friday update

SHORT TERM: gap down opening, DOW -143

Overnight the Asian markets lost 1.2%. European markets opened lower and lost 1.3%. US index futures were lower overnight, and at 8:30 the PPI was reported higher: +0.5% v -0.1%. The market gapped down at the open to SPX 1823, dipped to 1820, and then began to rally. The SPX had closed at 1833 yesterday. At 10am the SPX hit 1830, and Consumer sentiment was reported higher: 82.6 v 80.0. Then after a pullback to SPX 1820 again, just past 10am, the market rallied to 1835 by 11:30. Another decline, to lower lows, at SPX 1814 followed by 3pm. Then after a rally to SPX 1823, the market pulled back to end the week at 1816.

For the day the SPX/DOW were -0.90%, and the NDX/NAZ were -1.25%. Medium term support drops to the 1779 and 1699 pivots, with resistance at the 1828 and 1841 pivots. Last night the FED reported the M1-multiplier higher: 0.701 v 0.695, and today the WLEI was reported higher: 53.3% v 53.0%.

The market gapped down at the open today, hit SPX 1820, then rallied to close the gap before heading to 1814 in the afternoon. We noted yesterday, the most obvious count for the SPX/DOW was the ongoing Major wave 5 diagonal triangle posted on the DOW charts. Today we updated the SPX charts to reflect this pattern. We also included an alternate count, in green, that will be discussed in the weekend update.

Short term support is at SPX 1814 and SPX 1800, with resistance at the 1828 and 1841 pivots. Short term momentum is displaying a slight positive divergence at today’s lows. The short term OEW charts remain negative with the reversal level now SPX 1846. Best to your weekend!

MEDIUM TERM: downtrend

LONG TERM: bull market


About tony caldaro

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31 Responses to friday update

  1. bhupal777 says:

    Thank you Tony. Eagerly waiting for your weekend update. Always something to learn from your analysis. As your primary count is showing diagonal, a bounce might be coming very soon. May be as soon as by Monday afternoon. When D wave concludes and E wave starts that might be my last chance to exit from remaining longs.

    My PUTs worked really great today. HLF (-14%), GM(-4%), CELG, DG, WFM and SPY. Booked profits in CELG, DG and SPY as they are nearing expiration. I am thinking HLF and GM just started their 3 of 3 wave down. Just following the plan.

    GDXJ is also down as per the chart that I have been updating here for the past 1 week. But I was little early in shorting it and got stopped out. If it turns out C wave then I will get my chance to short it again. If not ready to hit LONG button.

  2. Hi Tony

    starting in June 2013
    w-1: 8/2/13
    w-3: 1/15/14
    w-5: 4/4/14 (a lot of 4’s!)
    This medium trend move up, is now over

    first stop 1750:
    – there is a nice trend line on the monthly
    – 50 EMA on the weekly
    – 200 SMA on the daily

  3. torehund says:

    No doubt we have been wrong footed here, but a clear abc down on the spx so come monday and a brisk rally we are on track once more. Sold off some and rased good cash, that seems to help making the bottom.🙂 If not, then further trouble.

    • torehund says:

      Maybe Tony places a c-wave and a 2-wave under the SPX on Monday. But that requires a monster gap up Monday ! Lets see if the wave to bottom occurred today there should be no hesitation.

      • torehund says:

        2s are ugly X ugly, always has been and always will be, lets hope. I Wish all contributors a fine weekend, and our guide Tony all the credit for never being swayed into letting the emotions do the thinking.

  4. Cliff Uzan says:

    Hi Tony, Just want to say thank you for this blog. Btw do you think we are heading into or are possibly already in a recession? Thanks again.

  5. ocaj2000 says:


  6. 56rambler says:


    Thanks for your update. I’m still relatively new to EW, but it doesn’t look like you’ve assigned Primary Wave III yet (on SPX). Is that correct? Thx

    Would also like to chat on the side about your OEW program …

  7. radrian6 says:

    I mentioned 1120-1115 support in yesterday’s post and the RUT, technical marvel that it is, kicked in at 1115.55. The ensuing rally quickly tested gap resistance near 1128 then after a bit of price waffling, the bears rode the RUT down to 1107.93. Another rally sprang forth but was rejected at 1115 resistance because of EOD selling.

