thursday update

SHORT TERM: gap up open then pullback, DOW -231

Overnight the Asian markets lost 0.4%. Europe opened higher but lost 1.4%. US index futures were higher overnight. At 8:30 weekly Jobless claims were reported lower: 315k v 323k, Retail sales were reported higher: +0.3% v -0.4%, Export prices were higher: +0.6% v +0.2%, and Import prices were lower: -0.2% v +0.3%. The market gapped up at the open to SPX 1873, ticked up to 1874, then began to pullback. At 10am Business inventories were reported higher: +0.4% v +0.5%. The pullback closed the upside gap just past 10am and continued lower until just past 1pm, when the SPX hit 1846. Then after a bounce to SPX 1853 by 1:30, the market dropped to 1842 around 3:30. After a bounce to SPX 1849 the market closed at 1846.

For the day the SPX/DOW were  -1.30%, and the NDX/NAZ were -1.50%. Bonds gained 20 ticks, Crude added 25 cents, Gold rose $5, and the USD was flat. Medium term support remains at the 1841 and 1828 pivots, with resistance at the 1869 and 1901 pivots. Tomorrow: the PPI at 8:30, and Consumer sentiment at 10am.

The market gapped up at the open, clearing SPX 1870, but was immediately sold off. Today’s action was similar to Tuesday’s, when the SPX cleared 1880 and then was immediately sold off. This is certainly not third wave activity. When we look at all four major indices since the February downtrend low we observe: new bull market highs in the NDX/NAZ, no new high in the DOW, and four weeks of choppy activity after the initial two week surge in the SPX.

We noted yesterday above SPX 1870 the market would start to look positive short term, but below 1850 it would start to look negative. We got both today. In fact, when the market declined to SPX 1865 we knew the third wave was on hold. After reviewing the charts we updated the DOW charts putting the Primary wave III top, and Primary wave IV underway back on the table as an alternate count. This does not suggest this market is about to collapse. The NDX/NAZ are nowhere near a Primary III high. Until the DOW starts impulsing again, we see it in a wide trading range for an extended period of time.

In regard to the SPX, this pullback to the 1841 pivot range is still acceptable. Although this uptrend, as noted above, is quite choppy. However, a break below the 1828 pivot range would suggest the uptrend may be over. Short term support is at the 1841 and 1828 pivots, with resistance at the 1869 pivot and SPX 1884. Short term momentum is quite oversold. The short term OEW charts remain negative with the reversal level now SPX 1865. Best to your trading!

MEDIUM TERM: uptrend

LONG TERM: bull market


About tony caldaro

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151 Responses to thursday update

  1. JK1987 says:

    covered at lower low 1840-

  2. Lee says:

    Thanks Tony
    Think the roll still has some “gotcha” waves left in it before H goes officially M even though today blows as far as volatility goes since the 1 st hour…I know I know Ukraine yadda yadda

  3. llerias7 says:

    Wendsday. Let supose that: 1. Crimea agreament (more autonomy) 2. The FED might “taper the taper” path regarding the unrest. The outcome: a monster short squeeze to 1900´s for sure!

  4. robnaardin says:

    HUP Tony

    If you look at the RUT it’s minor 4 is where your SPX minor 2 is.
    Choppiness fooled us.

  5. gary61b says:

    Rut, 60 min looks to have completed ( a ) wave 1185 and in a ( b ) now and below 1177 then looking for (c) to resume up to complete.

  6. uncle10 says:

    just bought some kinda of expensive lottery tickets on AMZN. If it hits 370 today its lobster for the year for Uncle. If not I blew a g.😉
    Good weekend all.

  7. jeffbalin says:

    This market just loves the 1841 pivot. A break below it then….?

  8. bobhopium says:

    I am watching for a rally here up to the red TL @16240 ish.Potential inverse H&S developing in Dow cash. I expect the rally to be short lived and will look to add to shorts(position trade). Aimho and GL to us all.
    Dow 5 min :-

  9. kvilia says:

    CSLT. Exactly what occurs at the market tops. One can make a killer short on this one. Nothing new, 2000 all over again, except this time liquidity came from Fed. Well, it all ends, and although I’m not Yen guy, I can see signs all over. Scalping here is fine, investing is dangerous, jmo.

