Weekend Report

Weekend Report

Provided by the OEW Group

December 7, 2019

SPX closed last week at 3141 after making a new high at 3154 into the Thanksgiving holiday.  Negative trade news gapped the market lower on Monday, consolidating in the 3110/3120 range. Tuesday saw another opening gap lower, testing 3070 in the first hour before steadily grinding higher into midweek to recapture the 3110/3120 zone. Friday’s robust employment figures drove the market out of congestion to retest the highs, reaching 3151 before finishing the week at 3146.

SPX gained 0.16%/DOW lost 0.13% while NDX/NAZ lost 0.08%/0.10% this week.

On the economic front, the following reports surprised positively or met expectations: Manufacturing PMI 52.6; Services PMI 51.6; weekly jobless claims 203k; factory orders 0.3%; nonfarm payrolls 266k vs 156k, much better than in October; unemployment rate 3.5%; whole sale inventories 0.1% and Consumer Sentiment Index 99.2 up from 96.6 in November. On the downside: ISM Manufacturing Index 48.1%, ADP employment report 67k vs 121k in October, ISM Non-manufacturing Index 53.9% and average hourly earnings 0.2%.

Next week’s highlight is the FOMC announcement on Wednesday.  Other than that, we get NFIB Small Business Optimism Index, CPI, PPI, weekly jobless claims, retail sales, import prices and business inventories.

 

LONG TERM: Uptrend extension likely underway

In the US, the long-term count remains unchanged with the Super Cycle SC2 low in March 2009.  Primary I concluded in mid-2015 with Primary II concluding in early 2016.  Primary wave III has been underway since February 2016 with the Major wave 1 high occurring in October 2018 and Major 2 bottoming in December 2018.  Our preferred long-term count is posted on the SPX Weekly chart, which reflects that Intermediate wave i of Major wave 3 is underway and continues to subdivide into Minor, Minute and now Micro waves.  A breakout above the September Micro wave 1 uptrend high at 3020 has occurred, ushering in a series of potential wave 3 moves higher.  However, we’re still waiting to see if the current trend continues to make new highs, rising enough to not overlap the previous uptrend high, during the next downtrend.  Until then, we maintain our low probability bearish alternate count as posted on DOW in the public chart list.  Note this week how the 13 EMA on the weekly time frame provided support for Thursday and Friday’s strong rally.

spxwkly

MEDIUM TERM: Uptrend inflection point

After posting another all-time high during the previous week at 3154, SPX started this week/month with a sharp pullback to 3070.  This ~2.7% decline was the largest counter trend move since October and sets up some interesting possibilities.  The pictured scenario sees 3154 as a completed wave, either Micro wave 3, or a potential Nano wave i from the downtrend low at 2856 in early October.  The Micro wave 3 scenario suggests the current uptrend may be at or close to completion, while the Nano wave i scenario suggests a very bullish extension may be in play.  Consequently, we’ve updated the medium term status as an inflection point.  This inflection point will likely remain until either a downtrend is confirmed, or SPX can rally above 3200 or so.  A few indices such as SOX and TRAN are in confirmed downtrends, which could be a warning sign for the more bearish medium term outlook.  Either way, we continue to project a bull market into 2020 as part of the Minute wave iii subdivision that’s been underway since the 2822 low in early August.  Our nominal target for Minute iii sometime early next year remains unchanged at 3300.  Once the inflection point is resolved, we will update our medium term projection.

spxdaily

SHORT TERM:

The short term count tracks closely with the medium term subdivisions.  We can count five qualified waves up from 2856 to 3154 with a large third wave, which gives a nice impulsive structure to that point.  Nano wave v for that sequence fell short of our 3180 target, but was pretty close to fib ratio 0.618x Nano wave i, and stopped right near our 3156 pivot.  From there, we have the largest pullback for the entire trend at 84 points to the 3070 low.  This is typical for a subsequent retrace to exceed the prior fourth wave when the fifth is smaller than the first.  SPX set up a positive divergence off that low on Tuesday, which preceded the strong rally into Friday to another qualified wave at 3151.   Given the inflection point mentioned in the previous section, we’re counting the 3070 low as either Nano wave a of an ongoing Micro wave 4, or possible Nano wave ii which would suggest a rescale of the prior small waves down one degree.  SPX reached extremely overbought level at the highs this week.

Short term support is at the 3121 and 3105 pivots, and resistance is at the 3156 and 3180 pivots.

spxhourly

trends

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

 

Have a good week!

