thursday update

SHORT TERM: volatile day, DOW -137

Overnight the Asian markets gained 1.0%. European markets opened higher but lost 0.3%. US index futures were lower overnight, and at 8:30 weekly Jobless claims were reported higher: 308k v 305k. The market opened four points below yesterday’s SPX 1694 close and continued to decline. At 10:00 ISM services were reports lower: 54.4 v 58.6. Around noon the SPX hit a new low for this decline at 1670, then began to rally. Around 2:00 the SPX hit 1683, pulled back to 1676 by 2:30, bounced to 1682 by 3:00, then dipped to 1679 to end the day.

For the day the SPX/DOW were -0.90%, and the NDX/NAZ were -1.15%. Bonds gained 6 ticks, Crude slid $1.05, Gold added $1, and the USD was lower. Medium term support slips to the 1628 and 1614 pivots, with resistance now at the 1680 and 1699 pivots. Tomorrow: the monthly Payrolls report will not be released. There is also a speech from FED governor Stein at 9:30, which will probably not be reported either. US Government closed due to lack of cooperation, as certain politicians create talking points for next year’s elections.

The market opened lower again today, but for the first time in 4 trading days it was not bought before 10AM. The decline continued until the SPX made a new low for the move at 1670 around noon. This represents a 60 point decline from last month’s high at SPX 1730. The DOW, over the same period, has dropped 760 points of its 950 point Aug-Sept uptrend. It is still leading to the downside.

After the early decline the market had a good rebound to SPX 1683. If it goes much higher we would consider Intermediate wave A of Major wave A may have ended at today’s low. If so, the market could continue to rebound into the 1690’s. If not, it should head to the next support at SPX 1654-1665.

Short term support at SPX 1654-1665 and the 1628 pivot, with resistance at the 1680 and 1699 pivots. Short term momentum was quite oversold before a bounce back to neutral. The short term OEW charts turned negative with the reversal level now SPX 1688. Best to your trading!

MEDIUM TERM: downtrend likely underway

LONG TERM: bull market


About tony caldaro

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133 Responses to thursday update

  1. mcmasoniam says:

    Quite a market. Impressive! But traders are very nervous. So now the question is: Will there be an agreement over the weekend that will open ALL govt come Monday morning?

  2. torehund says:

    successful stockinvesting is like marrying the woman you despise the most; as the relationship can only turn out to the better better as time go bye…

  3. gary61b says:

    Russ futures looks to be headed for 1075.2 then1082 level.

  4. 16golfer says:


    Piker is a favorite of ours and if we even perceive he is being attacked, ridiculed or whatever, you will quickly be dismissed as not being a serious poster.

  5. pbnj123 says:

    The EMA (89) on the SPX 60 minute and the EMA (13) on the daily are keeping this tiddy😉
    Also the “wedge” or ascending triangle is still shaping up nicely but now have 9 waves?
    Is that corrective?

  6. blackjak100 says:

    Same old story today…NAZ near 13 yr high, DOW lagging, and S&P in the middle. This will change someday.

  7. micheletonon68 says:

    Everything is drived by algorithms, ….no matter all other things

    • torehund says:

      There seems to be some kind of collective intelectual impairment spreading throughout the world, anxiety, preoocupancy with worsts case scenarios, shoot before you investigate…etc. Best time there is to buy Stocks.

  8. pio27 says:

    just heard 90 companies in the S&P gave negative guidance most since 2006 since there was 88. that the debt ceiling , goverment shutdown and still right at the highs. Mr Chairman doing a great job.

  9. pio27 says:

    S&P 2 % off the high I guess traders seem not to be too woried about anything. looks like deal over the weekend coming.

  10. torehund says:

    who needs government when we have BOTS ?

  11. blackjak100 says:

    If we close near 1690, I’m inclined to think we may head towards 1700 before C wave next week towards 1663. b of B may be an irregular flat down to 1670 and we are now in c of B with target of 1705. It must exceed 1696.55 by definition.

    More food for thought if we close above 1687ish.

  12. pbnj123 says:

    If we make it to 1690 we will have a short but nice ascending triangle to complete int b.

