Weekend update

REVIEW

The week started at SPX 2670. After a gap up opening on Monday the SPX hit its high for the week at 2683. Then it pulled back to SPX 2625 on Tuesday, rallied to 2661 on Wednesday, then dropped to 2595 on Thursday. On Friday it hit SPX 2671 before dipping to end the week at 2663. For the week the SPX/DOW lost 0.2%, and the NDX/NAZ gained 1.5%. Economic reports for the week were mostly positive. On the downtick: ISM manufacturing/services, construction spending, auto sales, and the ADP. On the uptick: personal income/spending, the Chicago PMI, factory orders, monthly payrolls, plus weekly jobless claims, the trade deficit and unemployment rate all improved. Next week’s reports include the CPI/PPI and export/import prices. Best to your week!

LONG TERM: uptrend

With this Intermediate wave iv correction still lingering on. Some are thinking we may already be in a bear market. For some sectors of the market that may be true. But for many others it is not. Regardless of counts and wave structures, the DOW, NYSE and DJ Global index still require at least one more new high to end their bull markets. Plus FANG stocks, i.e. AAPL, AMZN, GOOG, and NFLX are still in bull markets. And market breadth indicators, the NYSE A/D and the SPX A/D, both made new highs last month. No bear market yet!

The long term count remains unchanged. Primary waves I and II of a new Cycle wave bull market completed in 2015 and 2016. Primary III began then and should complete some time around the year 2034. Its first bull market is Major wave 1 from the 2016 low. Major waves divide into five Intermediate waves. Int. i and ii completed in the spring of 2016. Int. iii then subdivided into five Minor waves. Minor waves 1 and 2 completed in the fall of 2016, and Minor waves 3 and 4 completed in the spring of 2017. Minor wave 5 and Int. iii recently completed in January 2018. Int. wave iv has been underway since then. When it concludes the bull market should resume, and Int. v should carry the market to new highs.

MEDIUM TERM: downtrend

We have been tracking two possible medium term counts: triangle and double three. The first is posted on the SPX daily and the other on the SPX hourly. The triangle pattern suggest a rally to exceed SPX 2717 in the coming days/weeks to complete a wave D. Then a decline to about the mid-2550 level to end wave E and a triangular Int. wave iv. The double three pattern suggests a drop to the mid-2550’s or so without ever rallying above SPX 2717 to complete a 3-3-3 pattern. Either way it appears the mid-2550’s would be hit before the market enters a new uptrend.

Today we throw one more possibility into the mix. This one seems to be quite far fetched at the moment, but with this choppy market you never know. How about an ending diagonal triangle for Intermediate wave v, starting from SPX 2553? This would suggest the market could remain in its choppy pattern, but the bias would be positive rather than negative like it has been for three months. Right now this has the lowest probability. Medium term support is at the 2656 and 2632 pivots, with resistance at the 2731 and 2780 pivots.

SHORT TERM

The short term patterns during this correction have displayed signs of impulsiveness activity, but have all ended in corrective activity. Even Thursday/Friday’s rally from SPX 2595 looks impulsive. But will it hold? Recent market activity suggests not likely.

Going back to the beginning of April you can clearly see from the above chart the price activity has been corrective. There was a rally early that looked positive (2553-2672), but it failed with a choppy follow up.

Technically Thursday’s low did provide some positive RSI divergences on the hourly and daily charts. And the market responded with a good rally. SPX 2683/84 is the next resistance, then SPX 2717. A failure at SPX 2670 might lead to another three waves down into the final low. Stay tuned. Short term support is at the 2656 and 2532 pivots, with resistance at the 2731 and 2780 pivots. Short term momentum ended the week overbought.

FOREIGN MARKETS

Asian markets were mostly lower on the week for a lost of 0.2%.

European markets were mostly higher and gained 0.4%.

The DJW index lost 0.5%, and the NYSE lost 0.8%.

COMMODITIES

Bonds remain in a downtrend and lost 0.2%.

Crude nearly hit $70 and gained 2.4% in its uptrend.

Gold is back in a downtrend and lost 0.7%.

The USD continues its uptrend and gained 1.2%.

NEXT WEEK

Monday: consumer credit. Wednesday: the PPI and wholesale inventories. Thursday: weekly jobless claims, the CPI and the federal budget. Friday: export/import prices and consumer sentiment.

