friday update

SHORT TERM: volatile two days, DOW +186

Overnight the Asian markets lost 1.4%. Europe opened much lower but recovered to lose 0.4%. US index futures were sharply lower overnight (SPX 1895 equivalent) but turned positive heading into the open. The market opened three points above yesterday’s SPX 1910 close, ticked up to 1915, pulled back to 1909, then hit 1915 again by 10am. At 10am Wholesale inventories were reported higher: +0.3% v +0.5%. Then after a pullback to SPX 1909 again by 10:30, the market took off to the upside. With only three point pullbacks along the way the SPX hit 1932 near the close and ended there.

For the day the SPX/DOW were +1.15%, and the NDX/NAZ were +0.85%. Bonds lost 2 ticks, Crude added 25 cents, Gold was flat, and the USD was lower. Medium term support rises to the 1929 and 1901 pivots, with resistance at the 1956 and 1973 pivots. Last night the FED reported a record high in the Monetary base: $4.121tn v $4.041tn. Today the WLEI was reported lower: 53.8% v 54.2%.

After a sharp selloff overnight the market opened higher, bounced around a bit after the open, then continued higher for its best single wave rally since the downtrend began: 1905-1932. Also, there are now daily positive divergences on all four major indices. It is possible the overnight washout was what was needed to establish a low, just like the overnight washout in April. For the past few days the OEW 1929 pivot has been the overhead resistance for this market. Once it is cleared probabilities suggest SPX 1905 was the low for the downtrend.

Short term support is at the 1929 and 1901 pivots with resistance at SPX 1943 and the 1956 pivot. Short term momentum hit slightly overbought after yesterday’s positive divergence. The short term OEW charts turned positive at SPX 1917, with the reversal level now 1921. Best to your weekend!

MEDIUM TERM: downtrend may have bottomed

LONG TERM: bull market


About tony caldaro

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40 Responses to friday update

  1. valunvstr says:

    I think Ew’rs are jumping the gun here. SPX CCI got to almost -300. That rarely happens at a bottom. Usually a bounce then a lower low occurs and sets up a bullish divergence. When RUT/IWM trades this far below the weekly BB and closes below it like this it almost always makes its way to the lower BB, now in the high 107’s.

  2. hucky2 says:

    Bouraq’s last “Trading Channel” charts showed a short entry once price bounces off his green support now resistance line. That could happen Monday.
    Only a very strong move closing well into the 1940’s would change that.
    Probability suggests to me that Bouraq is likely correct.
    Have a look at Ron’s SPX daily;
    His trend lines are a bit sloppy but you get the idea. GLTA

  3. I think I was saying pretty much the same thing as being one of two possibilities. With the other being a small pull back and another impulse up being the other. When price speaks ya gotta listen.

  4. To me the down move from 1991 just doesn’t have the look of a completed move. While it’s true it can be counted that way, it can also be counted that we are still in expanded minor b with another move to come on the downside. Perhaps only a retest of the 1901 pivot. At this point we do have a small impulsive looking move up from the low which is a positive sign. But only a sign, not a confirmation. As conservative trader, I personally want to see a pull back that finds support at a fib level of this move up and a break above the high of the current move before I would jump in on the long side. Just my thoughts.

    • blackjak100 says:

      If you believe 5 waves down ended at 1911 like myself, the move from there is anything but impulsive and indicates that it’s very likely a retest of the 1901 pivot a couple weeks from now. Today’s move is clearly impulsive, but a c wave within an ongoing correction IMO. I’d be shocked if this c wave clears the 1929 pivot. Gl to you!

      • torehund says:

        Agree Backjack, something featherlight happened to the trading today, and if you have been watching the differnet moves moves for a very long time you just feel this lazy motive iplusive feel it had….

      • I think I was saying pretty much the same thing as being one of two possibilities. With the other being a small pull back and another impulse up being the other. When price speaks ya gotta listen.

  5. pcskier says:

    JNK is at major resistance if it can punch thru equities will follow, if not……
    Have a good wk end you all.

    • pcskier says:

      Japan central bank did nothing yesterday. That can’t be good for the world leverage speculative long trading community.

  6. timing101 says:

    Thanks Mr. C for doing what you do!

  7. Greg Polites says:

    Hi Tony; Looking foward to your weekend update. I was surprised tonight when looking at my indicators to see the new buy signal be confined to a likely B wave bounce. So we could be seeing new or equivalent lows coming soon after we relieve this oversold condition in equities. Both the SP500 and Dow have the same indicator set which strengthens the call. It will be interesting to see how you call the current price action.
    Charts and details at:
    GWE to all, Greg

  8. Tony – Thanks for everything you do for us mate. And thank to your 1901 SPX pivot (1895 ES), last night I was able to buy my forth ES lot at 1891.75; hence, bring my average price to 1918.5. unfortunately I did take small loss when I decided to hedge using the Dec ES, the good news is that my Dec ES hedge was stopped out and my Sept ES longs are now riding nicely in the Greenland. 🙂

    cmucha – Hope you were able to enjoy riding your 1898 ES calls all the way to Tony’s 1929 pivot (1923 ES). As I mentioned earlier, Tony’s pivots more often then not will act as support and resistance.

