friday update

SHORT TERM: quiet opening, DOW +45

Last night FED chair Yellen gave a speech in Washington, DC: Asian markets ended 0.2% lower. European markets opened higher but lost 0.4%. US index futures were lower overnight. At 8:30 Housing starts were reported higher: 1072k v 946k, and Building permits were reported higher: 1080k v 990k. The market opened unchanged at SPX 1871, ticked up to 1872, then pulled back to 1865 by 10:30. At 10am Consumer sentiment was reported lower: 81.8 v 84.1. After a rally to SPX 1873 by 11:30, the market pulled back to 1868 by 1pm, then it started to rally. Heading into the close the SPX hit 1878 and closed there.

For the day the SPX/DOW were +0.30%, and the NDX/NAZ were +0.55%. Bonds lost 7 ticks, Crude added 55 cents, Gold slipped $3, and the USD was flat. Last night the FED reported a rise in the Monetary base: $3.928tn v $3.927tn. Today the WLEI was reported at nearly a one year high: 54.9% v 54.5%.

The market opened flat this morning, dipped down to SPX 1865 in the first hour, then turned Options expiration into a positive day. Today the market held above yesterday’s extremely oversold SPX 1862 low. Then took out yesterday’s rebound high at 1872. Thus far, the market has held the SPX 1860 and 1851 levels noted yesterday. While a test of SPX 1860 is still possible, it would certainly create a positive RSI divergence on the hourly chart. Possibly setting the market up for a more sustainable rally. An interesting sector/index relationship will be offered in the weekend update.

Short term support remains at the 1869 pivot and SPX 1860, with resistance at the 1901 and 1929 pivots. Short term momentum hit overbought after yesterday’s very extreme oversold level. The short term OEW charts turned positive today with the reversal level now at SPX 1873. Best to your weekend!

MEDIUM TERM: uptrend

LONG TERM: bull market


About tony caldaro

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36 Responses to friday update

  1. Here is SPX path. It should not make new high. Your stop loss should be 1913. This is to take care of GS/JPM gangsters. Latest news is JPM is turning a good boy.

    Every five point rise should be sold at increasing level. For example, if you sell 5000 dollars worth spx at 1880 then, at 1885 you should sell 10000 dollars worth.

    I am likley to revise final downward target to further south.

  2. 16golfer says:

    I noticed that $SPX closed lower last week by 1 point. Also closed lower by 1 point this week. Do you think the big boys are trying to fool us? Surely not. I think we see 1750+/- in June. After all, they need to buy it lower before end of quarter so they can run it up and make some $$$.

    • 16golfer says:

      Correction: Last week closed 3 points lower than the week before. This week was only .62 point lower than last week. LOL

  3. alexhartley1 says:

    FWIW I see this move up Friday as a ‘b of c of ii of 3’. Regardless of what Monday brings (I think a lower high to finish the b) I think we’ll be down into the 22nd where there is a turn date. That should mark the bottom of the ‘c of c’ and complete ‘ii of 3’.

    We should then be rallying in a ‘iii of 3’. This clearly chimes with what Tony is expecting so I shall be looking for the positive divergence around 22-23rd and a re-test of 1860 area. Then a push up into mid-July where I currently await a top for the S&P.

    I am just as interested to see if we have a major bottom in the USD. So far I believe we do. I have interest in short EUR/USD, GBP/USD, EUR/CAD, AUD/USD and GBP/JPY.

    For now I am still playing the S&P from the long side.

    A good weekend to you all.

  4. Kevin M says:

    We have an end of day POP from OPEX manipulation and the majority say it’s now ripe for a breakout to the upside? Again from a purely price performance, 1900 is a brick wall. It couldn’t breakout all year long and now it will? during the worst months to invest in? Seriously folks look into the odds of this. It is very very very rare for this to happen. After October 2015, well that’s another story.

    Now if the index’s go sideways until the end of June, then a massive breakout (upside) will happen during the months of July and August. Again that would be very very rare. However I’m open to the possibility. This could be a 1998 situation here. Very low probability here though. I suspect fund managers are going to unload their losers off their books by the end of June. Doing this will create a vacuum in the market.

    Take care…

  5. simpleiam says:

    Thank you, Tony! Looking forward to WEU and your Report. Simplify!

  6. winslow80 says:

    The last two days appear to have laid the foundation for a resumption of the rally. As measured by TRIN, there was extreme fear yesterday. The major indexes have held support. Today, RUT and Naz were relative strength leaders. SPX has maintained its pattern of higher highs and lows off the 1814 corrective bottom. SPX daily RSI is stabilizing near 50. As measured by SPX Hourly %B, the market became more oversold this week than at any time in the last two years. NYMO is below its Bollinger Band and has formed a complex IHS. The leading Transport Index is already within striking distance of a new high. The Greed/Fear Index registers 27 (Fear). AAPL has constructed a bullish flagpole and flag.