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

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Thursday update

SHORT TERM: gap down opening then rebound, DOW +5

Overnight the Asian markets lost 0.6%. Europe opened lower and lost 0.6% as well. US index futures were lower overnight, and at 8:30 weekly jobless claims were higher plus the trade deficit was lower. The market gapped down to SPX 2624 at the open and continued to decline. The SPX had closed at 2635 yesterday. At 10am ISM services was reported lower. The decline continued until the SPX hit 2595 around 11am. Then the market started to rally. The rally rose all the way back to close the gap, when hitting SPX 2637 around 2:30. After that the market pulled back to close at 2630.

For the day the SPX/DOW were mixed, and the NDX/NAZ lost 0.10%. Bonds gained 5 ticks, Crude rose 55 cents, Gold added $7, and the USD was lower. Medium term support slips to the 2594 and 2575 pivots, with resistance at the 2632 and 2656 pivots. Tomorrow: monthly payrolls est. +188k.

The market gapped down at the open today from yesterday’s SPX 2636 close. It then dropped a total of 41 points from that close when bottoming at SPX 2595. After that the market rallied all the way back to SPX 2637 by 2:30. Volatile day traders market continues. We continue to observe a lot of three wave movements. Of late: [2717] 2658-2684-2613, and [2683] 2625-2661-2595. However the market is now approaching the two previous lows Feb 2533 and Apr 2554, with today’s drop below 2600. Let’s start looking for technical signals that could suggest an end to this multi-month correction. Short term support slips to the 2594 and 2575 pivots, with resistance at 2632 and 2656 pivots. Short term momentum ended the day around neutral. Best to your Payrolls trading!

MEDIUM TERM: downtrend

LONG TERM: uptrend

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

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Tuesday update

SHORT TERM: selloff then rebound, DOW -64

Overnight the Asian markets open gained 0.2%. European markets opened also gained 0.2%. US index futures were lower overnight, and the market opened 4 points below yesterday’s SPX 2648 close. At 10am ISM , construction spending, and auto sales were all reported lower. This offsets yesterday’s reports which showed personal income/pending, core inflation and the Chicago PMI all rose. By 1pm the SPX had dropped to 2625, and then started to rebound. After that the market rallied into the close to the OEW 2656 pivot again. The close was SPX 2655.

For the day the SPX/DOW were mixed, and the NDX/NAZ gained 1.05%. Bonds lost 7 ticks, Crude dropped $1.15, Gold slid $9, and the USD was higher. Medium term support is at the 2632 and 2594 pivots, with resistance at the 2656 and 2731 pivots. Tomorrow: the ADP at 8:15, then the FOMC statement at 2pm.

The market opened lower today, continuing yesterday’s decline from SPX 2683. After hitting SPX 2625 around 1pm the market rallied for the first time this week. Clearly this remains a day traders market with a negative corrective bias. From the April 2717 high we count three waves to SPX 2613. Then a rally to SPX 2683. Followed by a decline to SPX 2625 this afternoon. Choppy action. The total correction continues to look like a double three/triangle. Short term support is at the 2632 and 2594 pivots, with resistance at the 2656 and 2731 pivots. Short term momentum rose from extremely oversold to just below overbought. Best to the often volatile FOMC trading tomorrow.

MEDIUM TERM: downtrend

LONG TERM: uptrend

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

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Weekend update

REVIEW

The week started at SPX 2670, and ended there as well. The SPX ranged between 2684 on Tuesday to 2613 on Wednesday. Quiet compared to most recent weeks. Also, in a week that had three gap up openings, and no gap down openings, one would have thought the market would have gained about 2%. But it was simply unchanged. For the week the SPX/DOW lost 0.3%, and the NDX/NAZ lost 0.3%. Economic reports were all positive. On the uptick: Q1 GDP, existing/new home sales, Case-Shiller, consumer confidence/sentiment, durable goods, plus weekly jobless claims declined. Next week’s economic highlights: FOMC meeting, monthly payrolls, and ISM. Best to your week!

LONG TERM: uptrend

After making an Intermediate wave iii high in late January, the market has churned its way for three months in an Intermediate iv correction. Tuesday will make it the fourth month, and longest correction of this 2016-2018 bull market. It is quite easy to turn bearish after well over a year of 3% or less corrections, and then watch a nearly 12% correction unfold while dragging out for months. We see no reason to be concerned unless the SPX loses 2500.

The bull market, despite this lengthy Int. iv, continues to unfold as labeled. Intermediate waves i and ii ended in the spring of 2016. Intermediate wave iii then started to subdivide. Minor waves 1 and 2 ended in the fall of 2016, and Minor waves 3 and 4 ended in the spring of 2017. Then after a lengthy uptrend, Minor wave 5 and Int. iii ended in January 2018. Int. wave iv has been underway since then. When it concludes, Int. wave v should carry the market to all-time new highs. Still looking for SPX 3000+ between 2018-2020.

