thursday update

SHORT TERM: new all time highs, DOW +60

Overnight Asian markets gained 0.1%. Europe opened higher and gained 0.8%. US index futures were higher overnight, and at 8:30 weekly Jobless claims were reported lower: 298k v 311k. The market opened two points above yesterday’s SPX 1987 close, and then hit 1992 by 10am. At 10am the Philly FED (28.0 v 23.9), Existing homes sales (5.15mn v 5.04mn), and Leading indicators (+0.9% v +0.3%)were all reported higher. The market pulled back to SPX 1987 just past 10am, and then started drifting higher. Just before 3:30 the SPX hit 1995, then dipped to 1992 to end the day.

For the day the SPX/DOW were +0.30%, and the NDX/NAZ were +0.15%. Bonds gainedย 3 ticks, Crude addedย 55 cents, Gold dropped $13, and the USD was lower. Medium term support remains at the 1973 and 1956 pivots, with resistance at the 2019 and 2070 pivots. Tomorrow: a speech from FED chair Yellen at 10am, then a speech from ECB president Draghi at 12:30.

The market opened within two points of the SPX 1991 all time high, and by 10am it made a new high. After a 5 point pullback just past 10am, the market continued to set new records. Last friday, around noon, the market made a significant low at SPX 1942 – which we labeled Minute wave ii of Minor 3. Since then the market has risen over 50 points without one meaningful pullback. This rally certainly looks like Minute iii of Minor 3. The count posted remains unchanged.

Short term support is now at SPX 1991 and the 1973 pivot, with resistance at the 2019 and 2070 pivots. Short term momentum remains overbought, which it has been for most of the week. The short term OEW charts remain positive from 1950, with the reversal level now SPX 1988.ย Best to your Jackson Hole trading!

MEDIUM TERM: uptrend

LONG TERM: bull market


About tony caldaro

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132 Responses to thursday update

  1. gary61b says:

    2 of min v or c of min iv, market keeps ya guessing

  2. manunidhi21 says:

    Tony !
    Do a 9 pointer today can be considered minute iv. of 3 ?
    Uptrend is really strong.

  3. pcskier says:

    No mention of QE out of Draghi, sellers should emerge before close sending $indu below 17K for a long time.

    • tony caldaro says:

      “We stand ready to adjust our policy stance further” if needed to help the weak recovery, Draghi said in the text of a speech at the U.S. Federal Reserve conference in Jackson Hole, Wyoming.

      The bank has cut interest rates, offered cheap loans to banks and is weighing asset purchases to pump more money into the economy.

  4. so is this minute iv of minor 3 or the start of minor 4? anyone care to provide their insight?
    IMO, if spx fails to make new high then I will lean toward start of minor 4 considering that Monday is new moon day.

  5. blackjak100 says:

    Could we be setting up for an int V ED that would take us to 1922-1935 for wave ii? ISE Put/call ratio is certainly suggesting it’s possible. It’s had 3 consec days readings above 200. Last time this happened in jan 2014, we saw a quick 3.5% drop equating to 1925 – a perfect acceptable retracement in an ED.

  6. lunker1 says:

    Interesting pullback. Exactly 10 points and 60 minute RSI5 bounced from same level 30-35 as Minor 2 and Minute 2. So was that Micro 4 (or Pico 4) or Micro A of Minute 4 with a lower low Micro C to come? We’ll see.

  7. rounder1944 says:

    As predicted, a SPX 10 point pullback, TO THE TIC, now we shall see.

  8. drwarmington says:

    Tony, is the 1988 OEW reversal something you can trade on?

  9. elmer510 says:

    Tony .

    A couple of questions today.
    Do you think the move 1996 – 1986 at SPX is minute 2 of minor iii ?

    And if you have an eye upon the german DAX.
    Do you think they already are in the ABC correction of Primary IV ?

    Thanks for your updates and great work.


  10. GM all, 10 handle hit, not syaing it’s done. Hey Lunk, missed ur ? about the extension yesterday. Hope you found em. hit.

  11. rc1269 says:

    looks like another day of too much good news

  12. pcskier says:

    My translation of yellen spec his simple good news will be bad news going forward. The only reason the market is not deeply red is draghi upcoming speech

  13. manunidhi21 says:

    Namaste Tony!
    OEW reversal 1988 is closing or intraday ?

