thursday update

SHORT TERM: quiet consolidation day, DOW +33

Overnight the Asian markets gained 0.4%. European opened higher and gained 0.3%. US index futures were higher overnight. At 8:30 weekly Jobless claims were reported lower: 340K vs 344K, and the Trade deficit expanded: -$44.4 bln vs -$38.5 bln. The market opened two points above yesterday’s SPX 1541 close. At 9:30 FED governor Powell’s testimony: Then after a pop to the uptrend high at SPX 1545 the market dipped to 1542 by 10:00. The market then ground its way higher to a new uptrend high at SPX 1546 by 12:00. Flow of Funds were reported: Then the market started to drift lower. At 2:00 the SPX hit 1542 again then moved higher. At 3:00 Consumer credit was reported higher: $16.2 bln vs $14.6 bln. Heading into the close the SPX hit 1546 again by 3:30, then closed at 1544.

For the day the SPX/DOW were +0.20%, and the NDX/NAZ were +0.25%. Bonds lost 15 ticks, Crude rallied $1.10, Gold dropped $5, and the USD was lower. Medium term support remains at the SPX 1523 and 1499 pivots, with resistance at the 1552 and 1576 pivots. Tomorrow: the monthly Payrolls report at 8:30 then Wholesale inventories at 10:00. After the market closes there is a speech from FED governor Duke at 8:00.

The market opened higher today, but spent the day in a tight four point range: SPX 1542-1546. It did make a new uptrend high, but there did not appear to be any great interest, either way, with the monthly Payrolls report tomorrow. The negative short term divergence, we observed after the close yesterday, remains. The count remains Minute i SPX 1525, Minute ii SPX 1501 and Minute iii SPX 1546 so far. We uncovered a series of time and price relationships for the market longer term. It offers a potential roadmap through 2014. Will report on this in the weekend update.

Short term support is at the 1523 and 1499 pivots, with resistance at the 1552 and 1576 pivots. Short term momentum displays a negative divergence. The short term OEW charts remain positive with the reversal level now SPX 1529. Best to your trading!

MEDIUM TERM: uptrend

LONG TERM: bull market


About tony caldaro

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160 Responses to thursday update

  1. budfox9450 says:

    SP has had a great run. (iii) is cresting. Time for a corrective pattern, and rest
    for this weekend. Anyone, going short?

  2. pbnj123 says:

    We are just a smidge outside of the upper BB(20,2,0) – but VIX has room to move to the down side

    • mokiepon says:

      pb, what Vix does and what Vix etn’s do I’ve found can be very different things. Etn’s are high because everyone is expecting a downtrend. That’s why I’m a bit paranoid about shorting. M

  3. rc1269 says:

    spx 1600 by next wednesday!!

  4. mokiepon says:

    To: Our Guru and generally RAD Leader – When do you think your Weekend Update will be posted? You don’t want a bunch of us to get in trouble with our Sig. Others because we can’t turn loose of your site, anxiously awaiting your news! LOL! M

  5. mike7x says:

    SPX 1552 or 1576? Which pivot does the Uptrend end at? Or, can we go higher? SPX 1564 is the average of the two pivots. That’s my target. SPX 1564. (The waves may suggest different. We should find out in the Awesome Weekend Update.) 🙂

  6. CB says:

    Hi Tony, is Brazil close to confirming an unptrend today?

  7. mokiepon says:

    I have a hunch this is going to be one of those meandering 4th waves that makes you sea sick. Hope I’m wrong. M

    • rc1269 says:

      that is, unless this iv wave only lasted 50 mins

      • mokiepon says:

        Sounds good. “Make it so!” – Capt. Picard M

      • torehund says:

        In small scale EW its easy to bee fooled by the dimensions of things, just like if one uses a magnifying glass looking closely at ones nails (for example), very close its almost impossible to tell if its a toe nail or a finger nail. But when things have resolved one sees the difference on a larger scale. Thats why its stressful to attempt comprehending smaller structures. So larger is better, let alone some aweful intermediate term mistakes. Tony is very good at separating all dimensions on his charting, and thats why he can predict down to smaller scale. But meeting trigger points where small roads crosses its always hard to tell which way on the small timeframes, so it isnt easy to day trade…and especially if one speculates in small cap stocks.

