friday update

SHORT TERM: quiet day, DOW -18

Overnight the Asian markets gained 0.4% again. Europe opened higher and gained 0.3%. US index futures were higher overnight, but the market opened unchanged at SPX 2038. At 8:30 Retail sales were reported higher: +0.3% v -0.2%, Export prices lower: -0.9% v -0.2%, and Import prices lower: -0.2% v -0.1%. The market rose to SPX 2042 by 10am and then started to pullback. At 10am Consumer sentiment was reported at a seven year high: 89.4 v 86.9, and Business inventories were reported higher: +0.3% v +0.2%. By 10:30 the market hit SPX 2036, then rose to 2041 by 11am. After another pullback, this time to SPX 2035, the market rose into the close to end the week at 2040.

For the day the SPX/DOW were mixed, and the NDX/NAZ were +0.25%. Bonds gained 5 ticks, Crude rose $1.70, Gold rallied $28, and the USD was lower. Medium term support remains at the 2019 and 1973 pivots, with resistance at the 2070 and 2085 pivots. Last night the FED reported a decline in the Monetary base: $3.89tn v $3.98tn. Today the WLEI was reported lower again: 47.2% v 48.2%.

The market opened flat today, rose to SPX 2042, dipped to 2035, then spent the rest of the day in that narrow range. Yesterday we posted that the uptrend had now done three waves up from SPX 1821: 1898-1878-2046. A top at this level would suggest an a-b-c uptrend with a Major C downtrend to follow. Should the market go higher, after the pullback from SPX 2046 concluded, then an extension of Primary III would be likely underway. Today’s action added nothing to these two potential scenarios. Guess we need to wait for next week. Short term support is at the 2019 pivot and SPX 2000, with resistance at SPX 2049 and the 2070 pivot. Short term momentum ended the week at neutral. Best to your weekend!

MEDIUM TERM: uptrend

LONG TERM: bull market


About tony caldaro

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54 Responses to friday update

  1. Looking at breadth ($SPXA200R) the past 4 weeks seems most similar to the pattern @ July 2011. Whether July 2011 is M5 of P1 or B wave of P2 seems a matter of semantics. And right here, poor market breadth (and falling all week) at new price highs can’t be a good thing.$SPX&p=W&yr=6&mn=1&dy=17&id=p12757952857&listNum=10&a=376441377

  2. torehund says:

    The world is seismically in a heavy phase right now, the volcanoes are getting more active and the midatlantic Ridge in particular. Seems like there is a push zone developing contralateral to that Ridge, as of writing there has been a large quake in Indonesia at 7,2. As in everything the governmental agencies hide or tweak what they dont want you to see. Take care, and good weekend to all on board.

  3. rabbittrader1 says:

    JeffMilano; My”system” is :I do not have a system ,but consider many technical and fundamental indicators Then make an intelligence based decision. I was way too premature in seeing a top of this wave up from the last low in the SPX. . However I am long Crude Oil & Gold as well as 40% long individual stocks. I Do strongly continue to believe that we will see ..a major move DOWN over the next 4 to 5 weeks (probably 5, into Dec. 18th. I think this will be a C wave unfolding in 5 waves (3 down and 2 up) . Then of course the XMAS rally and on up into next MAY. I have been short crude oil since $104 per barrel and long and short gold multiple times since the year began. I wish everyone the best in their investing or trading. There are no guarantees that I will be right . R.

    • perceval7 says:

      Good luck with your trades Rabbit!

    • fotis2 says:

      Rabbit most were expecting a top to me it looks like any day now low volume,rounding top,weekly doji close,5hour macd turning down etc.I was waiting for a break of the wedge to and a retest and reversal of breakout +a drop bellow hourly macd to signal a short did not happen so still out of a trade im long spot gold on retest and reversal of 61.8 at 1150 it could be an ABC but it could also be the start of an impluse stop just bellow 1130 target 1300.

  4. Well quite some games played in gold and gold miners today. Will be interesting to see where the short covering runs out of steam.

  5. xscaler92646 says:

    For those of us that have been doing this as long as we have, how many times have we all heard or lived through these types of markets where the ‘pros’ preached the never ending bull? I remember plotting two charts back in 2005 of two stocks I was big into, MRVL and SYNA, and plotted all analyst upgrades and downgrades. All ups were within the topping areas and of course the downs near the bottom.

