Thursday update

SHORT TERM: gap up opening breaks streak, DOW +63

Overnight the Asian markets lost 0.9%. Europe opened higher, were disappointed with the TLTRO results, and ended mixed. US index futures were higher overnight, and greatly improved after several economic reports. At 8:30 weekly Jobless claims were reported lower: 294k v 297k, Retail sales were higher: +0.7% v +0.3%, and Export (-1.2% v -0.9%)/Import prices (-0.2% v -0.2%) were lower. The market gapped up at the open to SPX 2036 and continued to rally. The SPX had closed at 2026 yesterday. At 10am Business inventories were reported higher: +0.2% v +0.3%. The rally continued, with very small pullbacks, to SPX 2056 by noon. Then the market started to pullback. By 3pm the SPX had dropped back to the opening level at SPX 2036. After a rally to SPX 2046 by 3:30, it dropped to 2031, then bounced to close at 2035.

For the day the SPX/DOW gained 0.40%, and the NDX/NAZ gained 0.50%. Bonds lost 7 ticks, Crude dropped $1.20, Gold slipped $2, and the USD was higher. Medium term support remains at the 2019 and 1973 pivots, with resistance at the 2070 and 2085 pivots. Tomorrow: the PPI at 8:30, then Consumer sentiment at 10am.

The market gapped up at the open today, breaking the three day gap down streak but it was still a gap. Normally, multiple gaps mostly to the downside suggest a correction is underway. The gap up opening carried the market to SPX 2056 by noon, nearly a perfect 61.8% retracement of the 55 point decline: 2079-2024. When the market started to pullback in the afternoon we updated the hourly chart to display a Minor a at SPX 2024, and a Minor b possibly at 2056. As long as SPX 2056 is not exceeded tomorrow, Minor c should be underway. Short term support remains at the medium term pivots. Short term momentum nearly hit overbought today after yesterday’s positive divergence, then ended the day approaching oversold. Best to your Friday trading!

MEDIUM TERM: uptrend may have topped

LONG TERM: bull market


About tony caldaro

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253 Responses to Thursday update

  1. bob623 says:

    Scotty, be kind!

  2. rabbittrader1 says:

    Some people seem to be wondering HOW we get to SPX 1694 by Dec 24th.. Try a couple days (like Monday and Tuesday of 700 Dow points down ,followed by a couple of 500 point and I assureyou the SPX will be at 1down days

  3. alexhartley1 says:

    Hi Tony. Did an ‘a’ just disappear from one of the charts?

    Also kindly, at what level would you consider this turn down to be enough to be a Major 4? 5% may be enough right?

  4. simpleiam says:

    Was that a flush I heard?

  5. mjtplayer says:

    Just sold my VXX longs right here before the close – it’s been a great week to be long the VIX and I don’t want to think about it all weekend.

    – Cheers Everyone and have a great weekend!

  6. tradeanimal says:

    SPX RSI (5) showing some positive divergence. SPX needs to hold 2,006 and we can get a counter trend bounce. Bought a few Jan calls on SPY with a 25% stop loss.

  7. manunidhi21 says:

    Namaste Tony !

    Its getting close to it still Imp. ?

  8. rabbittrader1 says:

    Hello sibyn, when did you get so conservative ,MY Friend, how about a close below 2000?

  9. John Arella says:

    Looks like its going to get ugly on Monday, we did the 1st wave and 2nd wave of the 3rd on the downside, 1st wave of 3rd was 2056 to 2016, 2nd of 3rd was 2016-2025, 3rd wave coming which should be at least 40 Spx points and up to 80 coming

  10. rc1269 says:

    people pay too much attention to the VIX for day trading. on an intraday or daily basis it doesn’t tell you any more or less than what you can see just by looking at an SPX chart.

    if you’d like to get some use out of the VIX you need to look longer term. for instance, tracking VIX vs SPX in 2007 you can see that VIX gradually started trending up and made higher highs while the SPX was making higher lows. also VIX made lower highs as the SPX made lower lows into March 09. those are meaningful trend divergences. we’re not exactly there again, but if VIX gets much higher than the Oct highs then that’s something to make note of, as this selloff is clearly a higher low in the SPX vs the Oct lows.

    otherwise it’s just noise on a shorter term basis. cheers

  11. rabbittrader1 says:

    Crude looks dropping to $54 or so ,After that a wave 4 correction in this bear market to possibly $91 per barrel before then falling over next year or so to $25 per barrel, WHY? Don’t know why, just the cycle and the waves (Elliot waves) R.

