thursday update

SHORT TERM: gap down to start 2014, DOW -135

Overnight the Asian markets open, were -0.4%. Europe opened higher but closed -1.2%. US index futures gapped down as trading started, and remained lower into the open. At 8:30 weekly Jobless claims were reported higher: 339k v 338k. The market gapped down at the open to SPX 1842 and continued lower. The SPX had closed at 1848 on Tuesday. By 10am the SPX hit 1835, while Construction spending was reported higher: +1.0% v +0.8% and the ISM was reported lower: 57.0 v 57.3. The market rallied to SPX 1839 by 10:30, but then headed even lower. At 2:30 the SPX hit the 1828 pivot and tried to rally again. Around 3:30 the SPX hit 1834, then backed off to close at 1832.

For the day the SPX/DOW were -0.85%, and the NDX/NAZ were -0.80%. Bonds gained 6 ticks, Crude dropped $2.85, Gold rallied $19, and the USD was higher. Medium term support drops to the 1828 and 1779 pivots, with resistance now at the 1841 and 1869 pivots. Tomorrow: monthly Auto sales and two FED speeches. FED governor Stein at 1:15, then chairman Bernanke at 2:30.

The market gapped down at the open today to start 2014. Generally not a good sign for the year. By 10am the SPX hit 1835, and the pullback looked quite normal for a Minute iv. But the rally was short-lived and the market headed lower. Apparently, either during the Friday-Monday 1845-1839 pullback, or Tuesday’s 1849-1842 pullback, Minute iv occurred. For most of us it was too small to get noticed. Nevertheless, when the market dropped below SPX 1835, before noon today, we posted a Minor 1 label at the SPX 1849 high.

Typically second waves have had steep pullbacks in this bull market. This suggests a possible re-test of the previous SPX 1814 high, or SPX 1800, for support. Thus far the market has already dropped 21 points to the 1828 pivot. Short term support is at the 1828 pivot and SPX 1814, with resistance at the 1841 and 1869 pivots. Short term momentum was quite oversold at the low. The short term OEW charts turned negative early this AM, with the reversal level now SPX 1836. Best to your trading in the New Year!

MEDIUM TERM: uptrend

LONG TERM: bull market


About tony caldaro

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85 Responses to thursday update

  1. mcmasoniam says:

    What is it the guy just said? “Are we about to get ‘The Bernanke Bouquet’?” If so, should have a nice pop on Monday; Tony’s w3 coming up? I think so. Bye for now…

  2. If 1827 was the lows for Int-ii then

    1827 + (82 * 1.272 OR 1.618) = 1930 to 1959 (Tony’s target)

  3. elmer510 says:

    Today’s low at 1829 (SPX) I hope was a failed flat wave c of minor 2. A decrease of 9 points should be sufficient for a minut wave of this kind. In case we should have finished minor 2 and are ready for some positive days ahead. Well, first I have to see what Tony writes about this matter.

    The bears don’t have their time yet, They have to wait for primary 4 which will occure late winter/early spring.

  4. People seem to be slow at buying because either the market has gone up huge or seem to be taking mild profits because of the same reason. But nobody seems to think the bears have any teeth whatsoever.

  5. tommyboys says:

    ECRI WLI Ticks Up
    A measure of future U.S. economic growth rose last week to its strongest since April 2010, while the annualized growth rate stayed steady, a research group said on Friday.
    The Economic Cycle Research Institute, a New York-based independent forecasting group, said its Weekly Leading Index increased to 132.9 in the week ended Dec. 27 from 131.9 the previous week.
    The index’s annualized growth rate was 1.8 percent, the same as a week earlier. The previous week’s figure was originally reported at 1.9 percent.

    • rc1269 says:

      considering the 2013 rally was largely a ‘climb the wall of worry’ move, rather than great fundamentals, i’d say that’s a bearish reading
      best since april 2010 you say? well i remember what happened in may 2010…

      • tommyboys says:

        That’s not my writing it’s part of the release – and of course you do – remember…

  6. torehund says:

    Not much to add, happy weekend to all !