MEDIUM TERM: downtrend

This Intermediate wave iv downtrend has had many starts and stops. In February it looked like it could be done, but the following uptrend failed. In early April it looked like a double bottom, but the rally off that low has been choppy and corrective. This week, after the gap up openings, in an uptrend the market would have been up about 2%. It was unchanged.

We continue to track two possible scenarios: triangle and double three. The triangle suggests a rally about SPX 2717 before the SPX drops back to the 2550’s again. A double three suggests the market trades lower, without rallying to 2717, to complete the pattern in the low to mid 2500’s. Either way it looks like more choppy action ahead. Medium term support is at the 2656 and 2631 pivots, with resistance at the 2731 and 2780 pivots.

SHORT TERM

The month of April started with such promise. The SPX had made a double bottom. There were positive divergences everywhere. Strong earnings were expected to be reported. And the GDP was still near 3%. The market started with a strong rally from SPX 2554 – 2672. Then after a pullback to SPX 2586 still in the first week, the choppy/corrective activity began and lasted throughout the month.

Expecting more of the same until this complex Int. wave iv completes its pattern. Short term support is at the 2656 and 2632 pivots, with resistance at the 2731 and 2780 pivots. Short term momentum ended the week just above neutral. Best to your trading!

FOREIGN MARKETS

Asian markets were mostly higher and gained 0.7%.

European markets were all higher and gained 0.6%.

The DJ World index lost 0.3%, and the NYSE lost 0.1%.

COMMODITIES

Bonds remain in a downtrend and lost 0.1%.

Crude is still in an uptrend but lost 0.4%.

Gold may be in a downtrend and lost 1.1%.

The USD remains in an uptrend and gained 1.4%.

NEXT WEEK

Monday: personal incoming /spending and the CPI at 8:30, then the Chicago PMI at 10am. Tuesday: ISM, construction spending, and auto sales. Wednesday: the ADP and FOMC statement. Thursday: weekly jobless claims, trade deficit, ISM services and factory orders. Friday: monthly payrolls (est. 103K). Best to your weekend and week!

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

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Thursday update

SHORT TERM: gap up and go kind of day, DOW +239

Overnight the Asian markets ended mixed. Europe opened lower but gained 0.6% on the day. US index futures were higher. At 8:30 weekly jobless claims reached a 50-year low and durable goods orders were higher. The market opened at SPX 2654 and continued to rise. The SPX had closed at 2639 yesterday. By 11am the SPX hit 2664. Then after a pullback to SPX 2654 again by 11:30 the market moved even higher. At 3pm the SPX hit 2676, then pulled back to close at 2667.

For the day the SPX/DOW gained 1.00%, and the NDX/NAZ gained 1.85%. Bonds gained 8 ticks, Crude added 15 cents, Gold dropped $5, and the USD was higher. Medium term support rises back to the 2656 and 2632 pivots., with resistance at the 2731 and 2780 pivots. Tomorrow: Q1 GDP at 8:30 (est. 2.0%), and consumer sentiment at 10am.

The market gapped up at the open today for the second time this week. Oddly enough, even without any gap down openings, the market is still down for the week. After dropping from SPX 2684 to 2613 by Wednesday, the market rallied back to 2676 today. Has anyone said this is bi-polar activity yet? Wildly swinging days/weeks, going on for three months, all within a 300-point range. Triangle, double-three, still looks like corrective activity. Short term support rises back to the 2656 and 2632 pivots., with resistance at the 2731 and 2780 pivots. Short term momentum ends the day just below overbought. Best to your GDP trading!

MEDIUM TERM: downtrend

LONG TERM: uptrend

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

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Tuesday update

SHORT TERM: gap up opening then selloff, DOW -425

Overnight the Asian markets gained 0.8%. Europe opened higher and gained 0.1%. US index futures were higher, and at 9am Case-Shiller was reported higher. The market gapped up at the open to SPX 2682, ticked up to 2684, and then started to pullback. The SPX had closed at 2670 yesterday. At 10am consumer confidence and new home sales were reported higher. Just past 11:30 the SPX had dropped to 2661, closing the gap and turning negative. Then after a rally to SPX 2672 by 11:30, the selling accelerated. At 2:30 the SPX hit 2617, the low for the day. Then the market rebounded to close at SPX 2635.

For the day the SPX/DOW lost 1.55%, and the NDX/NAZ lost 1.90%. Bonds slipped 3 ticks, Crude dropped 75 cents, Gold rose $6, and the USD was lower. Medium term support drops to the 2632 and 2594 pivots, with resistance now at the 2656 and 2731 pivots.

