Thursday update

SHORT TERM: gap up opening sold again, DOW -106

Overnight the Asian markets gained 1.8%. Europe opened higher and gained 2.1%. US index futures were higher, lower, higher overnight. At 8:30 weekly Jobless claims were reported higher: 316k v 294k, the PPI was reported lower: -0.3% v -0.2%, and the NY FED was reported higher: +9.9 v -3.6. The market gapped up at the open to SPX 2020, ticked up to 2021, and then started to pullback. The market had closed at SPX 2011 yesterday. At 10am the Philly FED was reported lower: 6.3 v 24.5. The market then made a low at SPX 1999, rallied to 2016 by 10:30, then made as lower low at 1993 by 12:30. Then the market tried to rally. The rally lasted until 3pm when the SPX hit 2004. Then the market made a lower low on the day at SPX 1991, just before a 1993 close. First close under 2000 since the downtrend low in December.

For the day the SPX/DOW were -0.75%, and the NDX/NAZ were -1.40%. Bonds gained 28 ticks, Crude fell $2.30, Gold rallied $30, and the USD was higher. Medium term support remains at the 1973 and 1956 pivots, with resistance at the 2019 and 2070 pivots. Tomorrow: the CPI at 8:30, Industrial production at 9:15 (est. -0.2%), Consumer sentiment at 10am, and it’s options expiration Friday.

The market gapped up for the second time this week, and just like the first time it headed lower within the first 1/2 hour of trading. The three wave rally we observed yesterday from SPX 1988: 2009-2000-2013 peaked out at 2021 this am. Then the market dropped below SPX 2009 shortly after the open, making the rally just another corrective bounce. After that the market traded down to SPX 1993, then entered a trading range for the rest of the day before breaking lower in the last few minutes. While the market did not break through yesterday’s SPX 1988 low, keeping the Minute wave ii flat scenario alive. We did not observe any impulsive action to suggest this pullback might be over. Should the market break SPX 1988, one of the two pivots should provide support. Short term support is at the 1973 and 1956 pivots, with resistance at the 2019 and SPX 2057. Short term momentum did not move much above neutral during today’s continuation rally attempt, and ended the day below it. Best to your opex trading tomorrow!

MEDIUM TERM: uptrend in jeopardy

LONG TERM: bull market


About tony caldaro

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285 Responses to Thursday update

  1. torehund says:

    BIB, is warming up the tires…:)

  2. scottycj1 says:

    imanewbietrader…… Congrats…..good numbers !

  3. fotis2 says:

    Excellento! Was really starting to miss Mr.Bull glad to see him back..

    • tommyboys says:

      Don’t hold your breath today is OPEX. Tuesday likely red…

      • fotis2 says:

        Tommys closed shop in profit for the day Tuesday another day another trade for me tackle each day as they present themselves the way its been trading defenitely not the market for buy and holders imo.

      • Opex irrelevant TB, can expedite but doesn’t determine direction. Everything was known/determined at yesterday’s close, overnight triple-digit weakness in futures, opex, etc., just noise. The key is to find something that works, consistently, causal not coincidental, real-time not rearview mirror, then ride it hard until it doesn’t. Has ade all the difference ince I developed this indicator in December. GL

      • DL (@dl1976) says:

        Thanks financialblog for giving us heads up on your indicator readings. You nailed it

  4. Hmmmm…… People waddle home early, to Friday tea and scones at 3:00 pm, giving up on the markets, and then the mafia moves in at 3:30 pm for the jam at new SPX highs. Only 4% away. We shall see.

  5. You are taking losses because you did not believe in my model.

    Please don’t blame me if you don’t take profits NOW. You will get one more opportunity to buy at 2010 SPX.

    • XSCALER – YOU DO GREAT WORK . I dont know if u saw my comment the other day.
      I mention you at the bottom…i am very long( erx 46.66)
      Pick your spots.

      Darkness (@SirDarkness) says:
      January 14, 2015 at 9:23 am
      $spx going to a choppy 2156-68 by late March …get 8-12 % correction
      ibb 331
      oil 54.06 no news…news 61.10

      xscaler – you do good work but now is the time you want to be buying ERX ( 46.66 )

  6. Best not to complicate things, I said last night (see below) when futures were down triple digits that rally would start today, expecting to get 500-1000 points on the DJIA (that’s the average for this signal) , probably new highs on SPX. I will sell and go short (options on inverse ETF) when my indicator gives next sell signal. Dow UP triple digits today, many are still too afraid to buy and will unfortunately miss next week’s rally.

    • buddyglove says:

      frb, Yes I can see the possible “Stealth Reversal” structure in place, however it is a little weak for my liking and vulnerable to sunday overnight flushing 50/50 imho. Gl.

      • Hey BG. I find that my indicator’s timing is almost perfect, market moves accordingly (and immediately, perfect for options) and other factors then “fall into place”, which brings in other buyers/sellers to extend the move and increase the profits.