  13. Looks like 5 down 3 up in NDX and RUT from Wednesday’s high.

    I don’t know if anyone follows the ISE data, but the intraday equity readings are sky high. Highest since 12.17.12 and 3.26.12 if it holds into the close. Big dates.

    • berniebaruch says:

      Quick explanation for the ISE data for the undereducated?

      • The ISE Sentiment Index is a unique put/call value that only uses opening long customer transactions to calculate bullish/bearish market direction. Opening long transactions are thought to best represent market sentiment because investors often buy call and put options to express their actual market view of a particular stock. Market maker and firm trades, which are excluded, are not considered representative of true market sentiment due to their specialized nature. As such, the ISEE calculation method allows for a more accurate measure of true investor sentiment than traditional put/call ratios.

  14. Int. B probably underway … Int. C down to follow … to end Major A

    Tony, how much deep Int C ?

  15. Good risk/reward short here@1686/87 imho.

  16. Tony

    What is your upside target for short term interm wave b ? Probability target ?

    • tony caldaro says:

      After the early decline the market had a good rebound to SPX 1683. If it goes much higher we would consider Intermediate wave A of Major wave A may have ended at today’s low. If so, the market could continue to rebound into the 1690′s. If not, it should head to the next support at SPX 1654-1665.

  17. jklongspx1670 says:

    DOW Intermediate ii of major 5 of Primary III has completed.
    SPX count will follow this count of Intermediate iii of major 5 of Primary III.
    HFT confirmed.

  18. 777daimon says:

    3 waves decline to 1662-1668 for today and that’s it.
    we need that cause one friend told me that the GOP’s want an extended agreement (gov shutdown and debt ceilling) to be reached with the dems until the end of this week-end , maximum until next Monday or Tuesday.
    the GOP’s seniors pressured Boehner to reach an agreement ASAP under the threat of sustaining dems in House.
    so be prepared for good news broadcasted when nobody expects it …. out of the blue …

  19. Good morning all (EDT) or Good afternoon all (GMT)…Here are a few notes/charts for my own trading purposes, if useful to anyone.The trading trend is still down and I will continue to short rallies until it either stops working for me or I see a tradable bottom in place… GL.
    S&P fut :-

    Dow fut :-

    …Of note in the 5min snp fut chart below is potential triangulation, which I would expect to resolve downwards.

  20. 16golfer says:

    Piker…I watched all of the round yesterday. The Presidents and the Ryder Cup are right up there at the top with the Masters as my favorite tournaments. GO USA…..

  21. bouraq says:

    Important junction for SPX.

  22. Mcdonalds Striking Chart Pattern (MCD)

  23. battista1 says:

    Buon giorno Tony ,

    thank you for all your work i am following every day

    just a question on Spx chart hourly , you do not mention about positive divergence that i see

    can you tell me which is technical motivation , so that i can understand

    thank you and best regards

  24. Thanks for the update Tony!

    Looking at the daily AI on the indices there’s a very weird setup that resembles that of mid-august and which suggests further downside. For sure no buy signal yet!

  25. $SPX $SPY $AAPL $UVXY $NUGT, market update for thurs. (within remark’s sect. of blog):

  26. Tony is using a 3’s combination. I’ll put in a tentative third three into the mix.

    a-b. SPX 1697-1707= +10, 09 hrs
    b-c. SPX 1707-1691= -15, 04 hrs
    c-x. SPX 1691-1704= +07, 07 hrs
    x-a. SPX 1704-1674= -33, 24 hrs
    a-b. SPX 1674-1696= +22, 10 hrs
    b-c. SPX 1696-1680= -16, 05 hrs
    c-x. SPX 1680-1693= +13, 05 hrs
    x-a. SPX 1693-1670= -23, 03 hrs
    a-b. SPX 1670-1683= +13, 02 hrs
    b-c. SPX 1683-1679= -04, 03 hrs (ongoing)

    If the previous b-c waves are any guide, we’ll see a double digit decline in the next few regular trading hours, before the next relief rally. The frequency of waves seems to be getting shorter, but maybe I haven’t mapped them correctly.