    All of which guarantees nothing. But in a bull market, the preceding combination of factors rarely leads to a decline.

    tony caldaro says: “While a test of SPX 1860 is still possible, it would certainly create a positive RSI divergence on the hourly chart. Possibly setting the market up for a more sustainable rally.”

    This scenario is consistent with recent market action as it relates to wave structure, duration of correction, and momentum readings.

    • Hi winslow! The high TRIN reading of 3 this week is not supportive for the bull case. To the contrary, it is a very week sign based on the low trading volume during the top.
      The ATH in Dow came in with the lowest trading volume for the whole year. This tells us that there was no institutional buying at that high index level.
      This market is lacking fuel, and have to take a break (P 4) before moving higher.

    • torehund says:

      Winslow-good analysis.

    • simpleiam says:

      winslow, I wanted to say thanks for the write-up. Writing, not my strength, unfortunately. Thanks again. Simplify!

  7. jamesbondman says:

    Thanks Tony. Eyes glued on this volatile market. Looks to me like that was a shakeout yesterday. Looking forward to your report tomorrow. Interesting times indeed…….

  8. blackjak100 says:

    Thx tony! Well I’m thinking we are not seeing a fourth wave here due to the duration. It’s either a b wave or in my main count (top 1902 ED), I’m inclined to think 1902-1862 was all of wave i down with an extended fifth. This means rally could hit 1885ish first before rolling over. I know your weekend update will not be bullish, but a lot of indicators suggest otherwise.

  9. mkbull says:

    Have you sold your short position from couple of days ago?

    • CygnetNoir says:

      I’m still short ES, but I covered some yesterday when the Dow, again, held its 50 day MA. Also, I bought some TF this afternoon right after 3 PM EDT when RUT-X traded above yesterday’s high. I’m actually net long when you take my positions as a whole. On Monday, I will be watching how traders respond to today’s high and yesterday’s low to determine how I will manage my positions. Tuesday set up a Big Down, which triggered on Wednesday. Today set up a Big Up on the SPX, which would trigger if Monday sees a higher high that sticks. RUT set up a Big Up yesterday and it trigger today right around 3 PM and held with the higher close.

      I guess I would say that the market is at a short term inflection point. 🙂

  10. When every blogger is Bull, be skeptical. Look around at a few blogs everyone is Bull looking to go short at 1910-1930. Will everyone get out alive before the market tops or Primary 4 begins, I highly doubt it.

  11. Thanks, Tony! Have yourself a super, nice weekend. I’ll be waiting for your weekend update, as usual. 🙂

    -OEW Coffee Club Member

  12. timing101 says:

    Thanks Tony. My version of CN’s Big Up triggered today. $RUT took out yesterdays high, see attached chart.$RUT&p=W&yr=3&mn=0&dy=0&id=p72906947311&a=351424224

    • lunker1 says:

      Noticed that too. Correction over for R2K and was SPX In a messy running or expanded flat?

      • CygnetNoir says:

        Hey Lunk, in my layman’s, non-EW or OEW understanding, it looks to me as though the Dow and SP were done with their corrections in Feb, but the risk indices had so much momo they didn’t take notice until March, and had to play catch up in the correction game. The RUT was the only index to make a new low this week – the Big 4 stayed above last week’s lows. It is almost as though they were holding on base waiting for the RUT to tag up so that they can all now round the bases. Next week should be interesting. I am looking forward to Tony’s weekend update 🙂

    • CygnetNoir says:

      I hadn’t seen your post when I responded to MKBULL’s question above – RUT did indeed trigger a Big Up today. The Dow, SP, NDX-X and CompQ set up Big Ups today which will trigger on a break and hold of today’s high on Monday. It looks to me as though the various indices we follow and trade are trying to get in-sync for the next move. Since it is a bull market, odds favor a new, broad based rally finally beginning.

      • pooch77 says:

        With you on that CN ,cannot see big correction with rut weekly at a bottom and daily almost there.Would like to see these top out and then correction should start

  13. gtoptions says:

    Thanks Tony
    Another strong Friday close. 😉
    Look forward to your WE thoughts and analysis.

  14. torehund says:

    Tkanks Tony !
    Finally RUT made a complete complex abc that seeems to be done and NAS should start wave 3. So all indices in uptrend. Had one been anticipative enough one would have waited until RUT was done With its thing. So Nice to see RUT scrubbing along 108 and then turn With conviction. Leson learned, I hope for the next correction.

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