thursday update

SHORT TERM: another Yellen rally, DOW +74

Overnight the Asian markets gained 0.5%. Europe opened lower and lost 0.2%. US index futures were lower overnight but rallied after the economic reports at 8:30: weekly Jobless claims higher: 348k v 336k, and Durable goods orders lower: -1.0% v -4.2%. The market opened two points below yesterday’s SPX 1845 close, continued higher to 1847, then pulled back to yesterday’s 1841 low by around 10am. At 10am FED chair Yellen began her Senate testimony. The market began to rally and reached SPX 1855 by 1:30. After a pullback to SPX 1850 by 3:30, the market spiked in the last few minutes to close at 1854.

For the day the SPX/DOW were +0.50%, and the NDX/NAZ were +0.60%. Bonds gained 7 ticks, Crude slipped 30 cents, Gold added $1, and the USD was lower. Medium term support remains at the 1841 and 1828 pivots, with resistance at the 1869 and 1884 pivots. Tomorrow: Q4 GDP at 8:30; then the Chicago PMI, Consumer sentiment and Pending home sales all around 10am. Also at 10am FED governor Stein has a panel discussion in NYC.

The market traded much lower overnight but opened just two points lower and then rallied, after a retest of yesterday’s low, for the rest of the day. With all the choppy action of late we posted a potential a-b-c pattern from last Thursday’s SPX 1825 low. This could also be counted as a 1-2-1-2 pattern from that low, as the b wave up was three waves: 1846-1836-1859. Should the market clear SPX 1859 this is probably the right count. If not, the a-b-c count will probably unfold. The NAZ, which may be leading, broke out of its choppy pattern to the upside today.

Short term support is at SPX 1851 and the 1841 pivot, with resistance at SPX 1859 and the 1869 pivot. Short term momentum put in a positive divergence at today’s low, and hit overbought during the day. The short term OEW charts turned positive with the reversal level now SPX 1847. Best to your GDP trading!

MEDIUM TERM: uptrend

LONG TERM: bull market


About tony caldaro

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146 Responses to thursday update

  1. Lee says:

    They really honked the nas 100 , just the bots playing in the 3 of 3 up or something else?
    thanks and good day sir

    PS I’m buying drinks at the local dive

  2. In an irregular flat, the B-wave typically extends the A-wave drop by factor 1,15.
    The A-wave drop from 1851-1738 was 113 points. This calculation gives us a B-wave top at 1868, which seems quite accurate.
    The C-wave should then find bottom at around 1720.

    • perversionofthemean says:

      Is the collective thinking now that we’re actually in a large B after all, with C back to 1720?

      Per many here, I thought they were looking for a 3 of 3 up (a gap-and-run day).

      If this is in fact a key-reversal day, what level break is required to suggest that we just finished a c of B up, and are embarking on a of C down?

      • simpleiam says:

        potm, I’m not convinced that the 3 of 3 count is correct. Not saying it’s wrong, but only giving it 50%, along with 50% for 5th wave. I’ll let markets make up my mind for me. GL!

    • bhtrade says:

      C wave theory null and void imo

  3. Sorry for the 4th psot, but this is last..Something else is happening…If war was anticipated and this market was falling then gold should have gone up..but gold is not going up..there is something else, it seems for this fall…

  4. fractepper says:

    kkandru12 said:February 27, 2014 at 11:04 pm
    “I’m big time short and extremely confident of it.”

    Thanks & Congrats!! (..and can you share what made you so confident last night?)

  5. Lee says:

    SPX EMA 34 @ 1851.63 on the 60 minute just got tickled.

    • Lee says:

      see what happens on a re test /throw over or throw up.
      C N papers are too harsh man
      Tony ur killing me today haha

  6. JK1987 says:

    Covered at 1853 with slightly profit, switch to long with 1-2-1-2

  7. buddyglove says:

    Hello Mr Bear……..How nice of you to drop by.

  8. Looks like Russian reality is sinking in…..if things go terribly wrong, then market gap down 50 points SPX

  9. It is disappointing to see NOT too many positive comments, charts etc targeting 1950 for SPX. That shows SPX can move higher. I should like to see comments like; “Fannie/Fredie posted 130 billion dollar profits and repaying all monies to treasury. So, SPX (I know Fae is not SPX but just saying) trades at multiple of only 6 and should trade 3 times the present level”.

