thursday update

SHORT TERM: choppy market activity continues, DOW +55

Overnight the Asian markets gained 0.3%. European markest opened higher but closed mixed. US index futures were higher overnight. At 8:30 Q2 GDP came in as expected +2.5%, and weekly Jobless claims declined: 305k v 309k. The market opened at SPX 1697, four points above yesterday’s close, and continued to rally. At 10:00 Pending home sales were reported lower: -1.6% v -1.4%, and FED governor Stein’s speech was released: A few minutes later the SPX hit 1704 and started to pullback. The pullback continued until 11:30 when the SPX hit 1694. After another rally attempt, this time to SPX 1700 by 1:30, the market pulled back again. By 2:30 the SPX had hit 1693, and bounced into a 1699 close.

For the day the SPX/DOW were +0.35%, and the NDX/NAZ were +0.75%. Bonds lost 7 ticks, Crude added 25 cents, Gold dropped $10, and the USD was higher.Β Medium term support remains at the 1680 and 1628 pivots, with resistance at the 1699 and 1779 pivots. Tomorrow: Personal income/spending and PCE prices at 8:30, then Consumer Sentiment at 10:00.

As we noted yesterday, the recent market action does not look anything we expected for an Int. wave iv. It does, however, look like the market is in correction mode or pullback back mode in a potential wave 2. As a result we have updated both the SPX and DOW charts to reflect both of these potentials. The DOW count, which is preferred 60/40, suggests Primary III topped at the recent high. The SPX count, which is possible, suggests the market is in an Int. wave ii pullback. This market seems to be caught in the middle again in yet another inflection point. We will just have to give it some time to sort itself out.

Short term support remains at the 1680 pivot and SPX 1654-1665, with resistance at the 1699Β pivot and SPX 1730. Short term momentum continues to display a positive divergence, but this market has not gone anywhere yet. The short term OEW charts remain negative with the reversal level SPX now 1700. Best to your trading!

MEDIUM TERM: uptrend erratic

LONG TERM: bull market


About tony caldaro

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167 Responses to thursday update

  1. torehund says:

    Some afterhours thoughts, I think its important to convey patterns that are really obvious, regardless of how many post one have made in a day or a week. I dont think it is in Tonys intention to limit posts that may contribute. What makes noise is all the intraday trading comments that seems like a febrile fencing game, and not like it should be” the lucid eye that looks calmly Down on the dog fight and assumes who might win. I normally dont post a lot and always tries to hold back during trading hours (as my head isnt made for the fast moves). However when I post there are patches of opportunities in patterns that I have somehow filtered through for some time, and they might be Worth listening to. Last one is the Uranium patternthat has nowhere to go but up for the following two weeks. In that I am pretty confident, mixed With all kinds of inconfidence that makes up the soul of an investor.

  2. valunvstr says:

    Looks clear cut. Massive breakdown of TRIX as well as RSI* and STOCH on the weekly charts. Top to top usually takes about 3 months. That would put us mid to end of October. VERY early November at most. The wedge is perfect too. The first 10%+ since 2011 is likely to come at that point.$SPX&p=W&yr=3&mn=0&dy=0&id=p58095832708&listNum=1&a=306044109

    • mcmasoniam says:

      vvestr, I remember how you’ve always been adamant about TRIX. Appreciate you posting your opinion. Wonder if or how TRIX would work in Futures mkts… Hmmm

  3. Must—–not—–close—–at—–low.

  4. lunker1 says:

    Well ain’t that America….TGIF! πŸ˜€

  5. Seeing inverted cup and handle now… should go down….unless fed is determined to support it for happy friday close.

  6. For those who missed it, Tony asked that we each limit out comments to three or so per day. At least one of you is on “Hyperpost” today.

    • 16golfer says:


      How was your golf round Tuesday? Saw your post about getting out of your short and looking for higher highs. Will be interesting to see how this bi-polar market will settle out.

      • I shot a 95, which included an unbelievable 12, yes a 12 on a par 4. My tee shot was good – not great, but good. My second shot over shot the green, however, and landed on an embankment covered in what, you might ask? Rocks! Round, brown, stones. I was in trouble. I play with three friends, and we have one rule (maybe it is two but we always call it our “rule”) – stroke play, with no relief unless the ball is under water. It was not an easy hole. I ended up using the toe end of my putter to get it out. About six of those strokes where the hazard, the other six were largely because I could not stop laughing.

        Right now I am thinking I will stay long the Nqoos over the weekend.

