friday update

SHORT TERM: gap down and decline again, DOW -318

Overnight the Asian markets lost 1.4%. Europe opened lower and lost 2.1%. US index futures were lower overnight, and the market gapped down at the open to SPX 1819. This opening was one point below yesterday’s low, and several points below yesterday’s SPX 1828 close. In the first 15 minutes the SPX dropped to 1812, then it bounced to 1817 by 10am before dropping to 1801 by 11:30. After that it tried to rally again but only made it back to SPX 1808 by noon. Then it dropped further. Heading into the close the SPX hit 1790 and closed there.

For the day the SPX/DOW were -2.00%, and the NDX/NAZ were -2.05%. Bonds gained 12 ticks, Crude slid 40 cents, Gold added $5, and the USD was higher. Medium term support remains at the 1779 and 1699 pivots, with resistance at the 1828 and 1841 pivots. Today the WLEI was reported higher: 54.2% v 53.7%.

The market gapped down again today for the second day in a row. It took out short term support at SPX 1814 in the opening minutes, then SPX 1800 in the afternoon. Over the last two days the market has gapped down twice, and dropped from SPX 1845 to 1790 with only one rally in between (1820-1829). Most of the other rallies have been bounces of five points or less. It appears this market is reaching an important decision point. Either turn around and resume the uptrend, or break down and possibly confirm a Primary wave IV correction. More on this in the weekend report.

Short term support has dropped to the 1779 pivot and SPX 1768, with resistance at SPX 1800 and SPX 1814. Short term momentum remains extremely oversold. The short term OEW charts remain negative with the reversal level now SPX 1825. Best to your weekend!

MEDIUM TERM: uptrend weakening

LONG TERM: bull market


About tony caldaro

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45 Responses to friday update

  1. 777daimon says:

    To Tony & all:
    don’t be in such a hurry to declare that we are in Primary IV.
    only below 1767.99 (to the last dime !).
    if 1767.99 will be broken, than bye-bye to Primary III.
    exact target for Primary IV ( I feel generous today! 🙂 ) is the 1614 pivot (+/- 7 points).
    write it down, it will be of good use only if we don’t register a new high! (if we do, a new 38.2% fibo retracement level will be valid).

    of course, this doesn’t exclude that market will try to spook us with a criminal fall down to near 1767.99…. 😀 !
    anyway, after the redish Friday, CPC indicator at 0.92 still (!) shows complacency – it’s very unbelivable to me , very,very,very! 🙂

    (!!!!!!!!!!!!) buy longs only above VIX 20 and CPC above 1.20 (!!!!!!!!!!!!!!!!!!!!!!!) ok?

    some strong guys unload now, this is not a retail induced movement (as per volume).
    Maybe they know something as per next weeks techs earnings (apple, amazon, google, others) , maybe not!
    But it’s clear to me that this movement is not “retail-ish” induced. And this means something!
    And stochastics show that this down wave still has blood in it for a few more days , up to maximum a week.

  2. JK1987 says:

    Economic Ice Age from McHugh:
    Stocks are plunging again Friday, January 24th, down 275 points after losing 250 points Tuesday through Thursday. This 525 point plunge is coming on the heels of a December Hindenburg Omen stock market crash signal, which warned a stock market crash over the next few months had a 25 percent chance of occurring, far above the normal random probability. Is this the start of the expected Economic Ice Age? It could be.

  3. JK1987 says:

    third time’s the charm. 🙂
    This is the third time oew claims PRI III top in the last 6 months.

    oew labels PRIMARY III for SPX and DOW.

    Looks like you gave up 1869+ PRIMARY III target.
    “the worse case scenario for a Primary III high would be around SPX 1869 and best case around SPX 1970.” (weekend update Posted on January 4, 2014)

    PRIMARY II was elongated flat for 22% correction.
    PRIMARY IV should be zigzag. zigzag should down more than 22% than the flat? 30%~40%?

  4. torehund says:

    We have been in a corrective pattern since Oct 21 in 2013, with a double abc down then followed by a larger abc down that is finishing today at very low macs levels. Its time for the economy to impulse, and markets too, foremost real issues signing improving demand for commodities.
    This period has given near 0 gain for the indexes, not too bad for a corrective phase.
    As Tony implied yesterday the emotions ran rampant, and made a top today as exasperation is palpable. Some saw this washout coming, kudos to Bob, well I looked at Shanghai which was up today, but as always mass media whips out weak hands creating a brand new catastrophes out of known issues.

  5. Thanks Tony!
    Looks like we are soon finnished with the head in a bigger HS formation, and will start to build the right shoulder IMHO. The market will probably provide us with a neckline above 15.704 in Dow, just to keep us in the fog.
    When the right shoulder finally breaks up, and we get the P4 confirmation fall, the P4 will be close to its end.
    P4 should retrace all of Major 5, according to EW rules, ie it might fall to 14.800.
    14.800 would also be a nice target in a potential HS, with neckline just above 15.704.
    Best wishes Sverker

  6. lunker1 says:

    from Ghostine…….ES numbers….already in the Crab zone.

  7. Cliff Uzan says:

    Would not be surprised if we trade in the low SPX 1700-1720 this wave down for possible P4 or something else.JMO.