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653 Responses to Weekend Report

  1. AMD 30 Minute Chart …

    Will it open higher or lower ?

    Liked by 1 person

  2. M Wags says:

    Xmas comes early for AMRN shareholders as FDA agrees to expand label for Vascepa. The PDUFA date wasnt supposed to be until Dec. 28th. Shares +15.6% on Friday to $26.71, including +10.74% in after-hours.

    Liked by 2 people

  3. gary leibowitz says:

    Hindenburg Omen, Ohama Titanic Syndrome, Buffett Indicator at 148.6. Now add impeachment in first term of office, earnings projections as of today still showing the possibility of the fourth quarter of negative results. So what we have is an extremely optimistic Wall Street. The trade war news is as likely to result in an agreement as the Senate is likely to convict trump. The surge in stocks started on 12/03/18 12 months ago. Fibonacci number of 13 might just apply to a dramatic topping formation.

    Now add the fact that 11 years of an historic run and with no ability of the FED to raise rates out of the basement floor. They tried as was pushed back. GDP at a struggling 2 percent even after the huge tax breaks. Home prices now at a level where it is not affordable in 74% of the country for the average wage earner. Credit card debt, wage stagnation, is at an unprecedented level. This after the HUGE ECONOMIC RALLY. The encore will be what? Lower fed rates? Higher wages? GDP over 2 percent? Another tax cut?

    Where is the move to sustain this economy coming from? Robotics? AI? Demographics?

    I keep presenting a view that is not apparent yet. I keep marveling at the ability of people to “normalize” horrendous behavior and unrealistic future expectations.

    The worse case scenario for our future is if we do not start the winter bear in 2020. It means another 4 years of TRUMP, most likely in my estimation, and an even worse case scenario for mankind.

    Liked by 3 people

    • itsfknlee says:

      🇺🇸

      Liked by 4 people

      • torehund says:

        To all traders, if you loose it all you might find it…

        Liked by 6 people

        • fionamargaret says:

          ..great video Tore.
          The dogs tried to replicate through the trees, after a good snowfall overnight.
          Dogs blurry and powder flying…good to be alive.
          I took the little car out and let it stretch out….not ice-racing, but still loads of fun….x

          Like

    • Cycles 40 week 21 week 34 week ect.

      Observe weekly candles on Nya, spx Sox Index ect

      Msft stock hit all time high on Friday after Xbox news with AMD chip Inside!

      3200 Inst buying Msft shares mania many of Inst pensions hold 5 Million to 8 Million shares of Msft stock., they keep adding shares pushing price higher thus it helps to show they are making return for their investors..

      What happens if someone starts selling Msft shares?

      Could trigger Tidal Wave Crash .. liken to US Steel $220 price which fell to $20 in one day.

      Highly unlikely but human nature repeating itself.. Msft valuations are in mania Zone..

      If some disruptive technology came along to steal just Msft PC market share of desk top market, that might trigger sell off.

      Smartdesk by Cemtrex Inc. is turn key 🔑 product that was expected to steal huge market share from desk top PC market.. but now they produce another version of Smartdesk model that uses USB port so existing PC desk top computers, laptops Apple Macs can simply plug into with one cable.

      But disruptive advance technology like Smartdesk with 18 patents could one day hurt Msft

      Dangerious Times, one needs to be fully aware of everything …

      Bill Gates enjoying ride for now..

      Like

    • phil1247 says:

      ” if you persist in your bearish opinions …..
      you are going to miss the entire rally to DOW 100 thousand ”

      Tony Caldero

      Liked by 8 people

      • zepfan123 says:

        Well at least Dow 30,000 + on this current run.

        Liked by 1 person

      • SPYtrader says:

        Dow 40,000 with Trump’s re-election.

        Liked by 2 people

      • M Wags says:

        I remember back in 1993 when Robert Prechter said that the market would NEVER get over 3600 – 3700. And that it would peak in the Summer of ’93 and head down in a massive Bear Market…. taking the Dow ultimately down to between 100 and 400.

        https://www.latimes.com/archives/la-xpm-1993-06-11-fi-2172-story.html

        I guess THE ELLIOTT WAVE GURU was in the wrong wave. 😀

        Liked by 2 people

        • Wags, the problem with Robert Prechter, is his dogma ran over his karma and that was the end of Robert (yes I am a genius——with a IQ over 149) Prechter!!