  14. Ryan Parker says:

    Is it just me or is this the first time that the US Dollar has been in an uptrend with virtually every other major currency in a downtrend with a rising US equity market since the late 90’s? Since 1999-2000 a rising US Dollar has usually coincided with a down market and a falling Dollar has coincided with a rising market. Its a short term phenomenon thus far but definitely worth noting. Strong US Dollar with all other major currencies being down relative to the Dollar would seemingly seem like a nice tailwind for the US equity market. On the other hand not so hot for exports.

    • tony caldaro says:

      noticed it too Ryan

    • pcskier says:

      True with basket of currency like DXY not true with yen. Weaker yen almost always mean carry trade to buy risk.

      • Ryan Parker says:

        Yen carry trade has been off and on over the years. The Yen has been the key currency to watch since the Canadian Dollar lost its touch back in 2011. From 2000-2011 there was a direct correlation between the Canadian Dollar and US equities. Loonie up, US market up. Loonie down, US market down. Yen has definitely been the carry trade since 2011 and it really took hold in late-2012. But this is the first time in ~15 years I can ever recall seeing the US Dollar rise, all other major global currencies relative to the Dollar in a downtrend, and the US market in an uptrend. This is big because even if the US equity market stays flat there is now an advantage for the whole rest of the world to come into US equities as they will make money just on the currency appreciation alone. Everywhere else in the world one has to make up the currency depreciation just to break even.

      • pcskier says:

        Right on Ryan completely agree with everything u said, cheers

      • pcskier says:

        But if the trend changes the ROW, rest of the world will come into the us market chasing a downward trend ๐Ÿ™‚

      • pcskier says:

        The world is addicted to following the trend up or down

      • If so, the chance of gold falling significantly from current levels appears to be significant.

    • valunvstr says:

      Historically, there is very little correlation between the two. late 1990’s $ strong, equities strong, much of 2000’s $ weak, equities strong. It goes back decades. It is something the media talks about but is largely irrelevant.

      • Ryan Parker says:

        Something that hasn’t happened in 15 years is definitely worth noting. Just my opinion. I’m not going to make investment decisions on this observation alone but this would seemingly be quite bullish for US assets in general…..unless it is a signal of global deflation. If the US equity market breaks down with a strong Dollar that would be a sign of potential trouble down the road.

      • torehund says:

        Ryan the USD is the king of currency and Will be that as long as Growth supercedes what can be found elsewhere. And a dollar rallying means just aout everything Will be more expensive abroad. Charts and fundamentals og hand in hand. Same pattern emerging like in the roaring 20s ? Livermore was long then….

    • Lee X says:

      “I would follow you through the mists of avalon”
      Good stuff Ryan

  15. pcskier says:

    I am guessing we get a bad cop yellen followed by a good cop draghi speech.

  16. drwarmington says:

    They will release Yellen’s speech before she speaks. Watch for it coming soon.

  17. That is Russian aid trucks entering in Ukraine without agreement. taking SPX down 8 points so far..

    • Jesus guys news has nothing to do with it per yesterday the target for this 3rd of a 3rd was 1992-1995 on the sept es target hit correction in play. don’t look for it to last long but we will see

      • Good, now futures have stabilised, do you still think correction? I think you think “ELLIOTT WAVE drives events and not otherwise?”

        IMO, no stop till 2034 now (few points here and there). It will suck all SHORT SELLERS. Everyone is waiting for 1998 to open SHORT.

        I see a comment cautioning we are near ATH.

        We were near ATH at 1561, 1562….1579….till 1995

  18. tony caldaro says:

    getting close but no change yet

  19. Just days before, Richard Russell opined that “Trannies all set for new high but INDU needs to be watched (as according to him it was unlikely that DOW would make new high and that would have set DOW Theory Non confirmation..)

    ..And see where we are today, Trannies and INDU both set for new high. FYI-Stopped twice in last three days.

  20. 8in8 says:

    Thank you
    Blog fantastic

    • mjtplayer says:

      Support is at the $1,270 area – bottom of the triangle that’s formed over the past year+. Yesterday we got down to $1,274 and now oversold, daily RSI at 13; time for a bounce back up to $1,300 or so?

      The trend is down for gold, but it will be a choppy road, not a straight down move.

