Monday update

SHORT TERM: gap up opening, DOW +135

Overnight the Asian markets gained 0.1%. Europe opened higher and gained 1.0%. US index futures were higher overnight. The market gapped up to SPX 2458 at the open and continued to rally. The market had closed at SPX 2441 Friday. Just before 11am the SPX hit 2468, pulled back to 2463 by 3pm, then bounced to closed at 2466.

For the day the SPX/DOW gained 0.80%, and the NDX/NAZ gained 1.30%. Bonds dropped 9 ticks, Crude lost $1.35, Gold slid $9, and the USD was higher. Medium term support jumps to the 2456 and 2444 pivots, with resistance at the 2479 and 2525 pivots. Tomorrow: retail sales, export/import prices, the NY FED all at 8:30, then the NAHB and business inventories at 10am.

The market gapped up today for the first time in two weeks. It gapped over the 2444 and 2456 pivots at the open, which it had lost on Thursday, and continued higher. After three waves down last week: 2462-2474-2438, with a double bottom at 2438 and an extreme oversold condition. It has now had a quantified reversal to the upside, from SPX 2438 to 2468 thus far. A gap up opening, not as dramatic as this one, kicked off the previous Micro 3 in May. Let’s see how the market handles this one on this busy economic/opex week. Short term support is at the 2456 and 2444 pivots, with resistance at the 2479 and 2525 pivots. Short term momentum ended the day overbought. Best to your trading!

MEDIUM TERM: uptrend

LONG TERM: uptrend

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

 

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Weekend update

REVIEW

After three weeks of trending sideways this was a wild week! The market started the week at SPX 2477. After a higher open on Monday the market rallied to all-time high on Tuesday at SPX 2491. After that what appeared to a normal pullback turned into a profit taking selloff after the NK and US engaged in saber rattling. By Thursday the SPX had dropped 2% to 2438, bounced, and retested that low again on Friday. For the week the SPX/DOW lost 1.25%, and the NDX/NAZ lost 1.35%. Economic reports were light and mixed. On the downtick: consumer credit, the PPI, the Q3 GDP estimate and weekly jobless claims rose. On the uptick: wholesale inventories, the CPI and the budget deficit improved. Next week we have industrial production, retail sales, the NY/Philly FED and the FOMC minutes. Best to your week!

LONG TERM: uptrend

With the bull market already 18 months old, and the NK/US saber rattling intensifying this week, the market pulled back immediately after making all-time new highs. Since the potential for a black swan event exists, it behooves us to review the seven major indices (SPX/DOW/NAZ/NDX/TRAN/SOX/R2K) with a worse case scenario in mind. Therefore, we are putting aside expectations and just reviewing each of these indices wave patterns to see what they are displaying.

A worse case scenario for the DOW suggests the recent uptrend just completed Intermediate wave iii, and an Intermediate wave iv correction is underway. The wave structure from the early-2016 low does not suggest the bull market is over.

The NYSE has a similar pattern, albeit it is carrying the alternate Primary V scenario. Three Major waves up from the early-2016 low, with possibly a major wave 4 correction underway. No bull market top here either.

The Transports, however, do display five Major waves up from the early-2016 low. And the bull market here may have ended with the alternate Primary wave V count. Historically the Transports have topped together, with the other indices, or were a few months early. Despite the potential bearish count this supports the DOW/NYSE scenarios.

The Semiconductor SOX also displays three waves up from the early-2016 low. The recent uptrend failed to make new highs, so the SOX is probably doing an a-b-c Intermediate wave iv. Again, no signs of a bull market top in this index either.

The Russell 2000 does look like it has done five waves up from the early-2016 low. We have labeled it a Major wave a, since the R2K has always moved in large a-b-c’s. Sometimes this index tops early like the TRAN.

The SPX can be counted five waves up from early-2016 if you are will to accept a 2% correction as all of a key 4th wave, Intermediate iv. Since there have only been two other 2% corrections in the past 100 years, and neither was a significant wave, we have trouble with this potential count. The more likely scenario is that that little correction was Minor a of an ongoing Intermediate wave iv correction. This count would align the clearly bullish DOW/NYSE/SOX. An irregular Intermediate wave iv correction would also align the charts of the NDX/NAZ.

Plenty of worse case scenario counts to choose from. Some bullish, some bearish. Decide which ones you like and go with it. It’s your money.

MEDIUM TERM: uptrend

After a miniscule correction in April, the SPX aided by the DOW which did not correct, rallied to all-time highs just this week. The uptrend looked impulsive at times, but spent the past three weeks, of a 4+week uptrend, in a 1% range before the false breakout on Tuesday was sold. What the market managed to do in three weeks, a 1% range, was accomplished, in reverse, in three hours on Tuesday.

