Thursday update

SHORT TERM: market in pullback mode, DOW -10

Overnight the Asian markets gained 0.2%. Europe opened lower but gained 0.6%. US index futures were higher overnight. At 8:30 weekly Jobless claims were reported higher: 313k v 283k, the CPI was reported lower: -0.7% v -0.4%, but Durable goods were reported higher: +2.8% v -3.3%. Then at 9am the FHFA was reported higher: +0.8% v +0.8%. The market opened one point below yesterday’s SPX 2014 close, then pulled back to SPX 2106 by 10am. After that it rallied to SPX 2014 by 11am, before starting a choppy pullback to 2104 by just after 3pm. Then the market rallied to close at SPX 2111.

For the day the SPX/DOW were -0.10%, and the NDX/NAZ were +0.45%. Bonds lost 19 ticks, Crude dropped $1.95, Gold added $3, and the USD rallied. Medium term support remains at the 2085 and 2070 pivots, with resistance at the 2131 and 2198 pivots. Tomorrow: Q4 GDP (est. +2.0%) at 8:30, the Chicago PMI at 9:15, Consumer sentiment and Pending home sales at 10am, then a speech from FED vice chair Fischer at 1:30.

The market opened lower today, like it has done for about two weeks. It dipped down to SPX 2106 by 10am, bounced to 2114 by 11am, hit 2104 just after 3pm, then rallied into the close. Our initial short term concern level, at SPX 2102, was not hit today, but the market did set up a potential short term positive divergence at the 2104 low. As the NDX/NAZ tried to rally all day, the cyclicals appeared to be held in check by the strong USD rally +1%, and the 5% drop in Crude at its lows. Nevertheless, we do see five waves up from the SPX 1981 downtrend low, with each rising wave shorter than the previous one. This suggests a few potential short term scenarios. But we will await either new highs or a drop below SPX 2102 before getting into any detail. Q2 GDP tomorrow could be the catalyst. Short term support is at SPX 2104 and the 2085 pivot, with resistance at SPX 2120 and the 2131 pivot. Best to your trading!

MEDIUM TERM: uptrend

LONG TERM: bull market


About tony caldaro

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122 Responses to Thursday update

  1. simpleiam says:

    We need: THE RALLY SQUIRREL!!!

  2. lunker1 says:

    Close below 2105.65 has me cautious

  3. A perfect close would be at 2090. Don’t think we will get there, but you never know. Would leave a lot of options open for Monday. Was 2120 the P3 top. End of Minor 1 end of Int 1 end of an A wave.
    look forward to Saturdays update. everyone have a nice weekend.

  4. Looks to me the move today off the intraday low to the high was an ABC. This would suggest a new low for this pullback below yesterday’s low still to come.

  5. This is the quick one, some strange chatter going on, wont name sources. But I suggest, pl. don’t keep long open over the weekend. These chatters usually are meant to create fear and then take advantage, so there is another angle as well.

    But, intelligence is such confused thing, that they wont know who took SONY “The interview” down even with comparably best technology. In the end, winner is “black hole”

  6. bhuggs52 says:

    Starting to look like it could be another a-b-c down from 2119.48. IMHO.

  7. torehund says:

    Good weekend to all, bears and bulls.

  8. It’s only been 5 years later since wall street/govt/media preach “Escape velocity YOY, but what do ya’ll say

  9. mjtplayer says:

    I see continued low volatility for another 2 weeks before increased volatility in the 3rd and 4th week of March. Could it be that the market does nothing for 2 weeks while we await the March Fed meeting? In a manipulated world, nothing is more important to markets than the manipulators meetings ans statements. So sad, I miss the free market…

  10. sibyn says:

    If 2097 then I waiting for 1820 (Bart pattern). Third time short at 2111 (fishing) 🙂 . SL 2114.
    Time out (writing).

  11. lunker1 says:

    standard 1,2 from 2103

  12. fotis2 says:

    So far similar action like whole week gap down and now going up DB/ target 2120 so long above 2106 break bellow that bellow that 2090 target HS leaving it alone today looks like spinacoin trade.

  13. Here comes Nasdaq 5000 get the Champaign and confetti ready

    • mjtplayer says:

      You know they’re going to try to hit it today, last trading day of the month and a Friday to boot. If they can print Nasdaq 5000 then the weekend financial publications can run their bullish articles, getting the retail investor more excited.