    People forget that if FAE extends 4 trillion dollar of home loans then due to interest rate diff of 3.75% (it pays 0.25% to FED and mortgage at 4%), it should make 150 billion dollars but if house prices fall 10%, it loses 400 billion dollars..

    Anyway, small SPX short position opened at 1867.7.

  10. Lee says:

    A poem by Lee :

    When I make money on a trade that plays out
    I am not grumpy , I do not pout
    I do not call other’s foolish when their plan goes south
    I just don’t get what that’s all about.
    Oh how I love to make money and the joy that comes with
    Then head to the bar and buy drinks and get pissed.

    The End

    Have a great weekend everybody !

  11. 0zach0 says:

    Long time lurker

    MEDIUM TERM: uptrend
    LONG TERM: bull market

    So tough to call the top with these being Tony’s counts. Almost as scary as trying to catch the falling knife. Let’s not over-think this market; With stops, let it work for you.

    Thanks Tony

    gl all

  12. mjtplayer says:

    The DOW closed the open gap from 1/22 at 16,373.34 – where the Jan/Feb selloff began. Anyone else concerned that the S&P, NAZ and R2K have made new highs but the high in the DOW was 2 months ago? The high in the DJT was over 1 month ago.

    The outperformance in the NAZ is being fueled by biotech and internet stocks, speculation as it’s greatest, only thing missing from the NAZ is medical marijuana stocks. When one looks at a long-term chart of biotech, the parabolic rise over the past 2 years looks exactly like the rise from 1998 – 2000. More recent, the blow-off move over the past couple months looks almost identical to the blow-off move in late 1999/early 2000. Impossible to know where the top is, could be now or next week or next month or several months away, but the result will be the same in the end – a crash like drop. From Feb 2000 – July 2002, biotech lost 70%. Biotech down 70% again between now and July 2016? That would be roughly 900 in the biotech index or where we were in Oct 2011 when the parabolic move higher began – retracing the entire parabolic move, as bubbles so often do.

    Carve-off a pice of the portfolio and short the IBB or buy the BIS and go to sleep for the next 2+ years?;range=my;compare=;indicator=volume;charttype=ohlc;crosshair=on;ohlcvalues=0;logscale=off;source=;

    That’s 3 for me – have a good weekend!

    • tony caldaro says:

      Biotech will probably top when the market tops in PRI III.
      The best thing these pot companies can do is to make stock certificates out of the weed.
      Then they made we worth something =)

    • Ryan Parker says:

      Much of what I’m seeing in what is “hot” right now is reminding me of my old brokerage firm intern days. Just by coincidence I started in October 1998 and left just before Spring Break in 2000. Market topped while I was on Spring Break in Acapulco. Just before I left I remembered the talking heads on CNBC claiming that Nasdaq 6000 was around the corner….and Kevin Landis was the hottest thing since sliced bread.

      • tony caldaro says:

        Kevin who?
        Thanks Ryan

      • Ryan Parker says:

        Exactly Tony. He ran the Firsthand Funds and had billions under management. Produced 40 fold returns (if my memory serves me correct) from 1995 until the top in 2000. Heck, I remember applying for a job/internship there. He was hailed as a tech god that understood things in a way that nobody else did.

        Then his funds fell 80-90% over the next two years and never recovered. Turns out valuations do matter. It is now a closed ended fund and trades under the ticker SVVC.

  13. mjtplayer says:

    Gold is a short here, downside to $1,275 – $1,290. If $1,275 breaks then $1,250 becomes the must hold. A break of $1,250 means we go down and test the lows

  14. mjtplayer says:

    The US Dolalr looks terrible, breaking 80 today. You’d think the buck would’ve seen a flight to safety while emerging market currencies are collapsing and the Yen at 102, but not so much. Next stop is the critical 79 area – the “must hold” area.

    • The US Dollar is on the brink of self destruction.