    I trade mathematically and systematically. Maybe one day I sit and write an article on how to nearly always make money with a simple pyramiding strategy I use weekly. I follow all the EW guys who are worth anything (of course that means NO prechter – how sad is it that the guy who wrote the book is so wrong all the time) to try to assure I’m on the right side of things. But as we can all see, EW sometimes leaves things to be desired. Like I said, Pretzel (not Prechter), Avi, and Tony are all on different pages. Actually Pretzel has no idea and he’s usually in the right camp. I like that honesty. Tony is going to be one bigtime hero if this thing does roll over into a B wave. I have to admit I do see the catalyst for it. This last rally was first led off by a major support hit which led to some short covering that led to gaps through resistance levels that massively triggered short stops that clearly then led to performance chasing by loser wealth managers. But now?

    We’ll see! Fun to watch. Cycles have next week down, the following week up, then the first two weeks of Dec down – potentially big – then end of year BS ramp. Next year potentially is a big one up due to the ‘5’ factor. But with all these counts in 5ths, I wonder.

    • Testing out my new screen name to see if it worked. Actually it’s my Xbox Live screen name for Halo and Call of Duty. I admit it, at 45, I’m addicted to those games.

    • CB says:

      thanks Xscaler. I like your cycle guidance for next week. Makes a lot of sense after looking at several things (incl.:bonds & $spx intraday pattern ).
      Amazon, yes it’s had a big move,but now @ daily TL resistance. Watch $Vix @ 16. If it touches it, it will be significant.

    • fotis2 says:

      Said pros seem to pop out of the woodwork at major turning points usually i take it as a sign we getting mighty close to turnaround

  6. randomacts4 says:

    Never to be used as a standalone indicator but, for those who follow such things, November 20th is the next Bradley Date on the calendar. I believe this is considered a Major Turn Date.

    • randomacts4 says:

      And the next new moon is on Nov 22. So the confluence of new moon and Bradley dates are something to consider.

      • joecthetruthteller says:


        Most new moons are tops, most full moons are bottoms, occasionally they invert, occasionally they have no effect at all.

      • randomacts4 says:

        Truth – Agreed. I always find it interesting or amusing when these natural phenomena do end up corresponding to some kind of market shift. I’m curious what will transpire over the next week.

  7. blackjak100 says:

    daily NYMO actually closed below lower BB today. That must be mean we marked a short term bottom at 2035 and are heading to 2070 pivot next week. 21 straight days with a close above 5 dma….it’s amazing!

    • soulsurfer says:

      not necessarily. NYMO had a similar price/BB pattern on

      5/22/2013: SPX peaked that day at 1687 and dropped to 1560 over the next month!
      7/29/2013: SPX bottomed that day at 1682, climbed to 1707 over the next week, and then dropped to 1627 over the next month
      10/3/2013: SPX was at 1692 and continued to drop to 1646 (not a similar price set up)
      11/7/2013: SPX was at 1746, continued to climb to 1810 over the next month, dropped to 1786 in the ensuing two weeks
      1/24/2014: SPX dropped from 1827 to 1790 that same day, and continued to drop to 1740 over the next few days (not a similar price set up)
      3/10/2014: SPX peaked at 1882 a day later (5p higher), then “dropped” to 1814 a month later, while making a new high in between
      9/9/2014: SPX went side ways for a few days (200-1980s), peaked at 2019 the next week and then dropped to 1821..

    • vinniesj says:

      That’s because you are using NYMO which is ratio adjusted, you need to use $NYMOT.
      You can’t use adjusted ratios in a marker rigged with central bank intervention.
      Traditional gives you a true read of overbought or oversold, in this case it’s been parabolic overbought with readings topping 125 daily.

  8. torehund says:

    Adding a currency to the hyperinflationary ones, the Brasilian Real, like SEK and NOK they are firmly headed for the goast town, With no return. Thats what happens if a country doesnt deflate their economy by themselves (No bubble poppers ala Clinton), then others do it for them by dumping the currency. All these nations are heading in direction of Argentina and Venezuela.

  9. bhupal777 says:

    Thanks Tony.
    IMHO small correction may kickoff next week. Because from 1820 low one can count 5 waves (again EW is very subjective). Correction could be as shallow as 23.6% or 38.2%. Then 3 of 3 would kick off breaking the upper resistance line on SPX that is drawn connecting highs of the whole uptrend from 2009. This time it is China that would be keeping the bull case alive. We will start seeing the China outperformance in coming weeks and months to come.

