Provided by the OEW Group
November 16 2019
SPX opened the week from a gap down opening at 3080, then rallied up to reach 3087 by Monday’s close, from last weeks close at 3093. Tuesday has reached 3100 at the first hour, but gave back the gain and close at 3092. Wednesday opened lower at 3084 again then rallied back for the rest of the day to finish at 3094. Thursday is a flat and closed at 3097. Friday opened with a gap up at 3107 and rallied to the high of the week and finish the week at 3120.
SPX/DOW gained 0.89%/1.17% while NDX/NAZ gained 0.77%/0.72% of the Week.
On the economic front, weekly unemployment claims were up 14K at 225K and worse than forecast of 215K. Industrial Production was down at -0.84%, which was worse than consensus of -0.4%. Producer Price Index was 0.4%, up from -0.3% last month. Core CPI was 2.31% , down from previous month 2.36%.
LONG TERM: Early stages of breakout
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 2930 level provides support going forward.
However, the DOW all time high this week did not eliminate the alternate count yet, so our alternate count for a potential breakdown is still posted on the DOW in the public chart list. We’re developing the criteria on how and when we could phase out the alternate count.
MEDIUM TERM: Uptrend
SPX continued the rally this week to reach another all-time high at 3120, and appears to be breaking out of the nested 1-2 structure that’s been in place since May. This confirmed Micro wave 2 completed at the 2856 low in October, and Micro wave 3 has been ongoing ever since. Our nominal target for Micro wave 3 would be 1.618x Micro wave 1, which gives 3180. This is a good start for an impulsive structure, and we’re expecting the Micro 5 / Minute iii could go as far as 3500 level. A move below 2893 would invalidate the current Micro wave 1 and Micro wave 2 count.
Not much has changed short term. We continue to count three waves up from the Micro wave 2 low as Nano wave i = 2960, Nano wave ii = 2893 and Nano wave iii in progress. Nano wave iii is now well beyond the length of Nano wave i and exceeding 2x ratio with that wave, which further confirms the impulse structure. Since it reached our next pivot 3121 area this Friday, the next level to watch for a potential target is 3156. Noted that both the Hourly and Daily RSI has been over bought, a nano wave iv may happen at any time soon, before the nano wave v finished the Micro wave 3 at 3180 level.
Short term support is at the 3105 pivots, and the Resistance is at the 3121 and 3156 pivots.
Asian markets (using AAXJ as a proxy) lost 2.15%, mainly due to the Protest in Hong Kong and disappointed China Q3 data.
European markets (using FEZ as a proxy) gained 0.38%.
The Dow Jones Global index (DJW) gained 0.39%, and the NYSE gained 0.64%.
Bonds (US 10 year) are in a downtrend, but gained 0.57%
Crude oil (WTIC) is in a downtrend, but gained 0.84%
Gold is in a downtrend, but gained 0.38%
The USD is in a downtrend, but lost 0.34%.
GBTC (Bitcoin) is in an uptrend, and lost 5.70%.
Be kind and have a good week!