OEW Tutoring

Great News! We have just completed our 2019 update of the OEW lesson plan. Over the past four years we have been compiling additional verified and quantified observations in the various markets. As a result, the new lesson plan has been expanded to thirty lessons, with nearly all real time charts.

Objective Elliott Wave, (OEW), is a quantitative approach to the Elliott Wave Theory. OEW is not textbook Elliott Wave. It is a proprietary technique that defines every significant wave within bull and bear markets quantitatively. All markets are driven by long term investor confidence cycles. When the cycle is positive a bull market unfolds, when negative a bear market. The OEW technique not only determines if a market is bullish or bearish, it also determines how far a market has progressed in its current cycle.

This is not a course, this is one on one private tutoring. You may take as long as you like to fully grasp the material and concepts at hand. It is not complicated. Actually, you will be amazed, after some period of time and dedicated study, how easily you will be able to discern the waves as they unfold. OEW quantitatively identifies all the medium, and long-term waves that create bull and bear markets. Every one! We have been applying this technique, successfully, for nearly 40 years.

Once you learn OEW you will be able to quantitatively research the historical price performance of any asset class, or stock, and determine its current position within its overall long-term trend. Quantified waves never change. Then using shorter term charts, you will be able to determine good entry and exit price areas in the asset you are tracking.

We first uncovered this technique in the early 1980’s when doing an analysis of the entire history of the US stock market. We still have those charts. When waves are determined quantitatively, mathematically, they never change, past or present. At that time our analysis led us to believe that a stock market crash was likely in late-1987 to early-1988. Then another bull market would be underway. When the stock market did crash in October 1987, and a new bull market began in December 1987, we knew we had quantified the Elliott Wave Theory.

Over the years OEW analysis has led to some important projections in just the stock market alone. We projected the 1987 top and subsequent crash, called the Dec. 1987 low, the July 1990 top to the day, the 2000 top, the Oct. 2002 low, the Oct. 2007 top (in early Jan08), the Mar. 2009 bear market low nearly to the day, the 2016-2018 bull market (in mid-2016), and the recent bull market top in 2018.

In Bonds: OEW confirmed the bull market in 2007, then turned long term bearish in 2016. OEW pinpointed the bull market high in Crude at $148 in 2008, turned bearish, and then turned bullish in Q2 2016. In Gold: identified a new bear market not too far from its 2011 $1900 high, and we remain bearish. In currencies: OEW tracked the bear market in the USD until 2011, signaled a new bull market, then turned bearish again in 2016. In Real Estate: OEW identified the bull market top in 2005, and then turned bullish in 2012.

Bull and bear markets can last for years. Medium term uptrends and downtrends only last for a few months and are often mistaken for changes in long term trends. OEW analysis not only confirms when changes in long term trends are occurring, but also allows one to track a bull or bear market as it unfolds.

If you are interested in learning how to do this type of analysis yourself, and joining our private OEW group, just contact me at caldaro@msn.com for details. Best to your trading/investing.

“The possession of knowledge, unless accompanied by the manifestation and expression in sharing is a vain and foolish thing. The Law of Use is universal, and he who violates it suffers by reason of his conflict with natural forces.”

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Wednesday update

SHORT TERM: consolidation day, DOW -21

For the first three days of the week the Asian markets gained 0.9%, and the European markets gained 1.5%. The US market started the week at SPX 2707, dipped on Monday to 2699 before making a new uptrend high at 2725. Tuesday: a higher open and the SPX hit 2739. Wednesday: a lower open, dip to SPX 2724, then range bound for the rest of the day.

Not much change in the squiggle chart, except Micro 3 (orange) has hit a new high at SPX 2739. We have noticed however, the market appears to be stalling within the OEW 2731 pivot range. There is a negative divergence hourly, and negative divergences daily on all four major indices (SPX/DOW/NDX/NAZ). If we have seen the best of Micro 3 we could get a 30+ point pullback next for Micro 4. The uptrend won’t end, it will just be a pullback. Short term support is at the 2731 and 2656 pivots, with resistance at the 2780 and 2798 pivots. Short term momentum has that negative divergence and ended the day at neutral. Best to your trading!

