thursday update

SHORT TERM: pullback continues, DOW -73

Overnight the Asian markets lost 0.3%. Europe opened lower but gained 0.1%. Last night the FED released this: US index futures were lower overnight, and at 8:30 weekly Jobless claims were reported lower: 340k v 350k. The market opened unchanged at SPX 1763, pulled back to 1761, bounced to 1766, and then pulled back further. At 9:45 the Chicago PMI was reported higher: 65.9 v 55.7. The pullback continued until 10:30 when the SPX took out yesterday’s 1757 low hitting 1756. Then the market started to rally. The rally continued until around 2:30 when the SPX hit 1769. After that the market headed south, and oddly enough closed at SPX 1757.

For the day the SPX/DOW were -0.40%, and the NDX/NAZ were -0.25%. Bonds lost 8 ticks, Crude slipped 50 cents, Gold dropped $18, and the USD was higher. Medium term support remains at the 1699 and 1680 pivots, with resistance at the 1779 pivot. Tomorrow: ISM manufacturing and Construction spending at 10AM, plus Auto sales.

The market opened flat today, tried to rally, then took out yesterday’s SPX 1757 low. As soon as it hit SPX 1756 it began to rally. The rally carried the market right back to the upper end of the post-FOMC trading range. Then the market headed back to the lows into the close. After a week or so absence, the BOTs are back. At the open they took out of overnight ES highs, then the overnight lows, then the early highs, and finally were shooting for the early lows near the close. Typical BOT action. With several reversals over the past few days, and the SPX 1757 low exceeded this AM, it certainly appears a pullback (profit taking) is underway. Year end selling?

Short term support drops to SPX 1756 and SPX 1730, with resistance at the 1779 pivot and SPX 1804. Short term momentum rose from quite oversold to neutral today, then ended oversold. The short term OEW charts flip-flopped during the day but ended negative, with the reversal level now SPX 1761. Best to your trading!

MEDIUM TERM: uptrend

LONG TERM: bull market


About tony caldaro

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119 Responses to thursday update

  1. I suggested y’day we may see ~1750 (for minor a?); LOD at 1752…; so not shabby if I may say so myself.😉 But, I am not seeing the sell-off among stocks -at least those 30+ I track- which I would associated with a P-IV event. But, hey what do I know?!?!?

  2. Great Service Caldaro. You seem to hit nail on the head and not be emotional. Signs of a great trader.

  3. tuamotu says:

    B wave of the correction or (for the bears) the 1-2, 1-2 of the 3rd down ?

  4. budfox9450 says:

    aircraft stil landing LAX, but very few…

  5. berniebaruch says:

    RUT bouncing off support. Observations welcomed?

  6. Chart of two possible counts…

    Either Downward Wave C of a Zigzag off 1775…… or the more probable Downward Wave 3 of 3 of A of a larger degree Zigzag correction…..

    1.0 Downward C support near 1749..

    1.618 Downward 3 support near 1737

    • chrisk44342 says:

      Carlos I like your analysis and the fact that you look at alternates. On the hourly, the 3 of 3 scenario probably has not played out as planned. So the downward C makes more sense to me at the moment.

  7. China’s Tech companies are spending on talent, like the Americans used to be in the 90s, and Americans are being pushed to the edge of suicide like Chinese used to be…

    The fall of US and rise of China is faster than anyone thought, maybe too fast? maybe not.

    Next few years, we either come back and China will fall like we did, or there won’t be much left of us, and that is the truthiness!

    Have a great weekend everyone🙂

    • budfox9450 says:

      an amazing comment to make…

      • mcmasoniam says:

        Hello Bud. Calling the statement ‘amazing’ is being kind, which you always are kind that I can remember. Was listening to one of my many webinars the other night and the presenter had what sounded like a very sore throat. He said he’d just spent 2 weeks in China and breathing the air over there hurt his throat so bad that a week later, he still hadn’t recovered. We can skip what was said about the lack of clean water, and that there aren’t enough young women to boost or keep up the population, since the 1-child policy favored males to females. I did have a friend who went to a number of cities in China on vacate in 2011 who said much the same thing; plus, there are entire cities with buildings of every kind and all are completely empty.

        A one Chinese man told a reporter, “We can learn math, engineering and copy most anything, but don’t know how to invent…” Sort of sounds like Japan back in the day, doesn’t it? Interesting…

      • Mason, if you are still not seeing the tire tracks on your back, then stay happy with their “false complements”.

