Weekend Report

November 1 2019

It was an excellent week in the equity world this Fed week.  Looking at US markets we see the SPX, Nasdaq, COMPQ, and Dow Jones 30 all breaking out of multiple 1,2 setups to new highs.  Looking at Europe we see similar set ups (though not necessarily the same OEW count) in the German Dax, the Swiss SMI, and the French CAC.

As expected, the US Fed cut its lending rate an additional 0.25%.

SPX opened the week with a gap open to 3032.  The SPX touched 3048 at 10AM Tuesday morning and was then rangebound between 3020 and 3048 until Thursday afternoon when a run up began from 3023.  A 12 pt. gap up on Friday kicked off a nice final day of the week with Friday closing out at 3066.

SPX/DOW moved up 1.47%/1.44% while NDX/NAZ gained 1.64%/1.74%.

On the economic front, Consumer confidence was slightly down.  Advance GDP was higher than expected at 1.9% vs. 1.6% expected.   Non-farm employment was +128K vs. +90K expected.

LONG TERM: Early stages of breakout from consolidation

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, Minute and now Micro waves.  A breakout above the September micro 1 high at 3020 has occurred.  We are bullish as long as the 2920 level provides support going forward.

spxwkly

MEDIUM TERM: Uptrend breakout in progress.

SPX appears to be breaking out of multiple 1,2 formations at this time.  Consequently, there are no changes of our current preferred count.  The new all-time highs appear to have confirmed the previous micro 2 low.  This is a good start for an impulsive structure, ideally the previous 1 wave highs would provide support going forward.  A move below 2893 would invalidate the current Micro wave 1 and Micro wave 2 count.

spxdaily

FOREIGN MARKETS

Asian markets (using AAXJ as a proxy) gained 1.15%.

European markets (using FEZ as a proxy) gained 1.08%.

The DJ World index gained 1.32%, and the NYSE gained 1.17%.

COMMODITIES

Bonds are in a downtrend but gained 0.5%

Crude oil is in a downtrend and lost 0.81%

Gold is in an uptrend and gained 0.41%

GBTC is in a downtrend but gained 8.6%.

The USD is in a downtrend and lost 0.46%.

Have a good week!

 

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496 Responses to Weekend Report

  1. torehund says:

    Pundit king is at it…

    Liked by 3 people

  2. sixpack says:

    Just remember this one thing……and this is fact!! The stock market goes up alot more than it goes down. You now how we know this? Because if it weren’t true then the market would of been at zero a long time ago. 🙂

    Liked by 4 people

  3. kevinm76 says:

    I love how these cycle guys (Peter Eliades) show their predictive lines(Red and green lines) and claim they are so smart by calling the recent high numbers. In fact he has been way off. His lines called for a top early October and a bottom late October. Way way off.

    He has a secret chart that shows a top coming soon based on a subjective cycle analysis. However you must go to his website and pay for his service to get this. LOL!!! SnakeOil salesman at it’s best here. Using fear to make his money. Sad but this is rampant these days.

    Here he is calling for a crash (50% or more) similar to 2008 in Jan 6th 2018 https://video.foxbusiness.com/v/5727398735001/#sp=show-clips Markets bottom a few days later and goes up for 7 more months and reaches all time highs and only declines 20% by EOY. Here he is again(early Jan 2019) negative on the market and calling for some sort of retest of the December 2018 lows in early 2019 https://wallstreetwindow.com/2019/01/peter-eliades-on-the-january-breadth-thrust-facing-big-bear-trend-source-marketviews-tv-01-24-2019/ Markets never look back and go back to all time highs in 3 months after this guy keeps talking about 1929 and the 1970’s. I can’t make this stuff up.

    Guys like this are always negative and this is how they make their money people. Top calling is a very lucrative business if you show you called the 1987 top and the 2007 top. The fear is real for the masses.

    Keep it simple, OEW does a damn good job and is free. Let that set in.

    Liked by 6 people

    • sixpack says:

      Thanks Kevin…Agree. The truth is it cant be done consistently. But oew helps identify the trends. Which for me is very helpful. Plus it gives us some idea of how a correction might play out. That helps too.

      Knowing that we’re probably in a large 3rd is very helpful right now. Everyone else is just guessing. I like oew.

