thursday update

SHORT TERM: gap down decline, DOW -264

Overnight the Asian markets lost 0.1%. Europe opened higher but lost 1.3%. US index futures were lower overnight. At 8:30 weekly Jobless claims were reported higher: 293k v 280k, and Durable goods orders tumbled: -18.2% v +22.6%. The market gapped down at the open to SPX 1991 and continued to decline. The SPX had closed at 1998 yesterday. By 10:30 the SPX hit 1970, taking out yesterday’s 1979 low. After a bounce to SPX 1976 by 11:30, the market dipped to 1968 by 12:30, then bounced to 1973 by 1:30. After that the market hit SPX 1967 by 2:00, then started to rally. The rally topped out at exactly 1973 by 3:30, then the market declined to its lowest level of the day and closed there: SPX 1966.

For the day the SPX/DOW were -1.60%, and the NDX/NAZ were -2.05%. Bonds gained 16 ticks, Crude slipped 25 cents, Gold added $4, and the USD was higher. Medium term support drops to the 1956 and 1929 pivots, with resistance at the 1973 and 2019 pivots. Tomorrow: Q2 GDP (est. +4.6%) at 8:30, then Consumer sentiment at 10am.

The market gapped down at the open for the second time this week. While Tuesday’s gap down was closed in the first hour of trading, this one was not. In fact, by the first hour of trading today the SPX dropped below the important support level at 1979. Then for the rest of the day traded within the OEW 1973 pivot range (1966-1980). We noted yesterday that this level and pivot appear to be quite important: “The key level to watch now is SPX 1979 and the OEW 1973 pivot range. If the market heads back to that level and breaks that pivot, probabilities increase that Primary IV is underway.”  We will now add two more parameters to the potential Primary IV scenario: 1. a break of the OEW 1956 pivot, and 2. a downtrend confirmation.

The 1956 pivot is important because the rising support trend line for nearly all of Primary III is currently at that pivot. A break of that trend line would be another negative. A downtrend confirmation is important because we do not see any other counts, but a Primary IV underway, should we get one in the 19xx’s area. Since the market lost 23% during the five month Primary II, we would expect a similar decline but likely lasting only 2-3 months. We are certainly at an interesting juncture in this bull market. Short term support is at the 1956 and 1929 pivots, with resistance at the 1973 pivot and SPX 2000. Short term momentum is displaying a potential positive divergence. Best to your GDP trading tomorrow.

MEDIUM TERM: uptrend under pressure

LONG TERM: bull market


About tony caldaro

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247 Responses to thursday update

  1. John B says:

    I cannot see it as nested 1,2, the best bear case I see it as an abc down for a bigger A

  2. H D says:

    Have a great weekend Tony, All.
    First signs of fib control, new Bullish above bearish below level ES.

  3. Gary Lewis says:

    Bought more SPY puts at 198.30, out to Nov to replace Oct 3 puts closed out yesterday. Thought we would get a bit more on the upside today but this was a nice reaction. Looking forward to seeing where Tony and others think we are on OEW. I’ll certainly do a full analysis this weekend as things are getting interesting

  4. llerias7 says:

    In my modest opinion this become an UNTRADABLE market this week…

  5. lunker1 says:

    1987 is 21 fib # from 1966
    next is 34 = 2000
    HWB = 1993

  6. gtoptions says:

    Thanks Tony
    SPX @ resistance on chart I posted last night.
    GL & Good Weekend All

  7. My guess is this would be a good area to lighten up for a couple of months. Based on spider sense and nothing else. SPX 1985

  8. mjtplayer says:

    Even though the market has been rolling over and volatility has risen, it’s still Friday, which means it’s time to pay everyone’s favorite game – SMASH THAT VIX!!

    That’s right kids, the game where your local criminal bankster, in cahoots with others crooks and market manipulators, systematically and artificially smash the VIX contract lower in the last 2-3 hours of trading on Friday afternoon, just to have it bounce back up on Monday. Say it together – SMASH THAT VIX!! YEAHHHhhh!

  9. pooch77 says:

    Art Cashin is seriouly losing touch of the market as he stated high gdp number would bring market down today I remember 2008-09 he was wrong way on his calls as market kept doing opposite as his calls

    • CB says:

      consider his motives…who is he working for, the TV viewer or the Wall Street guys?..maybe it’s his job to be perpetually “wrong”….

  10. Peter Sliney says:

    Ultimate short squeeze.

  11. gasman88 says:

    It’s a month and quarter end on Tuesday. Da Boys will make sure we close high

  12. oneandonlyuniverse says:

    Man Proposes
    God Disposes

    oneandonlyuniverse says:
    September 25, 2014 at 10:26 am
    i see $spx getting back close to spx$1991 today early or fri a.m. ….and me buying more $baba
    No worries 2027.74 on the come
    “So nothing is ever good or bad unless you think it so, and vice versa. All luck is good luck to the man who bears it with equanimity”
    “There is no training — classroom or otherwise — that can prepare for trading the last third of a move, whether it’s the end of a bull market or the end of a bear market. There’s typically no logic to it; irrationality reigns supreme, and no class can teach what to do during that brief, volatile reign.”

