
        accept my offer that i gave you SEVEN times already
        but you have never accepted…………..

        LEAVE forever and i will show you the buy ticket this am

        PUT up
        or SHUT up
        aahmichael

        Like

        • aahmichael says:

          RE:  “SHUT up”

          That’s funny. You posted 11 times on Wednesday and 19 times yesterday.  I posted 0 times on Wednesday and 1 time yesterday. Yet you’re telling me to shut up. (go figure)
          This is not your blog. Christine controls this blog, not you. If you want control of a blog, then start your own.

          re: “i rebot this am at 3005 es”

          That’s nice, but it’s completely irrelevant, as it came 12 hours after you missed out on what you called the “poetry in motion” wave. What’s not irrelevant, though, is that you got stopped out for a loss on all of your longs at the dead low yesterday when ES traded down to 3001, just before it rallied straight up 20 points.

          phil1247 says:
          September 12, 2019 at 8:57 am
          BELOW 3002 es i dont want to be long any more

          Lessons you still need to learn:
          1. Cutting your profits short is just as bad as letting your losses run. It’s always a horrible mistake.
          2. Trading “scared money” will always result in being a losing trader.

          Liked by 3 people

      • phil1247 says:

        this is a short squeeze

        Like

      • kvilia says:

        No personal attacks, is it so difficult to understand, man?!
        Post the chart or something instead.

        Like

      • swamper1 says:

        Since when, is closing a position to lock in gains considered to be a mistake?

        Liked by 1 person

  3. torehund says:

    ..maybe Trump is a bug 🙂

    Like

  4. torehund says:

    https://www.investing.com/commodities/gold

    ..seems like Gold is at it once more. Running abc is finished from 07/08-2019. Look at the 1D chart option.

    Like

  5. gary leibowitz says:

    Announcement of delay in tariffs till October 15th. that will put some juice in this rally. Still split on this being THE final top or not. US Dollar grinding ever upward now at 98.6. Candlestick patterns extremely negative on the monthly charts. And trade war will get worse not better. You don’t need a recession for a big drop. You need bad profits. has anyone revised upwards expectations? The street already expects low single digit gains over next 2 quarters. So that will NOT cause a big drop in stocks. What will is the next 2 after that. if they start dropping their 20 plus percent gains expected and we start a recession that double whammy can easily be a catalyst for a crash or deep drop. I believe both will hit at the same time. Many nations are already in a recession. The US Dollar will have to rise as a result. be careful what you wish for. It is all about earnings and not about the consumer. Both can be in sync or at completely opposite sides. Strong earnings weak consumer or weak earnings strong consumer has been seen before. I look for future guidance and expectations to change.

    Has anyone figured out what wave count we are in? Where the terminal ranges are? I know that most here see only the start of a long wave up from here. That’s where we part company.

    Liked by 1 person

    • gary leibowitz says:

      BTW the length of each wave up has been pretty consistent at around 80 SPX points. the start of this last wave was 2965 which puts it at 3045 area.

      Liked by 1 person

      • phil1247 says:

        its been straight up all year long

        why keep fighting SPX ?

        bears have been crushed
        when the last bear turns into a buyer
        there is your top

        Like

        • Dan Bellend says:

          Straight up all year? What about May and August. And aren’t there always bulls and bears? I can’t recall a time that absolutely everyone agreed it was going up or down

          Like

  6. Gloria Langdale says:

    Could someone kindly post which are the pivots above spx 2995.
    Many thanks.

    Like

  7. lml25 says:

    PPT Trump delays tariffs again.Easy way to move markets–that are embedded already.

    Like

    • courtesyoftc says:

      they expecting another QE, this time with thesilence E , start with ECB tomorrow and FED later , few more trillion somehow swept under the carpet , they have no shame , well they are gonna be very disappointed ,tommarow withg ECB

      Liked by 1 person

  8. courtesyoftc says:

    spx cashat the moment is 3016 , 3rd extreme gap ,worth shorting 6 figure per point , impossible any advance before hitting 3002, that’s 120 grand guaranteed ,

    Like

  9. schizo1688 says:

    Above 3000 .. Fiona must be smiling … 😂

    Liked by 3 people

  10. wahlyelim says:

    Dont fight the momentum runup in the SNP. No deterioration in macro fundamentals of US economy up till date coupled with tecnicals for medium/long term strategy back to positive side.
    Just follow the OEW mkt analysis and readers will be fine holding net portfolio longs.
    Intraday or short term mkt movements are random and unpredictable basis unsuspecting news resulting in unpredictability of mkt direction. If you think mkt is low, you buy. Opposite is true as well. As such stop losses are warranted.
    As no recession in sight to date , medium/long investors can still stay the “Bull Course” with very SNP strong support at 2822 to suit their risk appetite with their conceived trailing stops to protect good profits.
    When mkt breaks down, we should be nimble enough to change our views according to our own judgemental calls.

    Liked by 3 people

Comments are closed.