thursday update

SHORT TERM: gap down opening reversed, DOW +64

Overnight the Asian markets lost 1.2%. European markets opened lower but gained 0.2%. US index futures were much lower overnight. At 8:30 weekly Jobless claims were reported higher: 339k v 331k, and Retail sales were reported lower: -0.4% v +0.2%. The market gapped down at the open to SPX 1809 and then started to rally. The SPX had closed at 1819 yesterday. At 10am Business inventories were reported higher: +0.5% v +0.4%. The rally continued into the afternoon, with only 2-3 point pullbacks along the way, until the SPX hit 1830 around 1pm. It then traded in a three point range into a SPX 1830 close.

For the day the SPX/DOW were +0.50%, and the NDX/NAZ were +0.90%. Bonds gained 16 ticks, Crude slipped 5 cents, Gold rallied $11, and the USD was lower. Medium term support rises to the 1828 and 1779 pivots, with resistance at the 1841 and 1869 pivots. Tomorrow: Export/Import prices at 8:30, Industrial production at 9:15, then Consumer sentiment just before 10am.

The market gapped down this morning on weak Asian markets and negative economic reports. But immediately started to rally right after the open, ignoring all that, and made a new rally high at SPX 1830. The market has clearly rallied five waves up from last week’s SPX 1738 low: 1788-1777-1827-1809-1830. The NDX, SOX and NYAD have all made new bull market highs already, as this apparent impulse wave continues to work its way higher. Should the SPX/DOW also make new highs then Intermediate wave iii is definitely underway. Until then, there is still the possibility that this rally is a B wave within a larger correction. But that possibility is declining.

Short term support is at the 1828 pivot and SPX 1814, with resistance at the 1841 pivot and SPX 1851. Short term momentum is beginning to develop a negative divergence. The short term OEW charts remain positive with the reversal level now SPX 1810. Best to your trading the Friday before a three day holiday.

MEDIUM TERM: uptrend more probable

LONG TERM: bull market


About tony caldaro

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164 Responses to thursday update


  2. gary61b says:

    Looking at TF 15 min chart it looks to be in a ED with wave c yet to finish.

  3. pcskier says:

    I am still bearish, the Dow hit the level we hit the Friday after thanksgiving, we pulled back after that. $nymo will be at the level a pullback occurs. Plus if you look at tony non log megaphone pattern we are right under the line. $nikk is looking sick also not good for long lasting risk on. People are playing a game of chicken being long here.

  4. llerias7 says:

    ain´t see it coming!…Probably we are in a minor 3 of major 5 ending above 1870´s!
    I was caught in a cash position…frustrating…

  5. uncle10 says:

    Interesting little company. CPST. I like the chart pattern. Double your money with not too much risk. 😉
    Good weekend all.
    Thanks Tony!!

  6. Ryan Parker says:

    SPX now up 102 points or 5.9% in 8 trading sessions. August-Sept. rally last year was 103 points but didn’t happen nearly this fast. Feels like panic buying to me.

    • I’ve never heard of panic buying. What’s the difference between panic buying and exhuberant buying? Or, as one might see in a blow-off top, or intermediate;/minor top? LLAP

    • torehund says:

      Ryan if you take a closer look at the US -dollar chart (which is horrendous), it will make much more sense to you why folks are hoarding shares. However that said I think EM are turning and much funds will go into these markets, AND small caps. When market acts like it does right now there is always an underlying reason that may yet not be too apparent.

  7. oneandonlyuniverse says:


    Once again, great call on the gold/miners.I bought them last 2 weeks of DEC and first two weeks of jan doubled up an already substantial position( i needed that report you put out). I cut half of that today on gdx @ 26.44. My gut tells me the first wave up is in and we get a pullback before moving up to 31/32.


  8. JK1987 says:

    To celebrate Lee 50 birthday, let’s do half here at 1839.