  10. oneandonlyuniverse says:

    $spx macd daily cross …hourly 34 almost thru 89 . who knows

  11. jobjas says:

    Dow & NDX also appears to be in P4

  12. anybody else seeing this pullback as a good buying opportunity!? If anything, IMHO, all the market has done over the past 2 weeks so far is retrace to a little above where it was but now it is very OS on the hourly and OS daily instead of when it was OB back then… hence leaving much room for more upside!?

    If any indications; the bollinger bands on the daily are tightening again suggesting bigger move coming to our screens soon😉

    on the weekly the SSTO-indicator did provide a sell-signal, so that’s holding me back from being too bullish.

    • JK1987 says:

      You are looking for 1828? Tony also is looking for 1828 pivot as the inflection (10:21 am).

      Like soul Said:
      “with 2 now in c of an expanded flat. IF c is 1.618x a, then it should target 1828 (a was 34 points: 1868-1834, b to 1883, c = 1883 – 1.618x 34 = 1828), which is also the 50d SMA.”

      • oneandonlyuniverse says:

        Hey jk-
        Remember, your trading capital is like soap, the more times you touch it the smaller it gets….be careful ! U did’t get the 50 you were looking for this week and we are about to get waxed>…… good luck

      • not necessarily looking for it (1828), it’s just a nice fib-relationship, confluence. doesn’t mean the market will/has to get there. can almost be too obvious…

    • RDC says:

      I think we will have huge gap up Monday.

    • oneandonlyuniverse says:

      Imho, we retest Feb lows $spx 1713-38

  13. elmer510 says:

    Given the fact that Mr Putin and politics will have a storng effect upon the stock markets, we can’t rely just upon one special count these days, cause the outcome of Ucraine crisis is not given. There has to be options – positive and negative.

    But personally I think the probability is highest for a gradually rising count cause this problem about Crimea will be solved, with Russia taking over Crimea one way or the other and the West will impose a few sanctions to show their anger over russian aggression. And the West wins Ucraine as their partner, first of all EU.

  14. blackjak100 says:

    Gold reversing hard after hitting $1388 which was right at top of bouraq’s channel and my EW target of $1380-$1390 for the rise from $1182. 5-8% pullback finally underway?

    • RDC says:

      Thanks BJ. I have started short position today.

    • oneandonlyuniverse says:

      5% sounds good – that would put gdx $24.5-25, before the next leg up. Then again, we could of all purchased $nugt at 28 on Tony’s gold call early Jan and sold it at 59 today. The sr’s , more importantly the jr’s need to raise some cash so expect some weakness from these levels

  15. JK1987 says:

    Chop city 1840 – 1852 with lower lows.
    Get ready to short 1852 again.
    Accumulating 10 handles profits at a time.

  16. rc1269 says:

    Lavrov & Kerry meeting over. all good in the hood nothing to see here

    • magnus1234 says:

      BUNDS: June sharply lower and has reversed all earlier FTQ gains after news wire
      quotes Russian Foreign Minister Sergei Lavrov saying “Russia has no plans to
      intervene in Eastern Ukraine” at press conference.

      • rc1269 says:

        of course that’s what they said before right before they did the exact opposite. but mkt doesn’t really care much for things like that…
        i bet they’re telling the truth this time. i’m sure of it

    • uncle10 says:

      lol, funny RC.

  17. magnus1234 says:

    Positive divergence on 30 min and looks like we are gonna get it on 1h too. Added to my ES longs

  18. JK1987 says:

    Covered short at 1841-, 11 points from 1852.

    • blackjak100 says:

      Jk it’s amazing how you always post you covered a short right at the bottom. However, usually the market continues lower so you leave $ on table

      • JK1987 says:

        Because I am counting small waves and qualify with indicators.
        Look at the time price sales. 11:25 EST with price below 1841.
        The short from 1852 was because of 3 small waves up.
        Short 3 waves up, cover or buy 5 waves down.

  19. gtoptions says:

    Thanks Tony
    SPY ~ WS1 @ 183.77 ~ swing point support!
    38.2% @ 183.14 Bullish Above
    50.0% @ 181.34 Slightly Less Bullish
    61.8% @ 179.54 Bearish Below
    GL & Good Weekend all
    M ~ Hope your doing well.