  12. simpleiam says:

    A little something to start getting everyone in the mood…

  13. jparkins10 says:

    Springheel Jack ‏@shjackcharts
    The low in Nov was 2001.01 #SPX. The last Dec low below a Nov low was in 2002. Nine instances since 1970, mostly in clear bear markets.

  14. lunker1 says:

    So far 14 points off the SPY low….stuck in the pivot with you

  15. uncle10 says:

    Thanks Tony. good work as always!
    qqq not even to the 50 day, spy down a few percent from all time high and the vix is above 20!? and our cnn fg is back to fear. 😉 bunch of scaredy cats out there..
    great weekend all

    • tommyboys says:

      Still remember ’08-’09 – burned into memory. SILC!

      • uncle10 says:

        hey tb. we do a little game. my pick for next year is XON. you going put Silc or someone else? ends dec 31 2015. who u got?

      • tommyboys says:


      • tommyboys says:

        XON @ 27 here (pretty decent last few months), RDCM @ 11 here..

      • tommyboys says:

        Thought you meant XOM not XON! Biotechs are all or nothing. GL!

      • uncle10 says:

        TB, XON is a bio tech but not like most of them. granted it is speculative! I checked out RDCM. I like it! really like that big gap on huge volume about a month ago! My experience with a chart like that Many times it doubles from the gap so would be surprised if it didn’t hit at least $14-18. good luck!
        btw- you like those small Israel stocks!!

    • buddyglove says:

      Dude, you’re the scared cat, get yourself long again the $/Y…

      • uncle10 says:

        Hey Bud. I don’t get the feeling it is going to run away from me. there is some news this weekend and I don’t want the risk. gl

  16. buddyglove says:

    Seeing another bullish set-up here @2017. Last one failed, but this looks better GL to all.

  17. FiveStars says:

    VIX is clearly sending the signal it is time to close short positions and go long.
    Nat Gas is breaking out, looking very bullish.

  18. sibyn says:

    SPX top for now 2025 down now 2003 short term.
    Waiting for 1618 long term.

  19. 2024 up or down from here guys? Best guesses or thoughts?

    • CB says:

      we have 3 lower lows ( 60 min chart) with higher RSI…just saying…that’s my best guess, which may, however, not be good enough 🙂 GL. everyone!

      • mjtplayer says:

        DOW is leading the markets lower, that’s very unusual. NAZ (thanks to biotech) and small-caps outperforming, another unusual occurrence, these are the most volatile segments of the market. Seems we have a backwards market…

    • alexhartley1 says:

      down into early am15th Dec most likely. After that it will move up but whether the up move gets past the 18th will probably be determined by Fed speak.

  20. cicelyalaska says:

    Do I hear sleigh bells?

  21. fishonhook says:

    Anyone want to guess the count where we are right now with S and P down 10. Been harvesting some shorts at -17 or so. Not sure to add or cover.

  22. chrisk44342 says:

    My premarket commentary from this morning:

    • fotis2 says:

      Thanks chrisk nice vid ive joined the highs from yestreday and was looking for a short entry but it now looks like a falling wedge 3 touches on bottom i think a break above might be chased by the bulls.

      • fotis2 says:

        On SPX

      • chrisk44342 says:

        Hi Fotis. Yes, I understand. U don’t work on Friday afternoons. No money in it! That said, the cash chart (not covered in the video) is king when it comes to the SPX. So one could make the argument at the intraday low was the end of intermediate or minor A. I don’t play the EW prediction game, so who knows? If you look at the chart for ES, it was very interesting to watch the price action play out inside the diamond I mapped out in that area.

    • CB says:

      Nice work, Chris. Thanks.

  23. FTSE has already retraced 69% of the rally from mid-October and closed today below the close of the first day following the low. CAC has given back 50% and DAX 33%.

  24. lunker1 says:

    SPX Double +D on the 60 minute and +D on the daily

  25. lunker1 says:

    Hi Tony on the SPX daily chart your 2019 pivot position is a little low. Looks like it’s sitting at 2015

  26. playitkool says:

    I’m thinking a of C @ 2012

  27. mharrison60 says:

    European main markets down big this week and particularly today. Do you folks think we see a real waterfall move on Monday or are we mostly done here? Thanks

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