thursday update

SHORT TERM: gap down opening, DOW -167

Overnight the Asian markets gained 0.1%. Europe opened lower and lost 1.0%. US index futures were lower overnight. At 8:30 weekly Jobless claims were reported lower: 297k v 319k, the CPI was reported higher: +0.3%  +0.2%, and the NY FED was reported higher: 19.0 v 1.3. At 9:15 Industrial production was reported lower: -0.6% v +0.7%. The market gapped down to SPX 1884 at the open and continued to decline. The market had closed at SPX 1889 yesterday. At 10am the Philly FED was reported lower: 15.4 v 16.6, and the NAHB was reported lower: 45 v 47. The market continued to decline until just past 11am when it hit SPX 1864. Then after a bounce to SPX 1869 by 11:30, it declined to 1862 by noon. After that it started to rally. Heading into the close the SPX hit 1872, then dipped to end the day at 1871.

For the day the SPX/DOW were -1.00%, and the NDX/NAZ were down 0.75%. Bonds gained 9 ticks, Crude slid 85 cents, Gold dropped $10, and the USD was lower. Medium term support remains at the 1869 and 1841 pivots, with resistance at the 1901 and 1929 pivots. Tonight a speech from FED chair Yellen at 6pm. Tomorrow: Housing starts and Building permits at 8:30, Consumer sentiment at 10am, and its Option expiration Friday.

The market gapped down at the open today and traded all the way down to the lower end of the OEW 1869 pivot range. Quite a drop, 40 points, in just two trading days. At SPX 1862 it found support, and then had its first rally since the decline began. Short term momentum nearly hit zero at one point during today’s decline. A very rare occurrence. After yesterday’s drop through the previous rally high at SPX 1889, we posted this uptrend was getting quite choppy and was starting to look corrective.

After a close review, and input from the posters and group members, we updated the SPX count. Since the rally from SPX 1860 looks like three waves, we labeled it a B, and left the first two rallies as Minor 1 and Minute i. Ending the SPX/DOW uptrend at yesterday’s high, just does not fit with the NDX/NAZ count. Unless the entire uptrend is a B wave, and the NDX/NAZ have not completed with their downtrend. The key levels to watch now are SPX 1860 and 1851. A retest of the first would not be surprising, but a drop to the second level would force a count change. Project, monitor and adjust. This market remains somewhat risky short/medium term as there are several count possibilities.

Short term support is at the 1869 pivot and SPX 1860, with resistance at the 1901 and 1929 pivots. Short term momentum was extremely oversold early, then bounced. The short term OEW charts remain negative with the reversal level now at SPX 1877. Best to your Options expiration trading!

MEDIUM TERM: uptrend

LONG TERM: bull market


About tony caldaro

This entry was posted in Updates and tagged , , , . Bookmark the permalink.

169 Responses to thursday update

  1. gtoptions says:

    Just a thought for Monday Gap Up! ~ Technical set up similar to Friday May 9.
    FYI ~ Mon/Tues big POMO ~ Repeat May 9 & 12
    NOT TRADE advice, just an observation. 😉

  2. I know I’m a crazy bear but todays close for OPEX and it close in general would in my opinion be the perfect way to sucker in longs if market was to continue downwards on Monday. Please know need to attack, just sayin.

  3. Wave 5 down to 1850 or crash on Monday. Enjoy!

  4. rc1269 says:

    last post today-
    this move into the close i believe increases our odds of a gap down monday, rather than a gap up. just my two cents. shorts covered.
    enjoy the weekend everyone, and thanks Tony for another solid week of keeping the ‘O’ in OEW. cheers to you my friend.

    • tony caldaro says:

      Posting an interesting sector/index relationship this weekend the bears will probably not want to read.
      have a good weekend too RC!

    • JK1987 says:

      rc, you can use my post. This is my first post of the day.
      I value your opinion among the top of the forum. 🙂
      So I take your advice to take profit here.
      SPX at 38.2% and RSI overbought.

      10 yr tsy bottomed at support? TLT topped at 61.8%?

  5. Bollinger Band width (20, 2.0) on the daily is below 2 today: 1.807. That has only happened 4 other times over the past 3 years. So it’s a rather unique set-up. Tightening BBs indicates a strong move is coming to our screens soon. 2 times it was up (sept ’12; april ’13), 2 times it was down (aug ’13; jan ’13. So that’s a toss. Comparing the set up of other TIs (RSI, MACD, FSTO for example) then and now may give more clues. IMHO, looks like the current setup resembles that of Sept. ’12 the most. I could be wrong of course…

  6. Kevin M says:

    WOW!!! I feel like I being ganged up here for saying this “Excellent Chart John….I think you have a grasp on reality. Unlike some perma-bulls here” WOW….so horrible. I guess the truth hurts and the ones being hurt let it be known.

    Come on now is this a forum about trading or is this 10th grade in high school???? I thought I was talking to adults here? Grow up!!!

    Regardless of teenage girl attitudes here the market will go down and the perma bulls will ttry to call every bottom until June/July. This will be fun to watch. O and BTW Tony will embrace his Dow alternate.

    Take care….

    • rc1269 says:

      >>Come on now is this a forum about trading or is this 10th grade in high school

      it’s a forum about trading. so maybe you should take your own advice and just talk about trading? just a thought

    • kevin, please compare your posts with the last one I just posted. See the difference? Mine is pure technical, looking for clues on market direction etc. I am NOT using any words such as perma-bulls,or referring to other people in a condescending way (saying others are perma-bulls is a subjective/value statement and can be misinterpreted. please remember that harassment is not about what YOU say, it’s about how the other receives it… same goes if you call others perma-bears). Just leave those value-statements out. Instead use your skills to analyze this market, that’s what we need. We all can bring something to this great table, called Tony’s OEW, that others can’t. So all together we know a whole lot more than just 1. Name calling, “it will go down”, “told ya so”, etc are all not helping any of us.

      I am sure I’ve slipped a few through the cracks too. We are only human. But the name of the game in life is “we all make mistakes, just try to make as few as possible”.

      That’s all!

    • CygnetNoir says:

      We won’t give up you yet, Kevin. We know those teenage years can be difficult on you youngsters. 🙂

  7. rc1269 says:

    60 min macd and ma’s all looking ready for a breakout

Comments are closed.