          Like

          • M Wags says:

            Kevin, I’m surprised that you didnt mention the fact that Prechter graduated from your FAVORITE UNIVERSITY….. YALE !!!

            😀

            Like

          • Wags, I am very familiar with the flawed Robert Prechter and graduating from Yale and his IQ over 155—–so what——–the dude has been a disaster for years and at the same time, the late great Tony Caldero showed all of us that Elliott Wave can be looked at in a different light. Prechter’s, first TV appearance was with the late, great Louis Ruckeyser on Wall Street Week in 1980 and during that show Prechter said some things that made Louis and the three people on the panel shake the heads and say WOW. BUT somewhere down the line Prechter lost his way and now is just bleeding subscribers and credibility!

            Liked by 3 people

          • SPYtrader says:

            I am no fan of Prechter but I will admit I was enamored with him back in his early days.
            Never really followed him that close since I wasn’t ever a subscriber. The question I have is; was he ever on the right side of the waves? Hard to imagine he was 100% wrong for 35+ years.

            Liked by 1 person

        • riderbobo says:

          Isn’t that when you followed him and blew up your account? Maybe geno could weigh in to confirm that.

          Liked by 1 person

          • M Wags says:

            Bobo ….. Heard thru the grapevine that you were one of the reasons why Daneric closed down that cesspool of a comment section of his where no one ever talked about Elliott Wave or the markets . . . just right-wing conspiracies 24/7. Is that why you’ve been actively posting here now all of a sudden? No where else to go for a 70 year old Canuck?

            Like

      • Phil, you are the stock market “HOMEBOY”——–all of the bagholders, keep on hating Phil and his bold, smart, on point calls———-when the S&P hits 40,000 by 2023———keep hating Phil and the truth, as it hurts so much. Keep drinking that cold Atlantic saltwater as the S&P marches forward. As the late (and yes very flawed, late Joe Granville used to say ( “the news is for bagholders”)! I just want to wish all the (“MISHPOCHA”) Tony Caldero’s, followers , admires and his lovely daughter Christine (Tony, a Queens boy born in 1948 in a house that cost $4,000.00 ) a very Merry, Merry Christmas and a Happy, Healthy, New Year———the start of a new decade in 18 days!! Ciao BELLA!!

        Liked by 3 people

        • Sorry, my bad——I meant the S&P hits 4000 by 2023

          Like

          • phil1247 says:

            well maybe it could be spx 40 thousand alta

            if we are in Don Wolanchucks

            epicenter of 3 of 3 to the upside ….
            he always said that the 1987 crash
            would be seen as a tiny blip on the chart
            once epicenter 3 kicks in

            Liked by 3 people

          • phil1247 says:

            the 1987 crash still looks like more than a tiny blip

            at DOW 100 thousand ….
            it will be a tiny blip

            Liked by 3 people

          • xEVAx says:

            We are on a scary trajectory it’s impossible to say when or where it stops….. Viewed on that scale it looks like the Tulip chart LOL

            Like

          • phil1247 says:

            yes … 100 thousand looks daunting

            i seriously can only get us to 30 thousand from here

            with 35 thousand DOW as the – 618 target

            anything above there is going to be very difficult
            without TULIPOMANIA on STEROIDS

            Like

        • M Wags says:

          Black Monday is still the biggest single down day in history.

          – 22.6%

          And for those of you that think that was just a little hiccup… it would be the equivalent of nearly 700 SPX points today.

          Liked by 1 person

          • h66h says:

            If we’re at an “epicenter,” what are we directly above, or alternately, what is directly below? Posting long term linear price charts is disingenuous. Of course a 22% move is going to look insignificant when we’re thousands of points higher. Show us a real, semi-logarithmic chart of the same time span.

            Like

          • phil1247 says:

            h66h

            you sound like you have missed this STRAIGHT UP monster bull run

            if you persist in your bearish ways
            you are going to miss the rest of it

            Like

          • h66h says:

            phil1247, I am making two succinct points that it “sounds like” you completely missed or do not care to address and would rather divert from. Let me try again. Firstly: “epicenter” really has only one valid use in the English language, and it is the location on the Earth’s surface directly above an earthquake. How that pertains to any market is beyond reason. Secondly: any serious market analyst would not try to diminish the severity of a 22% decline by showing it far in in the past on a linear chart; to do so is disingenuous. To address your non-sequitur: I’m not a holder in any direction. Any perma-bull is obviously going to more often right than any perma-bear in nominal terms due to inflation. It really adds nothing to the discussion.