After the pump and dump activity on Tuesday, and reviewing all the other major indices, we decided to put the irregular Intermediate wave iv scenario back on the table. Clearing the OEW 2479 pivot was certainly no breakout. In case it was, we are maintaining the Micro 1-2 scenario too. The irregular iv count aligns with the SOX, the DOW/NYSE, and if you are so inclined even the DJ World index. Medium term support is at the 2428 and 2411 pivots, with resistance at the 2444 and 2456 pivots.

SHORT TERM

We continue to carry the Micro 1-2 scenario on the SPX charts, since it looks quite similar to the Micro 1-2 during the last uptrend. In fact, this Micro 2 is as oversold as the last one. This scenario cannot be ruled out until the SPX confirms a downtrend. It is still in a uptrend.

The decline from SPX 2491 so far is three waves: 2462-2474-2438. Where the first and second decline are nearly equal. Several hourly/daily indicators are oversold, and the market is due for at least a bounce, or to setup a positive hourly divergence. With several unknowns, including option expiration, in the coming week, the market could continue its volatility. Short term support is at the 2428 and 2411 pivots, with resistance at the 2444 and 2456 pivots. Short term momentum ended the week oversold. Best to your trading!

FOREIGN MARKETS

Asian markets were all lower for the week for a net loss of 1.5%.

European stocks were also all lower for loss of 2.9%.

The DJ World index lost 1.6%, and the NYSE lost 1.9%.

COMMODITIES

Bonds continue their uptrend and gained 0.5%.

Crude is still in an uptrend but lost 1.5%.

Gold was safe haven status this week and gained 2.2% during its uptrend.

The USD is still in a downtrend and lost 0.1%.

NEXT WEEK

Tuesday: retail sales, export/import prices, the NAHB, the NY FED, and business inventories. Wednesday: housing starts, building permits and the FOMC minutes. Thursday: jobless claims, the Philly FED, industrial production and leading indicators. Friday: consumer sentiment and options expiration.

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

Posted in weekend update | Tagged , , , | 180 Comments

Friday’s update

SHORT TERM: higher open then consolidation, DOW +14

Overnight the Asian markets lost 1.1%. Europe opened lower and lost 0.7%. US index futures were lower, then higher, overnight, and at 8:30 the CPI was reported higher. The market opened at SPX 2444, 6-points above yesterday’s close, then declined to yesterday’s close in the opening minutes. The market then rallied to SPX 2448 by 10:30, dipped to 2441 by 11:30, rallied to 2447 by 2:30, then hit 2438 again at 3:30. After that a bounce into the close ended the week at SPX 2441.

For the day the SPX/DOW gained 0.10%, and the NDX/NAZ gained 0.70%. Bonds rose 8 ticks, Crude added 20 cents, Gold rallied up $6, and the USD was lower. Medium term support remains at the 2428 and 2411 pivots, with resistance at the 2444 and 2456 pivots. This week the Q3 GDP estimate was reported at 3.5% v 3.7%.

The market opened higher today, retested yesterday’s low, then went into a trading range for the rest of the day. Some consolidation after a 2% decline in two days. With the thought that the NK threats could turn into some sort of black swan event, we reviewed the seven major indices (SPX/DOW/NAZ/NDX/TRAN/SOX/R2K). Since these indices usually top/bottom around the same time in bull/bear markets, we figured each ones’ wave structure should offer some clarity. Details in the weekend update. Best to your weekend!

MEDIUM TERM: uptrend

LONG TERM: uptrend

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

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Thursday update

SHORT TERM: another gap down opening, DOW -205

Overnight the Asian markets lost 0.7%. Europe opened higher but lost 1.1%. US index futures were lower overnight, and at 8:30 jobless claims were higher plus the PPI was lower. The market gapped down to yesterday’s low at SPX 2462, and continued to fall. Just past 10am the SPX hit 2451. Then after a bounce to SPX 2458 by 10:30, then market headed even lower. At 12:30 the SPX hit 2445, bounced to 2455 by 2:30, then dropped to 2438 and closed there.

For the day the SPX/DOW lost 1.20%, and the NDX/NAZ lost 2.20%. Bonds gained 9 ticks, Crude lost $1.15, Gold rose $9, and the USD was lower. Medium term support drops to the 2428 and 2411 pivots, with resistance at the 2444 and 2456 pivots. Tomorrow: the CPI at 8:30.

