Weekend Report

Weekend Report

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

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.  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

spxdaily.png

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.

SHORT TERM

spxhourly.png

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.

FOREIGN MARKETS

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%.

 

COMMODITIES

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%.

 

CHARTS:  https://stockcharts.com/public/1269446/tenpp

 

Be kind and have a good week!

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563 Responses to Weekend Report

  1. sixpack says:

    Wesbury is always a good read. He’s been a solid bull and he still is. Hopefully this link posts.

    https://www.ftportfolios.com/blogs/EconBlog/2019/11/18/long-live-the-bull-market

    Like

  2. James McKee says:

    Possibile count above….
    Wave 3 ~ 2.618 * Wave 1
    Wave 5 ~ Wave 1 (presently)
    Wave 5 can still extend, which makes an A-B-C correction to the Wave 4 low a more significant event.

    Some satisfaction with fundamental positions.
    Some satisfaction with playing the tape positions.

    It may violate lesser degree EW rules, but one might still make it work by changing the candle times.

    The count looks like a duck to me–
    Buffet Indicator at 147% * GDP.
    Shiller PE10 > 30
    10+ year bull market = Impulsive wave(s)

    Liked by 5 people

    • gary leibowitz says:

      Find the call for market moves as polarized as the view on trump. How can both be seen when clearly one has to be wrong. One looks to the past and concludes the future is in the same fundamental and technical channel. The other sees major problems already and concludes the dam is about to burst. What i love about Buffett is that he has no ego, cares nothing about keeping score. His stock has under performed for 5 years now. Is he washed up at 88? Is his method outdated?

      https://www.ccn.com/billionaire-warren-buffett-predicting-a-stock-market-crash/

      Surprisingly prior to the 1929 crash there were no sign of overvaluation and in fact seemed justified in its price. The FED had little to do with the crash and many other factors sited as reasons seems rather lame. Most today would not view the market leading up to the crash as a warning to get out. BUT obviously there was major structural problems or the crash would not have brought on business closings, bank runs etc… Do we have the same underlying bad structure? look no further than the Mortgage Debacle and subsequent debt structure. We dismiss the exponential rise as part of the new era. We accept the ability for the FED to open the spigot but no longer see inflation as a by product. That is somehow treated as a positive. This deflationary environment is allowing for ever increased risk combined with disbanding the old safeguard laws and regulations.

      http://eh.net/encyclopedia/the-1929-stock-market-crash/

      My money is on Buffett.

      Liked by 1 person

      • phil1247 says:

        lots of hot air gary
        look at the daily dow chart in sept 1929
        3 days from the top you were in a downtrend

        say you held on for a couple of weeks .. losing
        down to 360 from the 385 top
        the next rally was unable to break the short at 375 …..
        ok
        if you didnt heed that warning

        drop to 320 …keep losing …next rally failed to break short at 360
        ok

        and all this carnage was BEFORE the crash

        i expect the same warnings today

        Like

    • So all of New inflow capital into pension funds in Dec will not propel stocks higher?

      Less stocks

      Huge inflow of new capital coming in Dec to fund their 401 pension funds

      Not most logical wave count

      Like

    • fxaprendiz says:

      James, interesting.
      I noticed that you’re starting following my blog. If you’re interested in reading the private posts give me your email inbox, here or in your own blog, and I’ll send you a password.
      Someone like you is always welcome.

      Liked by 2 people

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