  21. Some evidence is starting to accrue giving credence to the possibility we had some sought of top today. The bigger question is was it of Minute or Minor degree. Counting the advance until yesterday’s expected 4 was relatively straightforward but the shallow nature of that 4 not only put off the majority of traders, including myself, who were looking for a deeper retracement but made the counting subsequent to that expected 4 anything but straightforward. In fact it doesn’t really look like a 4 anymore … and that is the core problem when trying to count from that time forward. This opens the door to the possibility of an old friend, in the form of an expanded flat (EF), having participated in yesterday’s action. Just for an added twist the c wave of the EF is truncated which I’m not sure is even allowable but to me makes sense emphasizing the buying desperation currently in the market place. The conclusion of that EF or 4 was a fraction below 1980 in the cash market. A complete 5 waves can then be counted on the SPX to today’s high using only a little imagination whilst hardly any is required to complete the same story on the DOW. The other notable is the relationships between Minor 1 and Minor 3 which at today’s high was: DOW 1.985 and SPX 1.658. Although not perfect they’re in the ball park. Giving that mischievous 4 a Minute degree status I can find the following relationships: Minute 5 = Minute 1 x 0.595 (DOW) and Minute 5 = Minute 1 x 0.389 (SPX). When I apply a Micro degree status to the 4 I also get some relationships which are promising but not quite as good. Strange as this may sound to some but probability suggests that if a top of any significance at all was made today then that top was most likely Minor 3.

    • chicotheman says:

      Micro 3 from afternoon Friday 15th to afternoon Tuesday 19th works well, no? If so, then micro 5 ended this afternoon or maybe a few more drops tomorrow. SPX needs a reset for sure, but it could be very mild. If it’s deep then I’ll switch but I think Tony nailed int 4 and is bang on the count with this int 5. Minor 4 is going to be the shorts loading up on the top call above 2000 next week.

    • Extrapolating further should Minor 3 have topped today, the most common retracement targets for Minor 4 would be the a and c lows of the prior 4 which were 1976 and 1980 respectively using the EF assessment above. Should Minor 5 then equal Minor 1 (40 points) the high for Primary III would be come in at 2016 or 2020 right in TC’s 2019 pivot range. Surely it couldn’t be this easy … or could it?

      • chicotheman says:

        The difference between the 2 small level counts is whether micro 3 ended just after noon on the 18th or late afternoon on the 19th. What we have experienced is more in keeping with the second I would think. Of course I appreciate your scenario and of course it is possible.

      • chicotheman says:

        Last comment. Another argument for your count is the perfect alternation of the sharp minute ii and very strong running flat minute iv. ii was less than 2 hours and in your scenario iv was about 1 day. I think we all know surprises are in store. This is an interesting one for sure.

      • chicotheman says:

        Ha ha one more. Your post obviously caught my attention, thank you so much. Actually, I agree with you now, brilliant catch on iv, it was so small, but should have been! Everything works and channeling on minor 3 is perfect. Minute 5 could possibly run further, it is much smaller than 1 and 3, but minor 3 is ending or has done so. I’m shortening up my time frames.

    • If “running flat” is the correct description instead of “expanded flat” that’s fine by me. Thanks for putting me straight. But sniffing out the alternation between Minute ii and Minute iv is the real pearl. Chico, your the man.

  22. jeff1student says:

    Thanks Tony and Lunker1 for your kind reminder. I am not a day trader, so should not chase the last few percentage……

    • lunker1 says:

      some are waiting for Minute IV to add long but the problem w that is a 3 of 3 can keep going so by the time you realize it’s a 3 of 3 and say to yourself you’re gonna wait to add at 4 of 3, SPX has gone up 20, 30, 40+ points. and also that 4 can then truncate on you or evaporate into a nasty C wave that reverses down. this is why some traders only play 3’s. 4’s can be tricky and you’re buying near the top anyway. this where you’ll hear of traders looking for a “set up”. some wait for the bottom with certain confirmations on shorter timeframes and then trade against that bottom so you’re buying at 1915 not 1990. Tony’s 60min RSI5 is a great one to watch for positive divergence. Buy low, sell high. ๐Ÿ™‚

  23. lunker1 says:

    Micro 3 in May/June didn’t have a pullback over 9 points until Micro 4. Watching same to signal this Minute 4. Micro 3 daily RSI5 hit 92ish and at 87 now. Still room to go up before Minute 4.

    Sometimes if I see enough coincidences at a level and I have the time to watch I’ll hedge against the trend with a cheap short. Tried one I liked today but only lost 20 Dow points.

    • Lunker, first of all thanks for all you do on this board, I really appreciate your post. Question though. It appears your more skeptical at these levels then some. Actually some are ubberly bullish. Yesterday you posted all your requirements were meet for a high. Are you not in the camp of the 2019 pivot for the high. I personally have a hard time believing it ends between 2014-2019 to many people expecting it. So either it happens sooner or we melt up. Just curious were you stand


      • lunker1 says:

        Thx TTMB. I was skeptical at .887 of both SPX and INDU since it a can be a last ditched reversal fib and it matched up with the measured moves I was watching. But until there’s a pullback of significance it’s still Minute 3 or Minor 3 and it could really stop anywhere.