      • tommyboys says:

        Dollar will be the currency of last resort likely long after everyone on this board has ceased to breath. No drama…

      • torehund says:

        usd will be sold off as money flow goes into europe and em markets, thats possibly why there is need of less taper. So when the real next young of growth comes in the US interest rates has to go up to attract money into the US, and thats when the bear starts howling. But until that happens enjoy EM markets , Europe and a weakening dollar.
        MAybe we will see negative interest rates before tide turns in the US. ut thats good for gold end equities….

      • tommyboys says:

        Tore I see new money continually coming into US next couple years – from all over the globe. Don’t see dollar depreciating much. Also don’t see gold doing much over this period. Guess that’s what makes markets aye!

  15. jobjas says:

    truncated count wave 5(5) out – target1886

  16. JK1987 says:

    Tony’s comment of a gap up and go kind of day is perfect.
    My shorts got squeezed hard, a very bad week on trading.

    the bears are wearing white.

  17. budfox9450 says:

    CANN – the Telsa of Cannibias (sp?)
    Need I say anymore?

    • CygnetNoir says:

      CANN is low float and illiquid and should not be pumped to amateurs.

      • CygnetNoir says:

        Just watch NVLX come undone – The pump becomes a dump. I have a buddy who is short and can’t even get a fill to BUY in and cover and take profits. When the door shuts, it shuts tight until all the money is bled from the longs. Was 61 cents when I posted the above, and now is 47 cents. Same story – just with CANN, the down ticks will be in whole dollars rather than half cents.

      • budfox9450 says:

        I ‘am not an amatuer…thank you for
        that sage advise….

      • CygnetNoir says:

        Not referring to you. I’m referring to the many who read this blog who don’t even know how to trade with a stop loss in liquid markets. You’ve posted twice on this pig in two days and I don’t care if it goes to $100 – I wouldn’t want my kids trading it – it is a dangerous security to trade.

      • RDC says:

        agree .. this is for pot smokers

      • CygnetNoir says:

        11:53 AM EST – look at the level 2 on NVLX – it is back to 50 cents and it looks like another 15%$ drop minimum is in the cards back to 42.5 cents if the promoters don’t come in to save this thing. Then look at the level 2 on CANN and see how little market (about 2400 shares) exists between the current $33.80 and 6 dollars down. Look at the daily chart of MDBX for an example of how volatile these can be.

      • uncle10 says:

        Now we are getting into my area of expertise….. :)/’ Hahaha
        There will be some companies that do very well and make lots of money and there will be plenty that crash and burn….. Shocking and unbelievable that it is not legal everywhere.

      • CygnetNoir says:

        Just to be clear – my point wasn’t “weed companies are bad.” My point was that we should all take care not to promote or pump an illiquid stock that lose 100% of its value overnight without stating that fact in our post. There are a lot of newbs who read Tony’s blog, and they may not know the difference between a stock that is up on legitimate supply/demand and those that are moving largely due to paid promotional pieces to bring about artificial and temporary demand. Medbox (MDBX) went ripping in early January, hit a pre-split high of almost $100/share and then closed down more than $50 from its high ON THAT DAY. I’m not saying the same thing is GOING to happen with CANN, but it is more likely to happen to CANN than many others.

        As always, everyone here oght to do his or her own due diligence before buying anything on anyone’s say so – mine included.

      • uncle10 says:

        CN, I don’t think anyone took it as you thought pot companies were bad. I know I didn’t.
        I agree with your posts. Very high risk 4 sure. Have a great weekend.

      • simpleiam says:

        I would think the Federal and / or State govts would have sole rights to supply mkts w/doobish. The revenue would be, well, over the top. The revenue should be used as a case for abolishing personal income tax. But then, if so many are stoned, they’re not contributing in personal income anyway. A nation of deadheads. An interesting question. Tokers from every walk of life, in line, waiting to give Uncle Sam their money, directly. Who knows. Something to ponder.

        Not Simple!

      • chrisk44342 says:

        Hi Cyg, not a gave me a laugh re. “legitimate supply/demand”. Unsure if there still is legitimate supply demand in the’normal’ market, he he.

    • Lee says:

      “These companies have no chance.
      If pot becomes legal the tobacco companies will supply it.
      Anybody can grow it, not like tobacco”

      Well said Tony

      Like uncle I know a guy who knows a guy who has sampled both the medical pot in MI and the recreation pot offered in Boulder Colorado and the “black market” stuff is cheaper and just as good and when they legalize recreational pot and you can finish off a couple of cloned super high quality leezilla#4 at ur own house every few months who needs the retailers ?