    If you don’t read the price action and trying to catch the tops it is hard to read the strong action behind this market. I have been there and learned it hard way. Take a look at AMZN today, money is just keep on flowing into any beaten stock. If takes out 340 then I can say that larger 5th wave is just kicking off in AMZN with initial target of 370 and then to 400. But it exactly stopped touching upper resistance line. So next week’s action would tell us if this is still larger 4th wave action or 5th wave action.
    Can you imagine Warren Buffet’s Berkshire is investing in GM and IBM. From fundamentals point of view they both are not great stocks. If that kind of euphoria is going on in the market then no one knows when that euphoria will end. Could be weeks or months. So better course of action is to participate in the bull run with good risk management. Looking at BABA it is consolidating for the past 5 days. Now you can draw trend lines for this newbie stock and the recent downtrend exactly stopped at the lower trend line. If that holds it will resume its up move in coming weeks. Good Luck all. Have a good weekend and peace to all.

    • tony caldaro says:

      Think China is moving with the rise in the USD.
      Same can be said about India and Japan too.
      No comment on AMZN.
      Buffet likes beaten down stocks.
      BABA looks good. But worry about any company’s earnings that are based in China.

      • torehund says:

        Agree With you on China Tony, they get cheaper oil and boost their revenues on the dollar hike. Not completely irrelevant is the effect on Europan miners that thrive on a dollar hike let alone the flatlining of metal prices, that is if they have already bought their Caterpilars…Lower wages With plummeting currency and a healthy price hike on what they produce. The shippers based in Greece Will look better as they earn more euros and have lesser fuel COSTs.
        US has got a head start as the property bubble made housing affordable, Europe still has deleveraging to do, as have my own country NorWay, in order to become competitive internationally. I think a much more profound devaluation Will fix it, as the population in these countrie dont get it…and prefer to strike instead of heightening their efforts. Governments dont get it either in these countries and increase taxes to employ even more dead-weight. And if no one get it…end result is like in Argentina. A country that has a leveraged real estate market like NorWay isnt normally too difficult to popp. However if someone made 30 times their Investment in 25 years, you just cannot popp such a huge bubble With ease. Thats why hyperinflation is a probable outcome, especially in Sweden and NorWay.

  10. pimacanyon says:

    Hi Tony,

    The move down from the September high to the mid-October low was a 10 percent drop. Does OEW consider a drop of that magnitude to be too small for it to have been P4 in its entirety? Is that the main reason you’re not considering the current uptrend as possibly the first wave up in P5? If you had to give odds, what would you say the odds are that the drop into the mid-October low was ALL of P4?

    Good weekend to you and all your readers!

    • tony caldaro says:

      In this bull market that decline looks no different than some of the declines in 2012.
      Certainly does not look like anything that occurred during the 2011 P2
      Wrote about this in last weekend’s report

  11. FiveStars says:

    Thanks Tony. Have nice weekend.

  12. blackjak100 says:

    Thx tony! Who needs trading SPX when you can trade gold and oil? – both going higher for bounce.

  13. afarsid says:
    I quickly skimmed it, people getting reckless again… Let me know if you guys have any market relevant takeaway messages from this in the short-term.

    • afarsid says:

      And thanks Tony!

    • joecthetruthteller says:


      The Fed manipulation is beyond heinous. Analysts at Cornerstone Macro have pointed out that QE typically acts as an amplifier of an existing trend. The current trend in US stocks is higher, so figure that the GPIF’s U.S. QE essentially acts like a bid under equities and bonds going forward – on every dip, it will be there!

  14. soulsurfer says:

    thanks tony, WLEI lower again… at what level do “the powers that be” consider it a concern?

  15. torehund says:

    Thanks Tony !

    ..its a moment of Zen and Zero.

  16. gtoptions says:

    Thanks Tony ~ Your weekend update should be easy. Enjoy.

  17. JeffMilano says:

    Tony, thank you for having this blog and for being the best EWtishian in the history. Humble but firm in your views. Open minded and who know his stuff and is not easly swayed.You are a person who gives a chance to some’s views yet explains his in very humble way without redeculing the other.
    Rabbit, my system still maintains the short from initially yestarday signal.

    Thank you

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