      • chrisk44342 says:

        I think lunker’s conservatism is warranted. Concerning yourself with hitting pivots at the top of a primary wave does not seem like a good idea to me but to each his own. The risk is that we have a truncation of some kind as this is common at important tops. Also, building tops are a process, so we may also see some choppiness which can also make trading difficult. This is where building a position is not such a bad idea where you leg into the direction you see developing.

  24. pooch77 says:

    Market having melt-up: Dennis Gartman

  25. wildmick says:

    great forecasts tony. appreciate your talents and willingness to share.

    while most seem to be concentrating on yellens comments Im concentrating more on draghis speech. that little voice inside that we all possess tells me that draghi will not announce any qe at this time esp. from JH. I think it would smack of him being coerced by yellen and others if he did so. this does not mean that he wont initiate some form of easing once he gets home.

    I would think that qe as we know it would be very hard to do in the Eurozone. each country has different banking rules and laws and it seems unlikely that the funds would make their way through the system quickly enough to make a measureable different in a short amount of time. USA has a much smoother route for qe. I don’t know what all this means in the long run but I think it means trouble for Eurozone in the future. it already seems a case of too little easing, too late. im not an expert so feel free to express different ideas as its the way I learn best, from other people.


  26. Anonymous says:

    Tony any comments on WTI? downtrend to continue?

  27. rc1269 says:

    good stuff maestro, thanks!

    boy wouldn’t it just be real serendipitous to have the PIII top coincide with Jackson Hole…

  28. pcskier says:

    Volume was considerable during the 330 ramp today, O I mean the 330 Red candle at the end of the day. It’s all about Yellen and the perception of the future of the punchbowl, Personally i think she will sound hawkish and echo some of Charles Plosser concerns.

  29. soulsurfer says:

    micro counting the snot out of the SPX ;-):

    micro 3 to 1982.57 (tuesday afternoon)
    micro 4 to 1977.68 (wednesday morning)
    nano i to 1985.82 (wednesday afternoon)
    nano ii to 1979.85 (wednesday afternoon)
    pico 1 to 1991.59 (this morning)
    pico 2 to 1986.98 (this morning)
    pico 3 to 1994.67 (this morning)?
    pico 4 to 1991.87 (close)
    now in pico v to finish nano iii, to be followed by nano iv and then nano v left to finish micro 5 of minute iii at 2000. !?

  30. esvxm says:

    Thanks Tony for the analysis!
    German DAX close above a key level:

    Trading the SPX to the new highs from the time and price pattern formation:

  31. tony caldaro says:

    just be careful Jeff
    market has already made a big run

  32. To Soulsurfer: Wednesday you made some Fib projections that were based on minor 1 being 36 points when it actually was 40 points.

    • soulsurfer says:

      george, no I did not. please read carefully. those were projections made for minute iii

      • soulsurfer says:

        Reposting my fib-projection post from Wednesday update:

        “comparing the current uptrend with the previous one, from late may to early june, there was a lot of โ€“ div on the hourly RSI(5), but the market ignored it. Why? Because it was in a 3rd of a 3rd wave.

        Same here now: market is in minute iii of minor 3. Strongest wave: market keeps on grinding higher. It will do so to 2000/2002, IMHO. Thatโ€™s where [minute] iii = 1.62x i, measured from ii (1942 + 1.62x 36 = 2000). After that minute iv and v to finish minor 3 at 2014. Why 2014? Because itโ€™s the year 2014โ€ฆduhโ€ฆ ๐Ÿ˜‰ And because itโ€™s the 2.00x extension of minute i : 1942 + 2.00x 36 = 2014.”

        Added [minute iii] for additional clarity.

      • You are right. I did not read carefully enough. Minute 3 rather than Minor 3. The insertion of [Minute] iii did help to clarify. Incidentally, what might the next higher plausible fib projection than 2.0 x minute 1 be for minute 3, or is there one?
        The wave count posted Aug 21 @ 5:06 PM is a real tour de force in precision. What time resolution chart do you need to see those tiny waves?

  33. FiveStars says:

    Thank you, Tony.

  34. XScaler HB says:

    See the setup for the decline coming?

    Only 10% of the SPX is pushing the market up. Most dummies only look at the raw headline number of the index (CNBC anyone?) The internals tell you what you need to know to backup the wave setups. The ideal technical setup for me would be the stochastics making a lower high on this next last leg up into the 2000’s. This next smaller wave 4 decline could roll them over now, making the next last 5th wave into this wave 3 high a lower, weaker high in the stochastics. PERFECT.