    With the 200-day MA near 1105 and the weekly lower Bollinger Band near 1102, today’s low could be considered a technical hit on those support levels. Still, I’m not comfortable with the current low of 1108 and I expect to see another test on Monday. I would not be surprised to see price firm up on Monday afternoon or Tuesday then a bounce into options expiration — RUT is still capable of putting up points in a hurry.

    The resistance levels are now obvious– 1115, 1130, 1147, and 1165-72 — we will be able to gauge any recovery rally by the way RUT behaves at these levels. It’s looking more like a serious correction so I’ll be examining Fib retracement levels and their correlation with the technical resistance areas mentioned above. RUT is already down about 105 points from the momentum high (1213) and about 100 points from the conventional high (1208) — the bulls are going to get the ball back soon and the way they handle it should tell us what to expect for the next several weeks.

    Finally, it will be interesting to see what happens next Thursday prior to the three-day weekend. If RUT finds comfortable support in the early part of next week, we may see some stability going into the weekly close, otherwise, we’ll likely see a downdraft.

    • radrian6 says:

      Here is a chart that shows the anatomy of the correction thus far and some projections for its conclusion.

      • ocaj2000 says:

        Any thoughts on the subsequent upward retracement ?

      • radrian6 says:

        There is a serious confluence of support near 1080 so for now, I am not looking any further down. With regard to retracements, I can only monitor RUT as it deals with each resistance level mentioned above.

      • kvilia says:

        Good stuff, Radrian, agree on 1080. I was quite entertained with today’s bull loyalty board at the close looking at at least a dozen of “buy” comments. It’s nice to see analysis rather than excuse chart for buying up. BTW, totally agree on “serious correction” and “bounce” definitions. I will be covering at around 1080-1090 and NOT buying unless convinced this is over. I personally think we will wind up around 1000 before bottom is in place. Have a good weekend.

      • Kvilla, you said “I was quite entertained with today’s bull loyalty board at the close looking at at least a dozen of “buy” comments. It’s nice to see analysis rather than excuse chart for buying up”

        The 2 minutes I wasted on you… Good luck with your position, up and down, hold down to one side and don’t let go.

  8. Thanks, Tony! Looking forward to your weekend commentary — the perfect compliment to my morning coffee. Have a perfectly wonderful weekend.

    -OEW Coffee Club Member

    • blubrd67 says:

      Jedi, did you go long yet, or just got rid of shorts? I feel it will be better to wait for Monday on longs, but was just curious of your masterly moves🙂

    • Hi, blubrd67, I did not go long yet — just sold off my shorts. I will definitely flip the switch and go long again when stocks I watch start giving the green signal. My last “go long” was on 2/5 and yielded nice profits. Flipped to short on 3/13 (I think) and held on through some chop (sideways action), but paid off. Good luck!

      • blubrd67 says:

        Thanks! That’s a lot of sideway action, you are brave!🙂 Do you have available list you follow or site where you post your actions, other then here?

      • No site. Regarding stocks I follow, this blog is not enough room, as I follow a few stocks within each sector … and follow the ETFs for the various sectors (i.e., XLY, XLP, XLY, XLF). I do have some of my favorite stocks that I always trade or hold as investments — like MU, ABT.ILMN, ABC, CTSH. Love those — make great profits investing or swing trading. Good luck!

      • Blubrd67, You need a plan for your trading — the triggers for you that tell you when to enter and to exit. We all have our favorites and the biggest tip to give you is learning patience and discipline … and do NOT hold a losing trade. Why??? If a trade isn’t going for you, get out quick. For example, I bought NUGT last week — expecting to go up, of course. It started going up and then started to quickly go against me. I didn’t let myself take a loss. No pride, no emotion — not every trade is a winner at the time that you enter. In honesty, it takes time, practice, diligence to train your brain to “flip the switch” from long to short or to cash.

  9. gtoptions says:

    Thanks Tony
    Have a nice weekend all.

  10. scorp100 says:

    Hi Tony, Namaste. I am sure you are watching China index. Anything interesting yet?

  11. 16golfer says:

    Thanks Tony! What % do you give the alternate count?

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