      • mcmasoniam says:

        surfwave, I have no idea what you’re talking about. I type my post and go do my thing. You don’t like my answer, then, don’t post. Out of here. Too much steak & wine so my typing sucks anyway. Good weekend to All.

      • mcmasoniam says:

        Surf, my boyfriend says quit crib’in lines from Jimi Hendrix (reference to tire tracks). As for the rest, who gives a s – – t what anyone thinks. I make money and leave. Like now. Bye Bye!

      • HAHA, you and your “boyfriend” said it all…

        Future right in the rear view mirror…

    • torehund says:

      Every nation peaks and decline thats just how nature Works. The Mayans knew about these cycles. Nowadays politicians think that they can alter mother economy, time and time again the weak economy just backfires.

  8. gtoptions says:

    Thanks Tony, Great work OEW…
    All I’m looking at is the Bearish Weekly Doji. Next week should be down. That’s all I’m saayin.😉
    GL and Good Weekend to all.

  9. H D says:

    So if you’ve listened to Lee and look and left you see the significance of 1752, last Friday low and a gap there too. We have layers of support, onion style.

  10. radrian6 says:

    Hello Tony and all,
    On my 60-min chart, RUT is printing a clear a-b-c corrective pattern from Wednesday’s peak of 1123.26. There is support starting at 1087.39 and c = a at 1083.18.

    The important issue is whether this is Minor a of Int. iv or all of Int. iv — this issue won’t resolve until we see the bounce. For the RUT, Minor b typically does not retrace more than 50% of Minor a.

    • jparkins10 says:

      Good analysis, thanks

      • radrian6 says:

        Hello J,
        Always good to hear from you. I’m thinking this move in the RUT from 1123.26 to 1087.09 (so far) is only Minor a. I don’t see any bullish divergences on my intraday indicators that imply a reversal — I therefore think the next rally (Minor b) will be followed by more downside. The RUT has only dropped about 3.2% so far and the corrections this year range from 4.6 to 6.5%. A 5% correction from 1123 would have the RUT near 1067 and the correction may complete near November options expiration — just some thoughts.

      • jparkins10 says:

        Thing that concerns me is that Int 2 was a 4.3% correction, and 4’s seem to be less than 2’s in this cycle, we could be in C wave now, morphing into an ED

      • radrian6 says:

        This correction has overlapped Int. 1 (barely) so it’s possible — we will have to keep a close eye on the retracement. I still feel that there is more downside to come. SPX hasn’t come close to 1730.

      • jparkins10 says:

        If this is A wave, I agree completely on the timing. Cycle work I see has a trough now, a spike into mid November, and another trough around November expiration.
        The other explanation for that timing would be a quick Int V, then into Primary IV

  11. gary61b says:

    YM is tapping on the 15483 level again,

  12. llerias7 says:

    Tony, Is it possible to consider on SPX a final fifth to above 1800´s coincidente with the xmas rally to final finish III?


  13. scottycj1 says:

    At the beginning of this week I asked “Are you selling Gold ? ” We are covering today with $5500 profit per contract. Thats @ 11 years of my service in one trade. Doesn’t seem so expensive now does it ? That sell arrow was there on October 21st.

    • What about the thousands that people have lost since you started your blog. Now you don’t talk about those – do you – Mr. Million Dollar Challenge..

      • scottycj1 says:

        Anybody who hasn’t lost on some trades is a liar or doesn’t trade.
        This trade was outlined in Advance—right here. I have a new Astro technique
        that as you can see works. Good traders constantly evolve and learn new methods. I still have many loyal subscribers who are doing quite well with the new astro. Good luck to you…’ll need it.

      • Losing some and losing 70% and more is different.
        People who know how to make money in market don’t run $42/month blogs.

  14. bobhopium says:

    Care with shorts imho…unless bears can push this down soon this structure is starting to look bullish imho….Good luck to us all.
    S&P fut hourly

    • torehund says:

      I dont think this is the time to be too afraid of going short, as I think there is a profound lack of buyers. Once potenial sellers recognizes this I think the dominos will fall.

    • bobhopium says:

      Looks and smells like a trap to me imho…I’m covering my short here @1753.6 and reversing with a tight leash…GL to us all

  15. torehund says:

    Homebuilders looks weak, I opened a short there too. Gold continues its decline as expected.

  16. H D says:

    1764-1756, range can expand.Oil getting the biz at major fib confluence 94.75, The hit everyone thought equities would get.

    • torehund says:

      Lee and all, I was an oil bull until pattern stopped playing out and the marked weakened some weeks ago. Attention now very much to the downside, and maybe for years to come. Conversely UUP could be the Place to put Money for Foreign investors or alternatively inverse funds. And With gold making that bearish weekly cross uuuh, as goes oil as goes gold.