  14. ashram says:

    During this bull market, breakouts on the SPX P & F chart have usually produced big rallies rather than nominal new highs:$SPX,PLTAMANRBO%5BPA%5D%5BD%5D%5BF1!3!!!2!20%5D&pref=G

  15. gtoptions says:

    Thanks Tony
    My Best Guess. 😉
    SPY ~ Thursday Close Test WPP @ 210.43
    Remain above WPP then HH by EOD, if not more consolidation.
    GL & Good Weekend All

  16. manunidhi21 says:

    Namsate Tony !

    I am not getting your short term count after 5 waves. Can you please elaborate.
    GDP 2.1 So is it catalyst ?

  17. On thee occasions (at 2060, at 2099 then at 2114), in last two weeks, my model came close to giving SELL (if SPX had closed at some intraday level), but since, it is closing price that matters, there is yet NO sell signal. All indices still show BUY but I wont BUY.

    • fotis2 says:

      Shrihas you think its getting close to a turnaround?Sitting long according to what I see but Can’t shake the feeling that when it drops it will be quick,nasty and take most by suprise.

    • rabbittrader1 says:

      I believe you should change your thinking, my friend. This market will not have a SIGNIFICANT DROP until MAY 2017, beyond normal EW corrections. We wont see any of those until MAY 10th. Just a word to the WISE! R

  18. fotis2 says:

    $/yen has formed a upptrend channel on the daily am looking at a 3rd touch of support around the 118.00 area for a dy long potential target back to 122.00.Light crude briefly tested support at 48.00 and reversed strongly with no bar closes on any time frames on that level so am still long till proven wrong.That’s all folks B carefull out there the Market tends to suprise when everything looks hunky dory and pointing strongly to a certain direction.

  19. rabbittrader1 says:

    Comments on important markets: SPX, should open on MONDAY with a gap up and trending up into MAY 10th to 2200 area.. Gold, still in it’s down channel should hit 1150 by Mar 24th or so, then on down into April 27th to the $1000 area.. Crude Oil still laboring in it’s UPward channel toward $60 by March 27th then higher into April. July Sugar (still a short) , also May Wheat, still a short. Going to the CITY this Sunday to the DELTA Grill in New York to hear DAN STEVENS (best BLUES GUITAR East of the Mississippi River.!!

  20. torehund says:

    brents, its only chance, macd looks good, but what about price ?

  21. mjtplayer says:

    Torehund – no disrespect, but I think you’re taking Martin Armstrong’s piece and chart a bit too literally. From my understanding, and I’ve been following Martin for years, is that home/real estate prices aren’t going to fall to 1955 levels. His analysis says that the super-cycle bull market in housing ended in early 2007 (the Case-Shiller top-tick in prices was Oct 2006). Prices were to collapse into 2012, which they did (they collapsed into 2009, bounced in 2010, then fell again in 2011 in some markets – making a “double-bottom” in early 2012). Then a big rally into 2015, but to a lower high – which we’ve also had as prices are up about 25% over the past 3 years and prices are indeed still lower than 2006. Then after topping this year, a continuation of the super-cycle bear market in real estate into 2033.

    A bear market can mean anything, even prices just going sideways for decades – It doesn’t necessarily mean collapse. As governments become more desperate for money, they will increase taxes, both income and property, making housing more and more expensive to own and maintain; this combined with rising rates in the future are all major headwinds for housing – pressuring prices. If prices just trade sideways for 10 or 20 years, that’s a major loser given financing costs, taxes, insurance and upkeep costs associated with real estate – think of it that way. That’s my take anyway….

    For those who want to read it, here’s the article:

    His comments regarding “big bang” on or around Sept/Oct this year are more geared towards debt/credit – not stocks. The bubble is in bonds, not stocks – at least not yet. He’s very bullish on stocks as there’s no place left to invest, stocks are the only game in town with cash paying zero, real estate overvalued and facing rising interest rates and with bonds paying nothing and on the verge of potentially losing money if/when rates rise. As money flows out of bonds, stocks are the logical beneficiary. He’s bullish on stocks until 2017, then the crash.

    • torehund says:

      agree, the real estate proj is “for now” just unimaginable, thats what makes it interesting for us speculators, and I am trying to be open to just about everything, as the sovereign debt bubble strides Ahead. But what if Food prices quadruples…

  22. bhupal777 says:

    Those who have already having some Splunk (SPLK) shares Congrats to you. After their bullish outlook, tomorrow it will gap up and go. It will consolidate at around 75 and will present another opportunity to enter a new position or pyramid on an existing position. We are not at the top. We are just starting the euphoria phase of this bull. Good Luck.

  23. torehund says:

    Thanks Tony as always, just one consideration swirling in my little brain….
    2015,75 the big day in M. Armstrongs model, could that not be the interest hike day and coinciding With P4; steep part of the P3 doesnt take a lot of time as its mostly straight up.
    Looking at his real estate predictions they are ugly Reading, housing declining to 1955 Levels by 2032,95..Kind of difficult to see Stocks rising in such an environment. Some loose threads going forewards.