MEDIUM TERM: uptrend

LONG TERM: uptrend 80% probable

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

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Turn what appears to be random growth into a quantified OEW repetitive pattern

Many are familiar with the original three Dow Jones Averages: Industrials, Transports and Utilities. The mainstream media reports daily on the first two, but hardly pays any attention these days to the latter. In the following paragraphs we will display how what appears to be random growth patterns are actually repetitive growth patterns using OEW.

The Transports. Most are quite familiar with this average as it is quoted every day by the MSM, and we even have its charts included in our stock charts. This is what it looks like over the past 100 years.

To the untrained eye, after the 1932 crash low, it looks like a major low in 1938, 1970 and 2009. Its three biggest bear markets over the past century. When we apply OEW quantified analysis we see something a bit different, and a series of repetitive patterns. No randomness at all!

After Cycle waves [1] and [2], 1932-1938, we see a simple P1-P2 (blue), a simple M1-M2 (black), then a five wave (purple) M3, followed by a five wave (purple) M5 to complete P3 (blue). Then Cycles waves [3] and [4] complete in 1973-1974, and the same exact pattern starts all over again. A simple P1-P2, a simple M1-M2, a five wave M3, followed by a five wave M5 to complete P3. SC1 and SC2 then conclude in 2008-2009. Then the same repetitive pattern starts all over again. This suggests Intermediate iii of Major 3 should be underway next.

The Utilities. While neglected these days by the MSM it is still unfolding in its own repetitive pattern. This is what is looks like over the past nearly 100 years.

 

Notice it did not end its depression crash until 1942. Then it looks like a major low in 1970, and another major low in 2002. When we apply OEW quantified analysis we see a totally different series of repetitive patterns, unique to this index.

Cycle [1] starts off with a lengthy P1 and P3 (blue), and ends with a five Major wave (black)P5. The after the Cycle [2] low in 1974 the pattern repeats with a slight alternation. Cycle [3] starts with a lengthy P1 (blue), a five Major wave (black) P3, then a simple P5 (blue). Then after the Cycle [4] low, SC 1 high, and SC2 low, the initial pattern (1942-1965) begins to repeat again. This suggests P5 should subdivide into five Major waves next.

If one had this much historical data, and the proper training, one could uncover similar repetitive patterns in any stock index, commodity, currency or stock. Best to your investing.

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

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Weekend update

REVIEW

The week started at SPX 2665. After a gap down opening on Monday the market hit SPX 2624. After that it rebounded, and continued to work its way higher for the rest of the week. Tuesday hit a high of SPX 2651, Wednesday SPX 2690, Thursday SPX 2709 and Friday SPX 2717. For the week the SPX/DOW gained 1.5%, and the NDX/NAZ gained 1.5%. On the economic front reports for the week were mixed. On the downtick: Case-Shiller, consumer confidence, ADP, pending home sales, Chicago PMI, plus the unemployment rate rose. On the uptick: new home sales, monthly payrolls, ISM, consumer sentiment, wholesale inventories and weekly jobless claims improved. Next week’s highlights: SOTU address and ISM services. Plus the ECRI continued to rebound for the third week in a row, after a low of -6.5%. Best to your week!

LONG TERM: 80% uptrend probability

As noted in previous weekend reports going back to September, we have been tracking several selected foreign markets. We had noted they had turned bearish well ahead of the US market. Then when the US market turned bearish in October they were all aligned. As the US market was selling off in December, for the worse December since 1931, these markets were displaying signs of being in their last bear market downtrend. In January some were confirming uptrends off that low. Now we have Australia, China, Hong Kong, Singapore and S. Korea all in confirmed uptrends. We concentrated on Asia for obvious reasons.