    While the indices has been moving quite a bit, today, NYSE and NASDAQ volume was in-line with the ten day average. One interpretation is that the big boys are hedged and are riding it out, so we won’t get a flush to the obvious buy point. We’ll see if tomorrow is another waterfall, or if we have the typical consolidation day after a wide range day.

    Breaking trend: for the first day in five, bulls didn’t jam the close. For the first day in six, they couldn’t convert early MOC sell orders into the closing bell. At 15h, there was >700 mil to the sell-side, ending at 400 mil into the bell. This break in trend fits in with Tony’s observation that the Q’s and Smallies finally joining the bear party. What’s stuck out to me is that the retailers (XRT) have hung in there, and are following the seasonals.

    I linked my own 535 count with a 1657 target by Tuesday A.M. for the ‘5’, I don’t know if it’ll pan out, but the math was fun. Having said that, I am also following @jedimasterstudent’s pitchfork style boundaries.

  27. theyenguy says:

    Yes you are correct short term, volatile day

    And Thursday October 4, 2013, was definitely a bearish day, as ETF Daily News reports Outer limits of monetary policy and inflation and the Finviz Chart of the Market OFF ETN, OFF, rose, and the Yahoo Finance Chart of Volatility, ^VIX, also rose, stimulating Volatility ETFs, TVIX,VIXY,VIXM, higher. The Great Bear Market that commenced Friday September 20, 2013, recommenced Thursday October 4, 2013, as is seen in the 200% Bear Market ETFS, such as BIS, FXP, SQQQ, SDD, SSG, trading higher.

    Nations trading lower included

    Indonesia, IDX,

    Mexico, EWW

    Philippines, EPHE

    Turkey, TUR

    Brazil, EWZ, and Brazil Small Caps, EWZS

    Sectors trading lower included

    Inverse Volatility, XIV

    Solar, TAN

    Internet Retail, FDN

    Nasdaq Internet, PNQI

    Biotechnology, IBB

    Homebuilding, ITB

    US Infrastructure, PKB

    Media, PBS

    Design Build, FLM

    Small Cap Pure Value, RZV

    Aerospace, IBB

    Small Cap Industrials, PSCI

    Industrials, XLI

    Paper Producers, WOOD

    Automobiles, CARZ

    Steel, SLX


    Consumer Discretionary, IYC

    Retail, XRT

    Yield Bearing Sectors trading lower included

    Utilities, XLU

    Global Real Estate, DRW

    Real Estate, IYR

    Leveraged Buyouts, PSP

    Of note, Global Consumer Staples, KXI, seen in this Finviz Screener, which includes TSN, PG, KRFT, MDLZ, CAG, and GIS, is a loss leading sector, since September 20, 2013, as is seen in their combined ongoing Yahoo Finance Chart.

    The chart of the Gold ETF, GLD, rose slightly, to the edge of a massive consolidation triangle, to close at 127, from which it will either break out, or break lower; either way, it is wise to Dollar Cost Average, an investment in the purchase of gold bullion, as in the age of authoritarianism, the possession of gold and diktat, will be the two forms of sovereign and sustainable wealth.

  28. torehund says:

    1) Syria conflict solved
    2) realtions towards Soviet softened
    3) Almost buddies With Iran which may probably be running out of oil like Saudi, fearing energy shortage and going nuclear
    4) Government shutdown.

    Still crude just lost a tiny bit….just a thought.

    • torehund says:

      …and oil Fields are planned increasingly on deeper water and in more artic and ever more hostile environments. Plus, all the “peak-oilers” have evaporated.

    • 16golfer says:

      But the Israel/Iran thing is still out there and BN made it clear in his speech on Wednesday that “Israel would go it alone if it had to”.

      • torehund says:

        Yes they are howlingfromthe crypt, but I think Obama loves the last drops of oil more than Israels irrational fears. Maybe US will even sell uranium to Iran. But i look at potitics as just a pre-constructed enemy game. They may all have common goals Power and Money…Putin, Obama, whichever leader in Iran, same leauge just different teams. We are the players..they eat cake.

