Provided by the OEW Group
September 28 2019
SPX opened the week down 10 points to 2982 in the first half hour of trade, rallied back to positive territory, before closing Monday unchanged at 2992. Tuesday gapped up and made the high of the week at 3008 within the first half hour, then reversed into a sharp decline to reach 2958 by the afternoon, then bounced and traded in a 20 point range before finishing with an outside day down at 2967. Wednesday opened flat but quickly declined to take out Tuesday’s low and reach 2953 within the first half hour, then reversed with a strong rally for the rest of the day to finish up at 2985. Thursday traded down to reach 2964 before noon, then rallied back to even, before reversing in the last half hour to close off on the day at 2978. Friday opened higher but reversed and declined to find the low of the week at 2946 in the late afternoon, then rallied into the close to finish the week at 2962.
For the week, SPX/DOW lost 1.01%/0.43% while NDX/NAZ lost 1.81%/2.19%.
On the economic front, New Home Sales, Durable Goods, Personal Income and Spending, PCE and core-PCE were all higher. Consumer Confidence declined, while Consumer Sentiment moved higher and remains bullish at 58.2% as we read the data. Q2 GDP third estimate was unchanged at 2.0%. The ECRI weekly growth indictor moved up again and is now just below the zero line at -0.23%.
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. Our preferred long term count is posted on SPX, which reflects that 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. However, we maintain our cautious status that the uptrend may be weakening until Major wave 3 can clearly breakout of this overlapping structure. Consequently, we’re still tracking our alternate count on DOW in the public chart list.
MEDIUM TERM: Uptrend
SPX extended the decline with a large outside reversal down on Tuesday, a rally on Wednesday followed by additional declines to find the low of the week at 2946 late Friday. A small bounce into the close at 2962 was not sufficient to signal the end of this two week pullback, which suggests Micro wave 4 is still in play. As mentioned last week, we have a dilemma with the wave count due to scale uncertainty pending further price action. But until this pullback can overlap 2940, we’re maintaining our current structure as Micro wave 1 = 2940, Micro wave 2 = 2892, Micro wave 3 = 3021 and Micro wave 4 in progress. This count requires a large fifth wave in order to achieve our logical target for Minute wave iii at the 3300 level. The uptrend continues to hold an impulse structure but is getting sloppy with this extended 4th wave. An overlap of Micro wave 1 would be concerning and suggest the medium term uptrend may be weakening.
Using our short term techniques we can count three more small waves down this week from our Nano wave b high, >2953>2990>2946. There are several ways to consider the entire structure from the Micro 3 wave top at 3021, so we’re waiting for additional price action to sort that out. It could be five overlapping waves from Micro wave 3, or an additional small wave down to complete the irregular a-b-c structure mentioned last week. Micro wave 4 will be invalidated if it overlaps Micro wave 1 at 2940.
Short term support is at the 2929 and 2884 pivots. Resistance is at the 2957 and 2984 pivots.
Asian markets (using AAXJ as a proxy) lost 2.40%.
European markets (using FEZ as a proxy) lost 1.21%.
The DJ World index lost 1.19%, and the NYSE lost 0.93%.
Bonds are in a downtrend and gained 0.48%
Crude oil is in an uptrend and lost 3.75%
Gold is in an uptrend and lost 0.57%
GBTC is in a downtrend and lost 21.97%.
The USD is in an uptrend and gained 0.64%.
Thanks for your patience!
Have a good week!