friday update

SHORT TERM: volatile Friday, DOW -70

Overnight the Asian markets lost 1.0%. Europe opened lower and lost 1.3%. US index futures were lower overnight, but rallied after the NFP report. At 8:30 monthly Payrolls were reported lower than expected: 209k v 288k, Unemployment ticked up: 6.2% v 6.1%, Personal income (+0.4% v +0.4%)/spending (+0.4% v +0.2%) rose, and PCE prices were higher: +0.1% v +0.2%. The market gapped down at the open to SPX 1926, dipped to 1925, and then started to rally. At 10am Consumer sentiment was reported higher: 81.8 v 81.3, Construction spending was lower: -1.8% v +0.1%, Auto sales were higher, and ISM manufacturing was reported higher: 57.1 v 55.3. The rally hit SPX 1937 just past 10am, and then the market started to pullback. After a decline to SPX 1929 by 10:30, the market bounced to 1934, then declined to 1916 by noon. Hitting several technical support levels the market started to rally. By 12:30 the SPX hit 1922, dipped to 1917 by 1pm, then rose to 1932 by 2:30. Then the market pulled back into the close to end the week at SPX 1925.

For the day the SPX/DOW were -0.35%, and the NDX/NAZ were -0.35%. Bonds gained 22 ticks, Crude lost 50 cents, Gold rallied $11, and the USD was lower. Medium term support drops to the 1901 and 1869 pivots, with resistance at the 1929 and 1956 pivots. Today the WLEI was reported lower: 54.1% v 54.2%.

Wild day! Index futures were sharply lower overnight, rallied after the NFP report, but the market still gapped down at the open. After holding the OEW 1929 pivot range, the market rallied, but then broke down below the pivot when hitting SPX 1916. With SPX 1916 representing several technical support levels: the June print low, a double bottom in ES at S1, and a 2.618 relationship between Minor C and Minor A. The market started to rally. Lots to update this weekend, and yes, downtrends confirmed.

Short term support is now at SPX 1916 and the 1901 pivot, with resistance at the 1929 and 1956 pivots. Short term momentum had a very slight positive divergence at the low and headed to neutral. The short term OEW charts remain negative with the reversal level now SPX 1935. Best to your weekend!

MEDIUM TERM: downtrend

LONG TERM: bull market


About tony caldaro

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46 Responses to friday update

  1. jeffbalin says:

    I don’t think the naz dropped enough for its major 4, needs to go down more so I’m voting that this is minor a of 4, in the s&p, minor b and c to follow. From the naz 4485 major 3 top, If the naz drops 5% for its major 4 that would be 4260, naz hit 4324 so far, that’s about 3.5% so far, kind of small. 5-10% expected drop in naz?

  2. lunker1 says:

    TNA – a line to watch. daily candle chart draw a line from the Feb low to today’s low and see how the May candle bodies fit it perfectly.

  3. Interesting that under the hood buyers are buying the dip in some sectors. I watched XLU and XLP go green early today, then later XLV and XLB and so on. The dip is already being bought, it’s just not visible on the surface very much yet. I’m prepared to say the dip may be over now, or Monday.

    • cmucha68 says:

      The target zone for iv is 1901-1929. The low was 1910 in the middle. So the chances are there for a rebound on Monday contrary to all cnbc commentators just seeing the start for a deeper correction. At least the possibilities are there for SnapBack. Where that is sustainable remains to be seen. To meet 1901 is also only 10 points below Fridays low. I would not bet for a further 10 points gain from the low only to see the market starting v up and not looking back.

  4. pooch77 says:

    so wave v to 1991+

  5. What should scare the crapola out of longs is Tony’s weekly SPX chart. Look at the MACD. WOWZA

  6. Anonymous says:

    I think this dip will be bought all in all economy just started to pick up FED are in no hurry to raise rates yet…unless you own some crazy stock with crazy PE then sky is not falling!

  7. gtoptions says:

    Thanks Tony
    Below is the link to the Major Index Fib Fans July Update & Observations. Those trading the RUT may be interested in the 50% Fib Fan that has held support 3x since 2009. Will this be the breaking point?😉
    Again, just observations and not trading advice. GL & Good Weekend.

  8. JeffMilano says:

    Does anyone have for TNA from nov15, 2013 to july 15, 2014.
    Thank you

  9. valunvstr says:

    It still amazes me that no one cares about the recent news out of Portugal. You have LTRO 2 out of Europe, negative interest rates and a 4% print in the US and the market is selling off. That is a sign of a correction finally occurring. The market was bought on every piece of bad news. Portugal, -2.9% GDP print in the US, Russia, Ukraine, middle east, etc. and now the market is rolling over on good news. There you have it…a market correction. But it won’t go down without a fight because EVERYONE is bearish now. EVERYONE! Look at the headline on What a joke! Hard to get big corrections with those headlines.

    • cmucha68 says:

      Yeah, and the headline below is the exact opposite. A full bullish report. You can never count on such statements.

    • Ryan Parker says:

      I noticed the same thing. Nobody is bullish right now at all. All of the headlines I have seen in the past few weeks are looking for 10-20% corrections. Meanwhile, while the S&P 500 just peaked a little over a week ago the Russell 2000 is already down 8.8% from peak to trough. While the broad market is just now getting hit, small and micro cap have been taking it on the chin for a month.

      • wildmick says:

        have to wonder how the P4 correction will be received when it comes along. will it be recognized in time for traders to scramble sufficiently or will they be complacent & think its another 5%, 6% or 7%er?

  10. uas2014 says:

    tks Tony. Have a great weekend…

  11. 4 of 3 of C topped out at the areas suggested. Since then we’ve been in 5 of 3. The 0.887% retrace off the lows of the day was oddly enough 4 of 5 of 3 of C. A tricky one on the U.S. indices but the DAX was the tell. So that puts us in 5 of 5 of 3 of C. There are other possibilities for sure, most of them a bit worse for the longs. Left a small short on over the weekend. Expect a gap down on Monday when the system opens up 8.00am Sydney, Australia time. However the market could be anywhere by the time the cash market opens in New York. Great site and great service TC. Keep it up mate. Good weekend to all.

    • torehund says:

      Thanks for the update Tony !
      Its horrible agree Tommy, to add to my disaster list starting With Sovereign debt crisis light here comes the BK of Argentina and the pigs piggy back With Portugal. I also have to include the induced paranoia here in Norway, sure they havent got a Clue why they alerted the Whole nation against impending Islamist terror. Yesterday it was so bad I poured a little into a Warrant in Our biggest bank DNB, they are doing fantastic even without the shipping sector coming back. Pe of 9 now, and a shipping recovery plus hyperinflation would do it well.

  12. lunker1 says:

    lots of interesting stuff at 1916 but no green minor c yet eh boss?

  13. mharrison60 says:

    Thanks Tony,
    FTSE down notably less than DAX for a second day.

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