thursday update

SHORT TERM: rally continues, DOW +221

Overnight the Asian markets gained 0.4%. Europe opened higher, dropped, then gained 0.3%. US index futures were lower overnight but rebounded after Q3 GDP was reported higher than expected: +3.5% v +2.5% est. Also at 8:30 weekly Jobless claims were reported higher: 287k v 283k. At 9am FED chair Yellen’s speech was released: The market opened four points below yesterday’s SPX 1982 close, dipped to 1977, and then began to rally. Within the opening minutes the SPX rallied to 1984, then dropped to 1975 by 10am. After that the market rallied to SPX 1999 by 2pm. A pullback followed to SPX 1987 by 3pm, then the market rallied into at 1995 close.

For the day the SPX/DOW were +0.95%, and the NDX/NAZ were +0.30%. Bonds gained 2 ticks, Crude dropped $1.20, Gold slid $12, and the USD was higher. 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, and Consumer sentiment at 10am.

The market opened lower today, bounced, then hit SPX 1975. After that it rallied, with nothing more than a three point pullback, to SPX 1999. This market has now rallied about 1.5% more than what was expected when this uptrend began at SPX 1821. In fact, the strength of the rally has been quite surprising as well. Since that low, 11 days ago, the market has made a higher low and a higher/equal high every day. Do not recall, in this five years bull market, when that has occurred before.

We continue to count this uptrend as three waves SPX: a 1898, b 1878, and c 1999. At SPX 2003 wave c equals 1.618 wave a. The rally has been so steady that counting our shortest timeframes has been futile. We can state two points of interest at this time. If the market makes new highs and this uptrend turns into five waves, then Primary III has extended yet again. If the market makes new highs, it will be the first time since this bull market began, that it has done so without aide of a FED liquidity program. All new bull market highs up till now, have been driven with either QE 1, 2 or 3, or Operation Twist 1 or 2. This would suggest the dynamics of this bull market may be changing. Which could suggest a more normalized business cycle is now driving the bull market. Two things to consider in the weeks and months ahead, if the market makes new highs. Short term support is at the 1973 and 1956 pivots, with resistance at SPX 2000 and the 2019 pivot. Short term momentum continues to set up negative divergences. Best to your end of month trading!

MEDIUM TERM: Major B uptrend continues

LONG TERM: bull market


About tony caldaro

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485 Responses to thursday update

  1. magnus1234 says:

    Short covering and Fund managers not to eager to write their monthly report with a 25% cash position. Ego will make them suffer.

  2. fotis2 says:

    In an irregular correction B can oversoot A by 23.6 fib and still be counted as corrective so if it reatraces at this point back to int.B of major A at 1977 and reverses at that level may offer a good long entry back to 2022+23.6 fib

  3. purplember says:

    honestly I don’t have anyone could count the waves from 1820 to now. basically straight up with a pause at 1890. there are a lot more experienced guys here than me but wave count isn’t clear to me.

  4. hawkeyes2014 says:

    Bullish sentiment is obviously EXTREME yesterday AND today. Shorts ALL thrown in the towel. Upside seems to easy. Possible double top right here at 2019??

  5. johnnymagicmoney says:

    7 Over under of number of Japanese within the cabinet that commit suicide within the next 5 years

    any takers? I personally wish they all commit suicide =) That would be a treat

  6. What will happen when the cash does finally run out from all these insane CB programs???

  7. Gary Lewis says:

    Without a surge at the end, SPY will have had a lower high and lower low for the month. Probably doesn’t mean anything, but just sayin.

  8. I have seen some asking where Tony is and why he has not posted. If I were him I would not post again until the unappreciative Ripraffs are gone. I am not saying the people that are asking are the unappreciative either. If we will all remember that Tony does this for free and that nobody forced us to be here or read his work. Furthermore, he never told anyone to buy or sell anything.

    • gasman88 says:

      Lots of emotions here, people can be mad at the central bankers and their printing presses, they can be mad at themselves for making their own decisions, BUT THEY SHOULD NOT BLAME Tony for his calls.
      If Tony had a crystal ball he would be living on a Pacific island enjoying his fortune. Nobody has the crystal ball and Tony offered best guess based on what he saw, could he predict BoJ QE?
      This blog is free, take it or leave it. This is not the first time when V-Shape bounce rolled over the bears, in many ways it’s different this time

  9. I’m with you uncle, so much BS here that passes for “detailed market knowledge.” This may well be remembered as the month Tony’s blog did this:

  10. Tony is no where to be found and there are more than 400 comments.

    • fishonhook says:

      he is in shock like the rest of us!