  20. blackjak100 says:

    Apple finally breaking down from a large triangle. I’ve been short but think there’s still time to get in with target at $460-$480

  21. bobhopium says:

    Greetings all.
    For my own trading purposes and maybe of interest to others.
    No change of opinion from last week, and the important swing high I was trading appears to be in. Still short from last week and looking for Dow 15600/15650 and S&P 1778/1781..of note is the bearish rising megaphone structures on both Indices. Aimho and GL to us all.
    Dow and Spx charts daily…

  22. JK1987 says:

    Short 1852.
    int c of Primary IV is proceeding.;
    Tony, 50% probability of PRI IV proceeding?

  23. magnus1234 says:

    Minute ii done. Im long ES futures since open. Good risk return since since natural stop is @ 1834 and we either have minute ii done or a C or a-b-c-x-a. Up we go.

  24. McDonald’s double bottom set up on five minute time frame, $97.00 even..

    Buy signal generated on five minute, stop loss at $97.00 even.

  25. JK1987 says:

    Tony cast the Primary IV as alternate (DOW alternate) for the 4th time.
    1849.5, out of long from 1846.

  26. 777daimon says:

    bounce coming from the H&S neckline support at 1843-1845.
    would be a real surprise if the potential right shoulder develops in a continuous up trend.
    the possibility is there.

  27. Cliff Uzan says:

    Actually made some money today short the SPX. I saw this coming. I think we could go to 1800 tomorrow. Major Non-confirmation by the DOW.

  28. Ok I’ve been studying things tonight and I see the market as near or ending wave a down today (or tomorrow). However I do not see this as the end of the decline, just the end of wave a. The rsi 5 on the daily is oversold now but there is no positive divergence yet, and there really should be before we can call this decline over with some confidence. At this moment I’m viewing last week’s high as the end of minor 1 and this current decline as minor 2. The Ukraine drop was minute iv of minor 1, or so it seems to me at this time. Am currently expecting this decline to be an abc and end at about 1828 SPX around the .382 retracement of minor 1. Next week most likely. Minute b should start tomorrow or early Monday if this is correct. It could have actually started during the last hour today. At this point it seems too late to sell right here for such a small gain. Maybe at the top of minute b for a short term trade but still hardly worth it.

    • It’s really very simple. This is a bull market until proven otherwise. Which means this is a small pull back. Count as you may, but until 1834 is broken, no need to worry. Tomorrow buy the dips show up and more short covering we could be back to where we were on Wednesday and the bubble will continue.

      • Tops always happen when things are going well in the economy and nobody expects it. Usualy, the Housing markets are at all time highs, everyone is fat and happy, (kind of like the roaring 20s) they never happen when there is a uncertain economy like today. The fed, large institutions, anyone who believes the markets are controlled and manupulated, the question you have to ask, is what would that accomplish. The next great depression, or worse. So it’s in everyone’s best interest that this market goes higher and it will

      • Sorry for the multiple post, but my battery keeps dieing. So, one last point. If the sp drops to 1400 who wins? It’s in everyone best interest to jack this market higher, then fall when the economy can handle it. May mean pe ratios of 25. But the alternative sucks, so giddier up. My third post, goodnight all

  29. One more easy recap as I’ve done here before

    Primary 1 was 704 points
    Primary 3 if 161.8% of 1 would target around 2200

    So we do not see 1884 as the top of Primary 3, Major 3 yes…

    1841 cross confirms for us Major 3 highs are done and we will continue to hold our TZA

    • A little more fun

      If Major 4 is 23.6% of Major 3… we double bottom around 1738

      Then if Major5 of Primary 3 is 76.8% of Major 3 then we end right at 2213 on the nose, which is where Primary 3 is 161.8% of Primary 1

      KISS…. the rest is noise

      So a perfect bottom is 1738/39, 146 point drop from 1884 Major 3 highs…. get your powder ready to buy down there if we break 1841

      • bhupal777 says:

        My last post……

        As per your counts, Major 2 was shallow with little over 38.2% retracement. So you are expecting Major 4 also a shallower retracement with only 23.6%. It is not a hard rule that wave 2 and wave 4 should alternate but it is hard to believe they both are shallow. In any case it does seem like 1738 is a good target for the downside for the double bottom.

    • buddyglove says:

      3x ETF…….thanks for posting here, your commentary is very useful.