    • torehund says:

      Melinda what I have come to after some years in the market is that one needs a solid backbone of conviction on a yearly basis and just stick to it no matter what the market does in the smaller timeframes. EW on a smaller scale gets more and more difficult as one gets down to the nano and pico waves. And throw into the equation individual stocks and one needs antacids… Concerns is the fuel that drives market like a depression is the sentiment delta that makes us feel happy and content when it lightens up. We all need tis delta thing in our lives to feel ALIVE, once struggeling and then we can appreciate rest and tranquility. If one summates all stocks and all human beeings we are much closer to the grave pessimism than to euphoria on a larger timeframe. As I have pointed out many stocks are still at the bottom of an aweful ABC down all the way back from 2000. And just a very few are closer to the peak than bottom like Apple. The energy problem that we have been struggeling with is now almost solved, and it was not so in year 2000 and in 2007. World is lean and mean and ready for a revenge, and a new round of prosperity will emerge. I dont need that Lamborghini, but in a few years from now it may be possible to drive one without beeing harassed, lol. Its all about collective consiousness and it swings on large scale between individuals, countries and the world as a whole unit.

  8. torehund says:

    Good weekend to everyone at the forum, gap up this morning didnt sell off a lot, more juice to come when all these macd crossings play out on the smallcaps. Many shares are starting to work on a 3rd wave (appears to be). That could give a smooth sustained rise when they eventually all march together.

    • mokiepon says:

      Hi torehund. I guess you’re back from vacation. It sounded really nice. Markets just doing their thing. Glad you’ve returned safely. M

      • torehund says:

        Melinda I am still residing in Barra de la Cruz, planning to stay until 11 of June. And yes I feel that I am eschewing (sounds better than cheating, lol) society a whole lot by not contributing meaningfully. Its a tranquil place just a small village, with an empty beach attached to it. I can fully recommend the place if one can handle a simple living for a while.

      • mokiepon says:

        So you’re still on vacation… You can’t quite vacat Tony’s site though; I understand, it’s in the blood. In my younger years, places like Barra de la Cruz were no problem for me and simple living. Nowadays, it gets a bit more involved. Go play while you can! M

    • torehund says:

      And the big Hang Seng divergence is yet to play out, on a large scale THE rallly of all time could soon commence over there, hopefully also creating some inflation making other countries a little more competitive.

      • torehund says:

        …and inflation in S Korea means inflated prices on rigs and ships too, making the latter players not having to write down valuations going forewards, and thats BULL.

      • torehund says:

        little off topic, but in addition to the power of dollar appreciation (available tool to compress commodities), I think the alternatives like ethanol and solar will keep a lid on runaway oil prices, then there is nat gas that will also compress the price of oil as its historically cheap. In 2007 we had NO tools from keeping oil prices from running wild, and they did….
        So before we will see a significant oil spike these altlernatives have to become more expensive. Thats why I think oil consumption could rise and not cause a lot of appreciation. That signals a possibility for renewed growth world wide.
        Japan is now out of recession, next up is Europe.

      • torehund says:

        M-sitting on a Batta@internet cafe just to check that things pan out as they should. Funny how selling exhaustion seems to be hitting the market. And thats understandable as more and more countries are bottoming out, it isnt great yet but boy do the world have lots of upside in the years to come. What we really have to do is buy and sit until a recession call is confirmed, and it could be way ahead in time. Looking at the USD to NOK it appears there is lots of room for the dollar to depreciate vs the NOK timewise 1-2 years, although the depreciation will not be significant. And the euro has heaps of upside once the markets focuses on German strength. And german strength will eventually fuel the surrounding countries in the EU.

  9. sirrobbie says:

    Please help understand here… I am new and I see a lot of opinions posted (with some that “expect things to happen the next day” which never happens)
    Whose opinion counts here (other than Tony’s)? Since I read lots of posts that Tony says “thank you” to, but they are all very, very wrong…

  10. llerias7 says:

    Lets see where we are: minute IV of Minor 3 of Intermediate 3…should we expect an end for Minor 3 around 1560´s…is that so?

  11. $SPX best short in weekly 2faced folio is $YOKU -10.22%

  12. budfox9450 says:

    Tony – the SP ( iii ), it was close, to my question in timing.
    But – no cigar….try to do better next time. Does appear 1575 ish
    is a good top area, too. Have a sunny weekend, too.