  35. Reblogged this on thedarklordblog and commented:
    Way to go Tony!

  36. hucky2 says:

    The next SPX resistance area is at the upper daily Bollinger band which is currently at 2001 and sitting fairly flat, then there is rising trend line resistance currently at 2020 also another currently at 2080.
    So the 2019 pivot + 2020 trend line resistance is my reversal target area. FWIW

  37. XScaler HB says:

    This is how I’m looking at trading this: there seems to be a consensus that the top of this bigger 3 will be in the 2010-2050 window. Looks like sometime early next month. Wave 4 around the corner maybe starting tomorrow back to the 1980ish area. I will be buying SPXL for that, then begin to buy the OCT SPXU $44 calls for as close to $2 as I can get them. The larger wave 4 decline should target at least $1750, most likely the 38% retrace all the way back at 1675. At 1750, SPXU will run to around $70 from the expected low of $43ish if we see 2020 or more. That is over 12x your money on those options.

    Time to start planning ahead.

    • one can make alot more on futures……and futures dont have time decay…..always wondered why one would choose options or etf’s over futures…..doing taxes are far superior come tax time also…….and shorting is a breeze with futures……no rules…..just sayin

      • gokalg says:

        Doug Yes futures have many advantages. But require lot of margin. About $5500 for 1 contract while if u use options on 3X ETF reward can be much more. Example TNA/SSO for bullish case and TZA/SDS/SPXU for bearish case.To alleviate time decay issue one an use debit spread .

  38. bouraq says:

    Buying spree:

    • blackjak100 says:

      Gold is toast bouraq! These declines where it acts like there is no support aka 200dma 18hrs ago, usually mean a long drawn out decline. See crude from $107-$93 over the last 8 weeks with only one meaningful bounce. From an EW perspective, I’m thinking this is a third of a third wave targeting $1220ish for starters.

      • blackjack,

        Dollar is going to junk status, hyper inflation is coming. Market going from 666 to 1992 spx is due to funny money printing not because things are GREAT- we are in final stages of dollar supremacy.. we are in DESPERATION MODE! Gold & Silver has long term value- the dollar could crash tomorrow.

      • blackjak100 says:

        I happen to think the economy is just fine right now. What I don’t know is what the unintended consequences will be down the road. I also know the only way to trade gold is thru technicals combined with EW. This current wave from $1345 could take us down to $1000 and the technicals back it up – MACD on daily has a lot if room to downside.

      • sloop says:

        hey imanenewbie,it must be extremely difficult to trade profitably with such convictions all this time.

      • torehund says:

        Newbie, sure there Will be inflation also in the US, but dollar isnt junk when it buys you a lot…compare to NorWay:) price of eggs went up more than 5 percent in just a month. Thats what you call a FIAT, and weels are comming off it in not too long.

      • bouraq says:

        Hope it goes down to 1150 and we can all go long there.

    • FiveStars says:

      Thanks Bouraq. Gold is in downtrend now.

      • sloop, its actually very easy for me to trade, tight stops when trading long and I never hold long over night. 666 -1992, No way I’m gonna get caught with my pants down holding long when this Ponzi/bubble pops. Best of luck to all.

    • ewmarkets says:

      I think Tony said gold is in an up trend. It does look like a 5-month long iHS is about to finish the right shoulder.

      • blackjak100 says:

        He said earlier this AM that the new low would most likely change everything. When gold can’t even maintain a rally with geopolitical tension, it’s a big red flag. Look at how many opportunities it’s had with zero success. Today was a clear sign to me gold is finally folding to the massive $ rally.

      • Gold can be manipulated, a handful of the elite control all the money than they can do whatever they want with, especially suppress the prices while they buy it all day long. at the end of the day a ounce of gold bought you a nice suit hundreds of years ago and it can do the same now. A dollar just 50 years ago went very far now it doesn’t go far at all when gas is $4 a gallon, beef is $4 a gallon. My point is: Gold is Good!

      • lol beef is $4 a pound, not a gallon. oh boy its been a long day, Good luck traders ๐Ÿ™‚

    • jeff1student says:

      Thanks Tony for your work. Purple means green light for me ๐Ÿ™‚
      Will put the remaining 30% of my cash to work, and enjoy riding the waves to ATH….

      • lunker1 says:

        Jeff see Tony’s comments above. Just an FYI the confirmation of the uptrend doesn’t mean the uptrend could continue on for another several weeks. All it means is yes this is INT V not IV B wave. It could end anywhere above 1991.

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