thursday update

SHORT TERM: pullback continues, DOW -110

Overnight the Asian markets lost 0.2%. Europe opened lower but ended mixed. US index futures were lower overnight. At 8:30 weekly Jobless claims were reported higher: 317k v 312k, Retail sales were reported higher: +0.3% v +0.1%, Export prices were reported higher: +0.1% v -1.2%, and Import prices remained flat: 0.0% v 0.0%. The market opened two points below yesterday’s SPX 1944 close, bounced around a bit, and then hit 1935 by 10:30. At 10am Business inventories were reported higher: +0.6% v +0.4%. After a bounce to SPX 1939 by 11:30, then market headed lower. At 3:30 the SPX hit 1926, bounced to 1931, then closed at 1930.

For the day the SPX/DOW were -0.70%, and the NDX/NAZ were -0.85%. Bonds gained 15 ticks, Crude rallied $2.30, Gold rose $12, and the USD was lower. Medium term support remains at the 1929 and 1901 pivots, with resistance at the 1956 and 1973 pivots. Tomorrow: the PPI at 8:30, then Consumer sentiment at 10am.

The market opened slightly lower today, pulled back, bounced, and then entered the OEW 1929 pivot range. Around 3:30 the SPX hit 1926, which represents a 30 point pullback from the recent 1956 high. This Minute wave iv pullback is similar to the Minute wave ii 31 point pullback in early May. That one was an irregular flat, and this one looks like a zigzag. The other technical parameters we have been observing have all been met. Expecting a Minute wave iv low quite soon, as long as the 1929 pivot range holds.

Short term support is at the 1929 pivot and SPX 1916-1919, with resistance at the 1956 and 1973 pivots. Short term momentum hit extremely oversold at today’s low. The short term OEW charts are still negative with the reversal level now SPX 1937. Best to your trading!

MEDIUM TERM: uptrend

LONG TERM: bull market


About tony caldaro

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65 Responses to thursday update

  1. fionamargaret says:

    Have a great weekend everyone, and Happy Father’s Day.

  2. torehund says:

    We need a New Jessie Livermore to get this thing going🙂

    • All in till you’re broke?

      • torehund says:

        Jessie wasnt exclusively a bull, but in his successful period he was a contrarian investor. Ran the bull from 23 to 29 and then shorted the heck out of it. Yes, I think we are skimming the bottom, markets have been correcting since 2011, and SPX since April last year. Corrections arent always showing up as price declines. when the yearly macd is elevated. But macd tells a story.

    • JK1987 says:

      Because there is no FED injection today on Friday the thirteen.
      Big FED injection next Monday to kick off minute v rally.

  3. uncle10 says:

    Thanks Tony. Some nice work by you and the board as usual.
    I’ve been away for a while. Prolly be early July before I get back to humping the screens again.
    btw- I sold my longs the day before yesterday… 😉
    Good luck and good weekend all.

  4. 1865 on s&p by Friday next week

  5. wave 4 from1925 1940 than fast drop to 1915

  6. Tony looks like we can mark minute iv at the lows now , looks like we bottomed out.

    Good one !

  7. JK1987 says:

    Tony Thanks for the Minute iv label.;

    1925.78 Minute iv at EMA (89) support.

  8. vix up 17% after wall st journal article that the fed is concerned by amount of complacency. so now the fed want to goose the vix. this is manipulated market for a managed economy

  9. Hi tony,
    Thinking that crude is an amazing short. Even though SPX futures are up, I still think market has a lot more to go on the downside maybe SPX 1907.

  10. Hi Tony

    If we say minute wave iv ends around this level and we expect another wave v up next , do you think we will break the recent pivot at 1956? What is the next pivot above 1956?

    Thank you

  11. lunker1 says:

    Ghostine ES target is near cash’s micro 4 = 1919

    • blackjak100 says:

      agree and once again it’s all in the bounce afterwards…new high or 3rd wave down?

  12. fionamargaret says:

    Thanks Tony…..and all contributors.

  13. blackjak100 says:

    Tony any thoughts if the 1929 pivot gives way? To me it looks like 5 waves completed from 1868-1955 to complete the ED. You must admit he ED is starting to gain credibility, but we have a long way to go before validation…1868. Crude is breaking out and appears to be heading towards $115-$120. Iraq Iraq Iraq!

  14. If the stock market is in trading range mode, then Naz is overbought/overloved/highly vulnerable. If it is in trending mode, today’s low represents a logical point for an upside reversal. Naz filled the daily gap created on 6/6/14 and held the 9 day sma on a closing basis. Naz has retraced .155 of the advance from the 4/15/14 low, which is similar to the .145 retracement made at the 6/2/14 low.. Since April 2013, Naz has been reversing direction every 49 trading days plus/minus one day. Today was Day 49.

    RUT partially filled the daily gap created on 6/6/14 and held the 9 day sma. It supported at the confluence of two Fibonacci retracements: the nominal .236 retracement of the advance beginning on 5/15/14 and the nominal .382 retracement of the advance beginning on 6/3/14.

    GDX held chart support ten trading days ago and now is on the verge of. a weekly histogram buy signal. Forex Crude has broken above a contracting triangle that measures to 110, and the potential exists for a monthly chart breakout above 115 that would project to new all-time highs. As al- Qaeda marches on Baghdad while being implicitly encouraged by Obama, the widespread cognitive dissonance regarding the fundamentals of rising oil prices should now be gone.

  15. With today being the official start of future indice rollover, wonder how much on an impact it had in the eod rally. Even I covered my June ES short position 10 prior to cash market close.

  16. ocaj2000 says:


  17. Kisshu2 says:

    Thanks Tony, do you mean zigzag unfolding and this is leg a?