    CN (@Cygnet_Noir) says:
    September 25, 2014 at 10:59 am
    I’m looking for SPX to trade 1946.xx today or Friday AM.

    oneandonlyuniverse says:
    September 25, 2014 at 12:33 pm
    need to adjust target $1985 -88 but 91 is def in play

  13. lunker1 says:

    Hi Tony, curious why you were 60/40 leaning towards P4 when so far this looks like a standard expanded flat to 1966 and holding the 1973 pivot. Is there something else you’re not liking?

  14. John B says:

    Hey Newbie it was quite delightful to experience you actually in a trade yesterday lol

  15. Walter Crane says:

    Hey Pooch, good call yesterday of course. And today looks pretty freaking strong indeed. But I don’t think I am selling my TVIX just yet. Held in for the new highs which was tough, its easier down here.

  16. RC,
    Has credit stabilized throughout the day and any word on bids? Thanks

  17. pooch77 says:

    Just btfd again bears toasted once more…un believable but as i stated yesterday big bounce today,probably get it all back by Monday close.3 still on 4 case dying again

  18. nickokc says:

    newbie how’s 1940 working out for you?

  19. My chart was expecting this bounce in between here and 1985 we drop like a rock

  20. wildmick says:

    waiting for 1980ish/hwb. see what if anything happens

  21. Next stop 1945 on spx

  22. rc1269 says:

    yet another HWB in the works? rinse, repeat. yawn

  23. buddyglove says:

    …….Just sayin’
    S&P hourly

  24. nickokc says:

    doom and gloom fail again when you have the largest economy clocking 4.6% GDP you know the sky is not falling this ups and downs won’t change the up trend until we have leahman brothers scenario ( doubt it)

    • torehund says:

      ..maybe US is strong enough to carry the rest of the world on its shoulders for a while ? A strong dollar is beneficial to a lot of foreign sectors too like shipping.

      • nickokc says:

        agree GDP strongest reading in 2.5 years and Russia losses are USA gains…serious investment coming back to USA as economical sanctions on Russia make multinational companies reluctant to invest again unfortunately many on this blog talking about S&P 666 and 1000 do I think S&P can go to 666 sure tomorrow if north Korea nuke South Korea or Putin just go mad but then you need to worry about food shelter and ammo not S&P pivots lol

      • torehund says:

        In the end an elevated USD Will Benefit Russia a lot…think Putin wants his nat gas in USD sooner rather than later. Also, a growing US economy Will find imported goods cheaper and cheaper lifting other boats too. Sure the multinationals may suffer if they are only exposed to outside of the US.

    • you believe what the govt feeds you? I don’t and good luck believing in fabricated numbers….just saying

    • nickokc, no offense to you- but you seem very complacent. You say Doom and gloom fail again???, how can you make this comment- the market has only been open for 4 hours since yesterday bloodbath. You commented ” the largest economy clocking 4.6% GDP” Would USA government ever fudge numbers? Would they ever change their mathematical equations to make things appear better then they are? Are you seriously trading/ believing everything the news and what the media tells you?

    • berniebaruch says:

      Possible. But that GDP number is about a relevant as the fact that I weighed 169 pounds in High School. 220 now 30 years later.

      • nickokc says:

        I don’t trade guys I invest long term and when I play short term I do only with money I can afford to lose…been debt free for years …I’m not going to debate Gov numbers because I can debate the whole validity of fiat money and monetary system and how money get created and conversation will go on and on “fractional reserves” “futures speculation” “derivatives” ” wars and economy”….Tony might ban us if we take that route…

  25. stephenk1980 says:

    Stuck in a wedge the past four hours; hopefully the breakout will tell us which way it’s going

  26. lunker1 says:

    so far SPX looks like a rounded bottom

  27. IMO The decline from 2019 looks and feels similar to the decline that start on July 24th

  28. uncle10 says:

    Not sure y this posted on wed update? think being short copper is a good probability, pretty low risk, and good return place to have some money allocated to. The trend is down. Its been hanging around $3 for a long time. If it breaks down could have a nice move. I have a position. gl

    • uncle10 says:

      just another thing to add to the very long list of things that make no sense: Spending hundreds of millions to produce the penny. 😉
      Have a great weekend all.

  29. Buy signals issued on 30/60 min SPY but not biting yet. NYA also showing positive divergence. Would like to see what happens EOD before making a move, if any…

  30. berniebaruch says:

    Burned off the extreme oversold readings and take a shot back at breakeven check out the temperature?

  31. A break and hold above that SPX 1975.79 reaction level from yesterday’s AM session would likely change the scenario I set forth yesterday. It would increase the odds of the 1956 pivot range holding, imo.

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