        Scroll down and see what most were saying last night, only a few (myself, Blackjack and a couple others) seemed confident of a rally today, in my case I wrote that I was “very, very confident”. We’ll see how it keeps performing but has been perfect the past six months, easy money. GL

  7. rc1269 says:

    anybody else thinking 2020 close with a big gap up tuesday?
    just like the 12/16-12/18 pattern

  8. rc1269 says:

    been a while since we had 6 consecutive white 60min candles

  9. afarsid says:

    I think we see a sell off 3pm and on?? Thinking most people don’t want to hold positions through the long weekend, too much uncertainty.

  10. Thanks for everything Tony! You are one classy guy!🙂

    SPX: On the hourlies it seems to me that we’ve recovered the support line (barely) and at the nomal rate of climb, if we climb, should challenge the downtrend line at about 2032. It will probably happen at a value lower than that if we have fits and starts. I think it will capture that line, perhaps soon. Surprisingly. Optimistically.🙂

  11. This call is on longer timeframe (unlike call of 300 points jump yesterday, which was on shorter timer frame). FTSE is on BUY, SPX/INDU will turn BUY if they close at same level (as of now; 2007 spx). This is as per model

    Now as per me, this rise will be slow grind and not sharp, but likely trap for BULLS and BEARS both

  12. GYN LAB says:

    Coming back down below the resistance connecting the highs of Tues & Thurs.. looked like a breakout above 2006 but if this falls then that was a fake and ED continues

  13. ariez5 says:

    There is nothing impulsive about this move up, even though the daily candle is promising. Seems like a flag (or drift…)

  14. Like everyone, I am sure, noting that they’re holding major support here — for now anyway.$SPX&p=60&yr=0&mn=6&dy=0&id=p64014201543&a=315374993&listNum=7

  15. rc1269 says:

    FYI – breaking rumor of a Fed Reserve bail in today. emergency meeting to set negative rates
    just a rumor

  16. bdoalex says:

    Don’t know if this was talked about….with Commodities taking a big hit the last few months, is there case to be made that investing in Commodities has more value compared to bonds/equities/currency?

  17. gtoptions says:

    Thanks Tony
    Is that a Flag or a Pennant on the 5min.? 😉
    SPX 1988 is now strong support. A close above 2023 would be nice, but a test of the pre-market SPY low at 197.15 could come next week.
    Enjoy the weekend all.

  18. nickokc says:

    Rabbit good your 1280 Gold call is spot on congrats

  19. blackjak100 says:

    NYAD extremely strong for small price rise so far…..

  20. uncle10 says:

    That consumer confidence number this morning was very good. best in a decade. Not good if your bullish the market. gl

    • tommyboys says:

      I look at this one as a soft science. The survey isn’t about the stock market per se’. More about consumer expectations and confidence in their own finances and spending and employment into the future. The fact that the market is completely driven by confidence I prefer a higher number when bullish…

      • uncle10 says:

        TB ,go back and study it. past 50 years. Look when it is really high ( high confidence). Plot it on a chart and over lay the market. Highest in a decade- not good news for bulls- medium to longer term.

      • uncle10 says:

        it works just as good to buy. In the future when we get the worst number in a decade it will be good news for the bulls.

      • tommyboys says:

        Couple things…Today’s spike likely an anomaly first. Second indicator has been higher for years at a time predicting recessions that never came or came after years of elevated levels and then there are years where it never breached 80 and will still got a recession. This is why I think its a soft science of interpretation along with the other million indicators and circumstances to evaluate. It is up there though I’ll give you that.

      • uncle10 says:

        I hear ya TB. time will time as always. BTW the stuff that tells me we are in a bear market are not present so still in a bull market for me. I do think it is possible that we are making a top but certainly not confident yet that we have. Just taking day to day like always.😉

  21. jeffbalin says:

    Minute 2 lasting way more days so far then minute 1 couldn’t be good for the primary count on the 60 min. Does that ever happen normally?

    • simpleiam says:

      Hi jeff. Take a look at last week in Oct 2014 through the rise in Nov. Looks very much the same. Not sure we go up, but find it interesting.

      • jeffbalin says:

        Thanks Simple! Except…..I’m not sure what you mean…. ? Sorry, I’m not nearly as smart as the others!
        On the tony 60 minute Spx, minute 1 was 8 days, minute 2 if, it ended today is at 13 days and I really don’t think the downtrend is over yet. The time length is out of whack to me, and is one reason the 60 minute count may not be the correct one.

      • simpleiam says:

        Sorry jeff. Hope someone else can address your timeline. I was just pointing out the pattern.

  22. tommyboys says:

    INTC back to even – so far. They made a ton of dough…

  23. GYN LAB says:

    Still looking for that v of c of Minute ii around 1960 today or early next week.. Above 2022 before, I would be wrong

  24. Ryan Parker says:

    For anyone looking at precious metal miners. Take a look at SLW.TO (SLW) and FNV.TO (FNV). Charts look MUCH better priced in Canadian Dollars.