  18. gtoptions says:

    Thanks Tony
    SPY ~ AB=CD Target @ 194 😉
    Have a nice weekend all

  19. Heading right to the 1875 target given out 3 weeks ago almost to the day… end of Major 3 coming soon of Primary 3

  20. Happy weekend all. Enjoy friends and family. In the end money turns out to be a lousy way to keep score.

    • pooch77 says:

      Well yes it does,all though if u work swingshift weekends,holidays,money from market can free you to spend more time with family,friends,guess it goes both ways

      • There are some who really enjoy this, and like to solve the mystery called the market.. and help others…

        Some here with big Egos or trying to get some clients who really take it personally when are wrong, and even change their story (was traveling, something was up…)

        Some here who are clueless, regardless of their past experiences, and have no idea how this market works anymore.. but they hang on to their old days and make fun of those who are trying… A sad bunch, really.

      • Lee says:

        You noticed Tony ….ahhh the internet

      • simpleiam says:

        I hear ya, pooch! Been there, done that many times, esp. in my younger years when parents actually PUSHED kids out the door to get a job during Summer, or working their way through college.

        “Money isn’t everything” always seems the pitch from those who have it.

        Subj Chg: Look at the vol dropping. Wish I’d added some XIV as well, but, can’t have it all.

        Good Luck and Good Weekend to All!


  21. budfox9450 says:

    Hello Tony, ready for more snow?
    Hope your doing well…Bud

  22. Cliff Uzan says:

    I am short the SPX and after reading this blog, I am not in a good position. Feeling foolish. Just thought the action this week was strange and leading up to something.

    • kkandru12 says:

      No you’re not. Hold on tight. I’m big time short and extremely confident of it.

    • budfox9450 says:

      My SP500, BoYu indicator, Daily,
      Weekly, and Monthly are all in
      Buy mode. I believe, you made
      the wrong decision. But, your
      correct – I suspect we are looking
      at a June-July major top…FYI.

  23. lunker1 says:

    SPX one pennant just morphs into another. Had a larger one with a smaller one in it and now those have morphed into an even larger one that started at last Friday’s close. see how today’s high fit the downslope triangle line from 1859.

    A 1836
    B 1859
    C 1841
    D 1855
    E tomorrow 1843 AM / 1845 PM or could truncate higher than that

    pennant measures 23 pts so targets are 1877 or 1820.

    • JK1987 says:

      I vote for 1820 with gap down and go kind of day. I shorted 1851.5, shorted more AH at 1854+. stop 1880, 3 points above your target.
      But looks like Tony vote for a gap up and go kind of day, from the earlier comment.

    • lunker1 says:

      also have a descending triangle 1859 to 1840 w target of 1821. that 1820/22 range keeps popping up.

  24. I have to say everyone that the level of bearishness and top calls on the blog lately is puzzling to me. The market seems to have gotten comfortable with the indexes near highs and no significant selling pressure has materialized. Why on earth short here? If you’re wrong you’re fighting what is likely minute iii of minor 3 of int iii. For heavens’ sake why?? This is the time it’s likely to move upward at the fastest pace and just keep rolling higher. Nothing in the last week makes me think this is a top right here. It’s a consolidation. The DOW stopped at the recent gap down and has been pressing up to it for days without falling. Now it’s testing a gap fill. This is pretty bullish price action as far as I can see. No significant new bad news is on the horizon, except perhaps Ukraine, which is not at all a major financial center. Ask yourself honestly, do you really believe the EU and Russia are going to start a war over Ukraine? If not, how will this make any significant difference in the markets beyond the short term? My take is it won’t. If anything it might create a short term buying opp at most. Unless shots are fired into Poland or somewhere similar there isn’t going to be a Primary IV because of the Ukraine situation.

    • tommyboys says:

      Concur. Has almost felt like a race to see who can call the top first. My work tells me we’re getting close to a melt up soon. Could start tomorrow. Time will tell…GLTA

    • pcskier says:

      the carry trade $:yen unwind looks to be happing a sign the top is in and has been in at least for $INDU and maybe everything else now. The Yen low happen the same day $indu topped, it sold off again on feb 5 when our markets started to bounce and it has been getting a bid lately. If traders are so bullish after today winning performance why is the Yen getting such a bid tonight??