  30. People really complicate Elliott wave theory so often. Use fibonacci math, keep it simple relative to prior wave pivots. 1875-1884 was a very easy target to predict for Major 3 highs of Primary 3. Heck, even today JPM had some quote out about “Relax and enjoy the Bull Market’…I mean if that is not a confirmation of the public mood at a major 3 of Primary 3 high there isnt one!

    So…. below 1841 its 1739 for starters, a re-test of prior pivot and a 23.6% retrace of 1267-1884 Major 3…. that would be THE most shallow of retracements on the docket.

    Our TZA position is now up about $1 per share and we should see the market accelerate to the downside next week we think.

    Primary 3 still has to get to 2200 ranges, so this Major 4 may in fact be shallow and 1738/39 would be an ideal bottom

    • What is your major 1 high and major 2 low? OEW has major 1 at 1422, from 1074, and Major 2 at 1267.

      Thus major 1 is 348 points long. Major 3 should then be ideally 1.618x 1, measured from 2: 1267 + 1.618x 348 = 1985. As per your own Primary III relation to Prim. I.

      Alternately, major 3 is 1.382x 1, measured from 2: 1267 + 1.382x 348 = 1902

      2nd alternate: 1.236x 1. Less common extension but still very possible. That would make major 3 target 1852.

      3rd alternate : 3=1, which targets 1770.

      Hence I don’t see the 1875-1884 as anywhere close to a normal 3rd wave target. Nor do I see any other significant top since the 1267 low close to the calculated potential major 3 targets. Could you therefore please elaborate how you got to 1872-1885!?

      If anything the January 1850 top would fit, Fib-extension wise, better as a major 3 target but it doesn’t EW count wise. I rather go by count then by extension as the latter are merely ideal target areas.

      • 1267 plus 563 is not over 1900 there sport, may want to check your calculator (348 1.618 is 563. 1267 plus 563—- 1830—

      • 3X, you sound full of yourself lately, you are not dating that tennis playing cougar, are you?

      • sorry, used 1422 instead of 1267 in my sleep drunken state late last nite… so here it goes again:
        major 1: from 1074 to 1422: 348 points
        major 2: down to 1267

        thus major 3 can be
        1267 + 2.000x 348 = 1963 (more of a major 5 target)
        1267 + 1.764x 348 = 1880
        1267 + 1.618x 348 = 1830
        1267 + 1.382x 348 = 1748
        1267 + 1.236x 348 = 1697
        1267 + 1.000x 348 = 1615

        So you then used the 1.764x extension for Major 3? IMHO, since I am for one a Fib-enthusiast for sure, that’s a somewhat uncommon 3rd wave extension, but of course not impossible, as it’s often more a 5th wave Fib-extension target. 3rd waves tend to go for the 1.382-1.618x extension. Why then use 1.618x for the Primary III wave target? Shouldn’t that be 1.764x then too?

        Just asking to understand your reasoning and learn from it. That’s all!

      • jparkins10 says:

        Soul, he “adjusted”, his original target was 1830

  31. llerias7 says:

    Now that everyone is looking down…the mkt will shot up! Things were overbought and 1840´s should be the bottom of (c) of this ugly wave 2…P3 should end about 1950´s.

    • I don’t know, my daily 5,3 stochastic indicator seems to want to go down a couple more days. b of C tomorrow followed by a c of C would probably take care of that. Market wouldn’t even have to go down much more really.

  32. thoth8 says:

    Thanks Tony as always! Seems to be next target for SPX is1808.
    Thanks for your hard work.

  33. Greg Polites says:

    Hi Tony; what is the contact email for OEW tutoring?

  34. bhupal777 says:

    Tony, Is there a possibility we completed PRI III on 12/31/2013. From December 31st high onwards we are in a PRI IV correction morphing into an expanded flat?. Wave A – 1849 – 1740, Wave B – 1740 – 1883. Now wave C is underway and has a probability of going down to 1740 or below 1740. If that happens that should nicely touch 30-week SMA and bounce from there for a PRI V. Looking at the entire bull market from 2009 on multiple occasions down turn has stopped at 30 week SMA and market turned up. Except couple of undershoots in 2010 and 2011. Thanks for the update.

