thursday update

SHORT TERM: gap down opening then rebound, DOW +33

Overnight the Asian markets were mixed. Europe opened lower and lost 0.3%. US index futures were lower overnight. At 8am FED governor Tarullo’s speech was released: At 8:30 weekly Jobless claims were reported higher: 291k v 290k, and the CPI was reported flat: 0.0% v +0.1%. The market gapped down at the open to SPX 2040, yesterday’s low, then began to rally. At 10am the Philly FED was reported sharply higher: 40.8 v 20.7, Existing home sales were reported higher: 5.26mn v 5.17mn, and Leading indicators were higher too: +0.9% v +0.8%. The market continued to rally until 11:30 when the SPX hit 2054, above yesterday’s high, then it started to pullback. Around 3:30 the SPX hit 2049, then bounced to close at 2053.

For the day the SPX/DOW were +0.20%, and the NDX/NAZ were +0.50%. Bonds gained 5 ticks, Crude rose $1.25, Gold rallied $12, and the USD was lower. Medium term support remains at the 2019 and 1973 pivots, with resistance at the 2070 and 2085 pivots. Tomorrow: Senate testimony from FED Governor Tarullo at 9:30, and it’s Options expiration Friday.

The market gapped down at the open for the second day in a row. That has not happened since the end of the downtrend in mid-October. After retesting SPX 2040 the market rallied into late morning. After the retest we arrived at the conclusion that Minor 5 may be subdividing. We posted a Minute i at yesterday’s SPX 2056 high, and a Minute ii at today’s 2040 low. It looks like the wave ii could have been a 2040-2052-2040 flat. Should the market clear SPX 2056 we will assume Minute iii has been underway. Short term support is now at SPX 2040 and the 2019 pivot, with resistance at SPX 2056 and the 2070 pivot. Short term momentum rose during the rally on what appears to be a positive divergence at today’s low. Best to your trading the often volatile options expiration Friday!


LONG TERM: bull market


About tony caldaro

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205 Responses to thursday update

  1. fionamargaret says:
    ..these are two charts I posted last weekend…..not negated yet.

    Thanks Tony, and everyone on board…..x

  2. Happy Thanksgiving to everybody. Caldaro thanks once again for the blog I appreciate the entertainment. Looking forward to Saturdays read. No worries Central banks in control. We will close at the highs of the day and the vix will get smashed into the close.

  3. fibs-R-us says:

    Anyone know where max pain is at?

  4. Far from impossible to count the move from yesterday morning’s lows as 5 waves complete (futures basis). Not suggesting this is likely, but it’s certainly a possibility. My best bear count in that case would be at present 5 of 1 or 5 of 3 of 1. The market would have to comfortably clear 17816/2064 to the upside to nullify this count and re-assert the potential the top is not in. But it’s cutting it fine. The 4 into 1 overlap lies at 17735.71/2056.08. Typically this market will keep us guessing to the last.

  5. jrtrader25 says:

    Reviewing the daily, weekly, and monthly charts, it’s hard to believe the divergence being displayed with my indicators. I would have expected the divergences to be cleared up on all time frames with a 250 S&P point move, but not so. The market has a chance to clear up these divergences over the next days, weeks, and months. It’s put up or shut up time. Stay nimble my friends.

  6. cmucha68 says:

    Like said below: final move up today. If we close near the lows it could go to the 2030 area. I noticed that many of the usual suspect follower have disappeared in recent days. Whether it’s disappointment, frustration or just fed up with B wave confirmations after a 200+ move upward I don’t not know. Doesn’t matter. With or without central banks, a chart is a chart and “there is nothing new under the sun” Jesse Livermore always said. I remember periods where we had daily swings in the S&P of 40-60 points over some weeks. Also doesn’t matter if SPX goes to 2150 or back to 1950. As long you are on the right side all profits taste good. I would alsways focus on the next 20-30 points. What is longer term comes later anyway. But 20-30 points up or down with a bulk of futures or enough options is ok. Then look for the next 20-30 points. If it was long first 30 points and then short 30 points what does someone else want more. Money is money. Cannot understand people who are calling constantly for the big C wave from 1970 and stay short 100 points only to admit then they have been wrong. Cutting losses quickly and looking for the other way round that’s what makes a good trader. Again Livermore:

    “If a man is both wise and lucky, he will not make the same mistake twice. But he will make any one of the ten thousand brothers or cousins of the original. The mistake family is so large that there is always one of them around when you want to see what you can do in the fool-play line.”.