  13. rc1269 says:

    VIX not yet playing along that this is any kind of top

  14. best performer in weekly 2faced folio is this week so far is $SNMX, +14% so far.

  15. Pico Lee says:

    Thanks Tony aka awesome dude aka The Ayatollah of Rock n Rolla
    I’m going to play the USDA report @ 11:00 then I’m off to a America’s Got talent audition
    U guys have a great weekend..Its beautiful outside

  16. rc1269 says:

    did AAPL have a mini algo flash crash this am around 10:01 EST? Bloomberg has a big tick down from 434 to 421 and then right back up to 434. anybody else see that?

  17. blubrd67 says:

    Do we still have a stimulus?
    Since Jan 1 not anymore. Nice article by Thomas Kee shows we have a drain now, that will soon show.

    “Treasury issues far more new bonds every month than it redeems, and when it does this, it drains liquidity from the financial system.
    Tightening fiscal-policy liquidity is being drained out of the economy at a much faster rate than what is being infused into the financial system.

    Therefore, if you add it all up, we have $11.2 billion in stimulus, and $23.4 billion as a drain on liquidity, for a net monthly drain of about $12.2 billion. This is the first time we have had a net drain since the credit crisis began, but no one sees it yet because the drain has not yet showed up in the data.

    It will. In fact, we should see the first glimpse of that when we get the first-quarter 2013 initial GDP readings, but right now, no one cares. The financial system is seeing added liquidity, the data does not show the drain yet, so the market is in an odd place. They just want to push it higher, and they do not have reason to be concerned yet. Most people are not seeing this warning, but it is real.
    We are now officially in an equity-asset bubble.”

    • tommyboys says:

      This is interesting because if the REALITY is that the Fed has been draining the pool for the past month or two and we continue to new highs it suggests the Fed is no longer needed to push things along. The market is effectively self sustaining. If it was shown that the punch bowl was removed and the market immediately did a 180 it would suggest the Fed was solely responsible for moving us higher. Whether we’re “aware” or not does have an effect but if we’re really moving higher independent of the Fed this is bullish imho. Time will tell…

      • mokiepon says:

        tboys, the markets are self sustaining because many don’t understand that liquidity is being drained. Once that realization occurs, reactions could be quite different. M

      • tommyboys says:

        I understand the premise of the article and disagree. It’s like teaching a kid to ride a bike by holding on to it until he rides without the help. When you inform him later he was actually riding without assistance he will not unlearn what he’s accomplished. The psychology of the market is a very subtle soft science. I recommend a great book published in 1912 entitled just this, “The Psycholgy of the Market” by George Selden…GREAT view from a traders’ perspective.

      • mokiepon says:

        tboys, I understand what you’re saying and disagree with you. I liken it more to Wiley Coyote who is chasing Roadrunner and unknowingly goes off a cliff; then, when he looks down and realizes it, down he goes. The reason that I think this is even with Fed assist, we can’t manage 2-3% GDP. It’s ridiculous. We need more like 5% for real economic growth. M

      • tommyboys says:

        All in good time (GDP)…further once an article like this is published its already well “out there” – if fact – and not many who count are surprised.

      • mokiepon says:

        tboys, you’re probably right. It is what it is. Have a great weekend! M

    • tony caldaro says:

      The monetary base just hit a record high … draining what?

      • tommyboys says:

        I think the article’s thesis is that its a lagging number. Whatever was reported most recently is data from some time ago and not current. I think.

  18. tommyboys says:

    Big jump in the 10 year today back to 2.04%…nice

    • Pico Lee says:

      hey tommyboys

      Its a nice start !

    • rc1269 says:

      i think 10yr has until about 2.4% before any real danger to the long term downtrend in rates

      • tommyboys says:

        Probably true. I’m operating under the thesis that rates HAVE bottomed however and the new trend is higher over the coming years/decades. I remain bullish for the market based on this – to a point. Once the 10 year gets up into maybe that 5-6% range it will begin exerting pressure on equities. Until then however its bullish imho… Time will tell.

    • rc1269 says:

      so if rates go back up at the same velocity they came down then we should have another 5-6 years of bull mkt for stocks. not bad!

      • tommyboys says:

        This is my thought – and would likely surpirise the most – although it’ll likely be longer or shorter as they probably won’t move at an identical pace – although a possibility. We’ll see!