    Rest All – If you happen to catch today’s down turn then good for you. Your indicators definitely worked today. Good day for bears. My day trade shorts on GM, WFM and HLF has helped me some what to fill the hole. Good Luck all.

    • tony caldaro says:

      The SPX completed its uptrend in January.
      It could have been a PRI III top, despite the higher high recently.
      With the DOW, thus far, failing to act like a third wave and make new highs.
      The NDX/NAZ acting like a fifth wave in its count, and the SPX caught somewhere in the middle.
      The road ahead could be a trading range for the cyclicals, while the techs finish their pattern

      • bhupal777 says:

        Thanks again Tony. It is very tough job to be counting minute and minor waves keeping the big picture in mind. Thanks for your hard work and persistence.

    • Kinda what I am thinking too. Would fit better with DOW count IMHO as well. Will be fun trading…

  35. radrian6 says:

    RUT recently tagged the weekly upper BB and is now retracing. The RUT tagged the weekly upper BB in May, July, October, and November of 2013 and again in January of 2014 — all of these BB tags resulted in retracements back to the 13-week EMA or to the weekly BB midline.

    So, here we are again. Currently, the 13-week EMA is near 1157 and rising; the weekly BB midline is near 1144 and rising. Additionally, there is support near 1164 and near 1148. The 38% Fib retracement of the recent uptrend is 1163 while the 50% retracement is 1148. The minor corrections in 2013 ranged from 4% to 6.5% and we have come down about 3.4% so far.

    It’s too early to call this a primary correction or a bear market — we should at least wait until RUT takes out the weekly BB midline … then we can start jumping out of windows or whatever.

    • Lol well said, and I agree. Biotechs (XBI) started their decline a week before the broad market and seemed better supported today. When those start shooting up the rest should follow soon after. XBI looks like a completed abc down on the hourly and could be done declining right here.

  36. Thanks Tony,
    This is a SPX weekly view that I put together as of Friday 28 Feb.

    It’s another perspective that fits the idea that we are in the topping process for equities markets.
    The consecutive higher weekly closes may be a signature that precedes that topping process. That was the case in 2007 and 2011 and the market is following the same path so far in 2014 (see notes on chart)

  37. gtoptions says:

    Thanks Tony
    SPY ~ Possible 5 Wave complete (ED C Wave)? Just a thought.
    Anyway my CCI was screaming buy at the lows. Will wait for some confirmation.

  38. bouraq says:

    Bears waking up:

    • robnaardin says:

      Peeps, Check out the H&S on Bouraq’s Dax. Dax’s 50 ma taking a trip below the 200 ma.

  39. Jennifer says:

    thx for the update!

    U.S. stocks tumbled on ongoing Ukraine concerns

  40. RDC says:

    Thank you, Tony!

  41. Ahhh yes once again the futility of EW has come to pass. Counts busted and adjusted ad infinitum. It’s hard to change people’s belief system, after all that’s what EW is. Now we have the alternate count on the Dow but that’s not to say its “about to collapse”. In other words let’s cover both bases to make it seem EW is on top of things. How can you make money with this!!!!! The only useful part of today’s “narrative” are the pivots, aka buy at support sell at resistance. It’s quite simple folks stop following the EW herd, it doesn’t work. And for those who portend it to be a “roadmap”, no one knows the road until you’ve walked it, least of all EW.

    • tony caldaro says:

      thank you for your opinion

    • Mac says:

      IF in Doubt, change the Count

    • ” no one knows the road until you’ve walked it” hmmmm, that means neither do you know it so your S/R method is thus as useful as OEW according to your own reasoning… Hence, we’re all in the same boat. So please scoot over and make room for everybody because we are ALL allowed to have a seat on this boat. However, people with a condescending attitude may need to be put in the crows nest for a while to catch some fresh air and clear their heads.

      • Hey if you want to attack me personally, that’s ok. I’m just trying to shake out the myth of EW, particularly to those unsuspecting new traders that come into the market everyday, having been lured by the all knowing, all powerful, all retro curve fitting EW system. Honestly if you were to apply for a job in a hedge fund, and at the interview said you use EW, they would show you the door. I’ve been trading for many many many years and it is a daily battle, so why complicate something simple (which trading should be) with EW (btw Gann, Astrology, Moon cycles or whatever are all in the same boat).