  8. M1 says:

    Aren’t you forcing the count ? Shouldn’t we bring the very last chart of your list to the first page as the second most probable count ?

  9. Jennifer says:

    Thanks Tony!

    U.S. stocks dropped one emerging market selloff

    Great weekend everyone 🙂

  10. ps: i forgot to mention that I look very, very much forward to Tony’s weekend update. This week has namely been very dramatic and unexpected in the sense that the downside so far has expected everybody’s -including Tony’s- expectations. Geeez, not to sound derogatory, but if even perma-bear Dan Eric was looking for more upside earlier this week, it really appears as if everybody was long and no body short. In such a case the only thing the market can do is sell… Hence, this was a key week, IMHO, and the market was at an inflection point. Either rocket higher or drop; it did the latter.

    FYI: Looks like FB topped… I have it as 5 major waves up completed, and with major 5 almost exactly equaling major 1. Would coincide well with a PIII.

  11. Hi Tony

    A week or so ago I mentioned that I was seeing the recent top as v of 5 of III – you were calling it wave-1. I also had a bearish count that far since the recent top.

    You had said that if we break below the 1814 you would consider my read.

    Any additional thoughts since then?

  12. simpleiam says:

    People here get so upset whenever I, or anyone mentions UVXY, or any of the VIX ETN’s, so, I’m going to mention it a few times, as it’s the cash move I made this week, except for selling a long ETN on Wed.

    UVXY, UVXY, UVXY, UVXY, UVXY, UVXY, UVXY, UVXY, UVXY,! LOL! Other than a few transactions in the cash, I’m sticking to futures. GL All!

    torehund, I will miss your writings. I’ll have to come back and read them ever once in a blue moon. GL Mr.SmallCaps!

    • torehund says:

      Not sure about that blue moon coming yet for the small caps M, split adjusted shares that has gone from 8000 usd to 2 can do strange things even in dim light. Safety dance no, no. Good weekend.

  13. rc1269 says:

    Thanks Tony. things are getting interesting indeed.
    cheers to all your hard work my friend!

  14. Lee says:

    Lee says:
    July 4,1776 at 12:01 pm
    “This little revolution might have some legs”

    Thanks Tony 😉

  15. kisshu2 says:

    Tony does this spx look like wave 1 of 3 subdivided at wave three taking wave one of 3 to 1800.69?

  16. JK1987 says:

    “possibly confirm a Primary wave IV correction. ”
    Is that 1768 for confirmation?

  17. thanks for the update tony! I didn’t post more in Thursday’s update to keep my number of posts to a minimum, but today increased the likely hood of PIII BEING in at 1850.84 tremendously. Namely,
    1) not even a bounce into the close, in fact a close at LOD, short term + div constantly being erased.
    2) DOW having it’s worst week in over 2 yrs! (that was PII back then), which is not reminiscent of a minor 2 wave IMHO.
    3) The technicals suggest further downside, but right now the market either needs to snap back or the rubber band will break and it will go in free fall… A lot of support has been broken.

    proposed SPX count still valid IMHO:

    PS: pulled a lot of money out of my trading account today for downpayment of house I bought… Thanks PIII!!
    pps: I did long the close though; seems like a decent low risk high reward at current OS conditions, but only expecting a bounce before new lows

  18. torehund says:

    ..becoming ever firmer as the afternoon matures, my small caps have done 2 waves up from bottom, this is the correction of the second one..These 2 waves constitute wave one(combined) and the decline until today wave 2 (sure it can be an abc too theoretically). But if the world hangs on until easter there will be an ever lasting slope going upwards. Puzzle finally made sense, for now 🙂
    Its all about being right, and when we aren’t its because we are also part of the waves, and lots of factors that ultimately differentiates us from the boots.

  19. mike7x says:

    Thanks Tony. Primary IV is overdue. Looks do it and get it over with. And, what are Ben & Janet going to do next week now? (Hint: Ben & Jerry would come up with a “new” flavor.)

  20. mjtplayer says:

    Thanks Tony!

    Only 175 DOW points and 23 S&P points away from confirming P4 – IMO. I already think we’re in P4, currently minute iii of minor C of int a down.

  21. oneandonlyuniverse says:


    Could you update your gold views this weekend?


  22. gtoptions says:

    Thanks Tony
    Some sick looking Weekly candles.
    Nice work everyone. GL & Good Weekend

  23. CygnetNoir says:

    That was quite a smash, huh Tony?

    CygnetNoir says:
    January 3, 2014 at 12:52 pm
    “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”

    Looks like I’ll be doing some re-thinking this weekend 🙂

    Thanks for all you do to keep it real and honest, Tony!

    • kisshu2 says:

      yes i see that . i didn/t understand what was your trigger? this took long time to play out.
      i noticed last nite the bid/ask was thin and not much enthusiasm vs previous 27 point drop- the sp futures got hammered 11:30 – 12 am after advance to 1828 pivot then dead calm around 1:00 am after returning to closing range – didn’t look like gap up to me – ironically i was looking for a long entry … went to bed without a short.
      if we put our heads together and connect the dots we can all succeed.
      thanks tony

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