      • Tore, it’s amusing to me when I read all these political comments. I know because I worked in that circle in the past.

        They don’t care about people like us, doesn’t matter who you call “them” and who you call “us”.

        A fake reality show is all.

    • I doubt if Saudi Arabia is very close to running out of oil.

  29. H D says:

    The Treasury Department reported a US budget deficit of $98 billion for July 2013.
    Under QE3, the central bank has been purchasing $85 billion per month on mortgage-backed securities and U.S. treasuries.
    Treasury Secretary Lew Screw 10/3/2013 “We’re out of tools to pay US debt”
    Let me give you an idea moron!

    See ya’s next week- The turkeys are gobbling. #GoTime!

  30. Two things: First, no matter what happens in the mean time, if the SPX closes positive tomorrow AND in the upper half of its range, it would set up a Big Up which would need to wait ’til Monday for a potential trigger.

    Second, GO PIRATES!

  31. Hi Tony,
    What are your odds that A was in today? 50%?

  32. Here is something I came up with, shows us in Major 4 triangle right now, fits well. Major 5 still to go of Primary 3….

    fits pretty well overall…

    • jparkins10 says:

      You’ve critiqued Tony’s Major 4 count as being too shallow, this would be not much different.

    • blackjak100 says:

      Agreed – major wave cannot go sideways as it’s too shallow. Your major 3 count fits perfectly as an ED. A lower low near 1663 would be perfect the look for wave iv of ED

      • whatever you say, but I still dont think we are anywhere near done with Primary 3… and this “correction” is pretty shallow either way… looks bullish to me. The DOW is up all of 7% since 2007 highs, I think there is alot more upside ahead… money out of bonds into stocks…. and Primary wave 3 is not likely to be less than or about the same as 1… just doesnt really work for me… thats all…. at least IM offering up actual charts with labels that actually do fit and work…

      • Nothing much more than a 5 month consolidation which will end around October 22nd from the May 22nd 1687 highs. Similar to the 4-5 month consolidation of INtermediate 1, 2, and start of 3 period as well…

        People over think every squiggle… its a bull market and primary 3 is not even close to over yet… let alone started primary 4


      • Yes and probabilities say that Primary 3 is probably now less than amplitude of Primary 1. It also says that Major 4 was probably not only a few weeks long and only a 5% correction if that and only 83 points relative to other major waves let alone intermediate waves.

        There is nothing to indicate Primary 3 ended in my view… and I could be wrong, but IM not convinced we are in primary 4…


      • should read “probably NOT less than Primary 1” sorry

    • My problem with this count is that new highs do not occur during corrections. 1729 should be counted as the end of an impulse of some degree, and not as a b-wave of something or other.

      There are only two counts I see as possible based on the current information price has given – either Tony’s count that places the current market in Major A of Primary iV, or (and I know Tony does not agree with this one at all) Major 3 of Primary 3 ended in May, Major 4 ended in June, and Major 5 of Primary 3 is taking the form of the ending diagonal that everybody and his brother and sister now sees. If this is Major 5 of Primary 3, it is difficult to see a scenarios where P3 trades much higher than 1730-1750, though the longer this takes to play out, the higher the acceptable target becomes. I guess the jist of this is that you and I have the market in Major 5 of P3, but we differ where the devil dwells, i.e. the details.

      • 16golfer says:

        Piker….we should know by Tuesday at the latest if it’s the ED or we turn & burn to the downside for Tony’s count.

      • piker i agree with the possible counts, but the problem with the ED of major 5 is -as you mentioned- that everybody sees it… Often, imho that means it ain’t going to happen ’cause everybody will then be on the right side of the trade…

      • mcmasoniam says:

        soul, I think it was lunker who brought up same observation as you a couple of times, that ED is too obvious. Maybe the obvious is the way this time? And who says ED has to finish w/new high. If govt shutdown is still on-going, w5 of ED could truncate, which I think likely.

