friday update

SHORT TERM: gap down opening, DOW -140

Overnight the Asian markets lost 0.7%. Europe opened lower and lost 1.0%. US index futures were also lower overnight, and the market gapped down to SPX 1873 at the open. The SPX had closed at 1879 yesterday. By 10am the SPX hit 1867, when Consumer sentiment was reported higher: 84.1 v 82.6. Then after a bounce to SPX 1872 the market hit 1862 by 11am. Another bounce pushed the SPX to 1869 by noon, but again the market pulled back to hit 1860 by 2:30. Still bouncing the SPX moved to 1866 by 3:30, then dipped to 1863 to end the week.

For the day the SPX/DOW were -0.85%, and the NDX/NAZ were -1.75%. Bonds gained 5 ticks, Crude dropped $1.30, Gold rallied $9, and the USD was flat. Medium term support drops to the 1841 and 1828 pivots, with resistance now at the 1869 and 1901 pivots. Last night the FED reported a decline in the M1-multiplier: 0.690 v 0.701, but an increase in the Monetary base: $4.012tn v 3.885tn. Today the WLEI was reported higher: 54.1% v 53.9%.

The market gapped down today for the first time in exactly two weeks. The last time the SPX hit the 1814 low, bounced around a bit, and then rallied non-stop to 1885. Today the SPX hit 1860, just below the 1869 pivot range, for a 25 point pullback or nearly 38.2%. The pullback has been choppy thus far: 1874-1884-1870-1883-1860. That two minute ramp to 1884 on Thursday’s open skews the pattern a bit, or else it would be a simpler: 1870-1883-1860.

Short term support is at the 1841 and 1828 pivots, with resistance at the 1869 and 1901 pivots. Short term momentum displays a positive divergence at today’s low. The short term OEW charts swung negative today and ended there, with the reversal level now SPX 1870. Best to your weekend!

MEDIUM TERM: uptrend probable

LONG TERM: bull market


About tony caldaro

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45 Responses to friday update

  1. 16golfer says:

    JK…can’t imagine the market giving us an “ideal” looking picture. Kinda looks like my golf set up…one shoulder lower than the other. Good luck with any positions you might have. I’m thinking the market will try to fake out both the bears and bulls with the pictures they paint on the tape. I agree with Jedi….all you have to do is look at the longer term charts and you should be careful being long. Nothing grows to the sky….

  2. 777daimon says:

    Tony in the market’s field :))

  3. Hi Tony!

    Thanks for your outstanding work.

    I have studied the Dow chart with regard to the ED wave Count, and found some interesting symmetry I want to share with you and all.
    First we have the Major 5 start at 4/10 at 14.717. Then we have the following:

    Wave A: 14.717-16.594. Three Waves. Third wave 0,6 of first wave. Second wave 0,4 retrace.
    Wave C: 15.345-16.651. Three Waves. Third wave 0,6 of first wave. Second wave 0,4 retrace.
    Wave E: 15.987-16.578-16.332. If the second wave now is complete, then we have a 0,4 retrace.
    If the symmetry persists, we will have a third wave up to 16.700 to end Major 5.

    Interestingly Dow 16.700 coincides with the longterm trendline from the top year 2000.

    Best wishes Sverker

  4. 777daimon says:

    seeing a lot of folks hoping for wars and crashes just to save their shorts 🙂
    got something for you: most of the tops end with a jaw-dropping vertical impressive spike (so we’re not talking about 10-20-30 points…but I really mean vertical impressive spike – minimum 75-100 points to the upside) … I never saw that …
    The high interest in puts at the end of this week (please check CPC , CPCE and SPY put/call ratio, also please check QQQ put/call ratio for NDX) GUARANTEES a good week for bulls next week!
    From psychologically point of view all, and I mean ALL (including all of you here, including me – God pls help me in that very moment!) will look to the upside when the ka-boom to the downside will appear… just remember last big drop when Tony and you all were still looking for some more upside but that “4 wave” was something else worse , to the downside.
    One more thing: Putin is a wise guy. He knows when to attack and when to retreat. If an attack will occur this week-end I’ll change my opinion on him. Massive military force used this week-end will not help Russia AT ALL, but it will weaken it’s position medium term.
    Considering all (not only here, but also on other blogs) are salivating for a military attack just to make some coffee nickels on others pain, expect … no massive military attack (and consequently a shorts cover) !
    On Friday we just experienced on SPX: a daily mid BB check and also a 50 dma check – very healthy for a good upside to follow! Also on VIX daily mid daily BB was checked (back-kissed from below) and 50 dma and 200 dma on VIX. And 50 and 200 dma and mid daily BB rejected VIX.
    The rising structure in SPX is not complete and SPX managed to maintain ABOVE daily mid BB and produced also a slight 60 min positive divergence.
    Just sayin’ ….. 🙂

    • bhupal777 says:

      I agree on your statement. (most of the tops end with a jaw-dropping vertical impressive spike).