  25. fotis2 says:

    Well so far so good break above pivot posible for DB payout to 2020 if it can find some footing….If

  26. lunker1 says:

    Looking positive now. Would like to see 2000 hold next 30/60 candle closes

  27. stephenk1980 says:

    Very bullish since we broke the downward trend line from 2032 connecting to 2022 that we touched at 1993 and then broke at 1990. In at 1990 and riding it hard.

  28. H D says:

    GM all, fairly cautious today but kinda feels like a down 10 @ 10 set up.

  29. rc1269 says:

    does this morning’s action look bullish to anybody?

  30. alexhartley1 says:

    Hi Tony – are you confident we’re close to a bottom on the 10 year (TNX) in what I presume would be a Major B and we should be looking for a Major C to start soon? Thanks, Alex

    • tony caldaro says:

      With the 30yr making a new yield low it looks like the bond bull has shifted out in time a bit.
      Thought the 2012 low was it. But it has shifted to 2015, exactly 34 years from the 1981 high.

    • mjtplayer says:

      The 30yr has already broken to new all-time lows, taking out the 2012 low. The 30yr leads the 10yr, so odds are that rates drop further. All-time low in 2012 for the 10yr was 1.39%, we’re at 1.77% today, so still room to go.

      Look at it this way, 10yr rates in Germany are 0.46%, in Japan they’re 0.24% and in Switzerland they’re 0.1% – US 10yr rates at 1.77% are a great deal by comparison.

      If I lived in Europe or Japan and knew my local currency would probably continue lower vs. the USD, I would absolutely buy US Treasuries over local bonds.

  31. Our indicators that keep us in check say NOWHERE NEAR A BOTTOM

    • we are just being a little tongue in cheek. That said, several that would need to line up with lows with others are not yet lined up. This 1992 range looks fragile as well. We believe the DAX index looks bullish, but must thrust or it will bust on the 10000 line… so we are watching the DAX very closely for help. The NYSE charts continue to look toppy and rolling over, and those remove the ETF’s and other securities that clog up other indexes. Also, bonds are indicating deflation… as is oil etc… so we would not assume a rally is forthcoming folks… we would be very cautious at this time….

      Again several of our OVERSOLD indicators are not anywhere close to the October lows… so we will chill until we see the DAX plow past 10,000 or not next week… then go from there

    • buddyglove says:

      3 x …I thought you guys were bullish for this year ?

    • Wait a minute, weren’t you the who was calling for spx 2300 or 2500 several days back or was that someone else?

  32. hkloon says:

    Tony, is it fair to say that the shipping index bdi had a cycle low in 2012 and now is entering 3rd year of the initial bull phase?

  33. mjtplayer says:

    This is just a dead-cat bounce in stocks, do not buy this. I don’t see a low until late next week, Thursday or Friday

  34. gasman88 says:

    DAX making new high, the bar has bet set very high for Senior Draghi. He must deliver next week, if not it will get ugly

    • mjtplayer says:

      If he does, it will get ugly in the Euro – pick your poison: tanking stocks or a tanking currency??

      I think he has to start considering defending the Euro, i.e no QE. With the Swiss bid gone, if he starts QE than I think the Euro will accelerate lower at a faster pace than most think. You’ll see 105 in the Euro/USD in short order.

    • simpleiam says:

      Remembering that Draghi has yet to put his Euro where his mouth is, I’m not convinced QE-E is a done deal. At best, 50/50.

  35. odds of a spx drop below 1800 are increasing, my original target was spx 1966.

  36. afarsid says:

    Everyone is now expecting a V shape bounce and that is precisely why it will fail me thinks

  37. Twitter Updates

    ” mini mkt. update and plan for friday (within blog’s response sect.): #SPX POSSIBLE BREAK OF 1966, #CRASH 5 hours ago “

  38. Hi Tony, Great blog! I enjoy reading very much. Your wave 2 count looks challenged to say the least. But, I must say you have navigated quite well in situations like this in the past. Your discipline is quite refreshing. Starting to cover my shorts for a few reasons. 1. Interest rates are very low 2. US economy will benefit greatly from lower oil 3. Lack of places to invest 4. We are very oversold. Recipe for a monster rally.

  39. rc1269 says:

    lower inflation. still plenty of time left in Q1 for the Fed to discuss not raising rates or even needing more stimulus…

  40. I’m anticipating the 233 daily SMA current rising towards the 1956 Pivot to be tested before we see trend reversal worth getting long

  41. Well well well, after being down triple digits last night, the futures did indeed reverse, rally starts today after strong buy signal was generated at yesterday’s close, as posted last night (see below). Buckle up. And enjoy the ride

  42. GYN LAB says:

    Still looking for that c=a*1.236 at around 1960 (upper range of 1956 pivot) preferably today for a V shaped bounce..

  43. Lee X says:

    It’s about making money , right guys ?

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