      • pcskier says:

        All of you bulls even tony were extremely bullish the last time SPX made it previous all time closing high, in fact you thought the next 50 points up were going to be a POC~ piece of cake. What happen was the SPX dropped 113 points.

      • Lee says:

        Hey pcskier,
        Most here are investors and view those types of moves as ” squiggles” while some here hedge their long positions via futures /etf’s ect.. while some hacks try to day /swing trade it.
        It’s all good but also remember, it is the internet .

    • I agree. No important levels have been broken to even get close at starting to be bearish and which would mean shorting is more profitable than being long (e.g. 1809 for starters, then 1800 and preferably 1738). Way to many individual stocks look way to bullish IMHO, and it is all these individual stocks that make the market… It’s not the other way around. The market (read indices) doesn’t take stock prices down or up, it is the stock prices of each individual ticker that make the indices go up or down. It’s called the S&P 500 for a reason (to name just one index)… it consists of 500 individual tickers… duh… 😉 Seems like many often forget that.

      TIP: track the 30 individual tickers the DOW consists off and you’ll get an idea what the DOW will do. It’s not the DOW that moves those 30 tickers…

      My weekly SSTO indicator that fired a buy signal on 2/11 is still long and strong. I don’t see a sign of the SSTO’s even leveling off. Let alone close to firing a sell signal, which would require a trade below 1800… This therefore suggest to me more upside. The daily SSTOs have not provided a sell signal either and may in fact have the 5,1 move up again (price has simply removed the OB conditions by moving sideways; OB can be taken care off through price AND time!). I’ll provide an update on the SSTO’s this weekend.

      As for the Ukraine; my partner is from simferopol (huge russian naval base close by in sebastopol) and the situation there has worsened with the parliament being taken (ukrainian flags taken down and russian’s raised, etc), the police station taken over by 60 armed men, etc. Her parents live only a few blocks away… Although Merckel and Putin said they’d do all to prevent the country from being split in 2 (a EU part and a Moscow part so to say) it actually appears as it may happen…. That would bring the chances of a civil war much closer… can’t really say this is a pleasant situation for us. We pray all may end well and hope that the unrest is short term and will bring peace, stability and prosperity long term.

      I don’t think this will affect the US markets at all, and therefore this is all I’ll say about it so we can focus again on the price action.

    • magicianme says:

      There is plenty of evidence that this market can show amazing bursts of strength. The recent rise in price has had a broad base. Further, it has been in a bull trend for a very long time and trends tend to continue rather than abruptly change direction.

      But the bullish case needs to always be considered together with the bearish one. And there are indications that, temporarily at least, the bull run is weakening. From 1738 there was a sharp rise, but last week was actually a down week. The week before we added circa 50 points. This week we’ve done only 20 so far (despite the new high, or maybe because of it). Divergences are building in momentum indicators. The COT position has turned bearish. Even if you discount Chinese and Ukranian problems, the economic data hasn’t been stellar (GDP just released is also short of expectation). Tapering is now a reality after months of uncertainty (and yesterday’s ATH could have been helped by the fact it was the largest POMO day of the month). The carry trade currency of UY hasn’t been doing that great – that long trend ain’t no more my friend. Safety plays like gold and bonds have been showing strength.

      I posted yesterday about my pending order for a short at 1856 with a 5 point stop. That triggered last night with stop now moved to B/E. Hope the previous para answers your question about why a short makes sense (to my mind at least).

  25. Jennifer says:

    Interesting, Tony 🙂

    U.S. stocks increase on Yellen weather comments

  26. Kudos Caldaro for you service your doing an amazing job. I don’t even think its possible to be an Elliot waver and keep a count because its really just a juiced market with one direction, Godd job my friend. stay bullish and you will never be wrong and long as there is no sellin with Yellen

    • tommyboys says:

      We get it – no need for further redundant obsession – you believe the rally is Fed inspired – wonderful. I see myriad drivers with the Fed now just in the way – wonderful as well. How about just forget about the ‘why’ and enjoy it? Fact is as difficult as it is for educated youth to locate employment, it would be many multiple orders more difficult with markets in the toilet. Count your blessings.

