thursday update

SHORT TERM: gap down opening-then bounce, DOW -42

Overnight the Asian markets lost 0.3%. Europe opened lower and lost 0.8%. US index futures traded lower overnight. At 8:30 Q2 GDP was revised upward: +4.2% v +4.0%, and weekly Jobless claims were unchanged: 298k v 298k. The market gapped down at the open to SPX 1992, dipped to 1991, and then started to rebound. The SPX had closed at 2000 yesterday. At 10am Pending home sales were reported higher: +3.3% v -1.1%. The rebound hit SPX 1999 around 12:30, then the market went sideways for the rest of the day closing at 1997.

For the day the SPX/DOW were -0.20%, and the NDX/NAZ were -0.20%. Bonds gained 5 ticks, Crude rose 75 cents, Gold rallied $7, and the USD was flat. Medium term support remains at the 1973 and 1956 pivots, with resistance at the 2019 and 2070 pivots. Tomorrow: Personal income/spending and the PCE at 8:30, the Chicago PMI at 9:45, then Consumer sentiment at 10am.

The market gapped down at the open today for the first time since this uptrend began on August 7th. There have been five gap up openings. The market opened within one point of its low today, and then rebounded for the rest of the day. When the market opened below SPX 1995 we updated the Minor 3 label to dark blue. When the market formed a positive divergence at the SPX 1991 low we posted a tenetative green Minor 4 label at that level. The 14 point pullback, 2005-1991, may have been enough for Minor wave 4. However, if Europe continues to slide the SPX could still hit 1985 or even the 1973 pivot. Any new high would of course suggest we are in Minor wave 5.

Short term support is at SPX 1985 and the 1973 pivot, with resistance at SPX 2005 and the 2019 pivot. Short term momentum displayed a positive divergence at today’s low then bounced to neutral. The short term OEW charts remained negative all day with the reversal level now SPX 1998. Best to your pre-holiday trading!

MEDIUM TERM: uptrend

LONG TERM: bull market


About tony caldaro

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114 Responses to thursday update

  1. CygnetNoir says:

    looks like it will be a LONG weekend after all.

    Have a good one Tony, Lee, HD, lunker, Uncle, golfer, et. al.

  2. oneandonlyuniverse says:

    stopped out on short…nice weekend

  3. Could end up with triple doji top today on SPX…..also a possible topping signal

    • valunvstr says:

      Not so sure about that. Will take another couple to few weeks. This is almost exactly like the March to April set up. Sideways chop to a new high then a small 3-4% pullback. All indicators from RSI to TRIX to Bullish Percent look the same

  4. Tony, once P4 commence would you expect gold and gold miners to decline along side equities? Your reply would be greatly appreciated, thanks.

  5. SPX should not cross all time high today (@2005), INDU has put up marginal high at 17153.8 but.Trannies have not.

    If lucky enough, something terribly goes wrong Geopolitically over the weekend and that will set up NON CONFORMANCE to DOW theory, and also SPX unable to cross high today, should add fuel to the fire.

    Good news is, if it does not happen as above over the weekend, nothing is lost, will get stopped out at few points. But, yet another opportunity to “have Ben Bernanke and his theories for breakfast…”. He and his theories cant run forever, will send him packing sooner

  6. pcskier says:

    Rsp equal weight 500 made a new all time high today,

    • budfox9450 says:

      As did the VTI…..Bud

      • pcskier says:

        Watching the market today is like wAtching paint dry. I am outside with two new puppies and a big bird just came down to see if one of them was alive. She was freaked out.

  7. torehund says:

    The Norwegian state asserts that oil Revenues exceedes public expenses. A massive state directed buying of the Norwegian Crown is therefore planned in an attempt to avoid hyperinflation.
    However this train has too much momentum for it to be staved off, unless a volcanoe, Russia invasion of Ukraine or ISIL tumults of oil-fields spikes the oil price.
    Tension is building between Norwegians and muslims, the threath previously mentioned weeks ago was revealed yesterday as a planned knife attack terror plot.

  8. pcskier says:

    JNK has been sitting on the razor edge all morning. Equities are trading the range until high yield makes it move one way or the other.

  9. Kevin M says:

    BTW…Does anybody see the head and shoulders formation on the $DAX daily?$DAX&p=D&yr=1&mn=0&dy=0&id=p31848848075

    All it would take is for the dax to break 8900 and you will have our P4 on the SPX.


  10. Kevin M says:

    Good 3 day weekend to all!

    Thanks Tony!

  11. Look at the DAX, such an old fashioned market, it actually has volatility. A 1.5% drop from its am top to its pm low, then a nice little 1% pop in the last hour into the close.

  12. uncle10 says:

    Thanks Tony!
    Sold my corn this morn. Going to wait til it looks better.
    Seems like u should get extra points being long into the weekend?
    Great holiday weekend all.

  13. mjtplayer says:

    This mornings high at 2,001 and low of 1,994: minute i,ii of minor 5?

  14. lunker1 says:

    Nice call Matador. The post Obama feel good ramp got chopped up pretty good. The boys were able to sell into it overnight to lock in some dough b4 Putin’s Wild Ride.