We have a data base of DOW weekly charts, labeled in OEW terms, going back to the year 1900. It has been a great reference over the years. I actually first did this work back in the early 1980’s. Recently we uncovered an interesting long term wave relationship. In recent times, between the end of one Primary III and the beginning of the next Primary III has been exactly 16 years. In example; 1933-1949, 1966-1982 and 2000-2016. The previous set, and we question the DOW data prior to 1921, was 1916-1933 – 17 years. There should no longer be any doubt we are in Primary III.

The weekly chart remains unchanged except for the update of a tentative green Major 2 to a standard black Major 2 labeling. That positive RSI divergence looks fairly compelling right now. A Super cycle wave 2 ended in 2009. Then a Primary I bull market lasted from 2009-2015. The Primary II bear market that followed was relatively short and bottomed in 2016. After that we had a five wave Major 1 bull market to 2018. And recently a Major 2 bear market from October – December 2018. An Intermediate wave i of Major wave III bull market should now be underway.

MEDIUM TERM: uptrend

We have been tracking five criteria to help us determine if the Xmas low was the bottom, or a retest of that low will be required. The five criteria were detailed in last weekends update. Currently four of the five criteria are positive: largest rally since bear market began, NDX/NAZ impulse wave, 14+% advance of the lows, and this week NYAD above 37%. The only factor left is an impulsive SPX/DOW. It looks impulsive, but it has not been quantified as five waves just yet – still three. This is the reason for the 80% probable long term uptrend.

The medium term uptrend was confirmed this week. As a result we have labeled the Xmas low at SPX 2347 as Major wave 2. This uptrend should be Minor wave 1 of an Intermediate wave i bull market. We have only labeled two waves thus far, with a third underway: 2520-2444-2717. This chart is where we are looking to quantify five waves in this uptrend.

One last note. We have been tracking the SOX index nearly from inception – 1994. We first wrote about this index on the blog in 2010: https://caldaro.wordpress.com/2010/12/02/sox-index-update/. It appears, yet again, a 2-year cycle low bottomed for the SOX in December 2018. Often this leads to an explosive move in this index to the upside, i.e. 2016-2018. Sometimes it doesn’t make much of a move at all, i.e. as noted on the chart in that writeup. In either case a 2-year cycle low for the Semi’s is often a good sign for growth stocks.

SHORT TERM

The short term count doesn’t look much different on the hourly chart from last week to this – except for higher prices. The reason, as we noted above, is that we have not been able to quantify more than three waves. We have been able to quantify the very short term movements on what we call the squiggle chart – first presented last weekend.

Just two new waves this week. The selloff to SPX 2624 on Monday, then the uptrend high at SPX 2717 on Friday. Thus far it looks like we have completed Minute waves i and ii, Micro waves 1 and 2, and Nano waves i, ii, iii and iv, with v underway. When Nano wave v (gray) concludes, it will also end Micro wave 3 (orange). Then we should see a sizeable pullback for Micro 4 before the SPX rallies to a higher high to complete Micro 5 and Minute iii (green). After that we should see even a larger pullback for Minute iv before the uptrend ends at higher highs to complete Minor wave 1.

Short term support is at the 2656 and 2632 pivots, with resistance at the 2731 and 2780 pivot. Short term momentum ended the week at neutral after putting in a negative divergence at the SPX 2717 high. Best to your trading the Rock Star FED speak week!

FOREIGN MARKETS

Asian market for the week were mostly higher and gained 0.6%.

European markets were mixed and gained 0.3%.

The DJ World index gained 1.3%, and the NYSE gained 1.7%.

COMMODITIES

Bonds continue to uptrend and gained 0.4%.

Crude remains in an uptrend and gained 2.9%.

Gold also remains in an uptrend and gained 1.9%.

Bitcoin is in a choppy uptrend but lost 3.3%.

The USD is in a downtrend and lost 0.2%.