        3 things… entry point, profit/stop, position sizing, keep repeating that over and over and over and over and over. Yep it’s a boring job, and if you don’t like your boring job find something else. EW doesn’t predict the future, but it is very clever at trying to make out it has an edge, and so preys upon our human instinct that we want to be in control of every aspect of our lives, when in fact we are not!!! You never know when the black hooded fella will come knocking so make the most of the now, not the past and not tomorrow.

        Remember only hedge funds have the h”edge”, they have the money.

    • buddyglove says:

      Mud…a little harsh, but a few fair observations.

    • robnaardin says:

      Hello bad nut

    • In my opinion and I am not a major advocate of Elliot I think Caldaro has used it well enough to keep most on the right side of the market. So to attack EW is ok but OEW has been efficient and Caldaro has done a great job.

      • iamwhoiis says:

        It’s not too hard to figure out who had a bad day in the market today! Time to hold yourself accountable for your own actions. If you can’t pull the trigger – don’t blame someone else. (I try to ignore it, but I just can’t understand how some people can be so selfish)

    • budfox9450 says:

      What does it say,about a system.
      if a people/group cannot stand
      for “descent”, or disagreement?

  42. blackjak100 says:

    This smells like one big ABC with C unfolding towards 1700. This seemed like a third wave down as it nearly reached 2.618 of wave 1. Looking for short term bottom at 1835ish to end minor wave 1.

    • mharrison60 says:

      Agree this is something significant to the downside underway. DAX and SPX have been closely correlated until very recently. DAX down 700 from recent high to below it’s major 4 level.

    • RDC says:

      BJ: What is your call on Gold? Still same or changed?

      • blackjak100 says:

        Still the same…I think we get to $1400+ but not before 5-8% pullback. Looking for $1380-$1390 in the next 2-5 days. We’ve had about a 16% move in less than 3 months so odds it goes much higher without pullback are very slim. Even the S&P doesn’t do that!

    • robnaardin says:

      I agree. Rut was the only index to give a goodbye kiss to the upper 20 bb and it’s 4 was on a different day from Tony’s spx 4

  43. thanks tony, the market certainly started off good, but that was just that pesky c-wave of a larger abc. I should not have ignored my own SSTO indicator that already gave a sell-signal 3 days ago, and which is still pointing down and wanting to see lower lows. But such is life. Can’t win ’em all.

    Market looks ridiculously OB on the hourly and daily is getting very close too. For now I root for the minor 1/2 count with 2 now in c of an expanded flat. IF c is 1.618x a, then it should target 1828 (a was 34 points: 1868-1834, b to 1883, c = 1883 – 1.618x 34 = 1828), which is also the 50d SMA. That would coincide well your remark/insight “a break below the 1828 pivot range would suggest the uptrend may be over.”

    • torehund says:

      Tx-T. Downtrend from top is a complex abc of 3 equal parts. Think its over and done with as of today🙂

    • Hi Soul, I’m struck that today looks like the C wave of some degree. Possibly the c of a. I guess the next move up will tell. Retest highs or stall, make a B wave and have the bigger C wave in the coming days? I am expecting a retrace to 1867 SPX or so( if this was the c of a today). Not sure today was the bottom of this wave, but tomorrow maybe, then 1867, then 1828, then buy everything in sight…

      Or wacky idea – panic sell at day tomorrow straight to 1828. Wouldn’t that be interesting?

      • lots of possibilities. IF this is minute c of minor 2, then looks more like it should be done fairly soon, maybe already done per Torehund’s analyzes. We’ll have to wait and see

    • pooch77 says:

      You got that signal to?

    • bhupal777 says:

      Soul, In minor 2 scenario that you laid out, the correction to1828 is very shallow. Not even .382x.
      GOGO is doomed today and looks like not much action AH.

      • Gogo is Nogo. Sold it very close after open for ok profit. May just have been an abc up… Weird kind off since earnings were good and company has major growth potential (in essence entire market outside the US…huge) but market was in sell-mode..: so be it. Moving on!

  44. JK1987 says:

    Tony Thanks
    Minor 3 still has a hope as long as SPX does not violate 1834 (my stop).
    Holding 3X long at 1846, and looking for 1874 in 3 days.

  45. Lee says:

    Thanks Tony
    Rollover Beethoven into SPM/ESM can be interesting at times.

Comments are closed.