friday update

SHORT TERM: pullback resumes, DOW -61

Overnight the Asian markets lost 0.1%. Europe opened higher but lost 0.1%. US index futures were lower overnight. At 8:30 Retail sales were reported higher: +0.6% v o.o%, and Export (-0.3% v +0.3%)/Import (+0.1% v 0.0%) prices were mixed. The market opened three points below yesterday’s SPX 1997 close, and continued to pullback. At 10am Consumer sentiment was reported higher: 84.6 v 82.5, Business inventories were reported higher: +0.4% v +0.4%, and the SPX hit 1987. The market then rallied to SPX 1993 by 11am before heading lower again. At 2:30 the SPX made a new low for the pullback at 1980, and then tried to rally. Heading into the close the SPX hit 1986 and closed there.

For the day the SPX/DOW were -0.50%, and the NDX/NAZ were -0.55%. Bonds lost 15 ticks, Crude lost 60 cents, Gold dropped $11, and the USD was lower. Today the WLEI was reported lower: 51.7% v 51.8%. Medium term support remains at the 1973 and 1956 pivots, with resistance at the 2019 and 2070 pivots.

The market opened lower today then dropped nearly to yesterday’s low at SPX 1986. After yesterday afternoon’s activity we thought short term sentiment had turned positive. We were badly mistaken. Not only did it not turn positive, but the market made a lower low for the pullback at SPX 1980. Right at the upper end of the 1973 pivot range. After that we got a small bounce into the close. Will review this choppy pullback to see if it is giving some hints of its conclusion. Best to your weekend!

MEDIUM TERM: uptrend

LONG TERM: bull market


About tony caldaro

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48 Responses to friday update

  1. lunker1 says:

    small +D at 1978

  2. torehund says:

    I think tthe market is patiently waiting for a Clue…and it Will probably be a major geopolitical event triggering the direction.

  3. SPX is in an Andrew’s Pitchfork from 2011, best viewed in the down channel on the 4hr futures chart. Based on this, a bounce Monday back up to the top of the down channel IMO…

  4. Michael S. says:

    Monthly Chart bearish engulfing patterns everywhere. UKX at the top of its range. Are we gong south from here?

  5. blackjak100 says:

    Can P4 be underway with the financials breaking out? I highly doubt it. This could be supporting Tony’s extending P3 count. At the very minimum, I expect 2011 to be retested and possibly exceeded before any meaningful drop.

  6. Greenlander says:

    Posted a 30 min long entry in SPY in my blog. Not sure how to post images here.

  7. Greenlander says:

    Sitting long still and still think for now, DIA/ QQQ/ SPY in consolidation within bullish uptrend. If we have a down day on Monday, I will reconsider

  8. pcskier says:

    mjtplayer says:
    September 2, 2014 at 7:14 pm
    Thanks, I’ll need it trying to short this market🙂
    pcskier says:
    September 2, 2014 at 9:58 pm
    Keep an eye on ewz brazil etf, it is running into its down sloping 50 month moving average right now, when and if the brazil bear market rally fades it has a history of getting hit hard when our fed tightens plus brazil just entered an official recession. Their is not many shorts that have a 50 month average down sloping on you side.

    “EWZ loss 10% this week”~MJT~did you catch it ???

    I know some of you guys thing i jumped the shark or I am some crazy permabear. But i may have some insight with the markets.

    • pcskier says:

      pcskier says:
      September 2, 2014 at 7:26 pm
      I have the $usd hitting resistance today and and exit long 10 yr UST or go to neutral. Keeping an eye on$tnx and $USD tomorrow to see if they stall or jumps higher. Looking for correlation between the two in this current atmosphere. Sell on indu confirmed today not yet on Spx.

      ~I called the exit long bond two day before David temper(still the right call, but keeping eye on it), I am not saying this to boast my ego I just want you to have an open mind if I double down on crazy next week(more code talk). Thanks, It’s coming

  9. fishonhook says:

    If you are a trader there is only one question you will want answered from Tony, not what is the exact labelling of each tiny squiggle, but has the down-trend started bestguestimate? If yes, then any shorts can be held and added to on a rally, if not no then no longterm shorts please….!

  10. Gary Lewis says:

    BOLD PREDICTION – You heard it here first!!! Looking at the long term daily on the SPX, I see the head being formed in a head and shoulders formation. Neckline 1905. Until I’m wrong, this is how I’m going to play it. 😉

  11. torehund says:

    One big punch, and the sun start shining…X es doesnt count..if folks belive it DOES.

  12. david soble says:

    Two weeks ago I warned everyone that if you were long the market it was time to get out. Period, end of discussion. Then everyone got fooled into a discussion of minutes, minors and 4’s vs 5’s. Yesterday Tony responded to me that the ECB’s ACB program was a game changer. IT CHANGED NOTHING. It changed the timing but not the direction of the market.
    Bear markets end with a V shape. Bull markets end with rounded tops as the late to the party keep buying the dips. It works until it doesn’t work. Liquidity is drying up in the market. The ‘smart money” wants to buy Alibaba. That will take 32B out of the market. They can’t sell the small caps. No liquidity there. They are selling the large caps that make up the DOW, S&P and NAZ 100. They will continue to sell until the IPO is completed because there is NO MONEY ON THE SIDELINE and the large caps are the only shares with a deep enough pool to raise 32B.
    The key is whether they drive this below 1905 and trigger a sell signal or if they unintentional trigger margin calls from the over invested public. My bet is on the latter.
    You will know if that happens. You will see waterfall sell offs after 2:30 PM. This is about declining liquidity in the market and trying to preserve your gains while you can. See the decline in the 10Y as a good example.

