friday update

SHORT TERM: gap down opening, DOW -123

Overnight the Asian markets gained 0.3%. Europe opened lower and lost 1.1%. US index futures were lower overnight, and at 8:30 Durable goods orders were reported higher: +0.7% v -0.9%. The market gapped down nevertheless to SPX 1983 and continued to 1978 in the first few minutes. The market had closed at SPX 1988 yesterday. After hitting that low the market rallied five points, then made a lower low at SPX 1974 by 11:30. Heading into the afternoon the market rallied to SPX 1980 by 1pm, then went into a 4 point trading range and ended the week at 1978.

For the day the SPX/DOW were -0.60%, and the NDX/NAZ were -0.50%. Bonds gained 8 ticks, Crude slipped 15 cents, Gold rose $14, and the USD was higher. Medium term support remains at the 1973 and 1956 pivots, with resistance at the 2019 and 2070 pivots. Last night the FED reported an increase in the Monetary base: $4.041tn v $3.914tn. Today the WLEI came in unchanged at 54.2%.

The market gapped down at the open for the second time this week. The gap openings continue: 11 of the past 15 trading days. Sense an EW pattern here? The pullback, which started yesterday at the SPX 1991 all time high, very quickly dropped below 1980. SPX 1980 was the high of the first wave up from 1956: 1980-1966-1991. So right now, we have a three wave pattern from that low as the market dropped to SPX 1974 today. These three waves could be indicative of several potential larger patterns. We will discuss this in the weekend update.

Short term support drops to the 1973 and 1956 pivots, with resistance now at SPX 1986 and SPX 2000. Short term momentum was quite oversold this AM during the decline. The short term OEW charts turned negative at the open and the reversal level is now SPX 1981. Best to your weekend!

MEDIUM TERM: uptrend

LONG TERM: bull market


About tony caldaro

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15 Responses to friday update

  1. esvxm says:

    Thanks Tony for the analysis!
    Amazon chart pattern, what is instore for the stock after earnings release yesterday?:

    And USDCAD marches on, already delivering 100 pips since the pattern was discussed:

  2. fionamargaret says:

    Thanks Tony.

  3. Not so good for entrenched longs today. Still some more pain to come but nothing historic. As far as counting the decline it appears much the same for the DOW and the SPX. At the close I have the major U.S. indices having just finished (or very nearly finished) wave 4 of a of an abc correction. More specifically for the SPX I have the count as wave 4 (finished or very nearly finished) of a of c of Minor 4. This means wave 5 of a of c of Minor 4 will follow shortly. If wave 4 is over, wave 5 could be a gap down on Monday (just speculating). In any event wave 5 is coming one way or the other. The Dow dropped 67 points in wave 1 and 158 points in wave 3 to give you some idea. Then the market will regain some lost territory as b of c of Minor 4 gets underway. A final 5 wave decline will then finish off the move as c of c of Minor 4 finishes. My targets for the lows remain the same at 16700 and 1940. Always do your own due diligence and have a nice weekend.

  4. Thanks Tony….looking forward to your weekend update…this bull definitely looking tiresome and toppy as the next +100 point rollover is right under our nose

  5. radrian6 says:

    From the recent peak of 1213.55, RUT initially dropped to 1131.42 which was very close to the 61.8% Fib retracement level of 1133. From that low, RUT bounced to 1163.66, a 38% retracement of the initial drop. RUT has now rolled over from the bounce and has retraced 61.8% of that bounce … it’s like Fibonacci clockwork, isn’t it?

    Even if you are bullish on the current pattern, it should be obvious that the bears are taking their full measure of the RUT. I am assigning a negative status to the RUT because it is operating below the daily and weekly BB midline and below the 50-day SMA. The bulls are still there however, and are not allowing the RUT to collapse but at this point, I would expect at least a test of the recent low of 1131.

    The RUT may eventually make it down to the lower end of its range (1090-83) before bouncing but there will likely be a lot of chop and overlap along the way. Resistance remains at 1151 and at 1164-69; support remains at 1131 and there’s more near 1119.

  6. timing101 says:

    Thanks Tony. Why the hesitation to label this Minute i and ii of Minor 5?

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