      • torehund says:

        Its just to establish a short and go drink that umbrella drink LOL, or better a Cold beer straight from the bottle. I am heading to Mexico in a month (good Place where debth to gdp is low), avoid the countires where debth to gdp is high as the Place will og very sour once rates starts to Climb for REAL.

  17. Vox Zeit says:

    Tony et al, if indeed the DOW is commencing IV, how likely is the SPX going to be re-adjusted? Or, do you expect the SPX to continue with completing iv/d and v/e whilst the DOW continues with IV ?

  18. 777daimon says:

    do you remember that I have told you that no taper would be in October, no taper in March 2014 and no taprr until 2016-2017?
    guess what?
    an official voice confirms indirectly that!

    “Where my bears at” ? :D?

    • tony caldaro says:

      Bullard does not matter
      Bernanke, Yellen and Dudley count

    • ISINCODE says:

      It seems that there is more talk about how QE is loosing it’s effectiveness so “tapering” is the “old” story. The Fed marketing team may have to come up with a new twist…. Oh sorry we already used Twist. How about operation flood? LOL

    • Didn’t you also say that your “source” in the Citibank Treasury Dept. had told you that the size of QE would increase in October?

      • 777daimon says:

        no Sir.
        never said “in October”.
        I said: in October, December or next Year”. If you search my comment you’ll see.
        In that comment I mentioned that there is only an option that’s still evaluated to be implemented.
        Until now I see that they linked the interest rate modification with the taper.
        This is a very important outcome!

    • How you came to your “no taprr (sic) until 2016-2017?”) conclusion from that article you linked is beyond me. You have reminded me of John Hussman’s weekly newsletter that came out this week. It’s a good read, as were David Einhorn’s musings in his most recent letter.

  19. tuamotu says:

    Just a simple question for an OEW newbie:
    In original EW we have
    Grand supercycle: multi-century
    Supercycle: multi-decade (about 40–70 years)
    Cycle: one year to several years (or even several decades under an Elliott Extension)
    Primary: a few months to a couple of years
    Intermediate: weeks to months
    Minor: weeks
    Minute: days
    Minuette: hours
    Subminuette: minutes
    In your sysytem you have a Major level. Can you tell me why and what is the normal duration of this level ? Thanks for your work .

    • tony caldaro says:

      The Major wave fits in between Primary and Intermediate.
      We also do not use the terms minuette and sub-minuette.
      They are replaced by Micro and Nano.
      Only the names of the waves have changed nothing else.
      Super cycle … shocking blue … SC
      Cycle … light blue … C
      Primary … blue … I
      Major … black … 1
      Intermediate … purple … i
      Minor … dark blue … 1
      Minute … dark green … i
      Micro … orange … 1
      Nano … gray … i
      Pico … red … 1

  20. manunidhi21 says:

    Namaste Tony !

    Is the expected primary IV correction will be around 10 % and then finally primary V to end the bull market. Is it madatory for primary V to make new highs ?

  21. 777daimon says:

    yesterday was a freakin’ day with stops hunting …. a little bit below 1757 to stop the weak bulls and a tiny ride to the upside to shake the weak bears …. this, boys and gals, is tipical wave 4 action (don’t know what degree – but for sure not primary 4!) … whipsaw, whipsaw, whipsaw!
    …. and a wave 4 requests a wave 5 , as far as I know :)!
    only one message for the hard kickin’and knockin’ bears….. you are shorting inside primary 3! Just wanted to pin-point this , maybe some folks forget it from time to time !

  22. $SPX $SPY $UVXY $AAPL $NUGT, mkt. update for thurs. and trades for friday (within blog’s remarks sect.):

  23. Anonymous says:

    Thx tony.

    I woke today and saw a HEAD and SHOULDER pattern on SPX, its better when you have a look on the hourly chart. It could spell trouble for the next few days.

    CHART HERE ==>

  24. M1 says:

    Nothing has changed, IMO.
    NDX Cycle wave 3 is ending.
    NDX Cycle wave 4 should start soon.
    NDX Cycle wave 1 was 1444 points (795-2239)
    NDX Cycle wave 3 is (for the moment) 2389 points (1019-3408) and 1.65 times cycle wave 1.
    A 38.2% Fib Retrac (912 points) will be normal for cycle wave 4. This means a +25% drop.