The market gapped up at the today. Which is nothing unusual these days when considering all the gap openings during the past few months. After running up to yesterday’s high, 2884 v 2683, the market headed south in a hurry. At today’s low the SPX had dropped 67-points, in 5 hours, on no negative news. It must be a correction. Today’s drop increased the probability of the double three scenario posted on the hourly chart. This suggests a retest of the February/April lows should end this Intermediate wave iv correction. Levels of interest, noted over the weekend, are SPX 2586, 2554 and 2533. Short term support drops to the 2632 and 2594 pivots, with resistance now at the 2656 and 2731 pivots. Short term momentum hit extremely oversold at the lows. Best to your trading!

MEDIUM TERM: downtrend

LONG TERM: uptrend

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

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Weekend update

REVIEW

The week started at SPX 2656. After gap up openings on Monday and Tuesday the SPX rallied to 2717 by Wednesday morning. Then over the next two days the SPX came within 5 points of giving it all back when hitting 2661 late Friday, before bouncing to end the week at 2670. For the week the SPX/DOW gained 0.45%, and the NDX/NAZ gained 0.60%. Economic reports for the week were quite positive. On the downtick: the NY FED and the NAHB. On the uptick: retail sales, business inventories, housing starts, building permits, industrial production, the Philly FED, leading indicators, plus weekly jobless claims declined. Next week’s reports will be highlighted by Q1 GDP and housing.

LONG TERM: uptrend

In the early stages of this bull market we suggested it could last 2 – 4 years and travel to SPX 3000+. It has been a bit more than 2 years now, and the high has been SPX 2873. Was that it? Not, according to the counts the have on the major US indices, some foreign indices, and some leading stocks. At minimum we should see another leg up to new highs. But where is it? All the market has produced, for nearly 3 months, is volatility and range bound corrective waves. It looks like it is waiting for a positive catalyst.

In the meantime the long term wave count continues to unfold as expected. A Major wave 1 bull market dividing in to five Intermediate waves. Intermediate waves i and ii completed in the spring of 2016. Intermediate iii then divided into five Minor waves. Minor waves 1 and 2 completed in the fall of 2016, and Minor waves 3 and 4 completed in the spring of 2017. Recently, in January 2018, Minor wave 5 completed, along with Intermediate wave iii, and an Intermediate wave iv correction began. After this weeks action, it appears it is still underway.

MEDIUM TERM: downtrend

Intermediate wave iv could have completed in February, after a 12% selloff ended with positive RSI divergences everywhere. The market rallied about 10% into March, did not make a new high and then failed. A retest of the low occurred right on the first trading day of April. Again with positive divergences. But the market has again failed to sustain an impulsive rally off those lows.

Some have speculated this correction could be a fourth wave triangle: A 2533, B 2802, C 2554, D 2717?, with E to follow. It could also be a double three: a-b-c zigzag to 2533, x wave to 2802, now another a-b-c (flat or zigzag) underway to retest the lows? Regardless of the final outcome we are still expecting at least one more uptrend, and series of new all-time highs. Medium term support remains at the 2656 and 2632 pivots, with resistance at the 2731 and 2780 pivots.

SHORT TERM

We were tracking the rally from SPX 2554 with a potential impulsive count. We had Minor waves 1 and 2 at SPX 2673 and 2586. Then a Minor 3 underway. Minor 3 divided into three Minutes waves: 2665, 2645, 2717. Then it blew up on Friday, when the market dropped below 2665. Now all we have is a lot of corrective activity from the high at SPX 2672 in early April. This potential uptrend no longer looks to have any chance of being impulsive.

Under the market we can see three potentials levels of medium term support: 2586, 2554, and 2533. Let’s see what the technicals looks like as these levels are hit. Short term support is at the 2656 and 2632 pivots, with resistance at the 2731 and 2780 pivots. Short term momentum ended the week oversold. Best to your trading this volatile market!

FOREIGN MARKETS

Asian markets were mostly higher and gained 0.3%.

European markets were all higher and gained 1.7%.

The DJ World index gained 0.4%, and the NYSE gained 0.5%.

COMMODITIES

Bonds are now in a downtrend and lost 0.8%.

Crude remains in an uptrend and gained 1.5%.

Gold is also in an uptrend but lost 0.7%.

The USD is in an uptrend and gained 0.6%.

NEXT WEEK

Monday: Chicago PMI and existing home sales. Tuesday: Case-Shiller, consumer confidence and new home sales. Thursday: weekly jobless claims, and durable goods. Friday: Q1 GDP (est. 2.1%) and consumer sentiment.

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

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