      I think we are in that process already. We got 70 points upside in 6 days. That I am treating ‘a’ of E wave that Tony laid out in his SPX count. Once the current ‘b’ of E wave completes around 1840, the ‘c’ of E wave will be so strong that all weak players will be on board. Then the real pain starts for longs. So if it reaches around 1920 area by next 1 week, that is 100 point rally in less than 3 weeks. So I think we are very close. Looks like sell in MAY is going to work this year.

  5. Well done, Jedi and Uncle

  6. blackjak100 says:

    I see talk on this blog about IHS and I’m thinking how could this be? The NAZ nearly corrected 10% and top tech stocks are rolling over on good numbers. Well, the most identifiable pattern is the H&S in the QQQ IMO….

  7. gtoptions says:

    Interesting Fibonacci Fan observation for the OEW Breakfast Club to ponder as they enjoy Tony’s Weekend Update. Enjoy 😉
    P.S. This is not an endorsement of my ill-conceived blog. Just a conduit for info sharing.

  8. torehund says:

    Investors are looking for the central bank to begin raising rates by September of next year, according to trading in the federal funds futures market in Chicago.

    fits With M:Armstrongs 2015,75 downturn proj.

    • mjtplayer says:

      Yup, but Marty’s ECM contines to decline into 2014.675 (Sept) before turning up and topping 2015.75

      I’ve followed Marty for a couple years, on and off, but have been following his blog closely since last fall, very insightful. His ECM has been dead-on acurate over the past 2 years – it’s amazing. But, that scares me too. After topping 2015.75 (Oct ’15), his ECM predicts a rough 4+ years into a bottom at 2020.05 (Jan ’20). In his words, the worst economy and recession/depression since the great depression – and that incldues 2008/09 – yuck, scary.

      • torehund says:

        Yes MJT, its amazing how predictable it is; and well like Prechter or someone othe leaning towards the pessimistic projection says; at a certain point its not how you are invested, but more so where you will actually be living that matters the most.
        Like Precter (in a dry fashion) utters; “it will be a sight to see.”…when it all collapses.
        These forecasts adds a bitter taste to the last part of the bull, thats for sure.

      • simpleiam says:

        Since I believe the recession past (2008-2009) and the next to come will be deflationary, I’ve no doubt it will be the worst seen for some time. However, the deflation might affect some aspects of the global economy, while leaving others unaffected. It’s impossible to tell. I would like to see the Bear bottom in 2019-2020 though… Right as I retire. Shopping list is ready.

      • tommyboys says:

        Simple, if we’re in a super depression from 2016-2020 you won’t much have to worry about retirement as you’ll have been out of work for a few years by then…just say’in.

      • simpleiam says:

        tboys, you didn’t hear ‘super depression’ from me, so read my post again & try someone else. I will be retired w/cash.
        Bye & Simplify!

    • torehund says:

      There is some Caves in Mount Roraima in Venezuela that would serve as Prechterishly cosy huts during the downturn. Amazingly the stone structure is the oldest known to man together With some South African mountanhides. Never Earthquakes there and if you look at it it has the kiel of a ship so whatever happnes its petty safe. However Venezuela isnt the country of Choice YET.

  9. Thanks, Tony! Looking forward to your weekend update, as usual. It was definitely missed last weekend. Coffee and Tony are truly the highlight of my Saturday. 🙂 Have a nice weekend, Tony, and all!

    -OEW Coffee Club Member

  10. mjtplayer says:

    Thank you Tony and I llok forward to the weekend update!

    A strange afternoon, indicies tried to rally in the last :90min but couldn’t, although they didn’t melt-down into the close either – just traded sidways. Probably a combination of shorts covering and longs selling in the final hours – i.e. the market treads water. Both bulls and bears nervous about potential weekend geopolitical news, thus both reducing positions.

    They tried to smash the VIX late in the day, as usual on a Friday, and managed to drop it 50bps in the last :45min. The VIX never got above 15 today and with no late-day buying, it tells me investors are taking the risk of not buying protection – i.e. they think there’s no need, nothing will happen this weekend. If they’re right, the VIX drops a bit. If they’re wrong, the VIX spikes and they have to chase it, risky bet with the VIX at 14, protection is still cheap.

    PM’s had another dissapointing day, GDX managed to rally some, but on very light volume. Gold barely closed above $1,300 and on mediocre volume – next resistance is just above at $1,310; the real resistance is up at $1,330 – $1,335 area. Silver closed flat. All in all, between yesterday and today combined, not bullish action in PM’s, just “meh” – continue to hold short, unless war breaks out and you’re forced the short (or the Fed doesn’t taper $10b Wed – which is highly unlikely).