    • torehund says:

      M1-dont forget the bearish cross on gold weekly, lol. That doesnt bug me:)

      • M1 says:

        Not so sure abt gold. If the market gets a correction I don’t think speculators will go cash…
        We may see inflows in Gold ? Silver ? Sugar ? …Corn ?? wheat ?? … Crude oil ??

      • torehund says:

        M1-at this time there isnt any default talks just Qe that hasnt done gold any good for a long time. I play it short through DUST, so far so good. bearish cross on weekly tells trouble ahead deluxe for this shiny metal. Could depreciate into jan 2014.

  25. gtoptions says:

    Thanks Tony
    Bots are messing with the Wave Genius! ;-0

  26. pooch77 says:

    That was for RDC,nymo in crash zone

  27. pooch77 says:

    Wow u say futes green 3 minutes later you say crash

  28. I’m sure this was covered in previous posts, but I have become confused by the meaning of the double labeling for the SPX (ii, b etc.). I suppose it means an upward corrective a-b-c wave to major wave 4 but it has gone far too high for that to be plausible.

  29. The negative number for the NYSE A-D line today was only half of what it was on Tuesday. It seems to me to be a little early for year-end tax selling.

  30. torehund says:

    On the spx 60 minute the macd could drop under zero, thats where the downward action gets serious.
    As stated earlier market is light and I continue to see bounceless fall in some Stocks(ugly action). Amazing to see these goldminers decline or consume lots of RSI without any meaningful appreciation (severe sign of weakness).
    Gold bugs are a stubborn breed and they dont throw in the towel in concert, and thats why a tradable bottom is nowhere to be seen right now. First popp was decent, butI think they are severely out of steam for now.

  31. CB says:

    Free Webinar tomorrow, if anyone is interested . Not an endorsment…blah, blah…someone sent me this link today for that cool TA guy from CNBC =) .. Happy Halloween everyone! Thanks Tony!

    • RDC says:

      Thanks but futures are green?

    • aultraman says:

      bouraq, a newbie question on your RUT comments. What would make RUT not bounce back higher from the red support line? I am just trying to understand why you felt the red support wouldn’t last for RUT to go down? What makes it different this time.

      This year I’ve seen RUT goes down briefly to some support and then just bounces higher despite the overall economic condition. I think $85B monthly has to buy something, which makes indexes in general keep going higher.

      Thanks for your time!

      • bouraq says:

        I expect red internal line to hold for a while and I expect a bounce but not for long. I do not expect that bounce to deliver a new high because the orange rising channel is broken down. Maybe the orange channel’s broken lower band will act as resistance if we bounce from here. We shall see.

  32. radrian6 says:

    Hello Tony and all,
    RUT dropped from 1123 to 1098 then corrected up to 1108.60 which is near the 38.2% Fib RL. After the retracement, RUT dropped hard into the close which suggests early weakness tomorrow. My 15-min chart is showing the potential for +div but that is dependent on the price action tomorrow. Despite the downside pressure, the RVX (volatility index) is only at 17.21 which implies that there isn’t any significant fear that the RUT could drop dramatically. Assuming we are in Int. iv and we get the full correction, the likely targets are the daily lower Bollinger Band (near 1048 and rising) or the weekly middle Bollinger Band (near 1049 and rising).

  33. Thanks, Tony. Well, we did get a follow-through day and a move back into the wedge pattern. We’ll see tomorrow if it this is just another bear “trick”. Happy Halloween, all.$SPX&p=D&st=2012-08-02&en=(today)&id=p11405416275&a=318213161&listNum=7

    • RDC says:

      Thanks Jedi. NYMO is in a crash zone. I think tomorrow sell off will intensify.

      • torehund says:

        RDC +1.
        Here in Norway they are planning on reducing government backed Security of Bank deposits from 300 000 euros Down to 100 000 euros, to comply With EU standard which is currently just 100 000 euros.
        In conjunction With rumors of a one time withdrawal of 10 percent on all EU deposits, this is just getting increasingly creepy… are we slowly approaching a global pop in the debth bubble ?

  34. RDC says:

    Thanks Tony.

  35. Tony Thanks
    Both SPX and DOW bounces dead at 62%. A nice chop city trading day.

    • seems like an abc pattern is forming (typical for a correction), where wave a is down to 1757; then wave b up to 1669 (classic 62% retrace), and now in wave c down. No real idea yet about the degree, but if we assume the SPX is now in int. med. iv/d than these waves are likely minute abc of minor a. If we then assume that minute c will equal minute a, then minor a may end at ~1750…!?!?

  36. cwallace90 says:

    Hello All,

    Is the Red Sox Win a bad Omen for stocks? We shall see.


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