  27. M1 says:

    NAZ not only broke out its choppy pattern to the upside today, it broke out a very important long term resistance at 4289 this week and it just keep rising without any important pullback. Now, NAZ is 3.90 times its 2002 low. (4322/1108).

    • fractepper says:

      I found this interesting today too, shorter term. EEM has 3 bumps (Feb.14,24,27) against ~$39.80 and I think that momo is declining. Meanwhile the yen is staying strong with its opposing story.
      Separately, IWM is now 14:1 daily positive closes – quite a position to start cranking up a 3rd wave, eh?

  28. JK1987 says:

    Still looking for SPX 1825 as irregular second wave as in yesterday’s update?

    I shorted 1851.5, stop 1856 (moved up the stop).
    Hopefully we have a gap down and go to 1825 tomorrow.

    • pcskier says:

      I am not convince yet. But I would not be shorting until confirmation of a breakdown. For me it’s indu close under 16175. If you look at recent momo darling stocks like goog, biib, azo, orly, mu, $sox, tsla, Amzn, Aapl, pcln. They all look toppy and a few look like they have rolled like mu, orly, azo, apple, Amzn. I am not mentioning the stocks for position but to support a thesis that the topping process can not be ruled out. Distribution, of the momo stocks. Look at josjob emini chart it looks like a kiss of death chart. Buffet dropped bull markets are like sex it feels the best right before it ends. $vix had an inside day yesterday and made a higher high and higher low today,

  29. mjtplayer says:

    Lots of data tomorrow, on a Friday, on the last trading day of the month, heading into a new moon tomorrow night. Interesting times, perfect timing for a top of some kind tomorrow or Monday.

    • Greg Polites says:

      Of course the more we grow the list of reasons for a top — the more likely the market will just keep on rallying…….

      • mjtplayer says:

        This morings economic news was lousy, just as it has been over the past 6 weeks or so, indicitive of a slowing economy. Only reason one could get excited about today’s rally is the expectation of teh Fed backing away from the taper. I watched the Yellen testimony today – nothing has changed. The Fed will taper another $10b in 3 weeks, if the market is pricing-in something else (no taper) then prepare to be disappointed.

      • pooch77 says:

        Bradley turndate the same as next FOMC meeting

  30. Greg Polites says:

    Hi Tony, thanks for your continued effort to work through so many cross currents in this market. My indicators and technical analysis all point toward a new high soon. Technically, today’s late rally broke a bullish flag and points to SP1861 as a target (OEW pivot). Both the DOW and SP500 have multiple buy signals in place using my indicators and the last signal was a sell signal that was immediately blocked by the overbought condition of the indicator elements pointing to a sidwards trend to be followed by new highs. So Friday could have a spike to new highs then due to the Putin/ weekend fears a rapid retracement (?)…..cheers, Greg
    Chart at:;
    Discussion at:

    • tony caldaro says:

      thanks Greg
      We are in an uptrend, and the NAZ made higher highs today
      May be SPX fri/mon too

      • hrmny358 says:

        I would find it extremely helpful if you could address the lag in INDU, Transies & XLF and what you think the implications and blueprint may be. Maybe this weekend?

        • tony caldaro says:

          I never pay much mind to the XLF.
          When it rallies people feel confident and the market rallies.
          When it doesn’t who cares: their banksters =)
          The DOW may still be on its own wave pattern, but is following the SPX.
          The Trans usually trends with the market.
          Both the DOW/TRAN are close to confirming uptrends.

  31. Hi Tony

    On the hourly, I still read the MACD as the last push up on a minute v. It can now fail anytime, but I will not be surprised if we see a higher high first (gap up?)

  32. 777daimon says:

    Thank you Tony for your update and for the full right of expressing personal view about the stock market (without offending you Sir, of course).

  33. thanks for the update Tony! Been AWOL due to travel, but back in town again. Strong close today IMHO. Let’s see if it can clear 1859 that be very nice 😉

    So far all systems are go. Many stocks green (some very green in particular 😉 ) and since it’s a market of stocks (instead of a stockmarket) these suggest further upside for the indices.

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