  19. Pico Lee says:

    Uptrend over

  20. pbnj123 says:

    Good morning Tony
    Quick question for you and I am sure it’s nothing but why is the 1552 pivot above 1560 on your SPX 60 minute chart?
    Thank you

  21. Pico Lee says:

    pp @ 1542.25 R1 @ 1547 R2 @ 1550.25
    S1 @ 1539 S2 @ 1536
    Pivot time & Fridays historically counter trend …maybe 🙂

  22. budfox9450 says:

    Nice “flag pole” possible pattern starting…1553-1560,
    near term estimate….

  23. H D says:

    LOD yesterday was 1541.67 10 handles to pivot

  24. H D says:

    236K Jobs added, 7.7% UE, $ ralling, all time highs DOW, Household net worth rose 1.17 Trillion to highest in 5 years….. cue the AC/DC USA!

  25. Pico Lee says:

    PP @ 91.12 R1 @ 92.02
    S1 @ 90.51

    Ok guys give em heck

  26. rc1269 says:

    well if anything is going to push us to a near term high this jobs # should do it

  27. Pico Lee says:

    Alright ! Pivot time !
    GL !

  28. mokiepon says:

    I love charts! Here’s some interesting ones this morning. Looking forward to Tony’s Weekend Update!


  29. M1 says:

    It is good to see futures suggesting another gap up at the open. This may be only the start of the huge rally that I am expecting.
    aapl is still weak, but soon it should rally.

  30. mokiepon says:

    GM All.

    Expectations of only 160K in new jobs?! Talk about loweingr the bar! Pathethic. Don’t know the name of the guy on CNBC who said it, but truly, markets have Bifurcated Psychological Disorder. M

    • tony caldaro says:

      My source suggests between +165K and +170K … previous +157K.

      • mokiepon says:

        tony, to be honest, all these numbers are utterly ridiculous! When compared to the number of jobs lost each week, there’s no where near the progress we should be making. M

      • wcagle says:

        Tony….do we sell the NFP news? Would seem we’ve had quite a rally into the #…tell me insiders didn’t know. “Say it ain’t so, Joe….say it ain’t so”….lol

      • mokiepon says:

        Tony says: They took 38K jobs from last month and added to this month.
        They seem to do that everytime”

        Thanks Tony. Forgot about that. Still the jobless claims need to be less than 100K per week and monthly gains of close to 400K for us to catch up. We’ll pay dearly for this in a year or 2, IMO. M

    • wcagle says:

      Sell the news M???? I am….

  31. Pico Lee says:

    morn all
    It’s Friday…yeah !
    Like I said… Like we said…Like I mentioned..As I said..
    Have a great weekend !

  32. Pico Lee says:

    awesome dude

  33. Wenesday, AFTER MARKET UPDATE, 2013/03/06

    1. elliott PSTT: is now on a BUY signal as it closed above 1520 spx on monday, 2013/03/04, the last sell short signal was on thursday’s, 2013/02/21, close below 1511. s. the PSTT is the most heavily weighted indicator for signaling a change in weekly to monthly wave counts and trend changes.
    2. qqq indicator: +7 (on a scale of -10 to +10) down 1 (need 0 to sell ………and -6 to short. +6 is a buy and remains a buy until 0 is triggered. heavily weighs momentum in unison with smart buyer activity.
    ……….a -6 remains a short until 0 is triggered).
    3. smart money indicator: +3 , unchanged. remains on sell signal. a -8, once triggered is usually a sell and remains so until a +7 is triggered.
    4. March monthly 2faced longs: + 0.60% profit today. system holds for an entire month.
    5. March monthly 2faced shorts: 4.04% loss today.
    6. weekly 2faced longs, 0.28% loss today. system holds longs for a full week.
    7. weekly 2faced shorts: 1.35% profit today.

    i use the weekly 2faced stocks as day trading candidates.

    8. large cap folio +0.53% today.
    9. small cap folio: +0.83% today.

    benchmarks: $SPY + 0.14%, $IWM +0.26% today.

    crash indicator at +6 (updated 4-01) , up 2, versus last friday’s update will be on 2013/03/08. a rare -10 signals a 2008 type of crash. no signs of an upcoming crash.
    all other long term indicators remain on a buy.
    medium term “PSTT” remains on a buy.

    changed: 51% invested, 10% short, 41% long.
    see blog for today’s trade details. increasing longs on this pullback.