  9. gtoptions says:

    Thanks Tony
    GL & Good Weekend all
    Happy V-Day Ladies
    Bit Coin prizes will be awarded @ the 2014 “Like I Said” Ceremony held at year end in Fantasy Land 😉

  10. hrmny358 says:

    Relentless buy programs are running traders over, me included, regardless of data. Brian Belski has a theory that all the $$$ that flowed into the emerging markets over the years would be coming back here as the game played out over there. Makes sense to me. Technically, the break of the ending diagonal in Jan should retrace to the bottom of the diagonal. Could happen, but is it possible to kiss the bottom of that trend line before heading lower? It looks like the daily BB is touching that trend line today at appx ES 1858 and moving lower. Double top? Maybe ETF’s 1875 target gets challenged which would therefore change the wave count. Daily momentum indicators are pointing higher and I hear hedgies are chasing. It is difficult for me to buy into these levels and this trajectory, so I am inclined to wait for this to top out, change direction, break a key trend line (yet to be identified) and trade with the momentum. Better yet I would like to see a serious correction that gives us an opportunity to load up at a reasonable level for the run to 1975 or more. The Fed is still involved, I need to remind myself of that every day and throughout the day and as Mr Caldero points out everyday this is a Bull Market. I think I am writing this more for me than anything. No more getting run over. Last weeks buy signal (was it only last week?)had a TRIN over 3, two 90% down volume days and a VIX above 20; 3 out of 4 ain’t bad.

  11. this has to be one of the best orcherstrated 100 point run up I have seen. Got to hand it the fed. they know how to run up a market. its like rigging a slot maching to win every spin who would complain. i am wrong to be short very stupid I am .

  12. mjtplayer says:

    So far, things shaping-up well for another “holiday high” on very light volume; full moon and Mercury Retrograde today too – perfect day for a top IMO.

  13. If the markets do not react before Tuesday next week, its all the way for BULLS, it can really go very high..It may well be int1 (for 1738 to 1827 move), so we are in Int.3 rd wave. If it prints 1862, its all over BEARS in short term.

    There are very good restaurants/picnic spots nearby, will see them (have been there 20 times in last 4 years..)

  14. Does anyone truly think the biggest fed pump ever for last 5 years is not going to end the same way it took place, it went straight up, now its time for straight down. Fed doesn’t care about traders, they care about debt, the more debt the merrier, the more debt the USA accumulates the more money the PRIVATELY RUN Federal Reserve Profits. They love debt, especially WARS those are great for running up huge amounts od DEBT! .

    • Lee says:

      Dude you called it , you warned us, you’re the man and when this thing turns you’re going to make a killing and can share it with us in the “Like I said Hall of Fame ” section of the blog.

      Chill my man and don’t take the markets moves personally IMHO

      I’m out supporting the economy thru my many vices this holiday extended weekend, not that anybody cares 😉
      PEACE !

    • CygnetNoir says:

      When the time comes for it to go down, there will be time enough for all of us both to recognize it and to profit from it, just like last time, and time before that, and so on. The reason we trade based upon what price is doing and what the waves are telling us is this: Though you may have realized how this is going to end, we need the other 300 million market participants also to recognize, and then to act upon that fact for the price action you keep predicting actually to occur.

      • Amen to that, will take him a while to get it….

        A disaster could happen, but it usually does not.

      • newbie, please post trading ideas, or opinion of exactly which way you think market is going, instead of your tirades of Doomsday. We have all sorts of sources we can go to for that. Also, you well exceed your posting limit, and nobody seems to find any value in your tangents. Exceeding the limit itself is not so much a concern, if there’s some value in the posts.

        Most newbies are smart enough to know they don’t know anything. Even most experienced traders are smart enough to know they don’t know everything. Please post info. that will help make us and YOU money. Thank you. LLAP.

      • Excuse me, CN, my blog was not directed toward you. LLAP.

    • tommyboys says:

      Think probably “newbie” says it all – let’s just leave it that…

      • You guys act like we have been in this exact situation before, whens the last time the Fed has pumped 4 trillion dollars using QE? Our economy is in worse shape than 2008, these are far from normal times.