NEXT WEEK

Monday: factory orders. Tuesday: ISM services. Wednesday: trade deficit. Thursday: weekly jobless claims and consumer credit. Friday: wholesale inventories. Plus there are five FED governor speeches and the State of the Union address.

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

Added four more charts to stock charts: CRON, DELL, EXAS and HYRE.

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Wednesday update

SHORT TERM: gap up opening, DOW +435

For the first three days of the week the Asian markets lost 0.7%, and the European markets gained 0.7%. The SPX started the week at 2665. After a gap down opening on Monday the SPX hit 2624 and then started to rally. Tuesday had a flat opening and the market finished at SPX 2640. Wednesday had a gap up opening, and the SPX hit 2690, a new high for the uptrend, before closing at 2681.

The short term chart we offered over the weekend continues to squiggle along. We’re accepting the SPX 2672 level as a small fifth wave failure, as the DOW made a new high that day, and the market sold off afterwards on Monday. At SPX 2624 it completed a small 4th wave ‘iv’ and now has rallied to a new high at SPX 2690 for a small ‘v’. It currently looks like the market needs a pullback, and then another new high to complete the third wave up from the SPX 2347 low. Then a sizable pullback for wave 4, should lead to one more new high to end the uptrend.

Short term support is at the 2656 and 2632 pivots, with resistance at the 2731 and 2780 pivots. Short term momentum hit quite overbought at today’s high. Best to your trading!

MEDIUM TERM: uptrend 99% probable

LONG TERM: uptrend 80% probable

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

NOTE: starting tomorrow, any blog post with the name Trump, Pelosi or Schumer in it will get deleted. If I forget remind me. thank you

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Weekend update

REVIEW

The market started the holiday shortened week at SPX 2671. Tuesday started with a China-US related gap down opening to SPX 2654. The decline continued until it hit SPX 2617 in the last hour of trading and then rebounded into the close. Wednesday a gap up opening to SPX 2653 was sold off to SPX 2613 by noon. Then the market rebounded again into the close. Thursday a quiet open led to a slightly higher close. Then on Friday the market gapped up to SPX 2661 on reports the FED may be halting Quantitative Tightening. Then the market hit SPX 2672 before settling the week at SPX 2665. For the week the SPX/DOW was mixed, and the NDX/NAZ gained 0.05%. Econ0mic reports for the week were sparse, as most were delayed due to the government shutdown. Two downticks: existing home sales and leading indicators. One uptick: weekly jobless claims improved. Next weeks reports are plentiful, highlighted by the FOMC meeting, Q4 GDP (est. +2.6%), and monthly Payrolls. Best to your week! ECRI ticked up again this week. Low was -6.5% two weeks ago.

LONG TERM: 60% uptrend probability

Over the past several months we had been reporting the deterioration in the foreign markets as the US markets continued to climb. Then after the US markets topped and joined the foreign indices we noticed a potential shift in late-December. The foreign indices that led the bear market declines appeared to be in their last downtrends of their bear market. This week we report that Australia, Hong Kong, Singapore, and S. Korea all appear to have bottomed, and are now in their first confirmed uptrend of a new bull market. Canada joins this list as well, and Brazil continues to make new bull market highs.

No change in the US markets. After a 2009 super cycle low the market advanced for six years into a Primary I bull market high in 2015. A Primary II bear market followed into early 2016. Then Major wave 1 of Primary III bull advanced from February 2016 to October 2018. This was followed by a bear market into a late-December low at SPX 2347. If that was the low, an Intermediate wave I of Primary III bull market is now underway. If not, we expect a retest of that late-December low then an Intermediate wave I bull market to commence. In either case the bear market is either over or close to being over.

MEDIUM TERM: 80% uptrend probability

As noted in previous reports, we have been tracking five criteria to help in determining that the bottom is in, or a retest is next. The five criteria: 1. the length of this advance, 2. the SPX/DOW short term wave structure, 3. the NDX/NAZ wave structure, 4. the strength of the rebound in percentage terms, and 5. the strength of the rally in market breadth.