    Have a great weekend everyone. Look out for all the morons on the loose.

  15. Lee X says:

    have a great holiday weekend everybody

  16. Looks a bit like a c wave this morning.

    • pcskier says:

      I will take the opposite and call Spx 15 handle before nov 14. Indu will shed 4000 points before nov 1

  17. gary61b says:

    TF broke wedge on 60 and setting up for a possible break of 1160.

  18. CygnetNoir says:

    SPX 2013 – I feel it me bones lol

  19. Gary Lewis says:

    Schiller’s CAPE PE that recently indicated a market top, now interpretted as a bullish indicator. I’m going to buy some more puts and continue feeding the bull. Call me a generous benefactor 🙂

  20. pcskier says:

    Lots of green in Europe faded to red after data here. I understand the 2019 target, it may get hit. But I think it is egotistical to stay long with the amount of risk. We all know what is coming. Good luck. My eyes are on JNK and HYG. I believe they will dictate what happens to risk. Good luck

  21. magnus1234 says:

    Fat head-n’-shoulder on “Das DAX” @1hr. Long weekend in US and an aggressive Putin can drag SPX(ES) down to 1973 (1970).

    • magnus1234 says:

      Sorry…forgot…. “Das DAX” gap to be filled at 9350

    • magnus1234 says:

      Euro HICP Aug lower than July +0.3% (0.4%) but excluding energy, food, alcohol, tobaco HICP increased to 0.9% (0.8%).

      Energy drag on HICP is -2.0% (-1.0%) so I’m not that convinced ECB will go for QE 4th of September. Markets seems to expect the QE from ECB.

  22. Gary Lewis says:

    Trader on CNBC says that Russian Invasion of Ukraine would be good for stocks, ‘No other place for money to go.’ I guess you’ve gotta stay long until the world ends. 😦

  23. bouraq says:

    DOW’s reversal came right on time:

  24. Hi Tony

    We’ll see what the escalation/ crash cycle in the 2nd half of September will bring about, decisive (one-second) events are likely between early September & mid-October. Mid-October is even a window for possible earth changes, e.g. a major earth quake in South Europe which could even threaten the European power grid. But the situation should remain calm until September 4-9: highs in the NWO & LoC model. The date September 3 is also a factor, where the gates of hell/ Hades are closing according to iPhone’s Siri.

    September 2014 through March (April?) 2015 is a window for extreme turbulences, with the 2 main focus points mid-September 2014 & early March 2015. It is also one of the 2 main windows for the biggest war breakout of our lifetime. The next 7 months will tell us what to expect for 2017 (2017 is one of the 2 main windows of global war peaks of our lifetime – the other in the 2020s). It looks like the events of March 2015 are a continuation/ acceleration/ culmination of what begins before mid-October.

  25. $SPX, $UVXU, $SLCA, $HTCH, $GILD, $SPY, $TWTR: market update and strategy for friday (within blog’s comments sect.):

  26. Hi Tony, thanks for all your fine work. I am seeing the market headed to the top weekly bollinger band before minor 5 tops. That would be about 2022 SPX or so, which would match up with the 2019 pivot. End of next week or beginning of the one after. It would be very unusual for the market not to tag that top weekly band before topping. I’m not prepared to say that it’s all clear to short once it gets there though. Best wishes!

  27. pas1968 says:

    Looking around the blogpsphere & came across a technician saying the SPX & DJIA30 weekly showing a long time frame build-up of confirmed double -ve divergence & potential triple negative divergence from May 2013 & a P3 target of between 2015 to 2085 (similar target to Tony).

  28. donaldfagan says:

    Tony, is the potential for an extended minor 5 off the table? I recall an earlier post of yours indicating that this was a possibility.

    • lunker1 says:

      when I read this I thought he said minute 5.
      Tony, any chance we’re off a degree and 1990.5 was minute 4?

      2005 – 1990.5 = 14.5
      minute 2 = 22.5
      14.5 / 22.5 = .644 close to .618

      minor 2 = 17
      14.5 / 17 = .852 not so ideal

      do you use this 2/4 calc with much success?

      • tony caldaro says:

        interesting you mention that
        the count has been discussed

      • lunker1 says:

        thx. similar to june/july’s strong impulse maybe we’re ahead of ourselves.

      • chicotheman says:

        Thank you for pointing this out. I think this is a great observation and it seems to better fit the facts. Minute 4 would be the 23% retracement to alternate with the 62% minute 2. This would also point more toward 2050 or so than 2020.

        Minor 4 really should be sharper vs. mild minor 2. Or at least not so incredibly mild as it would be on the current count. You could get that from a higher level in a selling wave early top call, and then a squeeze to top it off for minor 5.

        This is just another example of why this blog is so great, thank you. 🙂

      • afarsid says:

        Lunker, are you referring to Minute 4 of minor 3? Just wanted to clarify

      • chicotheman says:

        Actually, I should temper my numbers. Of course the possibilities are wider, but if minute 5 = minute 1 and minor 5 = minor 1, a 23% retrace for minor 4 only gets you to about 2040 and a 38% retrace only gets you to about 2030, give or take. So perhaps the surprise end is to overshoot the low targets and fall short of the high targets.

