Friday update

SHORT TERM: marginal new highs, DOW +59

Overnight the Asian markets gained 0.2%. Europe opened higher and rallied 1.9%. US index futures were higher overnight, and at 8:30 monthly Payrolls were reported higher than expected: +321k v +214k, plus the Trade deficit was reported slightly larger: -$43.4bn v -$40.0bn. The market opened two points above yesterday’s SPX 2072 close. It then rallied to yesterday’s high at SPX 2077, pulled back to yesterday’s close, then rallied to a new high at 2079 by noon. After that it pulled back for the rest of the day. At 10am Factory orders were reported lower: -0.7% v -0.6%. Then at 3pm Consumer credit was reported lower: $13.2bn v $15.9bn. In the last hour of trading the SPX hit 2071, then spiked to end the week at 2075.

For the day the SPX/DOW were +0.25%, and the NDX/NAZ were mixed. Bonds lost 20 ticks, Crude dropped $1.05, Gold slid $14, and the USD rallied. Medium term support remains at the 2070 and 2019 pivots, with resistance at the 2085 and 2131 pivots. Today the WLEI was reported lower: 47.6% v 47.7%.

The market opened higher today, made a new high at SPX 2079, then pulled back into the close. The wave pattern from the Minor 4 SPX 2030 low, continues to remain choppy and has been forming a rising wedge. This could continue into next week as the diagonal triangle continues to form. These markets have displayed some exceptionally long ones in the past year. Short term support remains at the 2070 pivot and the key SPX 2050 level, with resistance at the 2085 and 2131 pivots. Short term momentum ended the week at neutral after posting another negative divergence. Best to your weekend!

MEDIUM TERM: uptrend

LONG TERM: bull market


About tony caldaro

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51 Responses to Friday update

  1. ewmarkets says:

    FED website says it has temporary open market operations and today, it reverse purchased $145.5 billion in treasury.

  2. StemSki says:

    Hi Tony,

    Trading is a very frustrating lifestyle particularly when the job that gives you the funds to do so gets in the way. I know plenty of people who lost most of their retirement accounts at the same time as their jobs. 200, 300, and 400 K even. Why? Because for 20 years or so they never lost that much money or their jobs. No one knew that things could go so wrong.
    Now here we are almost 6 years into the largest longest bull market in history and there is no end in sight. I am scared that I will be the next one to lose everything so I tread cautiously and remain frustrated all along the way. Not even a 10% decline since 2011. Is it rigged?? Is this the new normal (2000-2003, 50% decline; 2003-2007, >100%; 2007 to 2009, 60% decline; 2009 to 2015, almost 300%)?
    I will never be at ease with an unhealthy market like this. Here is my prediction: Major wave 1 of III was 348 points so Major wave 5 will most likely go to 2168 (5 = 1) or to 2214 (Primary III = 1.618 x Primary I). No reason to expect anything else$SPX&p=W&yr=3&mn=3&dy=0&id=p35775606188&a=329928017

    • tony caldaro says:

      thx Stem,
      Only risk what you can afford to lose.

    • wtf10 says:

      What Tony said plus the greatest lesson I have learned:
      1. Patience
      2. Know when I’m wrong and If I am get out.
      3. Losses are part of the game
      4. Don’t revenge trade
      5. It is better to be out of the market wishing you were in rather than in the market wishing you were out.
      6. The market is impartial and doesn’t care about you or your feelings. It will do what it does sometimes inexplicably.

  3. JW says:

    There was some discussion recently on the blog about the GDX last minute trade down the other day. Here is an interesting piece of analysis attempting to explain what happened.

  4. gtoptions says:

    Thanks Tony
    Enjoy the Weekend All.

  5. Tony,
    Wanted to ask if that in your weekend update you would address if there has been any change in the probability of the 3 main counts from last week that you put at 40%-30%-30%

  6. fishonhook says:

    There seems to be an invisible string attached to the indexes and as soon as there is the smallest dip, the string is pulled and up it comes

    Maybe in a few years we learn that the Fed were buying the indexes too like the tin-hat guys keep saying. No one would really care if they are we are so deep into Ponzi territory what difference does it matter what they buy ?

    • Don’t think you will need to wait a few years as it is being done every week, mostly after hours.
      Since Oct low more than $37 Billion have been pumped into the market by the FED/Mega Banks…well documented.
      Lady Yellen’s PPT team watches the markets every second of every trading day..look at what happened the last 3 minutes of today!!!!!!!!!!

      • LOL when I say it people go nuts here

      • tony caldaro says:

        Do you really think the FED cares if the market closes at 2071 or 2075?

      • Their is a lot of things going on behind closed door that the average person in not aware of or would even frankly believe. Does the Federal Reserve care about a few points on the market, NO. Does the fed have something to do with holding up the stock market, and crushing volatility… well that one is easy. More importantly, the real issue everyone should be concerned about is the blatant manipulation of precious metals and the future of the USD.

      • CB says:

        OK, the floor pivot is now at2075.21, Traders have to pay attention to that. The Fed supposedly has ppl posted on trading floors around the world, so unless those guys are playing poker all day, it’ s reasonable to assume that they pay attn to all technicals, especially closing numbers… how otherwise could we have a “managed market.” – it needs to be managed and that means paying attention to numbers. In any case, that’s the markets we have and need to deal with, so no need to be complain about “what is”, I agree🙂

      • asaraniti says:

        Of course the Feds don’t care if the SPX closes at 2071 or 2075 but I do think they want the index’s to close on a positive note at end of quarter/month/week especially on Friday’s during the Christmas season.