  18. lunker: On Wednesday’s site you made good point about the VIX not measuring fear, but implied volitility, up or down. I’ve often wondered why the VIX is assumed to only measure downside risk. I also responded on Wednesday’s site to your explanation of abbreviations and the -> symbol, if you care to go back a day and read it.

    • torehund says:

      Good point George, thinking gap up retracements would move the vix too. We have had Sovereign crisis light, Cold war light, piggi back tumults in Iraq tellting that previous intervention by the US was all in vain; all bearish happenings during a pretty short time span.
      Can it get more sour ?

  19. bouraq says:

    Bearish overthrow?

  20. torehund says:

    Think we are seeing the first part of the squeeze in GNKOQ as depicted above. sure it isnt comfortable to buy a ch 11 Stock on the otc list. But it is what it is.
    Other than that a tepid day in bulking.

  21. Lynn Hoggan says:

    Tiny I’m really appreciate the daily updates plus the weekend detail updates. Keep up the great work. Much Appreciated🙂 Lynn

    Lynn D. Hoggan Sent from my iPhone


  22. Tony, any targets for AAPL. Looks like new ATH is a given.

  23. radrian6 says:

    The well-organized pullback in RUT continued today. The declining narrow channel penetrated the open gap but did not completely fill it — that would require a further drop to 1153.94. The 23.6% Fib retracement of the entire rally (1082.53 to 1179.84) was likewise tested today at 1156.88. RUT also tested the 38.2% retracement of the up-swing from 1118.66. So … a few technical targets were hit today but did we complete the correction and, if so, what degree was that correction?

    RUT corrections tend to be deep — typically 50 to 61.8% and sometimes deeper. If RUT is correcting just the swing from 1118.66, we may have a bit more to go — maybe 1149-42. If, however, RUT is retracting the entire structure from 1082.53, it has quite a bit further to go — probably to 1131-20. In either case, and particularly in the later case, there may be a relief rally that interrupts the correction.

    In recent times, RUT has not been in synch with SPX so I am not going to assume anything about this correction or connect its duration and magnitude to the SPX correction. I will be watching the reaction to support levels on the way down and trying to assign a realistic probability of reversal. Right now, it does not appear that RUT is ready to immediately resume the uptrend — there may be more downside or some sideways price action ahead.

    • Thanks for your great job of tracking the $RUT for us. The relative strength of the $RUT to the $SPX is the means of measuring the degree of synch between the 2 indices. But it is a variable quantity, and can be viewed as a constant only when it stays on it’s trendline (down TL in this case). At today’s closing value of .601, it is staying above it’s downtrend line, which probably reads about .5945 today.

      • George, would you elaborate on this indicator of sorts, past track record of any predictive value? Thx.

      • Yes, I will repost the explanation and chart of how that works. But first I must admit to an incomplete analysis in this statement from the above post:
        “RS is a variable quantity, and can be viewed as a constant only when it stays on it’s trendline”. Actually, only the rate of change of RS is constant when RS values stay on the trendline (whatever TL applies).

        June 9 Post:

        In the meantime we can look at the relative strength chart of the $RUT vs. $SPX. Here is a link to the chart of $RUT : $SPX for June 9:

        It has broken above it’s downtrend line and might come down to back test it on any correction. I am thinking the RS ratio would have to move higher before it did fall back to the downtrend line, however. I am not a paying member of Stockcharts so I cannot draw in a trendline. You’ll have to use a soft straight edge on your monitor screen. That means the $RUT price would be about .5950 to .5930 x whatever the $SPX is at the time it touched it’s downtrend line from above.
        To have forecasting value, you would have to estimate what the $SPX might be when the RS ratio hit the .5950 – .5930 range (I am talking about a short-term correction here). But that would be an easier task than estimating the more volatile $RUT price. The $SPX closed at 1928 on the day it broke above the down trend line. By watching the $SPX as the RS retraces to the downtrendline (say at .5940), we might estimate to within a couple of points where the $SPX would touch it, and using the RS ratio value, calculate where that would be for the $RUT.
        Using the above method and guessing that the $SPX would be around 1924 when the RS approached it’s previous down trend line from above, the $RUT value would be about .5940 * 1924 = 1142.86. The idea that the RS line might back test it’s previous downtrend line is kind of a worst case scenario in my mind, not what I consider the most likely one. I optimistically believe that the R2K will hold at the 1154-1160 support area.

        There is no track record because I invented it on Monday as I was writing the post. It is just a different angle from which to try to visualize the future performance of the $RUT.
        Since it probably is not widely used, the market may not have discounted it.

      • Thank you, sir – please update us on this regularly if/as your schedule permits. Interesting potential.

    • Agreed — RUT corrections tend to be deep. Your comment about “a relief rally that interrupts the correction” appears likely IMHO. Good luck all!

  24. Job well done Tony! Today we recorded a marubozu doji so I’m expecting more selling into tomorrow for another good 10-15 pt drop before we see any meaningful bounce or resumption of bull trend

  25. tony caldaro says:

    best rally of the day came in the last few minutes

  26. Nice calls lately Tony, looks like 1929 is important.

    INTC just raised their guidance after hours..may have just bottomed the Nasdaq and ended Minute wave iv. Plus BOJ meeting tonight and options expiration next week (generally upside grind).

  27. thoth8 says:

    Thanks Tony great job!
    Peculiar Geopolitical tensions always happens on Resistance/Support areas of crude oil…
    Crude is always a winner no matter what…it is so dirty business indeed.

  28. JK1987 says:

    Tony Thanks
    1925.78 Minute iv.
    EMA (89)

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