      Liked by 1 person

      • torehund says:

        Its all about keeping firm, P-III might be fiction; but if it aint, and you hit Jackpot there are immense rewards to be had. Its all about risk/reward. If you loose you loose, and if you win you win 🙂

        Like

    • Kevin well said—-I remember this guy in the early 1990’s with his doom and gloom outlook. These dudes are a dime a dozen including Mr “smarty-pants” Avi Gilburt. I have been in the game since the mid 70-s and the late, great Tony Caldaro was the best——and even more important then his talent in the stock market was that he was a big time mentch with a heart of “GOLD”!!

      Liked by 1 person

      • kevinm76 says:

        Exactly Alt! I think inherently or subconsciously people want crashes and bear markets. It appears engraved in human beings to expect the worst. The 2008 crisis was so severe that people still see another one coming and worse even after 10 years. I say rightfully so, given it affected billions of people worldwide in some way. However, it’s a generational event and won’t happen again for a very very long time to come. This is what people fail to see. It’s in our faces every year. I sound like I’ve drank the koolaid but the FED and the world governments will never let this happen at the present time. It’s also important to factor in demographics. The millennial generation which is larger than the baby boomers in population are no where near their peak spending power. They are married, have good paying jobs, having babies and buying houses. This great Bull market will not end until they peak (2030’s) as a generation in buying power. Tony was a genius and genuine guy that gave his objective view for free. He has been right on the money for years with a few hiccups inbetween that he quickly changed course. High respect I have for him and his legacy.

        Like

        • mcgcapital says:

          Ok boomers… really not sure where you’re getting this view about millennials driving these markets ever higher. All of the statistics show the opposite, that millennials are being squeezed on multiple fronts. They have record student debt, lower net worth than prior generations, and have basically being shafted by the financial crisis and policy response to it. Then we have to pay for all of the old folks entitlements and healthcare out of our taxes. The below article explains this situation well.

          http://www.businessinsider.com/stan-druckenmiller-on-generational-theft-2013-9

          Given they have minimal disposal income they aren’t about to flood the stock market with money.

          In fact, the only way these markets keep rising is currency debasement if the central banks print irresponsible amounts which is quite likely. Without that, taxes are going to have to go up in a major way to balance the books. And it will be the taxes that affect the boomers more since there’s little scope to shaft millennials even more, so capital gains, wealth taxes etc. That’s the way the political discourse is going. Good luck getting markets to rise in that environment. Markets can stagnate for decades while imbalances get worked off, look at Japan, look at the US post Wall Street crash, or the UK for long periods in the Victorian era. These periods come up from time to time so got no idea why there are so many people out there who seem hell bent on proving markets will always rise every year forever.

          We’re close to this bubble bursting that much is obvious

          Liked by 3 people

          • fionamargaret says:

            “Since 2009 the entire purpose of the US stock market has been to mask a fake, fraudulent and predatory underlying economy, so the elite plunder can continue unmolested”….interesting thought from Michael Krieger…

            Like

          • kevinm76 says:

            That article is from 2013. That’s like saying we are close to a 2008 crash and bringing up a 2007 article. Things have changed for the better in the USA, since 2013. I travel alot and I can say without a doubt that millennials are doing very good and from what I see in the major US cities, they are living quite well. They do have Jobs that pay decent and on top of this they have Mommy and Daddy that have helped them buy their first house, pay for college and give them an inheritance. All of this makes them feel quite secure. BTW I don’t listen to Macro guys. They are not to be trusted. They claim this thing and that as a negative but then according to their filings, they are invested heavily in stocks. Yeah, i think I’ll disregard these guys.

            Like

          • mcgcapital says:

            The point of the article is around what’s going on with the debt and entitlements. The date of it is largely irrelevant because nothing has changed since 2013, if anything these issues haven’t been addressed which makes it even worse.

            Got literally no idea which millennials you’re meeting, I’m a millennial myself so I know plenty. Most of them aren’t flush with cash. The hard data shows that to be the case so for you to suggest that they’re going to be the ones driving things forward is obviously nonsense

            Liked by 2 people

    • M Wags says:

      But….but….but…. its only $19.95 😀

      Like

  4. wahlyelim says:

    Thks Phil for the posting.
    Interesting cycles.
    CNN Fear and Greed Sentiment Index showing 91 from recent 84 (previous SNP previous high was 3097)
    but friday closing high at 3093 and yet forboding short term correction over due.
    Any decent short term pull back will be a great buy for higher highs still down the road.
    Decide your own buying entry point as no recession in sight!!!
    Medium/Long term investors can still stay invested for the long haul until the trend changes for the worse.
    The secular bull momentum trend is your friend until it bends.
    Have a great weekend.