  29. pas1968 says:

    Question for everyone;

    Are you trading in anticipation of a P3 top?

    Or are you waiting for confirmation of a P3 top before making your trading moves?


    • Gary Lewis says:

      I have been adding October put spreads the past few days but reading the large numbers proposed for the top of P3 wave 5, looks like I’m just feeding the bull.

      • That’s what a rational person would be doing. 1000 Russian solders in Ukraine, they are going to invade. Oil and gas are going to spike. Russia needs prices higher to offset sanctions. Europe in big trouble, draghi isn’t going to do anything, but tomorrow we will gap and go. Go figure. I’m still hoping for a roll over on Monday. But maybe by then Russia will have a full invasion and we will gap up again on Monday

      • Gary Lewis says:

        thanks Mr …buck. I went through this madness in 2005 when I kept shorting bonds. As we can see, nearly 10 years later, bonds are still going up. Just proves that the market can stay irrational for a lot longer than I can stay solvent. I guess that’s why I’m looking at the EW ideas. Somewhere there has got to be some logic to this madness.

    • magicianme says:

      For day traders like me I’m not sure P3 has any great impact. I read the action on the day and go long or short at points where I expect a turn in price. Get in and get out as quickly as possible or as soon as target is reached. The longer you’re in the market the greater the risk. EW is great for things like setting you up with a bias for the day but because of its nature – approximations, post action naming of waves, talk of pivot ranges (rather than exact points) – it seems difficult to apply it to my style of trading. So, in short, no I’m not waiting for any P3 top.

    • budfox9450 says:

      I’am short the $RUT via RWM.
      But, only a few hundred shares.
      OTW…waiting in my signals in
      the BoYu to go short the SH.

    • Yes I will be waiting for a lower high to short Primary 4. Will probably sit out Major A and buy Major B (we don’t really know it’s major B until it fails to continue the uptrend, right?) Then if we see a major B failure to extend the uptrend there is probably a great short for Major C down, but until then the trend is up. Why swim against the current?

  30. pas1968 says:

    Hi Tony,
    Thanks for your great work.
    You say probabilities suggest a P3 top is nearby.
    Are you able to advise what might be required to confirm a P3 top?

  31. mjtplayer says:

    If we are moving higher in minor 5, of int v, of major 5, of P3 – then it’s time for this (sorry, I had to)

  32. gtoptions says:

    Thanks Tony ~ Mom Loves to shop the JCP 😉
    Some concern showing through with the Daily candles. Most obvious would be the four sequential caution candles on NDX. This is the 5th wave after all.
    GL All

  33. torehund says:

    Rage, rage. Lets keep ourselves levelheaded at these times.

  34. Lee X says:

    Thanks Tony

    If Putin had to now 10 acres in the Heartland every 4 days that would settle him down real fast

  35. Looks like the futures market thinks Obama has given Minor 5 the green light.
    Ukraine has been thrown to the Russian wolves.

  36. Hi Tony

    Is minor 5 going to subdivide just like minor 3 ? Or do you expect just one push higher towards the next upside pivot ?

  37. Seems likely that they will close over 2000 SPX this week as that might not be possible next week if Draghi causes the market to dump. So I’d guess we’ll be up in the morning and most of the day but toward the end we should see some light selling as traders exit longs before the 3 day weekend.

    If so, then we could see the first wave 1 up (inside this last 5th wave up Tony speaks of) end at some point tomorrow and the wave 2 down start. Then it should end Tuesday I’d think and we’ll see the wave 3-5 happen into Thursday/Friday of next week.

    Draghi speaks at 7:45 am EST Thursday morning so that makes you wonder if we top out on Wednesday before that or Thursday after he speaks? Not sure what he could say to cause such a dump in the market that RabbitTrader see’s but possibly there’s another 9/11 event scheduled to happen?

    Since we are in a “7” year (2+0+1+4=7) and 4 plus 7 equals 11, we could interpret it as another 9/11 date I guess? But they usually schedule such events when we are already in a bear market, not at the top of a bull market. Maybe they want to surprise us all this time?

  38. purplember says:

    pardon my ignorance but when minor 5 completes in the next few weeks that is also P3 top and primary 4 is underway ???

  39. tony caldaro says:

    JCP rebounding after being written off for dead
    DSX trying to extend its bull market

    • mjtplayer says:

      Take a look at JCP’s balance sheet. The stock may have bounced, but the red ink is still deep; hard to see how they get back to sustained breakeven, nevermind profitable. A couple years behind JCP is SHLD, another retailer bound for the history books.

  40. have the minimum requirements been meet to start P4. If 1991 was minor 4 can 1998 be a failed minor 5?


  41. 56rambler says:

    Thank you, Mr Caldaro.

    If we have completed a shallow Minor 4, I wanted to get your thoughts on Minor 5 (price levels, time-frame, etc). Would you expect it to subdivide into 5 waves?


  42. budfox9450 says:

    Interesting charts – JCP and DSX, Tony….

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