      BTW – prize comment today goes to Lunker. “Maybe we should go back to 3 comments a day maximum” posted as his/her 7th comment in the last 24 hours 🙂

      I have no idea what this count could be. Is this a P5? truncated P5 only 1 of P5 or is B still in play…or does it even matter since by the time we are sure it is too late. No on could have foreseen the japanese response. Completely irresponsible BTW to use tax-payer pension money to prop up the stock market

    • Tony is studiously reviewing charts for his weekend post. This is why you are not hearing from him yet.

  11. mrgreen2010 says:

    Liquidity is the name of the game. This rally could go on forever with some minor pullbacks to get people beared up. I guess 2008 is still too fresh in peoples minds and banks are loath to ever let that happen again as it did seem we were having liquidity issues as soon as FOMC finished (they call it computer/platform problems). The CB’s can’t stop as things will get bad very fast so we have the QE baton passed from one CB to another…EU, FED, BOJ all to keep mothers milk flowing. Reminds me the past best performing stock markets in history were Weimer Germany, Argentina, Venezuala…(Zimbabwea?). Ben B. was right…”we can never have deflation as long as there is a printing press.” Curious how OEW handled counted those markets? I personally, will look for dips to go long while hedging with VIX calls as sentiment does not seem to matter in the face of a relentless bid. I would prefer to have volume to confirm a breakout…and a breakout could lead to a slingshot move to the upside and then watch out. Don’t fight the FED or its cousins.

    • You are so full -it. You may have some folks fooled, but how about giving those of us who know better a break.

      • mrgreen2010 says:

        I thought you were going to stop reading my posts and why does it matter to you? If you make money and good trades you should be happy. Fooled about what? Overall this has been a good month. We all come seeking knowledge and sharing what we can. We are not all infallible. So why be a curmudgeon?

      • uncle10 says:

        u really read his stuff? got no time 4 that 😉

    • CB says:

      mrgreen, I think Tony’s style has always been not to judge or exclude anyone if their contributions are market-related and useful. Yours are informative and frequently quite funny. I am sure some of the folks here enjoy them. If someone is not in a position to appreciate them, so be it.

  12. teej911 says:

    I am very new to EW in my investing style but want to share my lessons learned over the past several weeks. I went short in my learning account near 1930 and 1960. One I am fairly certain will expire before even coming close to the strike amount and I will be happy to get out of it on an 80% loss if I am lucky but the other still has a chance as it is a December put.

    Of all the post the most I have taken from all this is 1)jedimasterstudent I will forever be grateful to your several posts of using stops. 2)Tony’s count is still valid until proven otherwise by the market 3) We will have several more weeks of near 2000 imho simply of the fact of the put contracts outstanding until mid Nov are triple of that outstanding end of Nov into December and those shorts need to be squeezed some more. 4) Looking at the charts of similar counts if this is to be a corrective wave recently and in recent years past it has hung around the ATH for several weeks before a rapid decent.

    Again, I am really new and made some big mistakes recently and wanted to share those and what I learned and my very less important opinion. Be nice!

    • Good luck in your future trading, Teej … and know that we all have learned the hard way. Patience and discipline usually come only after not practicing the same. Forced stops enforce our discipline. They are the FIRST thing I teach friends/colleagues, because you do not have to lose a lot of money in the market — unless you are buying speculative stocks. If you do the latter, keep your position size small. I also never buy biotechs — don’t need the risk. When these go down, they can GAP down HUGE.

      • teej911 says:

        Albeit painful loss dollar wise it was not something I couldn’t afford to lose but next to complacency this is a rule that will be at the front of my notebook to constantly remind me.

        The missus sure loves her biotech and fortunately for her it was been wonderful the last year and half. Keep telling her she is playing w/ fire but take her profits but she likes to violate my first rule….complacency.

      • teej911 says:

        …and I apologize for the grammatical errors. Working at 911 forces you to type faster then your brain thinks (not technically possible but sounds like a good excuse) 🙂

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