    SHORT break out watch:
    LONG break out watch: $CACH, $VCLK (broke out monday), $PCYC (broke out monday).

    a BUY signal was triggered monday at the close by the elliott “PSTT” indicator as well as the qqq indicator but a further pullback is still a 30% probability. conservative profit goal for the weekly 2faced folio of longs and shorts will be 1% to 2% per week after commissions, that would be about a 67% return compounded over 52 weeks at a minimum, not bad for a market neutral strategy if it continues to work for me.

    see the “ABOUT” section of the blog for more detailed descriptions of the use of all the above indicators and different trading portfolios.

    follow the comments section of my blog for regular indicator and trade updates usually prepared on a regular basis usually prior to opening bell.

  34. fionamargaret says:

    Add me to the “waiting on tenterhooks for the weekly update”.
    …….for those who can’t wait, and subscribe to Bradley’s outlook, I give you 2013 and 2014!!

    Thanks Tony.

    • mokiepon says:

      Uh Oh. LOL! Et tu, fionamargaret? (kidding) Thanks for the links, fm. I need to read everything I can get my hands on right now, while I’m sidelined for the evening. Melinda

      • fionamargaret says:

        …thought the links would make you smile M – see, no worries until July – lots of time to feel better (while getting rich). x

        Thanks Tony.

      • mokiepon says:

        Thanks fm. If I work this just right, I might get to go to sleep by sundown. M

    • tony caldaro says:

      Won’t read Bradley, but you can tell me if it matches.

    • Ryan Parker says:

      I’ve never been familiar with the whole Bradley thing but if I’m reading these right they think the market peaks for the year in each of the next few years will be in June/July? Very unusual and if this overbought market continues to extend all the way into June/July that could set up one nasty correction. Actually that sounds very similar to what happened in 86-87. I think we are going to get a top of substance here in March/April at 1576-1614 on the SPX. The % correction is up for debate at the moment.

    • rolandu11 says:

      Fiona, the red original Bradley indicator says not July (but the high in the indicator just can be a turn date- not must). If you want, I tell you the right date. An other thing is the black indicator. Sometimes this indicator is importtant.

  35. We are still expecting a small pull back at this point to test the recent support level of 1,527 – 1,530 on $SPX.

    Either a gap down at the opening, which will likely be filled and then eventually move higher, or a gap up which will be sold off.

    A close below the recent 1,512 on the $SPX or 14,030 on the DOW will invalidate our scenario.

    Next target: Test support

  36. budfox9450 says:

    Tony – ready to put a iii at DJi 14,354 would I be wrong?
    In lieu of the RSI5 divergences?

  37. mokiepon says:

    Thank you, Tony. I make no assumptions as to what your Weekend Update will reveal; as long as we can profit from it, it’s okay with me. One of the kids might have given me the flu; feel horrible. Took Tamiflu. OH THE JOY OF RAISING CHILDREN!!!! LOL! Goes with the territory. M

  38. mike7x says:

    Thanks Tony! Tomorrow could be a wild ride with the Feb. jobs report out. At least one of those SPX pivots may get hit!

  39. scorp100 says:

    “We uncovered a series of time and price relationships for the market longer term. It offers a potential roadmap through 2014. Will report on this in the weekend update.”
    It’s a teaser, Tony. Can’t wait ..:)

    • CB says:

      “It’s a teaser, Tony. Can’t wait” — +1, Scorp… Tony knows how to write well and how to keep us on the edge of our seats : ) A little bit like those pros over at TMZ (just kidding): “folks:we have Megan Fox’s latest beach photos coming up in just a few short moments…but first…Roseanne Barr’s weight loss ordeal …oh man:( so we wait…. and wait and wait.. =)

  40. M1 says:

    I was expecting to see the Dow at 20,000.
    This guy is expecting much higher prices
    Should I adjust my target for the Dow ?

  41. M1 says:

    Cup with handle pattern in the tech sector. aapl should push the entire market to the upside and we may see a huge rally. I wouldn’t be surprise with +30-40% move in the next months.

    • mokiepon says:

      Sure hope you’re right about aapl, M1. I want to sell the rest of mine. It’s not much, but need to take profits on goog & aapl while I can. M

  42. andysingal says:

    agree, looking forward to the weekend update

  43. M1 says:

    Thanks, Tony
    It looks like this weekend update will be very interesting

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