            Like

          • phil1247 says:

            i think it was you h66h
            bemoaning the market going up and not being justified in doing so

            dont overthink it ..you will never figure it out

            Like

          • h66h says:

            Where am I bemoaning? I don’t care which direction it goes, as long as it goes somewhere, preferably with plenty of volume. I’m calling out nonsense analysis which would include epicenters as applied to the markets since there is no logic to the use of the word (or metaphor if that’s what it is) and, linear charts over long time frames show exactly nothing useful because it’s percentage moves that count in your account. The fact that the dollar is worth about 2% of what it was worth 100 years ago makes absolute measures (which a linear market chart highlights) completely useless. Next you’ll celebrate how the latest blockbuster movie brought in a higher dollar count over its first weekend and use that as evidence that it was a more popular movie than one in the 1980s that brought in less (more valuable) dollars.

            Liked by 1 person

          • phil1247 says:

            i think it was on Lunkers site where you posted it

            but you are banned there and i cant find it now

            Like

          • SPYtrader says:

            maybe h66h should look what epicenter can also refer too.

            Like

          • h66h says:

            phil1247: you are obviously more confused than I originally thought. I don’t think I’ve ever posted on lunker’s thread. I’m certainly not banned there and he wouldn’t even know of my existence. I’m still waiting for an explanation of how “epicenter” can apply to Elliott Wave or any market charting at all. And I’m also waiting to hear of the benefits or even any utility at all of long term linear charts.

            Liked by 1 person

        • fionamargaret says:

          Yes, but maybe search the archives…until DH and Carolan took his fancy, he was guilty of all the things he likes to place on Wags, (banned etc.) along with the intolerant “news doesn’t matter”, ad hominem attacks towards Fotis, Michael, HD, CN, Mr. Fischer and others, either directly or deflecting from their ideas to pronounce his oft unintelligible viewpoints, gathering his bully friends to back him up.
          At no time did he give deference to Tony by taking his course…why, because he is always right, but if he bullies you or posts so many times your ideas get lost, then you know you are a threat…

          Liked by 1 person

          • M Wags says:

            Someone doesnt know how to use a Fiona, meanwhile, his buddy Lunker is nowhere to be found to defend him. He must be banned too. 🙂

            Like

    • torehund says:

      Gary maybe you are spot on; Robotics and AI age ahead. UBOT is a relatively new 3X product with extermely healthy technicals, pan buy on all time-frames. If we cant win over the Bots ourselves, why not join them 🙂

      Liked by 3 people

  4. torehund says:

    …lipsticking the pig 🙂

    Liked by 1 person

    • torehund says:

      What we see is probably an anticipated cooling period, were food and raw materials will encounter a supply destruction. Or alternatively a rise in demand, or both. Agri and raw materials including food has been in a bear for ages, sugar is 80 percent cheaper than it was 40 years ago. Energy at bottom scraping levels. At least (in the lulls of low rates) there is room to run, and dont forget about China 🙂

      Liked by 4 people

  5. M Wags says:

    AMRN resumes trading in after-hours after trading halt and + 5%.

    FDA approves expanded label for VASCEPA to be used as an addition to statin therapy to reduce the risk of cardiovascular events.

    “Nothing this significant has happened in the world of cardiovascular prevention since the introduction of statins nearly three decades ago. Many patients stand to benefit from this historic advance in care.” – – – Deepak L. Ghatt

    Sure hope Lunker covered his “shorts” in the paper trading account.
    🙂

    Liked by 1 person

  6. Demoncrats have gathered all their might. President Trump and First Lady !

    Battle lines are drawn.

    Liked by 1 person

  7. Another Dark Pool Print Msft shares after hours for 1.4 Million shares.

    Exact same amount as last Dark Pool..

    $154.59 Price

    Bullish above
    Bearish below

    Like

  8. Observing Dark Pool trades with AMD, NVDA and Intel in after hours trading.. Intc even moves higher after Dark prints.

    Can chip Sector keep rising next?

    I’m thinking with Msft and Apple 🍎 leading the way Higher.. chips will follow..

    Like

  9. riderbobo says:

    I haven’t heard an announcement yet. The Supreme Court is supposed to make a decision today on whether it will hear the 3 Trump financial cases it has lost on appeal to Appeals Courts.

    This may affect market s if they decide not to hear the cases.

    Like

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