As previously noted. The advance is the longest since the bear market began – a positive. The NDX/NAZ wave pattern for this rally looks impulsive – a positive. The strength of the rally in percentage terms has exceeded the levels for a B wave – a positive. The SPX/DOW wave pattern still looks corrective – a negative. The market breadth has not yet exceeded potential B wave levels – a negative. Overall there is a 60% probability that the bear market has bottomed. A separate and reliable source, has breadth data from the year 1932. They suggest there is an 11% probability of a retest, a 22% probability we’re still in a bear market, and a 66% probability that the bear market bottom is in.

On Wednesday we noted some price parameters based upon the markets action this week. We currently see three waves up in the SPX. If at any time the SPX drops below to 2615 then that could be the 4th wave providing: 1. the market then rallies above 2675 and 2. the market does not drop below 2520 first. The former would suggest a five wave sequence higher, the later a three wave rally and retest of the lows. In either case it looks like the SPX will confirm a medium term uptrend this week.

SHORT TERM

Over the past several weeks we have been tracking this rally from SPX 2347. At first it looked a bit choppy, then five waves were completed at SPX 2520. Then the market did go into chop mode which ended at SPX 2444. We’ve labeled that high and low as waves i and ii.

Since then the market did several choppy waves up, then spurted higher in a good rally to SPX 2675. This week the market sold off early in the week hitting SPX 2617, then SPX 2613, before rallying into week’s end. This is how we are quantitatively counting this uptrend’s short term waves. This count will fail if the market drops below SPX 2598. A member of our group offered a slight alternate to this on Friday should it fail.

Short term support is at the 2656 and 2632 pivots, with resistance at the 2731 and 2780 pivots. Short term momentum ended the week overbought. Best to your trading FOMC week!

FOREIGN MARKETS

Asian markets were mostly higher and gained 1.0%.

European markets were mostly higher and gained 0.9%.

The DJ World index gained 0.4%, and the NYSE lost 0.2%.

COMMODITIES

Bonds continue to uptrend and gained 0.3%.

Crude continues to uptrend but lost 0.7%.

Gold remains in an uptrend and gained 1.2%.

Bitcoin appears to be starting an uptrend but lost 1.5%.

The USD remains in a downtrend and lost 0.6%.

NEXT WEEK

Tuesday: Case-Shiller, consumer confidence. Wednesday: Q4 GDP (est. +2.6%), the ADP, pending home sales, and the FOMC meeting concludes with a press conference. Thursday: weekly jobless claims, personal income/spending, and the Chicago PMI. Friday: monthly payrolls, ISM, construction spending, consumer sentiment, and monthly auto sales. Best to your week!

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

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Wednesday update

SHORT TERM: gap up opening sold then rebound, DOW +171

For the first three days of the week the Asian markets lost 0.4%, and the European markets lost 1.3%. US markets were closed Monday, had a gap down opening on Tuesday hitting SPX 2617 before rebounding in the last hour. Then had the above mentioned gap up opening today, which was sold until the SPX made lower low at 2613. Then the market rebounded in the afternoon.

Early Tuesday the end of month US-China trade meeting was reported cancelled. Kudlow came on CNBC in the last hour to say that report was false. Market is obviously still hostage to that important trade deal. Technically. The decline sets up a potential further drop to SPX 2604. This would give the SPX a potential 4th wave as long as it rallies to 2675 afterwards. It could also begin another avalanche if the SPX drops below 2520. This is were the first wave up of this rally ended. Inflection point remains with specific parameters for SPX price now: 2520, 2603, and 2675.

Short term support is at the 2632 and 2594 pivots, with resistance at the 2656 and the 2731 pivots. Short term momentum displays a positive divergence at today’s lows. Best to your trading!

MEDIUM TERM: uptrend 60% probable

LONG TERM: uptrend 60% probable

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

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