    • pooch77 says:

      So what is your timeframe for this to happen

    • joecthetruthteller says:

      Arggghh, I sold my Puts prematurely after Tony’s update yesterday ” But for now today’s SPX 1986 near retest of 1983 may have been it.”

    • lunker1 says:

      the smart money at Softbank has owned 37% of Alibaba for 14 years. Yahoo owns 23%. the other just as smart money bought Yahoo 2 years ago for $15 because it was undervalued. it’s now at $43. if anything the 6 underwriters JPM GS C MS DB CS are going to keep the market propped up till the 19th so that BABA sells for a good price. I could see 19th being a B wave high.

    • fishonhook says:

      Interesting take on the market. It’s all about the Fed IMVHO. The Fed has been throwing two Alibaba’s a month at the chosen WS banks to provide liquidity. So the banks have been buying every and anything with it. They are supposed to taper it down but wait until we get a correction and Yellen starts Yelling for another QE.

    • CB says:

      careful with that cup and handle theory, BG,Classic def requires decreasing volume on the right-hand-side of the pattern If you look closely, both on spx and djia, you have some large red volume bars…so the answer is: no handle…not yet..

      • budfox9450 says:

        Interestingly, my SP500 BoYu indicator, with it’s
        Sell signal, of 9/5 remains in control….Bud

      • rcun says:

        Greetings CB…Bud, I could not comment below, so I will do it here. Your BoYu indicator has been right on the money. Hope you are well.

      • CB. The slight volume increase at the bottom of the handle actually support the CH case.
        BG might be on to something here

      • CB says:

        Hi Randy, good to hear from you! I like your bull-bear avatar with a twist – shows you have a very flexible mind – that’s an asset in any market =)
        Cheers, Bud!
        Sverkerericsson, thanks, you mean as in a selling exhaustion?.. That’s generally a valid argument. However for the reasons explained here: , what we know is that the current situation historically wouldn’t tend to produce a good breakout. Considering those 2 things listed above: rising selling pressure & a v-shaped bottom, who wants to play the hero right this minute based on the alleged CH, huh? Also, how do we conclude that we already have “the bottom of the handle” when the downside volume is still rising? That’s premature evaluation or begging the question right now, right? Let see that selling pressure subside first to get a proof… In the meantime there is plenty of volatility to trade, so no worries, right? =) Here’s that DJIA chart w/ volume, btw.
        And yes , as far as the medium-term outcome is concerned, we tend to agree; if you agree that this is an Inv. H+S (on the daily) where we are now working on the right shoulder (targeting anywhere between 1960-1920), the end of October looks quite bullish under that scenario…However it’s all still work in progress now, isn’t it?
        The takeaway is that we’ve had a very fast move up and some fluff needs to be shaken out to produce a healthy breakout. It should take a little while longer to accomplish that. We just need a more substantial retracement to build a better foundation for the next move up.. Cheers guys! Enjoy your weekend all!

      • CB says:

        that link, again,,hope this works now :

    • torehund says:

      it felt like a wave 2 bottom on the RUT today. The artificial demand destruction created by Obama could backfire..if we see 200 usd oil, everyone knows who to blame. And if that happens alongside an improving dollar, an economic cathastrophy awaits Europe.

  13. gasman88 says:

    Financials ($BKX) have broken out, this market may not be ready to go down yet

  14. mjtplayer says:

    Typical Friday afternoon VIX smash today. The VIX was “hit” 90bps in the last hour or so, from 14.20 at just before 3pm to close at 13.30 – helping the SPX bounce.

    I think we put in minor A at 1,983 – minor B at 1,997 and in minor C down now. Although you could also count an abcde down to today’s low (or a lower low Monday) for minor A. Either way, the trend is lower unless we make a new high above 2,011

    • lunker1 says:

      the VIX peaked at 2:43PM. the SPX bottomed then too. isn’t the VIX reacting to the volatility of the SPX price action? the correlation is .95

  15. CB says:

    Thanks Tony. Pretty clear impulse intraday today, right?..Completed with +D. Started to retrace..TBC on Monday till resistance..
    So, for better or worse, I see a dangling carrot immediately ahead…a small carrot, but still a carrot…=) Have a gr8 wknd everyone.
    .. A Girl Scouts market, I like that name, uncle.. You said that,right? .that’s a.good one =)

  16. uncle10 says:

    Thanks Mr. T.
    Risk/reward seems to be on the short side.
    Get the feeling we headed to a big boy market soon.
    Great weekend all.

  17. pcskier says:

    Thanks for update,

    If the lights go out in a significant way over the week end i will share my thoughts as a one man verbal demolition team with the board next week. I am relieved the market did not close at the low today and i will be more relieved if the lights stay on over the wk end. On a lighter note, I think the P3 call is a done deal, just a matter of time. But really who knows?

    Enjoy the wk end,

    • pcskier says:

      I did not realize the QQQ made a new high on tues, slipped my attention. Odd I did not notices that on Tuesday. O well GL

  18. My 2 cents fwiw. I think we probably completed the first leg (a) of the correction today.

  19. Thanks Tony…..Zzzzzzzzzzzzzz you tomorrow

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