Friday update

SHORT TERM: gap up opening sold, DOW +10

Overnight the Asian markets gained 0.8%. Europe opened higher but lost 0.4%. US index futures were higher overnight, and the market gapped up to SPX 2068 at the open. In the first few minutes the SPX hit 2072 and then began to pullback. At 10am ISM manufacturing was reported lower: 55.5 v 58.7, and Construction spending was reported lower: -0.3% v +1.1%. The pullback continued until 10:30 when the SPX took out Wednesday’s 2058 low and hit 2052. After the that the SPX bounced to 2057 by 11am, dipped to 2049 by 11:30, bounced to 2057 again by noon, then hit 2046 by 1:30. Then the market started to rally. By 3pm the SPX hit 2057 again, pulled back to 2050 by 3:30, rallied to 2062 just before the close, then ended the week at 2058.

For the day the SPX/DOW were mixed, and the NDX/NAZ were -0.15%. Medium term support remains at the 2019 and 1973 pivots, with resistance at the 2070 and 2085 pivots. Wednesday the FED reported an increase in the Monetary base: $3.994tn v $3.738tn. Today the WLEI was reported lower: 46.1% v 46.7%.

The market gapped up at the open today to start the new year. The market ran into resistance in the OEW 2070 pivot range, and then started to pullback. After 10am the market took out Wednesday’s low, then worked its way lower until hitting SPX 2046 around 1:30. This pullback is now more than twice the size of the largest pullback during this uptrend: 48pts. v 20pts. This suggests Minute wave one might have completed at SPX 2092, and not Micro 4 of Minute one. However, we are maintaining the count as is for now. We can count three waves down from SPX 2094: 2058-2072-2046. Then a rally to SPX 2062. Looks like SPX 2058 is the pendulum level short term. Short term support SPX 2058 and SPX 2046, with resistance at the 2070 and 2085 pivots. Short term momentum displayed a positive divergence at the low. Best to your new year weekend!

MEDIUM TERM: uptrend

LONG TERM: bull market


About tony caldaro

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38 Responses to Friday update

  1. Walter Crane says:

    There is a ton you can do about aging, best you read the book that imo got robert Ludlum finished off, Sigma Protocol, its all in the telemeres……Old Robert died a few weeks after he snuck it out…

  2. fotis2 says:

    On the s&p hourly fridays trading that looks like a falling wedge

  3. Concerning this line from Friday’s Update: “This suggests Minute wave one might have completed at SPX 2092, and not Micro 4 of Minute one.”
    Since micro 4 would be a down wave and minute 1 would be an up wave, did Tony mean Micro 3 rather than Micro 4?

  4. All models (FTSE, INDU, SPX) in SELL as of Friday close. Good news for Bulls is MAJOR SELL will not be generated till 24th Jan. 24th Jan date has nothing to do with Greece/Draghi, my model does not know Greece/Draghi.

    However, based on ST SELL signal, SPX can still go down to as low as 1962

  5. bhuggs52 says:

    Tony, what are the odds that we could be in Minute Wave 2 following a completed Minute 1 at 2093? I like the chart provided by Optrader, from last Wednesday, which indicated this potential wave formation. We’d be somewhere in wave c on our way down to a low around 2030, before continuining up into Minute 3 of Minor 3. What are you thoughts?

  6. Wow just took a look at the palladium chart today for the first time in a long time. Wow the weekly looks like it just completed a big B wave. Really wish there were some options on PALL. Guess there’s the futures to short, but palladium’s wild and crazy moves almost caught me napping about 5 years ago. Gotta watch that one like a hawk.

  7. torehund says:

    Tony, as the moves post the flash crash are to be interpreted as corrective (2 x abc) With an upward tilt (due to the monthly macd being significntly elevated), are there some in Your group thinking we are finishing cycle wave 2 ?

  8. simpleiam says:

    Thanks Tony! Lots of confusion about the exact count; which isn’t unusual. Would love to see a hard sell-off on Monday so I can jump on long and get some primo points upward.

    Say Goodbye to Elly May!

    • 16golfer says:

      She was 81? Geez I have to pinch myself because I didn’t realize age was creeping up on me so fast.

      • simpleiam says:

        Same here, golfer; I don’t like this getting old business but not a thing I can do about it. Donna Douglas was a Honey, wasn’t she? All the boys had such a crush on her. I loved her swimming cat.

  9. mjtplayer says:

    Disappointing day for the bulls. First day of the new year and a Friday to boot, plus the DOW gapped-up 100pts. To roll over and close flat (and lucky to do that) is poor price action, I would say we’re going down a bit further, still looking at the SPX 2,025 area (2,019 pivot). I’m also beginning to lean towards an ED pattern.

    HH in the VIX today, marking day 5 of the VIX rally. As I’ve mentioned before, sustained rallies in the VIX typically last 7-9 trading days; today being day 5. Would expect a low in the market/high in the VIX next Tues – Thurs, marking what I think is wave 4 of an ED. A wave 5 rally into mid Jan to slightly HH’s to end either major 3 or P3. Large correction into the Feb & March period for major 4 or P4.

    • torehund says: has got to make Waves, its the delta that makes Our gains, if you are not not a day-trader..

    • ariez5 says:

      See this, too, except I think you have to consider that P5 might be ending, too.

      • torehund says:

        I see end of cycle wave 2 and you P5 ending. Differing opinions at two Extremes. Good weekend ariez5, nothing is better for the blog than strong opinions either way.

      • simpleiam says:

        ariez, I’m curious to know where you place P4 in your count? Currently, my P5 chart is in Major 1, with P4 having been the Oct. 2014 low. Thanks!

      • ariez5 says:

        simpleiam, Yes, I think we have to consider the possibility that the October 1821 low was it for P4.
        torehund, I haven’t a clue where you get that count.

      • simpleiam says:

        Thanks ariez. Just an FYI, if Oct. low was P4, and we continue to count waves as usual from that point, then time wise, probably have approx. a year to go for P5, could be a bit longer. IMO. GL!

  10. Greg Polites says:

    Tony – with the move up from minor wave 2 on the SPX count being three waves – alternatively could it be a B wave of minor 2 and we’re now in the C wave down to complete minor 2? Cheers, Greg

  11. Let’s get this story straight,
    1. The retail investor was told that the economy is at escape velocity because of rocking 5% 3Q GDP ….. Shhhhh! don’t tell them the data was financially engineered by shuffling data around.
    2. The retail investor was told that X-mas Sales turnout great with a +5% growth…..Shhhh! don’t remain them that it was financially engineered using “X-mas witht the Kranks” method.
    3. The retail investor was told to buy the Santa Claus rally and that it starts after X-mas……Shhh! don’t tell them Santa is not coming because he got a hangover
    4. Cheez Whiz superstars like Richard Russell, David Tepper and Laszlo Birinyi come out singing buy buy buy…………Shhhh! don’t tell them we are selling them our shares and shorting the indices.

    and what does the retail investor get for listening to all those clowns?

  12. fotis2 says:

    Tony getting interesting again im a litle more biased to the micro 4 scenario since it bounced of nicely at 38.2 time wise fits and the $ looks srong also but i suppose monday will be telling never really does exactly what we want it too🙂

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