    ” I made up my mind that since it was unwise and unpleasant to continue actively bearish it was illogical for me to stay short. So I turned and began to buy”.

  7. Know when to hold’ em …Tim is a little excited today.
    His October clues from his charting software were spot on B4 the October bottom was reached.

  8. John Arella, your doom & gloom chart is coming to life.. Will you repost or comment your thoughts?

  9. lunker1 says:

    BOLO nested 1,2s

  10. Tony,
    Is there a decent chance that Pri IV could start soon? I am not a pro at this by any stretch, but it looks to me that it is a possibility. Thanks.

    • a question only central banks can answer David. they are all on the same page. it would be disingenuous for anybody to tell you otherwise. Market not trading on technical and if fundamentals were so good Central banks would not be doing what they are doing.

    • Sorry David I am not Caldaro and I am not a expert in EW or what Caldaro calls OEW but I think the game has changed as noticed in mid OCT. Caldaro was on the mark but comments from FED member followed by A central bank move make all the OEW or EW irrelevant in my opinion. Its not easy to follow the map when Central banks keep changing your destination.

    • tony caldaro says:

      Pushed the P4 scenario to alternate, but still carrying it on the NAZ chart.
      See a potential for that scenario, but would not give it much thought unless the market broke 2040.

  11. ramdigitaldoc says:

    I, for one, find what you do invaluable. I don’t think you get the credit you deserve for all the time and effort you put in.
    So, THANKS! and Happy Thanksgiving.

  12. blackjak100 says:

    I would like to see 2059 hold for fourth wave correction with one final move to 2073-2079 to complete P3. However, we don’t always get what we ask for. It’s how I’m seeing the waves for minute iv of minor 5 of major 5.

  13. HI Tony – love your work. I’ve been out of the market for a while, but am interested in getting back in. I’m wondering if now is the time to do it, or if I’ll get a better chance over the next several months on a pullback. Any thoughts?

    • JD C. says:

      I’m not Tony, but think he probably doesn’t want to give investing/trading advice. Market can go higher but we are overbought on daily and weekly charts again. Got to learn the charts and indicators and invest when very oversold. The bull cycle is long in the tooth but will most likely go higher, but we are at elevated levels here again. Look at Tony’s charts and updates. Best to you.

    • tony caldaro says:

      Personally I would wait for a correction.
      This is not advice, this is what I would do.

    • Buy low, sell high. Period.

  14. jrtrader25 says:

    I’m getting the same feeling today as that of April 2007. I believe we are not too far from this whole thing going “tits up”. I believe the story this time will a global slowdown (already occurring) that leads to a loss of confidence in central banks. It will probably start with an emerging market crisis in the first half of next year. The safest way to play this in my opinion is to liquidate into cash and buy 5-8 month out vix calls. I know this goes against people’s wave counts and bullish feelings, but I’m just trying to save some pain and money in the end. This is just one mans opinion who has seen this story play out before.

    • jrtrader, I like your take- I think what is going to happen is a crash from up here or we are going to move quickly down to 1700-1800 area and bulls are going to be buying with all ammunition thinking a 5th wave is kicking off with dreams of 2100-2500 BUT the 5th wave will fail and bulls finally get burned. Bulls please don’t attack me, its simply my opinion.

  15. Caldaro I must compliment you on one thing. You have built an amazing and loyal following. You have been very good to people on this board. Stay in line with Central Banks and do not call for any P4 corrections and I am almost certain within a few years The Process of Beatification & Canonization will take place for you. Happy Thanksgiving my friend

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