      • 16golfer says:

        There’s no way I’m holding short or long over the weekend. Seen too many big gap ups and downs in this market. If I were betting, it would be that we gap up on Monday because of our oversold condition. Will be interesting to see what the Obummer has to say in the next few minutes…

      • 16golfer says:

        Take 8 off that 12 and you would have had a decent round. I shot a 12 on a par 4 once, but it was over water. Put 5 in the drink….went to the next hole and made a birdie over water. Humbling game, but I keep going back for punishment.

      • Trading and golf – both very humbling. Yet so gosh darn much fun! πŸ™‚

    • student8888 says:

      Piker are u still long?

      • I was stopped out of the NQ overnight at 3222.25, and I bought again this morning right after the RTH open at 3208. I am debating with myself as to whether I want to stay long through the weekend. I never bought ES, as SPX never came close to taking out yesterday’s high.

        I’m wishing I had read this better and had stayed short ES. I really did not read this well at all this week. I now find myself in the position of “hoping” for a decent rally to sell into before the decline really gets underway in earnest.

      • PX,

        President will be talking soon, I will be looking and….

  7. Hi tony , if SPX close under 1690
    Do you think SPX retest 1640

  8. Staying close to my shorts here…it is easy to see potential bullish set-ups without looking too hard.

  9. After looking through many weekly charts, I am confident that a high has not been put in on many of the leaders. I am seeing a lot of strength in a lot of stocks. However, DOW stocks are another story. The bottom line is that too many leading stocks are unaffected by any market downturn right now.

    • budfox9450 says:

      Maybe we are still in the early stages of this decline.
      Primary 4 down, is a down market pattern. Since
      1729 the SP has for the most part – seen a move

  10. pio27 says:

    does anybody here short vix futures? like vxx or uvxy? i mean the almost never go higher. It seem like the best trade .

    • Do it!

      Seems like no crash with most republicans voting with democrats, and another couple of months of nothing is going on anyway… I don’t see much meat on the bone, but hey, been wrong before.

    • rc1269 says:

      vxx and uvxy are not vix futures. and you can’t really get a borrow on them anyway, so not really an efficient short. just sell a straddle or strangle if you want to sell vol. cheers

  11. Emily Thorne says:

    Hello Tony,
    You said that SPX needed to hold the lower end of the 1699 pivot, I believe to maintain the SPX bullish count alive.
    Do you consider that today we broke the 1692 level and if yes, are you now abandoning your bullish count in favor of the bearish Wave C for both the SPX and the DOW ?

  12. rc1269 says:

    rising wedge intraday doesn’t bode well for the close

  13. I was just watching a bunch of people who make more than $250K a year cry about how someone on food-stamps bought a pack of cigarettes and how this is becoming a socialist country because some poor (*&^*) was able to “work the system” and “score”, then they conversation turned into how to avoid paying taxes by doing certain things, and how to “work the system” so someone can pay less taxes…

    It made me wonder, I think I am in the wrong reality.

    • mcmasoniam says:

      +100 Don’t forget ‘obese’ people… This is one of the reasons I refer people elsewhere now.

    • 16golfer says:

      Maybe that person is being forced to try to “work the system” to offset his taxes being used to buy someone else’ cigarettes.

      • All conversations are being honored by me, regardless of how awful and narrow minded some are. A thought came up and I shared my comments without anyone’s name being mentioned, no need to push people around.

  14. torehund says:

    U308 in whatever play, grab some over the weekend and see what happens.

  15. danteallemis says:

    Good day, Tony and community. Been following this blog since 09. Sometimes every day. Other times not for weeks. At this particular time of calm. Just stopping by to say. Thank you for sharing your thoughts each and every day.

    As I am an Berlin-based investor, I follow STOX5E. Lately Europe outperformed the SPX. As I share the thought that Europe still is in a bear market, sometime in the future the outperformance of the STOX5E vs. SPX should come to an end. The catalyst for this is of course still unknown.

    Who is counting the waves for the STOX? With the completed 5-3-5 move upwards and -div on the daily and weekly. Major b of Primary C might soon come to an end.

    Best of luck to you all. Dante.

  16. Lee,
    could you tell me what is your website.

  17. pio27 says:

    MR C
    I know charts can be decieving but who in their right mind would go into the weekend short stock when there is a high probablity that they will reach a deal or can release any news such as bernanke staying or Geitner coming will set the market on fire?

  18. Good risk/reward short opp here imo..Resistance is now @ 1691/92/93/94/96 and Tonys 1699 pivot….unless some numpty mouth on a stick announces some uber-bullish news that is better than “no taper QE4eva”, the path of least resistance is down…imo…Good trading to all.

  19. gtoptions says:

    Thanks Tony
    SPX ~ MACD signal cross πŸ˜‰
    Have a nice weekend

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