thursday update

SHORT TERM: new high then pullback, DOW -40

Overnight the Asian markets gained 2.3%. Europe opened higher and gained 0.9%. US index futures were higher overnight as well, and at 8:30 weekly Jobless claims were reported higher: 309k v 293k. The market opened three points above yesterday’s SPX 1726 close, hit 1730, and then began to pullback. At 10:00 Existing home sales were reported higher: 5.48mln v 5.39mln, the Philly FED was higher: 22.3 v 9.3, and Leading indicators were higher: +0.7% v +0.6%. The pullback continued until 2:00 when the SPX hit 1720. Then after a bounce to SPX 1724 by 3:30 the market closed at 1722.

For the day the SPX/DOW were -0.20%, and the NDX/NAZ were +0.15%. Bonds lost 13 ticks, Crude slid $1.60, Gold lost $1, and the USD was higher. Medium term support remains at the 1699 and 1680 pivots, with resistance at the 1779 pivot. Tomorrow is Options expiration Friday.

The market opened higher today and made a new high, then yesterday’s no-taper euphoria tailed off and the market pulled back. Bonds and Crude also reversed turning lower, while Gold was lwer and the USD higher. After hitting an uptrend high at SPX 1730, the market had a notable pullback to 1720. Only the second pullback this week, and only the third one in the past ten trading days. That was quite a strong rally from what we are now labeling the Intermediate wave ii low at SPX 1641. We can count five waves up (1665-1654-1705-1695-1730) from that low. Suggesting Intermediate wave iii may have concluded at today’s high. Should the current pullback extend from 10 to 20 points we would consider it Int. wave iv.

Short term support is identical to medium term: we dropped the 1762 pivot as it is no longer an applicable Fibonacci relationship. Short term momentum dropped near neutral today after hitting extremely overbought. The short term OEW charts remain positive with the reversal level now SPX 1698. Best to your trading on the potentially volatile Opex day.

MEDIUM TERM: uptrend

LONG TERM: bull market


About tony caldaro

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247 Responses to thursday update

  1. mjtplayer says:

    BOJ meeting in 2 weeks, Oct 4th. Many are speculating that the Fed not tapering opens the door for the BOJ to ease more (if that’s possible). Don’t count on it. Expect the BOJ to stand pat on current easing, no new stimulus, thus a Yen rally. A rallying Yen is bearish for equities, as it triggers an unwind of carry trades.

    Longer term, the Yen is toilet paper. But short and intermediate term, the Yen is so heavily shorted that its time to begin a squeeze. Expect a 90 – 92 Yen in the months ahead.

  2. for those who suggested c=1.618x a, it may have been the right call.
    a down to 1720 (10), b up to 1625 (5), c down to 1709 (16)… ?!?!!?

  3. lunker1 says:

    DC I like my yellow line.

  4. radrian6 says:

    In a recent post, Racing Squirrel called for continued under-performance by the (yield-intensive) Dow and outperformance by the growth-oriented indexes. That call has held true in today’s trading. As I write this, Dow is -120; NDX is -7.5; RUT is -1.4. To me, it seems odd to see a rotation into higher-risk assets toward the end of an uptrend (and late in a bull market) but it does appear to be happening. Good call Squirrel.

    Good weekend to all.

  5. torehund says:

    Good weekend to all on Board here, and wishing for another prolific week to come.

  6. gtoptions says:

    Thanks Tony
    Interesting weekly candles taking shape on the Majors.
    Enjoy the weekend all

  7. oneandonlyuniverse says:

    I think your call for a deeper major 4 was happening until the G/20. The answers to the test were given out then. I wish I would have gotten a copy for all of us. The award for the high tick buyer of the $ RUT will be given out very soon.

  8. pbnj123 says:

    CN – if you are out there today – are you monitoring the selling pressure going on today?
    Orderly – but strong – anyone else looking at that?
    Thank you

    • radrian6 says:

      Hello Peanut Butter,
      Yes, the tape is somewhat negative today but, so far, the 15-min price pattern remains constructive for both the SPX and RUT so we may see another break higher on Monday. If SPX closed below 1706, that might set up more selling.

  9. Lunker,
    Any fishing pictures? Thanks.

  10. radrian6 says:

    Hello Tony and all,
    Here is a chart showing the RUT and RVX (the Russell 2000 volatility index). You can see the symmetry with the two previous advances/retracements. If RUT continues the symmetry, the rally will extend to 1132-1140 — however, there are a couple of flies in the ointment. The RVX reached 16 on the two previous rallies and even though RUT has only advanced 7.1% on this rally, RVX has already tested 16. The other issue is that many conventional indicators are lagging this rally but traders can easily ignore indicator divergence. If RUT enters a speculative blow-off to end this uptrend, we could see 1130-1140 and RVX may drop to support at 13.7 … or not.

  11. lunker1 says:

    I’m liking a c=1.62A of about 1710 for w4
    the 23.6% of w3 1641->1730 is 1709
    the 114.6% of 1576->667 is 1709

    • greenroger22 says:

      afternoon…took half shorts off sp 1713..loered stop 1722..lowered stop rut 1080..not pleased with rut performance…heard b4 troops leading generals not a good sign..shall all thx for postings

  12. pio27 says:

    IN 2011 the VIX in june or july went from 14 to 40. does anybody remember the reason for the spike?

  13. lunker1 says:

    Happy Friday y’all.😀

    Not sure if there are any Heads on here but even if you aren’t this a rockin tune. They fiddle around for 3 minutes waiting for Bobby Weir to get his act together lol before they crank it up. The last 4 minutes is as good as it gets. I’m miss the good ole days…..The Fat Man Rocks!😀

  14. Hi all, looks like the short squeeze in AAPL may have petered out right on schedule. Plus there is a sell the news situation here with the launch of the new Iphone finally taking place.

  15. torehund says:

    Nice large pos div in the miners after the Bernanke gap.

  16. thinking iv (either minor or int. med.; not sure yet ) has possible ended as a zigzag;where a=c=10 points
    a down from 1630 to 1620 (10),
    b up to 1624 (40% retrace),
    c down to 1614 (10)

  17. Leetired says:

    Saw this on Twitter

  18. blackjak100 says:


    Has the group eliminated an irregular ZZ Major 4 wave? It certainly has not been invalidated and 1730 would make a nice B wave top. I would need to see downside momentum increase and see 1673 taken out before I’m a believer. Has the group considered the Int V Major 3 ED option as well?

  19. kloutt says:

    closed shorts at 1709 profit taking TGT and waiting for a bounce at support and retest that price to go long for wave5 up …. of course w5 will be a 5 wave structure in what could be a ending diagonal …..but gotta get a bounce first

    • kloutt says:

      got to wait to see it this support holds….. not happy with the look of that C wave …should be a 5 legger so we may go down further …just guessing and flat

      • kloutt says:

        deeper now t0 1705 …..TF levitating like it is immune to the move ….not so just lagging ….just shorted 1072 and waiting for the rug to b pulled out

      • greenroger22 says:

        hi k…u have stop for rut? hope ur right…been stubborn all using 1080 or 107.28 thx

      • kloutt says:

        1071 and TF holding ….must be a hedge fund with a massive position at 1071….market should crush that soon

      • kloutt says:

        i really am suspicious of markets like the TF that act like they can elevate as if in a vacuum….makes u wonder who is pulling the strings

  20. pio27 says:

    MR C
    would a nasty reversal and big correction totally take you by surprise or is there some alt count for it to happen?

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