    Liked by 4 people

  5. phil1247 says:

    very interesting info

    Liked by 3 people

  6. gary leibowitz says:

    Seasonality, 11 year bull complacency, trade war hopes, dominant economically strongest nation is a set up for the great TOPPING pattern. here is facts: Buffet has the largest cash position ever. Capitalization to GDP is hitting historic highs and all in the past resulted in big long term drops. Earnings: next quarter is expected to be worse than this one using companies projections. Would represent three quarters in a row of negative earnings. All of Wall Street projecting TWENTY percent gains after that. All baked in now. This on the THIRD rate cut? During good times? name me another situation ,like this/

    Probability: Trade War will go full tilt after China refuses unrealistic demands. Earnings picture already in fantasy land dismissing next quarters 4 percent drop estimates. One of the longest bull runs ever. Exponential increase in national debt to fuel this run up. World gone insane and paranoid picking destructive leaders. A perfect setup for a huge drop followed by one last gasp rebound. Winter is upon us that will last decades, IF we survive the nuclear age. 27% of adults would need to borrow or sell something to pay for an unexpected expense of $400. One quarter of adults have no retirement savings, and skipped necessary medical care in 2018 because they were unable to afford the cost. Millennial know for frugality. Credit Card 90 day delinquencies among them are over 8%.

    I predicted 3 years ago that 2020/2021 will be the dramatic start of drop. The super bear cycle. Phil states it is impossible to predict the future. I did. I stated exactly what would happen politically with TRUMP on day one of his inauguration. LUCKY GUESS? Common Sense and good analytical skills encapsulating all factors. I was way off in assuming the masses would see thru his corruption earlier than this and am still amazed at his support. So yes we all make mistakes. on the Macro level everything i stated that is bad will NEVER improve on the current path we are on. Logic dictates we have to have massive economic destruction before we can start to rebuild. Just a silly assumption. like paddling down a river with a know waterfall. WHEN? Mine is obviously a guess. Ukraine and Kurds a great example of imploding times. More will follow and soon. Based on LOGIC, pure and simple. I KNOW the man and know the signs of extreme excesses.

    Liked by 1 person

  7. jungletrader lucky says:

    Hi,
    The chart reading is bullish but with caution,until first target is reached for confirmation(~28,3k)

    DOW
    https://invst.ly/ojdyz
    https://invst.ly/ojd-w
    https://invst.ly/oje29
    https://invst.ly/ojeie
    https://invst.ly/ojelf
    IXIC
    https://invst.ly/ojgcj

    thank you,ciao

    Liked by 2 people

  8. 1,000 point drop in the Dow before Christmas 🎄 would be GIFT 🎁 Santa Rally…

    I don’t have options account: but If we get free gift.. loading up on calls …

    Only position I’m holding, Cemtrex Inc. 1,000 shares at $1.44 Nov 19th Earnings then I want to hold it long term into next year.

    Smartdesk product I like a lot…

    We need nice pull back, V shape pattern..

    Liked by 1 person

  9. sixpack says:

    I just went and looked at avi’s wave labeling on his free updates. The guy is completely guessing. Lol

    Liked by 2 people

  10. kvilia says:

    Page is correct – sell off, then magnificent Christmas rally.

    Arguments:

    – Bulls are happy with all resistances broken and looking for new highs every week, to da moon.
    – Bears are looking for the elusive end of B and constantly referencing back to the end of 2018.
    – Question: What would Mr. Market do to screw all, bulls and bears?
    – Answer: Run bulls over and create a bear trap.

    Disclosure: Still holding bleeding shorts medium term.

    P.S.

    NG. I’d be interested in case of:

    – significant lower opening with a buy and stop order below or
    – breaking recent highs in attempt to capture $3.5 or so.

    So far on the sidelines.

    Have a good weekend.

    Liked by 3 people

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