Provided by the OEW Group
September 14 2019
SPX opened the week higher, but quickly reversed to trade down, then rally back to close Monday just one point off last weeks close at 2978. Tuesday gapped down and made the low of the week at 2957 within the first hour of trade, then proceeded to rally and finish the day back to last weeks close at 2979. SPX continued to rally Wednesday and Thursday, with an 18 point pullback Thursday morning, to reach the high of the week at 3021 in the afternoon, before finishing the day at 3010. Friday had a quiet open, then traded in a 14 point range before closing the week at 3007.
For the week, SPX/DOW gained 0.96%/1.57% while NDX/NAZ gained 0.51%/0.91%.
On the economic front, PPI, Core PPI, CPI, Core CPI and Retail Sales were all higher, while Retail Sales ex-Autos was flat. Consumer Sentiment was higher and remains bullish at 57%. The ECRI weekly growth indictor was up slightly to -2.5%.
LONG TERM: Uptrend may be weakening
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
SPX continued to rally this week, extending Micro wave 3 of Minute wave iii to a high of 3021 on Thursday before closing the week at 3007. That gives 129 points so far for Micro wave 3 with no medium term subdivisions. Most US and international markets we track are now in confirmed uptrends. XLE, XLV and Hong Kong remain notable exceptions. Not much to add, as this uptrend continues to show signs of an impulsive structure off the Micro wave 2 low established last week. Now that Micro wave 3 has exceeded Micro wave 1, there could be 40-50 point pullback at any time. A much larger decline back to overlap the breakout level of 2940 would be concerning and suggest a corrective structure may still be in play. Our nominal target for Minute wave iii remains unchanged at the 3200 level.
Using our short term techniques, we’re counting this Micro wave 3 rally as three small waves up from the Micro wave 2 low at 2892, which gives 2989-2957-3021. As mentioned last week, we’re tracking several other short term counts as a backup to resolve the choppy price action in August. We will update the short term count if/when the small wave subdivisions develop such that one of those becomes the more likely pattern. For now, we have Micro wave 1 = 118 points at 2940, Micro wave 2 = 48 points at 2892 and Micro wave 3 = 129 points at the Thursday high of 3021. The 32 point pullback internal to Micro wave 3 suggests a small wave subdivision may be developing, however additional price action is needed to sort that out. Our initial target for Micro wave 3 remains unchanged from last week, at around 3080.
Short term support is at the 2995 and 2984 pivots. Resistance is at the 3033 and 3046 pivots. Short term RSI ended the week neutral after reaching overbought levels at the high.
Asian markets (using AAXJ as a proxy) gained 2.57%.
European markets (using FEZ as a proxy) gained 2.09%.
The DJ World index gained 1.47%, and the NYSE gained 1.48%.
Bonds are in an downtrend and lost 2.09%
Crude oil is in a uptrend and lost 2.95%
Gold is in an uptrend and lost 1.06%
GBTC is in a downtrend and lost 2.20%.
The USD is in an uptrend and lost 0.54%.
Have a good week!