  7. CygnetNoir says:

    Well, my GCG’s are up about $3500/contract, but that $25/contract I put into the VMW puts looks like toast if the market doesn’t give some help on the bear side – I’m not holding my breath, and I really could not care less, as I am going for the gold 🙂

    • Good job CN, what do you think about SPX?

      • CygnetNoir says:

        SPX triggered a little Big Down yesterday – as I mentioned last week, I’m looking 1792 – 1811. If we see a close below 1792, then I will need to rethink things. A close today below yesterday’s low, especially a close on the lows would go a long way toward setting up the next Big Up.

      • CN, if we don’t break yesterday’s low and head back higher, don’t you agree that we are about to skyrocket a good 5% or so?


    • gary61b says:

      CN, would u consider taking profits at 1250 or sooner on gold?

      • CygnetNoir says:

        I took 1 off at 1225 and one off a few minutes ago at 1238 – those two will more than pay for the trade should I have to stop out. I’ll take another off at 1250 and thn every $25 thereafter unless the market changes. Should gold get between 1350 – 1400, the last 3 could come off at anytime.

      • gary61b says:

        Take some off to cover your stop, and let the runners run to profit targets. Kudos CN

    • 16golfer says:

      Congrats CN & HNY! Not giving up on VMW yet, as I think we see $83.

  8. 777daimon says:

    the secret keys😉
    mid BB daily band – 1811 area (cash levels, not futures)
    50 daily MA – 1791 – and rising –
    both levels (adjustable day after day, if they are not reached today) will work together for a beautiful positive divergence😉
    Ho, ho, ho !
    777 ‘ the santa ‘ daimon ! :D!

  9. elmer510 says:

    Thank you Tony for always interesting comments and charts.
    A good help for us small investors.

    Today I guess we see the b wave of minor 2 at SPX going upwards, and perhaps a c wave is imminent to complete minor 2.

    Afterwards the market will continue with the high powered minor 3 which I think might go as much as 80+ points upwards at SPX, probably reaching the 1900-level.

    The trend is upwards and the trend is our friend🙂

  10. bobhopium says:

    Hi All…Just look at the perfect rounded bottom on this. I have just been reviewing some Spanish stocks and thought others maybe interested. Global Renewable Clean energy is becoming a hot sector again imho and also Spain is a cheap mkt in early bull stage.imho…GL to us all.
    Gamesa Corp Tecnologica…weekly

  11. gary61b says:

    Apple looks to be in a bear wedge

    • blackjak100 says:

      Agreed…think we need this 4th wave to bottom $525-$535 in the next 3-7 days before final fifth wave up to complete retrace from $705-$385. I’m looking to get short $580-$600 if it gets there.

      • gary61b says:

        BJ, if appl does not reach a new high would u consider this a B wave up from 385 and a C starting down to new lows.

      • blackjak100 says:

        If it doesn’t reach a new high, it would just mean we had a truncated 5th wave within primary C. Either way, we know a third wave or C wave down below $385 is needed to complete structure. I’m wondering if earnings bring about a top $580-$600

  12. pooch77 says:

    No jobs report today?

  13. 777daimon says:

    I’m wondering and wondering🙂 what happened to 3xETF trader (active trading – when he posted here had the EXACT same targets!😀😉 …. ) “1929 top of 3 of primary 3” ….
    after 1929 was taken “3Xetf trader” user dissapeared🙂 …
    …wondering and wondering ….🙂

  14. blackjak100 says:


    Thanks for the compliment! There is always some luck in trading, but the waves in gold seem more clear. EW guided me in the skill part. Tony is right this should be a bear market rally. Looking for 5 up to $1430 or 3 up to $1380-$1400 if it’s a triangle before next lower. This bear market rally should last 6-8 weeks.

    As far as WTI, looking for a bounce at $90-$93 towards $103-$105 before big drop. This should take 4-6 weeks to complete. Cheers!

    • mcmasoniam says:

      There you are, bj! Yes, Lady Luck is always your friend, but you did some great waving on this. Your WTI looks interesting; you’re still looking for 103ish, really? Okay, well, I got the bounce level right, but wouldn’t have expected over 99 or 100. Not sure how I want to work either of these yet; regardless, so many are already in positions that squeezes will be rough. VERY happy for you, bj, and exciting trading to come. TTYL.