    • torehund says:

      One thing is for sure, avoid the FIATs, look at the miners and preserve your purchasing power whilst the dollar crushes. Debt ceiling is unroofed until March 2015, and this time around I think the FED will make inflation. Nobody can stop Yellen 🙂

  15. lunker1 says:

    SPX fibs from 1850 to 1737. so far this wave up from 1737 it’s been….
    .50 support 1795
    .786 resistance 1827
    .618 support 1808
    .786 support 1827 (today)
    .887 resistance 1838
    .941 resistance 1844

    was 1809 w4 or 4 of 3?
    if 1808 lost for long then it was w4.
    if fast retrace comes and then rebound then it was only 3 of 4.

  16. lunker1 says:

    TLT expanded flat since August?
    or was the move up from 101 impulsive and now in corrective w2?

  17. gary61b says:

    this fifth wave should not exceed 1858.49 with wave 1 longer then wave 3. And with w4 larger retrace than w2 the sentiment looks to be changing,

    • gary61b says:

      This could be a day we have as much movement sideways as we do up or down, a square day. consolidation day or al least for now.

    • mmmiiikkkeee says:

      Yesterday afternoon, near the beginning of this thread, sso posted a different “should not exceed #”. The data I use from agree with gary’s 1858.49 and thus, do not agree with sso’s #.

  18. xela0 says:

    Anyone planning on shorting, say at around 1838?

      • Shorting the market today could change your life, If market was going to tank it would be from right where we are NOW, not to mention 3 day weekend- perfect time for an orchestrated event to occur. If shorting after a straight 100 point up shot isn’t a good time, I don’t know when is.

    • blackjak100 says:

      It would be great risk/reward IMO. Looks like 3 waves to me but would like to see 1843 touched which would be A=.382*C. The new all time high with NYAD is troubling for the bears though.

  19. JK1987 says:

    Will re-short into the close with this failed Primary V.
    Full moon on the Valentine’s day
    Saint Valentine’s Day, also known as Valentine’s Day or the Feast of Saint Valentine, is observed on February 14 each year. It is celebrated in many countries around the world.

  20. JK1987 says:

    Stopped out at 1833 for 10 points.
    Still a failed Primary V.

  21. torehund says:

    FIb 1,61 on my target NOK to USD from 6,2 to 3,8, complete 12 year or so abc down on dollar vs crown. If gold is indeed in a wave four bottom a top proj could bring it to 2050. As tony likes to say, nothing is 100 percent impossible.

  22. lunker1 says:

    Like I said got quiet

    • Lunker your right. very quiet because it seems on way market waves and count not useful during this time,. you cannot justify this move.

      • No justification for this upmove…. because HUGE DUMP is coming every short needs to be gone and every long needs to be confused, but longs will say ” don’t fight the trend, we are going to 2000spx, janet yellen is sexy lol” …………Best of Luck… 1600 before 1850 you can count on it.

    • Stopped out at 1833. 1837 is the 88% retrace off the 1737.92 low. Relevant only as the parallel of the Primary II retrace in July 2011 where major b rallied back up 88% before the waterfall major c decline, which by the way had a similar int. ii retracement back up of about 90% just to confuse the maximum amount of people.

  23. rc1269 says:

    i guess that’s that. happy friday folks

  24. short and wrong i am . Ladies and Gentlemen Janet Yellen. wow did i get run over

    • 777daimon says:

      sorry for the 4th message but I have to present my TA medium term target to prevent further loss of money
      this up wave targets 1865-1875, and the whole up structure targets until April 1960-1975 (that area).

      ok, that’s it.
      I promised myself to respect Tony’s ‘3 message rule’ but I had to post this one to help others here.

  25. 777daimon says:

    a test of the all times high is next – today or on Tuesday.
    there will be a great fight there!
    a great one!