        My thinking is that the intent of the QE program (in my opinion), is to elevate stock prices/keep interest rates low to make the people feel they are “richer” so they will go out and spend money which stimulates the economy.

        Permit me to ask a pertinent question. During the Christmas season, if the markets closed positive on Friday, would the public be more motivated to spend a few extra dollars over the weekend? Conversely, if the markets closed down big on a Friday would the public think twice about their spending habits over the weekend?

        Psssst …look at the VIX from 3:30 PM to the close.

      • tommyboys says:

        Yeah newbie and you’re privy to all this “behind closed doors” activity that “average people” aren’t aware of? Really? Sure. Man talk about wasted posting come on. Maybe we should just stick to known facts and drop the OPED, innuendo and paranoia – value in some instances on the blog is cratering… Jmho

      • tony caldaro says:

        In that case, maybe retailers like Walmart bought the close😉

      • John Bell says:

        The US Fed’s balance sheet has continued to expand even with QE printing turned off. I do not know exactly what they are doing, but they are doing something. So they are likely still providing liquidity in various places as they see fit to accomplish what they want. So the only proof that is public is their balance sheet continues to expand even with public QE turned completely off. This is public information.

        The CME futures exchange does have does have a special central bank trading program with trading discounts for central banks that was to end in 2014 but now extended through 2015. This is public information. So it is likely that some CB’s have setup accounts and been using the program. Otherwise they would not extend it, especially with special trading discounts. Anything else beyond the existence of a CB trading special program is speculation as the existence and contents and activity of accounts are private.

        Some central bank rules allow direct trading in various assets whereas other central banks do not allow direct trading and if they want to get around that rule must funnel money to a third party agent. For example BOJ stated in their latest statement that they would increase Japanese bond bond buying and with extra printed money they might also be buying stocks directly. And some stocks they would buy would be outside Japan (hint…USA.) Also Japan’s major public pension fund is reducing Japanese bond holdings and buy more stocks (Japan and other countries – US, etc.) So the BOJ had to increase QE to buy almost all bonds so the pension fund could sell out some bonds and diversify outside of bonds more and outside of Japan. If you understand this correctly, Japan is getting ready for ratings downgrades which would impact the impact the bonds market and also a possible monetary collapse.and buying outside Japan right now for protection.

        So you have a number of sovereigns buying quality US bonds and stocks as those are the calmest and safest “waters” around now. Metals, commodities and currencies are just getting into the heart of the war/storm. Nothing safe there now.

        Have nice weekend.
        The greed desperation run continues with there being increasing fear to let even a 2% drop go as panic might set in if it drops much below 2040. Jobs and bonuses are on the line for a number of funds and investment trading desks that have not had good years and they are chasing anything that moves and selling some and rotating to anything again that moves. But always staying in the game nearly fully loaded. So EW and TA analysis gets harder to factor.

      • tony caldaro says:

        Nice post John
        But this FED chart does not show the monetary base increasing since they stopped QE 3

      • John Bell says:

        tx Tony. I am looking at the FED weekly balance sheet statements which is not the same as your monetary base. It looks to me like the monetary base is not increasing but the balance sheet may be as I check the weekly posted data and it never seems to go down and mid November went up. They monetary base and balance sheet are different and refer to different accounting actions.

      • John Bell says:

        link to FED balance sheet trend chart
        They also have separate detailed balance sheet page.
        The balance sheet finally this week went down a little. And the balance sheet assets are about $700 B more than the monetary base. Too complex for me to figure it all out.

      • tony caldaro says:

        thx John,
        See the difference. Didn’t know there was one.
        Nevertheless you are correct.
        The increases likely due to reinvestment of interest.
        Purchases were made mostly in Gov’ts and MBS.
        End of Oct. $4.487tn, now $4.486tn

    • The fed may not be doing qe any longer but japan and devaluation of the yend left money sloshing long as there is that we trudge higher,,,is qe and mario next ..>

  7. llerias7 says:

    SPX 2150 is the final station of this long&exciting trip…

  8. chrisk44342 says:

    Yes, or could it just be that we hit the futures pivot and the bottom of an upsloping channel? Doesn’t have to be a ramp of any kind. Just has to make sense.

  9. torehund says:

    Thanks for your excellent work !
    But there is something not looking finished scalewise, one would expect the prim W 3 on the NAZ to be 2-3 times the size of wave one, its far from that yet, this bull has considering the latter far to run, and thats even being conservative With the count. The W 3 looks way too short.. sure it could be but then a pyknotic pattern isnt what nature prefers.

  10. CB says:

    Thanks Tony.
    Gotta love those bots; Spx up 3.45 on the day and 5 pts in the last 5 minutes.. wish I could trade off of 1 min-charts..

  11. mjtplayer says:

    Thanks Tony!

    It looked as though the market was going to roll over and close near the flat line, but the EOD ramp was in full effect, DOW was ramped 30pts and VIX was smashed 40bps in the final :10min.

    Full moon today/tomorrow, I wonder if this was the high, for now. Perhaps a pullback over the next couple weeks before the Santa rally the last 2 weeks of the month/year?

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