      Tony, I swear, I’m off the board now!

      • blackjak100 says:

        It’s entirely possible the big drop in WTI started from $100.75. It just doesn’t have the right look time-wise . Like I said a few days ago, the right trade was to be short either way. Ideally, would like to see a slightly lower low below $91.75 near $90 and then 5 up to complete expanded flat. C=1.618*A=$104ish. The problem is nothing is ever ideal in trading. The key is 3 waves down to $90ish so we know the structure is incomplete! Cheers!

      • mcmasoniam says:

        Mornin’ BJ. Agree, the structure is incomplete. Think I got a decent entry into GLD, but just not ready for WTI (as you said) yet. It’s “the look” (as you said). TTYL.

  15. chrisk44342 says:

    Looks like we are pretty close to completing a multi month impulse in the USD/JPY. Perhaps the correction will coincide with a P4 in stocks?

  16. Thanks Tony. Before market closing I went short on emerging markets (EEM) and long on US banks (XLF) for a quick trade. If tomorrow B wave materializes then XLF is going to outperform the market. BAC broke out of small consolidation and Citi is ready to breakout of long consolidation started in May. GL all.

  17. Anonymous says:

    ES weekly is looking a bit drab here, so more downside likely
    What is taking my interest is GOLD =>

    It seems, and I am taking a guess is that GOLD might be where you want to be in 2014, MONTHLY, WEEKLY, daily all starting to turn. Last time this happen OMG, we shot up like a gyfox night.

  18. The first month performance is what the January indicator is based on, not the first day. I think a little negative action at the beginning of the year is beneficial to knock down some of the bullish sentiment. Since so many people think the January barometer is based on the first day or the first week, a price decline around this time of year may be especially effective in increasing bearish sentiment, which is what we contrarians want to see.

    • ewtoriginal says:

      I was joking about the first day/tick indicator.But to set the record straight, here is a link to work compiled by Barry Ritholtz to prove/disprove monthly trading data follow-on,if you care:
      The other popular phrase often used by the media is, “as goes the month, so goes the year.” We tested this adage in much the same way as above. We compared January to all months much like we compared the first week of the year to all weeks.

      • mcmasoniam says:

        Yep, that’s what Barry says. He also says that EW is ‘just another tool’ in the TA toolbox.

      • mmmiiikkkeee says:

        To ewto… and mcm…,
        Neither the work nor the writing was by B. Ritholtz (as is clearly noted at the link)
        The article was by James Bianco and was a comment on an article by Mark Hulbert which appeared in Barron’s last January. The Bianco article starts with a long passage from the Hulbert piece from Barron’s.
        Perhaps mcm has foolish quotes from Bianco and/or Hulbert to give us unless merely reprinting the article was enough for Ritholtz to be quoted

  19. pooch77 says:

    After further review we should see a bounce or two then a final low around Jan-9-12,that is my take so whether it works out this way remains to be seen

  20. M1 says:

    Tony, what is your opinion abt gold ?
    It looks like we may have a low in place.

  21. kloutt says:

    b wave to ES1835 then C wave TGT to 1807ish but who really knows ????

  22. ewtoriginal says:

    Thanks Tony. Should be an extraordinarily interesting year. A review of the history books reveals that the 14/15 years of the century can be tumultuous. But then again, what year couldn’t be?
    For this year, it may go like that old,old Wall Street adage “So goes the first hour of trading on Jan2, so goes the year”. No, of course I made that up. But those who can’t see ANYTHING go wrong after FIVE years up and ONLY ( and I mean ONLY a 2.7x gain) are not seeing the real picture in my estimation. What could POSSIBLY go wrong? A more hawkish fed,already starting a reduction process, that muscles out the ultra dovish new chair and the continuation of that teams, policy? Nah. A more hostile China that is WHOLLY (LOL) reliant on the US? Nah. Rising interest rates for the usual (!) unforeseen (!) reason? Nah. A well structured financial marketplace run by computers with their emotions in check and fine ability to recognize value do to the last penny? Nah. ( BTW, always leave a penny bid out there for anything.You never know when you get hit and the NYSE decides not to bust THAT trade).
    Every party, all the conversations were about the stock market.I couldnt get away from it. Really? No,not really. They don’t and may never again care . Even my group of ultra well heeled barely discuss it,surprisingly. This blog contains some educated market folks. We’ll see how the conversation here evolves as the market behaves in its usual irrational manner. GL to all.