    • tommyboys says:

      LOL you’re in direct contrast to EW (HUGE DOWN) guy. I tend to think new highs around corner as well. I think we’re all so conditioned to the last decade’s huge ups and downs that we feel a HUGE DOWN is simply overdue as it’s been 7 years since the last one began – or at least 2 1/2 if you count 2011. What we’re forgetting is that there has been lots of periods where markets generally moved in one direction – up – for 8, 10, 12 or more years without any big bear intrusion. We’ll see but I see no bear for sometime. Possible correction but we may just get these 3-6% type pullbacks periodically getting sentiment super bearish in a hurry.

    • rc1269 says:

      >>What we’re forgetting is that there has been lots of periods where markets generally moved in one direction – up – for 8, 10, 12 or more years without any big bear intrusion.

      i don’t think people are forgetting. those were economic expansions. we’re not really expanding, other than the money supply. so, apples & oranges in my view. cheers

  26. pooch77 says:

    hmmm trannies leading

    • Ryan Parker says:

      Who was the genius that decided to call the Transports “trannies” and the spread between a barrel of oil and a finished refined product a “crack spread”? Try saying those words around non-financial folk as I have done a few times and you will get a few laughs.

  27. Today I have connected two dots.

    The words trader and traitor have the same latin root, “tradere” or “to offer”.

    Have you ever noticed that, the market is the perfect traitor, perfectly able to mislead, change direction, betray expectations, exactly when those same expectations arise to consciusness in the trader?

  28. alexhartley1 says:

    The Primary III continuation rests on the size of the correction from overbought that should start from a high today/18th into the 25/26th area. If we don’t get much below 1800 then it will be back off to the races towards (er…. it has been for the last few days) higher highs obviously from the 26th onwards into late March/April.

    It’s even possible that PIII would run into July. It’s from then into Nov that we get the significant drop that a lot of people are looking for! PIV or C2

    • alexhartley1 says:

      obviously C2 may not just take 3 – 4 months! however am wondering if the above proposed july – nov correction is PIV and the PV occurs throughout 2015 and into 2016 before the C2 correction ending in 2017 in time for the next bull starting 2018.

      2015 is set to be very very bullish.

      does that sound feasible Tony?

      • Ryan Parker says:

        My work suggests that the valuation low for the secular bear market that began in 2000 hits somewhere in the 2017-2019 timeframe. Nominal price low was 2009. Valuation low typically comes 8-10 years later. 1932 nominal low, 1942 valuation low. 1974 nominal low, 1982 valuation low. Some pundits have suggested that October 2011 was the valuation low but it just doesn’t jive with historical analysis. Valuations are normally about 1/2 of 2011 levels at the valuation low.

      • Ryan Parker says:

        Deep thoughts by Jack Handy: What has been extremely confusing to me is that since most indexes are trading at new all-time highs one has to conclude that this is indeed a new secular bull market. However, my view is that much of this has been engineered by the Fed. Fed did similar type of QE in the 1940’s and a new secular bull market began. Prior secular bull peak in Dow from 1929 wasn’t exceeded until 1954-1955. This time it happened only 13 years later. Difference then compared to now is that the Dow fell 90% from the peak then vs. 55% from 2007-2009. Thus there was a lot more ground and room to go on the upside prior to breaking to new highs. Just seems to me that this market is fundamentally way ahead of itself (as indicated by the CAPE/Schiller P/E) and looking back on history there have been two lows in each secular bear: Nominal and valuation. This would suggest that the valuation low is still to come but then again how does this sync up with the technicals? I’m guessing by Tony’s wave count the valuation low I’m looking for will be cycle wave 2 of the secular bull that began in March 2009. The most logical view IMO is that cycle 2 should bottom sometime in the 2016-2019 timeframe. 2017-2018 are the first two years of the next presidential cycle so that would seem like an optimal time for a bottom. However, the presidential cycle hasn’t been working very well since 2007-2008. Too much Fed intervention has distorted it in my view. Curious as to Tony’s thoughts on this. Others are welcome to chime in as well.

      • Agree with Ryan Parker. If this were a typical inflationary economic cycle/trend, this would likely be a new secular Bull market. Since the economic cycle/trend is deflationary, and I believe we haven’t seen the final lows of the various asset prices and valuations, this remains a Fed supported secular Bear market. There was simply too much damage done in the Credit Crisis, and deleveraging likely to last a decade or so. Although in US, and/or global stocks, the lows might be hit in 2016, this doesn’t mean they will bounce back immediately. More likely stocks will bump along the bottom in a narrow range for a couple of years before beginning to rise again. LLAP.


