thursday update

SHORT TERM: ECB surprises with ABS, DOW -9

Overnight the Asian markets lost 0.2%. Europe opened higher and gained 0.9%. US index futures were higher overnight as well. At 8:15 the ADP was reported lower: 204k v 218k. At 8:30 weekly Jobless claims were reported higher: 302k v 298k, and the Trade deficit narrowed some: -$40.5bn v -$41.5bn. Around this time ECB’s Draghi announced an ABS program will start in October. The market opened three points above yesterday’s SPX 2001 close. At 10am ISM services were reported higher: 59.6 v 58.7. The market continued to rally until hitting a new high at SPX 2011 around 11am. Then the market started to pullback. The pullback continued throughout the afternoon until the SPX hit 1993 around 3:30. Then a bounce into the close ended the day at SPX 1998.

For the day the SPX/DOW were -0.10%, and the NDX/NAZ were -0.15%. Bonds lost 10 ticks, Crude dropped 95 cents, Gold slipped $7, and the USD rallied. Medium term support remains at the 1973 and 1956 pivots, with resistance at the 2019 and 2070 pivots. Tonight there is a speech from FED governor Powell at 7pm. Tomorrow: Payrolls at 8:30 (est. +229K) and the Unemployment rate.

Before the open today the ECB announced they were starting a form of QE next month to raise their monetary base from 2.0 tn to 2.7 tn. Buying corporate debt instead of sovereign debt. Just as the FED is ending QE 3 the ECB starts another program. We reported on this possibility after the Jackson Hole symposium two weeks ago. For those that did not read it, or forgot, here is the link: The last section.

After reaching a new all time high at SPX 2011, the market started one of its largest pullbacks of the entire uptrend. It appears the choppy advance off the wave 4 low at SPX 1991 was a diagonal triangle fifth wave. We now have five waves up from the recent SPX downtrend low at 1905. For the bears, this could suggest a Primary wave III top. For the bulls, only wave one of a potentially extending uptrend. We currently give both the main count and the alternate count equal probability, while we await further price action in the indices and clarification of the ABS program. Obviously it was an emotional day for traders.

Short term support is at SPX 1991 and the 1973 pivot, with resistance at SPX 2011 and the 2019 pivot. Short term momentum dropped from overbought to oversold. The short term OEW charts flip-flopped again today, ending negative, with the reversal at SPX 2003. Best to your Payrolls trading day!

MEDIUM TERM: uptrend

LONG TERM: bull market


About tony caldaro

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190 Responses to thursday update

  1. rabbittrader1 says:

    Looks like a 2006.80top at .786 Fib. number,IMVHO

  2. Hello Mr Caldaro,
    Is there any correction soon on SP500 and DOW jones??
    many thanks
    Best regards

  3. Gary Lewis says:

    Looks as if they will again bid it up at the end and we will have a key reversal to the upside?

  4. H D says:

    To all the people that say there is no way to trade EW, and you know who you are, where was the previous 4th? :mrgreen: Have a great weekend all.

  5. manunidhi21 says:

    Gurudev(Master) Tony..
    I am confused..heart says P3(bots must be knwng what Daragi said as Blackrock is party to ABS)…mind says extension till 2015..

    Whom to listen Heart or Mind ?

  6. rc1269 says:

    i don’t recall exactly what CN’s ‘perfect top’ scenario was but feels like today is playing out quite a bit like it

  7. Peter Sliney says:

    I think this market has resolved itself to the upside. Minimum 500 Dow pts.

  8. Meat Loaf says:

    If the forthcoming decline is going to be as excruciating as the charts indicate, the bears must first be tortured and then shoved face first into a wood chipper. That process should be starting right about now.

  9. rabbittrader1 says:

    Extending to .786? or double top at 2011? or is the rabbit staying too long at the Mad Hatters Tea Party?? TONY-HELP.

  10. perversionofthemean says:

    With EEM up, VXX (long-vol) down, SPHB (high-beta) flat, and SJB (short junk bonds) down, it doesn’t seem like there’s much fear out there. IBB is down though.
    Also, I’m long TSEM. Anyone able to tell me what the count is on it? I’ll thinking a 5 of 5 of III, but I have no real experience…

    • budfox9450 says:

      Need few mins (3-5). Interesting pattern.
      More few minutes…Bud

      • budfox9450 says:

        As I said – Very nice Bullish pattern.
        However the price, is currently in a topping
        pattern, or W5. IMO — I would place a tight
        stop loss, say $11.30. And, if correct it is
        a Bullish larger pattern unfolding, then look
        for a W2 low between 8.94 and 7.02. These
        2 numbers are the 38.2, and 61.8% retrace
        levels. I have it stored. And, again thanks
        for showing a fine low priced investment.

      • perversionofthemean says:

        Thank you Bud!

  11. rabbittrader1 says:

    Upward correction complete at 2003.4 or ,618 of move from 2011.6. down to 1990.1, (as a couple guys here have also noted) next is beginning of small wave 3 down of wave A of this correction.(If not I will hop back into my rabbit hole! (And let Tony do the forecasting,as well as the excellent job of Tracking that only he does).

  12. pcskier says:

    Near or post intraday Top tic, sell the rip Putin is. I thought today would be straight down, but Putin had some selling to do. Dont get intoxicated with greed by buying the dip when u should be selling. I don’t know why I am posting this but maybe someone needs to see it. Loved your comment rabbit, thanks for sharing

  13. Meat Loaf says:

    SPX retested 1991-1990 support.
    DJI and SPX double bottomed on the hourly charts.
    Naz filled the highest of three daily up gaps as it completed an hourly ABC.
    RUT held the 20 day ema.
    Transports new all-time high.
    Utilities new rally high.
    The accelerated uptrend has held.
    So far.

  14. manunidhi21 says:

    Will it be fair to choose alternate count seeing Naz major 4 just to be 3.7 that much correction qualifies for the main count ?

  15. John B says:

    don’t look like a 5 down to me

  16. U.S. indices inching their way to the 61.8% retracement zone from whence they came. Messy structure early but 5 waves down complete at the mornings lows. With 3 hours left in the session, sucker rally wave 2 is close to concluding. I think you know what comes next. Do not abort your short.

  17. mjtplayer says:

    Obama about to speak at the NATO summit… that the European markets are closed of course. Saving the bad news (more Russia sanctions) till after markets close?

  18. gary61b says:

    I have a falling wedge on 15min chart of upro, possible one more trip down to complete then break out up ?

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