  33. budfox9450 says:

    Been a very long time, since I have seen a market
    decline of this character. Nasdaq at new highs, Vix a rally highs,
    but many of the stocks I track are not pushing lower. Yelp, DPZ, FMC,
    Sina, and Sohu. Silver is flat, Cycle low is still 10/8, High 15th
    then down int early Nov….Maybe this is only a Round 1, but
    sure is weird…..Bud

    • mccarthyti says:

      reminds me of 2008 where if you take out financials and housing you had commodity and commodity related stocks making new highs up until august. industrials were very strong until beginning of summer too. it was bizarre to see US STEEL at almost $200 while Countrywide was being priced for chapter 11

  34. So according to Tony Primary 3 ended at 1729, which would make Primary 3 less than Primary 1, almost equal to it in fact, about 93% of amplitude of 1. That would be REALLY odd to have Primary 1 virtually the same as Primary 3 no?

    Believe the counts are still way off, but just my 2… they just dont seem to all add up right at all.

    Who knows…

    • extended first wave 1. wave 3 doesn’t have to be the longest, as long as it isn’t the shortest. in this scenario primary V will be shorter than I and III. Say we get a 10% correction for IV, (1550s) then if V carries the SPX to 1780 OEW pivot, it will be ~230 points. Hence 1=3>5, and all is well in EW land.

      • gokalg says:

        Agree on satisfying Pri III being shorter if Pri V is less than Priii. Looking at the relationship of Pri II and target of 1550 for Pri IV. Does it alternate.

        Any guess on timing for Pri IV ompletion.

      • No idea about target in time and price yet. I’d like to see Major A and B finished first to start thinking about that. Cause then we can make fib extensions for Major C. All under the assumption that the market is now in Prim IV of course.

  35. student8888 says:

    Piker, did u go long at the lows today?

  36. radrian6 says:

    Hello All,
    The small diamond pattern on the RUT intraday charts broke down and price carried lower to expected support near 1064. Following the test of range support, RUT bounced toward 1073 before slipping to close at 1071. The bounce only retested the broken rising trendline so we could be looking at a “kiss of death” scenario — we’ll find out soon enough. If the “kiss of death” is in force, RUT will likely lose 1064 support within the next two sessions and head toward the cluster of support at 1049-1045. Critical support remains at 1064.

    If political and market forces combine to restore a low-volatility scenario, RUT could stretch sideways and form a head-and-shoulders or similar topping pattern. The potential for the H&S top is clear on the intraday charts but less so on the daily chart. The left shoulder(s) took nearly eight sessions to form so if we get the H&S, the sideways price action could last into options expiration week — don’t forget the debt ceiling deadline on October 17 which is the last trading day before RUT October options expiration.

  37. thanks for the update Tony; nice and simple with 2 options. Makes life easy: if higher than A is in. If lower then still in A. Nice!

    I am in favor of the latter based on Fib extensions. Namely, minor wave a was from 1730 to 1674: 56 points. Minor wave b: 1687 to 1697: 10 points (nice 0.174 retrace). IF Int. Med. A ended at 1670, then minor c was 27 points, which is ~0.5x minor a. Although possible, it is a somewhat uncommon relationship between wave a and wave c, but not impossible…, IMHO

    Often wave c relates to wave a as 0.618x or 1.0x a, or more. Assuming the first 2 relationships for now; then c should go to 1662 or 1641. A 1.618x extension, which is also possible, would target 1606. However, that may be a stretch for now. The first extension would target the short term support at SPX 1654-1665 you mentioned and may be the first logical target!?

  38. Tony

    Also what is your view about Yen ? Looks like it is about to head higher from here?

  39. Tony

    Is it possible intermediate A bottoms around 1630 and then Intermediate wave B rallies up to 1680 if it makes sense ?

  40. Rancho says:

    Thanks Tony.

  41. Jennifer says:

    Thanks Tony,

    Wall Street continued to drop today on the third day of U.S. shutdown:

    Have a great weekend everyone!

  42. gtoptions says:

    Like Lee said, Thanks Tony😉

  43. Like I said Lee says:

    Thanks Tony
    Enjoy your evening !

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