    Bonds rolled-over in the afternoon after a strong rally in the a.m., TLT rallied above the $111.51 high of 4/15, but closing below it on an ugly daily candle with medicore volume – not a great day for bonds considering the drop in stocks. Long TLT and dissapointed with today’s action.

    A good day to be short QQQ & IWM though 🙂

  11. torehund says:

    Thanks for keeping us updated Tony !
    Lotsa churn With all these 2s, I have had it With them, lets ascend come Monday, enough is enough. Still no change of stance for me China and commodities WILL retrace, all EM-markets are at desperation Level With USSR in the forefront, geee China cant expect to live this cheaply FOR EVER AND EVER:

  12. M1 says:

    Thanks, Tony.
    NAZ unfolding as expected.
    Today’s selloff increased the chance for a restest of its lows of april.
    However, the 50 dma is still the target medium term, so the way there could be very choppy during the next weeks.
    gl and have a nice weekend.

  13. esvxm says:

    S&P 500 rotates lower, unable to take out the key level and the 54 day pattern discussed yesterday:

  14. radrian6 says:

    RUT turned lower once again — this is the fifth down-leg from the 1213 peak of March 4. From my perspective, little has changed for the RUT — it’s still in a choppy downtrend for the intermediate term and still rangebound for the longer term. Until RUT breaks below 1083 or starts making higher highs and higher lows, the status remains at neutral to bearish.

    The RVX (RUT volatility index) turned right on schedule — it’s been traveling from 18 to 25 as RUT continues probing lower. Today, the RVX closed at 21.39 so it’s right in between support and resistance.

    The last three down-legs for the RUT have been around 60 points. The most recent high was near 1160 so we may see a move to 1100 — the 200-day SMA and weekly lower Bollinger Band are in that area so I would expect some type of bounce from there. There is also good support near 1083 so if RUT drops below 1100, 1083 should catch the fall.

    Some of you follow the daily RSI(5) as a short-term momentum indicator. On my chart, the RSI(5) hasn’t been able to cross above 70 since the RUT peaked in March but it has crossed below 30 on each down-leg — this confirms the downward bias of the RUT.

    • Thanks for the great $RUT update. It looks as though my hoped-for scenario of strong A-D performance lifting the $RUT and the whole market higher has been nullified and must start over almost from scratch. The NY McOs fell to -3 today, thus causing the NYSI to post a negative gap and begin rolling over. If we are lucky, the McOs will hold in the 0 area and move up into positive territory again soon. In the big picture that would cause the NYSI downward turn to end up just being a shallow dip creating a higher low. I am far from confident that that will happen, but maybe my fear is a good contrary indicator.

      • radrian6 says:

        Thank you, George. McO has been bouncing from -120 to -150 so I would be surprised if it held at 0.

      • I am talking about the NYSE McOs as rendered by Decision Point on Since Feb it has fluctuated between -60 and +65. Some other versions of the McOs use a different numerical scale.

    • mjtplayer says:

      The RUT was the worst performer today, virtually no bounce mid-day while the other indicies were bouncing. The RUT was a “gap and go” lower, to use Tony’s term 🙂

      After today’s close, this weeks’ candle is UGLY, more downside ahead in the RUT.

      • radrian6 says:

        I pretty much see it as you do, MJT — I see support for the RUT at 1100-1083 and a probable bounce from that area. We may ultimately see a H&S top but, if so, that may take a number of weeks to form.

  15. simpleiam says:

    Thanks Tony. If the media blitz causes the fit to hit the shan w/Ukraine situation over the weekend and markets gap down a bit at Monday open, I will nibble profusely. Have a great weekend and look forward to your WU! Simplify!

    • tony caldaro says:

      Seems like Crude could care less about the Ukraine.
      Think pundits just trying to justify profit taking in the NDX/NAZ.

      • simpleiam says:

        Tony, I completely agree. I’m waiting to see if profit-taking extends into Monday’s pre-mkt.

        Also found Ryan’s comments yesterday very interesting; re: How nobody believes in Crude under $80 again. Where have I heard that before?! Rather, when did I hear that before; the early 1980’s (again), just before crude tanked hard the first time and surprised the hell out of everyone from Houston to Midland and back, not to mention other parts of the planet dependent upon that Texas Tea.

        I hear the same thing too, Ryan. Guys in the ofc. are shocked when I tell them I’m waiting for <$80bbl crude, maybe even closer to $50bbl.

  16. gtoptions says:

    Thanks Tony
    Have a great weekend all.

  17. JK1987 says:

    Tony Thanks
    IHS everywhere. SPX COMPQ NDX RUT.

    • 16golfer says:

      IHS is pretty isn’t it? But then again, it could be a H&S top too. Now I just wonder why ‘da boyz” would want to confuse use???

    • radrian6 says:

      Not to be argumentative, but the ideal right shoulder for the RUT IHS would be 1130 — RUT dropped through 1130 and touched support at 1120. Of course, it can still respond and move higher but the trend is clearly lower at this point.

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