  30. Just watch 1875, its a PERFECT top on many levels for MAJOR 3 of Primary 3…. not major 5… Primary 3 aint even close to being over….

    • one other chart, in case you missed it….. all you really need for now$SPX&p=W&yr=0&mn=8&dy=0&id=p78471348598

      30 week MA line on weekly chart…. you can figure it out by looking

    • Young Tom says:

      Not so quick to your target. Yes it can get there, but if you are a true student of EW, and given the last five wave pattern the suppose max for this little upturn of a 5 wave pattern would be something under 1858. Then an a-b-c, to perhaps what your are expecting. Meaning only, wave three can’t be the shortest, with 1 and 3 already being exactly 50 pts,

    • 777daimon says:

      3xETF Trader,
      I have found a comment on from a guy …I’ll copy-paste it here and I really want your opinion (also the opinion of others):
      ” Latest S&P 500 Futures Comments
      Killa Beez
      Killa Beez Feb 14, 2014 06:45AM GMT
      let me tell you a little mighty secret …. 1890 is a special number for bears and perma-bears! it’s the maximum allowed number for this “bearish rally” in a final “c” wave of the so-called “bearish rally a-b-c” from the lows at 666.43 points. There are some funds that are short-positioned medium and long term! Cause Prechter and other retards have made their point in regard to this direction! If 1890 border is trespassed with ONE SINGLE POINT it will trigger THE MOTHER OF ALL SQUEEZE RALLIES due to forced coverage of medium/long term short funds! . So I have one single diabolic message for this market : GO GET’EM GIRL! DESTROY THE UNBELIVERS!”

      What do you think?
      Above 1890 is it possible to happen what this guy/girl said?

      thank you in advance!

  31. budfox9450 says:

    Those who are critical of Pretcher’s market timing
    are right – but – isn’t it equally poor judgement, to always
    be of a Bull market opinion? Right now, do not see
    the technicals Bullish. My MACD histogram, is not even
    at the zero line, and the price is jumping like it whats
    to print 1850+ ….Personally, I expect it will. But,
    I am watching the OEW NY A/D, Mr. C has that in an
    Intermediate 5 up, aka new high. What do you expect
    will follow?

    • tommyboys says:

      Of course. It’s best to be bullish in a bull market and bearish in a bear market. Against human psyche but best.

  32. torehund says:

    Shouldn’t this bull enjoy at least ONE worry free period, it has been knuckles and bones, desert galore, no fun, eat your oats alone for years….
    Just misery and misery and Zero hedge.

  33. gtoptions says:

    Thanks Tony
    SPY/SPX, along with some of the other Majors ~ Two candle continuation pattern. Doji with a bullish engulfing candle after an extended move. There may not be much of a pullback. JMO

  34. As soon as tomorrow, no later than Tuesday some pertinent information is going to be released, that information will be the catalyst for the next move (hint: HUGE DOWN MOVE)

    • tommyboys says:

      Stop reading the “absurdly” permabearish Zero Hedge! Those dudes have been preach’in the same since ’09. They concoct the most bizarrely flawed analysis of maybe any site on the internet and put the Dents, Prechters and Fabers to shame. Anyone following that site over the past five years would be exponentially broke fifty times over today.

      • Tommyboy, I don’t read zero hedge. LOL. Those clown have been preaching bear chatter since 2009, well its 2014 and Im NOW officially chattin/preachin Bear Chatter, except right now 20 points off of all time high. Id say 2009 chatter at lows versus 2014 chatter at highs is quite a bit different. I see wave 2 completing today at 1830 NOW Wave 3 to 1600. Market makes the News, not the other way around.