  23. M1 says:

    I agree. It is generally not a good sign for the year.
    Are they waking up. =)

  24. torehund says:

    Rotation you book profits in high-flyers for the new year and you buy the laggards.

    • Bingo. Bought GLD, SLW, BTU, NEM last Thursday. Sold all my high-flyers about 3-4 weeks ago — a little early, but gains that are 4X entry price are gains that need to be booked as profits. Good luck!

      This is the chart that I used to tell me “take your long-term profits.” — first one below. Posted here a few times. Also, the monthly charts for Russell and other indexes were screaming, “Top” close at hand (see below) … and momentum stocks were stalling.$SPX:$VIX&p=W&yr=15&mn=0&dy=0&id=p73796657589&a=325554048&listNum=7$SPX&p=M&st=1999-01-01&en=(today)&id=p04078160810&a=315140600&listNum=7

      • tony caldaro says:

        thx Jedi and kudos!

      • Ha! You are too kind, Tony. I was just going to post a “Thank you” to you for your commentary and saw your kind note. Hopefully, my new positions will be just as profitable — looking to hold them for some time. Missed MCP, but will look to grab that one on any pullback. Also, looking at CLF. Fun to have a watch list again for the laggards.

        • tony caldaro says:

          You might want to note Platinum confirmed an uptrend.
          And GDX is within a smidgeon of doing the same.
          Metals usually follow metals, and miners go along for the ride.

      • Thanks, Tony, for the additional considerations. Absolutely agree with your sector theme!

      • mcmasoniam says:

        Way to go jedi!!!!!
        Yes, you’ve posted the spx/vix chart a couple of times, and I love it!
        GL to you in 2014!

      • Thanks, Mason. Happy New Year to you! I got some flak from some on blog for selling all longs (momentum stocks mostly) when I did, but sure didn’t care — profits aren’t yours until you sell. Like, Torehund, going for sector rotation now — the laggards. Also started shorting some of the stuff I sold (e.g., LNKD, MU, SBUX). Good luck to you and all on Tony’s blog in 2014.

        Tony, I am now 1 post over the 3 limit. Sorry. I am typically not an abuser.

      • mcmasoniam says:

        jedi, I’ll risk being a triple abuser just to let you know that another person, namely me, is 100% IN YOUR COURT! Danged straight you should TAKE PROFITS! As a trader once said to me, “You can either scoop profits, or scoop poop!” I still have most of my core longs, but I bought them from 2009 (aapl, & sold at the top, accidentally!!!) to 2012 (div payers, mostly). I’m going to start rotating out shortly and “do a torehund” as well. My Employer Match 401k has few options; either up a couple of stock indices, a bond index or cash. Going for another ‘up’ the stock index starting tomorrow. GL jedi, always!

  25. bouraq says:

    Happy new year to all.
    2014 started with a drop:

    • mcmasoniam says:

      Thanks bouraq! Great WTI chart. Thankfully dropped it a couple weeks ago; my choice, small loss or big loss. So you’re thinking a fall into the 80’s? I have a bounce area of about 93-94. I’m not sure what blackjack’s bounce area is.

      Happy New Year!

      • bouraq says:

        Yes M. 94 can be a good place to exit shorts for a while but I don’t expect a new high over 100. My ultimate target for this leg down is 80s.

  26. HEJ Tony, could one expect wave (b) to let say 1841 and then (c) to 1814 or 1800 starting wave 3?

  27. JK1987 says:

    HNY Tony
    Wish you a prosperous and happy 2014.

  28. 777daimon says:

    feeding the lil’ bear🙂 … with shorts🙂

  29. mike7x says:

    Thanks Tony! Today the market had it’s first negative start to a year since 2008. And it was a doozy!

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