The market gapped down at the open for the second day in a row, as the NK saber rattling continues. From Tuesday’s all-time high at SPX 2491 the market has dropped 53 points. This is a bit more than a 61.8% retracement of the entire SPX 2408-2491 rally. The last time the market ended a Micro 1 in mid-May, the market also sold off quite quickly. That event was triggered by Comey’s memo. Many EW counts floating around. It’s been that kind of market. Project, monitor and adjust. Maintaining our count until forced to change. Short term support is at the 2428 and 2411 pivots, with resistance at the 2444 and 2456 pivots. Short term momentum ended the day extremely oversold. Best to your trading!

MEDIUM TERM: uptrend

LONG TERM: uptrend

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

Posted in Updates | Tagged , , , | 125 Comments

Wednesday update

SHORT TERM: gap down opening on NK fears, DOW -37

Overnight the Asian markets lost 0.8%. Europe opened lower and lost 1.0%. US index futures were lower overnight, and the market gapped down to SPX 2464 at the open. The SPX had closed at 2475 yesterday. In the opening minutes the SPX ticked down to 2462, and then began to rebound. The market continued higher until hitting SPX 2473 at 12:30. Then it started to pullback again. Around 2:30 the SPX hit 2465, then rallied to close at 2474.

For the day the SPX/DOW lost 0.10%, and the NDX/NAZ lost 0.20%. Bonds gained 8 ticks, Crude rose 40 cents, Gold rallied $14, and the USD was lower. Medium term support remains at the 2456 and 2444 pivots, with resistance at the 2479 and 2525 pivots. Tomorrow: jobless claims and the PPI at 8:30, then the budget deficit at 2pm.

The market gapped down at the open today, following yesterday’s big “new all-time high 1% reversal” day. What the market couldn’t do in the previous 14 sessions, it managed to get done in just three hours yesterday afternoon. These quick steep declines appear to occur about every month. Look at the NDX/NAZ daily charts. Within minutes after the open the market hit the low for the day at SPX 2462. Then closed at the high for the day at SPX 2474. Was that 29-point decline, 2491-2462, all of Micro 2? Short term support is at the 2456 and 2444 pivots, with resistance at the 2479 and 2525 pivots. Short term momentum ended at neutral after being oversold. Best to your trading!

MEDIUM TERM: uptrend

LONG TERM: uptrend

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

Posted in Updates | Tagged , , , | 180 Comments

Tuesday update

SHORT TERM: new highs then pullback, DOW -33

Overnight the Asian markets lost 0.2%. Europe opened lower but gained 0.2%. US index futures were lower overnight, and the market opened 5 points below yesterday’s SPX 2481 record close. Right after the open, however, the market started to rise. Just past noon the SPX hit a new all-time high at 2491, and then started to pullback. The pullback lasted until 3:30 when the SPX hit 2470. Then a bounce into the close ended the day at 2475.

For the day the SPX/DOW lost 0.20%, and the NDX/NAZ lost 0.20%. Bonds lost 3 ticks, Crude slid 30 cents, Gold added $4, and the USD was higher. Medium term support drops back to the 2456 and 2444 pivots, with resistance at the 2479 and 2525 pivots. Tomorrow: wholesale inventories at 10am.

The market opened lower today, made a low at SPX 2476 within the first 15 minutes, and then started to rally. Just past 11:30 the SPX broke through the OEW 2479 pivot range (2472-2486) on its way to 2491 just past noon. With the breakout of the pivot this uptrend, which started at SPX 2408 in early July, cannot be a B wave. As a result we updated the SPX hourly/daily charts to display Minute wave iii of Minor wave 5 underway. The previous uptrend/downtrend reversals have been downgraded from Minor 5 to Minute waves i and ii. With a Minute iii underway it suggests Minor wave 5, of Int. iii, is extending. Which is exactly what the DOW has been displaying for several months.

The short term count is not totally clear, but it does look like a possible 5 waves up from SPX 2408: 2432-2413-2484-2465-2491 to end a Micro 1. Micro 1 of Minute i was 77 points, and Micro 1 of Minute iii is currently 83 points. Short term support drops to the 2456 and 2444 pivots, with resistance at the 2479 and 2525 pivots. Short term momentum dropped from quite overbought to slightly oversold. Best to your saber rattling trading!

MEDIUM TERM: uptrend

LONG TERM: uptrend

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

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Swarm today at 5pm

Last week’s results were 4 of 6 correct. After 24 weeks the Swarm is 63% accurate, compared to a 51% accuracy from the surveys. Impressive!

If you have not previously participated and would like to, please follow the instructions in the second paragraph of this link: https://caldaro.wordpress.com/2017/02/05/swarm-intelligence/.

Please fill out this survey any time before entering the swarm on Tuesday at 5pm. Unanimous AI is offering a $25 Amazon Gift card to the most correct participant each week: https://www.research.net/r/CPMR2QJ

Use this private link to enter the SPX UNU on Tuesday: https://go.unu.ai/unums/2382.

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