      • tommyboys says:

        Dude the “Price/Sales” ratio link you posted on Wednesday’s board is a Zero Hedge link & concoction…

      • ewtoriginal says:

        I posted the price/sales chart, not imanewbie. It was not from zerohedge.You dont even understand ZH postings.So you think a price/sales stat is arbitrarily concocted? Sure it is.
        My only advice to you is stay long until the day Fed stops adding any liquidity,because once they stop, it’ll be at best like the Nikkei for 15 years at these valuations. Dont worry.The valuations are normal,but yesterday decided once and for all that nothing matters except CB intervention…possibly from international sources as well as domestic..because there can be no rational explanation of that price action.Perhaps,as I said, if retail sales could go to zero, the market could print 2500 or 3500 immediately.

      • tommyboys says:

        I confuse easily

    • I kind of miss the yenguy. where has he been. But then again imanewbietrader is easier to read. I am short with you imannewbietrader but I think I am wrong

    • and by the way how would somebody who has not been right since I have been reading here know about “pertinent” information?

    • bhtrade says:

      You may want to join that other well known Elliott Wave site. Heard they are all bear, all the time, seems like it might suit ya.

  35. bouraq says:

    Last resistances standing:

  36. jobjas says:

    P3 completing, expecting a 200 point drop for P4

  37. M1 says:

    A very interesting situation.
    1. spx confirmed today (imo) this is/was an impulsive wave. So I would adjust and level 1737 as int wave iv and this rally from 1737 should be int wave v (of major wave 5) and the end of primary wave III. I am not expecting new highs to confirm this scenario
    2. NAZ should be ending its primary wave III as well. (Tony’s count)
    3. dji and djt are another picture. It looks like they are already in a downtrend wave B/2. Soon we should know if we get a large selloff shortly.

    My Count still calls for NDX cycle wave 3 ending soon and cycle wave 4 coming next (+27% drop)


    • tommyboys says:

      RUT busted into some nice RS today which is exactly what bulls would’ve wanted to see…getting interesting.

    • 777daimon says:

      just my 2 cheap cents opinion ….
      1737 was wave 4 of major III of int. III of primary 3
      I see primary 3 ending at 2215-2217.
      I would touch short only if market would venture on a constant basis (weeks after weeks) below 200 dma! That’s the moment when shorts are required!
      ..and this is my long term view!

      QE won’t go away, you’ll see!
      Yellen & co. after a pack of bad data received will DOUBLE the QE in one single FED meeting! Mark my words!

  38. thanks for the update tony! Quite a rally off the 1738 (which is the 1.382x extension of Major 1 from Major 2… low). What the bears took in 1 month, the bulls pretty much reclaimed in little over a week… shows who’s still wearing the pants here IMHO.

    Assuming an impulse, then wave 1 was 50.33 points, wave 3 was 48.72 points, so wave 5 can’t exceed the length of wave 3, which sets a maximum to this uptrend at 1857.94 (measured from wave 4 low at 1809.22). I don’t think it well get there, instead I think the SPX will not make a new ATH this week (no more POMO this month, today was the last day… Tuesday and today were both POMO days…) just to keep everybody guessing. (Valentines day maybe red instead of pink 😉 )

    IF this is the start of intermediate iii (and l favor that likelihood vs a major b wave by an 80/20 margin now), then this is therefore likely minor 1, with minor 2 soon to follow, right!?. Given the no-POMO for the rest of the month, maybe the next 2 weeks may produce minor 2… good time to load up the long boat IMHO.

  39. mharrison60 says:

    Hmmm … Five waves up favours this not a B wave although possibility remains if part of a larger correction until 1851 hit.
    Odds may favour Bull case of up and away from here but Bears can still argue this is a re-test of highs / second chance to get out before a significant C wave drop.
    Interestingly the World Index has tentatively topped.

  40. budfox9450 says:

    The Naional Debt – 17 Trillion, 290 Billion $$$.
    I wonder, how high it can go, before. Someone,
    calls us on – our IOU’s ???

  41. negative divergence developed during last minute wave – more evident in DOW

    went short at close

    whether B wave or new uptrend, market will retrace first before continuing north

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