    • cmucha68 says:

      Thank you Matador. Bought calls at 0.90 and sold them at 9 Dollar. Afterwards price went to 13 into the close. I dint want to hold them too long as they expired. And after official market close you couldn’t find a buyer anymore in the after hours futures trading. So a god profit. Next week will be a big question for the next move. I f look on the weekly I could imagine a bit lower price in order to work off the overbought scenario and then a push higher at least to the 1943 area or higher if it breaks.

  9. gtoptions says:

    Thanks Tony
    Mix of Bullish & Semi Bull Weekly Candles. Mostly Bullish! 🙂
    Enjoy the Weekend.

  10. lunker1 says:

    Thx Tony. Couldn’t ask for more. 🙂

  11. llerias7 says:

    Int. V underway…4%-5% in a final leg up…

  12. The large cap stacks put on a tour de force today while the RS of the R2K vs SPX recoiled downward from resistance at it’s 50-day MA. I want to be the first to ask at what SPX price will we have confirmation that the Int iv low is in and that Int v has commenced?
    Again with the link to $RUT:$SPX:

  13. CB says:

    Nice call ,Tony, on the +div and today’s rally. As far as the April correction is concerned, there is a substantial difference, it seems.. In April $Spx did a thorough retest of the previous high & of the entire 1825-1850 range, which is more consistent with, let’s say, “the norm.”. This time (so far) $spx didnt even bother to retest the previous high. Just a quick hello and goodbye so far with lots of volume just underneath 1900 totally untouched .So, it must be one of those things that just make you go hmmm, right? Not that it has not been done that way before, but mainly we are not even close to the Jackson Hole meeting yet, so it’s hard to imagine that $SPX will challenge the previous high quickly right now. …so in summary: can we get that a double-bottom, please.. after we hit that brick wall at 1937-43…somewhere there…Happy weekend everyone! Thanks Tony!

    • Anonymous says:

      CB are you saying S&P to 1937-43 then back to 1900 possibly below? I was amazed futures were bright red then turned green and before you know market rocketed up! Russia pulled troops away from the brother didn’t anyone check if the pulled 5 miles away lol Monday breaking news ” Putin changed his mind and sent his troops back” 🙂 amazing

      • CB says: are right about the whole Putin news cycle…utter nonsense how $SPX first sells off on it & then rallies on it.. Putin doesn’t appear to be some kind of a wishy-washy idiot, right?…and maybe the Fed likes the war scenario anyway because it would help inflate the food and energy prices…so who knows…so let’s forget that argument then, which has nothing to do with the charts anyway…All we can say is that there are fibs at 1937 1942 and 1948 going forward.. Also, unless 1967 is overlapped, doesn’t it look like an impulse down on the daily?….jmho….Thinking that the big buying oppty may be a few waves away yet… lets see how Tony sees the big picture in his wknd update…Cheers Anonymous!

      • valunvstr says:

        I agree. Iwm is setting up to test lower weekly bollinger band but might first test 200dma. That might coincide with Spx piercing briefly the middle of the weekly bollinger band then both indexes move up together. Is that the page you are on? Otherwise the charts don’t sync up at all. I can see a Monday am bounce then reversal or a Tuesday turnaround.

      • torehund says:

        I think Russia had to make some Cooperative promises to be bailed out in 98.
        It seems like a soap opera in tragedy now, lets hope the airliner crash was not part of the plot.
        And when Putin pulls the gas hose away from europe then maybe Obama can sell som fracking fumes. Think Russias gas is headed for Cina.

    • tony caldaro says:

      Need to clear 1943 next to keep things positive

    • Anonymous says:

      Thanks CB you enjoy your weekend! so much fireworks out there (middle east -Israel-hamas /Syria oh the forgotten Syria war) Libya anyone? and of course Ukraine/Russia how about Portugal / hmm Italy officially in recession / Argentina not a big player in financial market but noticed how the default news evaporated? yet S&P still at 1931!! I believe it’s too risky to play this market.

    • CB says:

      maybe since int II was simple, int iV is going to be complex, so Tony has nailed the low, $SPX will make neither new highs nor new lows for a while and stay within a triangle. With opex next week & Jacksone Hole starting on aug 21..this should make all the parties v. happy right?..

  14. torehund says:

    Good weekend Tony and all contributors.

  15. Amazing job in calling this market over the past several months, thank you sir for sharing it with us so selflessly. Have a nice weekend, looking forward to tomorrow’s update as always.

  16. mjtplayer says:

    Thanks Tony – have a great weekend!

  17. gary61b says:

    TY Tony, have a good wekend.

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