    • tony caldaro says:

      2015,75 ? is that the 75th day?
      real estate is fine, people’s perceptions of what has transpired are not

      • torehund says:

        Its 0,75 percent of a full year, so thats Oct first 2015 for his big bang scenario. However its difficult to grasp exactly what Will happen at that day, it Depends on where market stands right infront of that date.
        Trying to use different input and attempting to construct a roadmap from it, but that aint easy 🙂

        • tony caldaro says:

          then in that case I’m still on 2015.5
          heard about the volatile Armstrong, and some others, are expecting by then
          but most agree to higher highs after that

          • torehund says:

            Yes, thats maybe the P 5, (post a brief abc Down flash type P4) we have been looking for. And it fits With what he is thinking now.
            Apart from that I would recomend speculators to look into the Biotech as its rolling over to the upside, its one of the sectors thriwing on a strong USD.
            Oil- well it had its chance to prove itself, but it didnt, I think it has further to go on the downside, absent a brisk hoock up on macd, it Will not do good Thing to holders yet.

          • torehund says:

            It seldom wrong to sell on first of july 🙂

          • hkloon says:

            I have done some research on Martin Armstrong’s timeline with Tony’s and see if anything can be matched. What I found was Martin’s timeline is maybe an event – an economic event that leads to something. But this may not directly translate to a Primary wave maybe the start of an intermediate wave or a major wave or ending of it…. So my guess is 2015.5 as Tony pointed out here maybe the start of int 2 (or ending of int 1). 2015.75 maybe start or middle of int 3. I think May/June we should see Greece default (assumption) and maybe leave Euro, then there’s scare that Italy and Spain may leave. During May/June to September, capital flight from Euro (devaluation) into USD assets and US stock markets.. that’s why we will start int 3. 3rd strongest wave, until the ending of the fifth wave in Tony’s Q1 / Q2 2016 target. thx just my opinion.

  24. M1 says:

    I still believe NAZ should find its first resistance at around 5,000 (so we could see a pullback)
    Here are some numbers:
    1. The first wave from the oct lows was 694 points (4116 to 4810).
    2. The 61.8% of this first wave is 429 points. (61.8% of 694)
    3. The third wave started at 4563.
    4. Add 429 points and the result is 4992.

    • M1 says:

      By the way, first resistance doens’t mean the end of the third wave. Actually, the “first” target of the my preferred count is much higher than 5,000.

  25. ashram says:

    Fifteen year highs in Naz/NDX and an ATH in RUT, so the situation is not entirely dire. Thus far, the corrections have been rotational. The SPX 9 day ema has contained the rally pullbacks, and it closed at 2102.39.The longest correction since the 2/2 low has been twelve hours, and the current ABC pullback has lasted nine hours. So far, just more of the same.

    However, tomorrow could bring a news-generated thousand point DJI down gap or a late day Fat Finger flash crash, so there is always hope.

    • robnaardin says:

      Spx uptrend has lost contact with the upper 20 day bb. A bull attempt to kiss that goodbye and then a bear attempt to kiss the rising 20 day ma goodbye is in the cards… …no such thing as hope, only anticipating where the f’ing puck is going!

    • CB says:

      Interesting comments. Thanks guys. Janet has those little spirit fingers, no? 😉
      $spx seems to be in the “show me” ( strength) state as of today. Maybe the GDP can do it…maybe not..

  26. CB says:

    Thanks Tony.
    Anyone seeing this spike in the 30 yr bond to 161 right now..or is it just my charts…(?)

  27. mjtplayer says:

    pooch77 says: February 26, 2015 at 4:24 pm
    “March17-18 bradley turn”

    That’s funny, the March Fed meeting is scheduled for the 17th & 18th – what a coincidence. Perhaps this is why I’m seeing increased volatility that week and the following week too 🙂

  28. bhupal777 says:

    Thanks Tony.

    I am thinking that tomorrow for financials (XLF) it may be an action day. There is a big move coming either up or down. If it is down then we might be looking at 200 day SMA in coming 2 to 3 weeks. If it is up then my KRE options should start appreciating considerably.

  29. bhuggs52 says:

    Thanks Tony. Tours is a sober update with the requisite cautions against rustic decisions. Here’s one perhaps for the moment: “Seeing the small is called Clarity” – Lao Tsu

  30. bouraq says:

    Today’s post:

    • bhupal777 says:

      Thanks Bouraq. On EURUSD and Dollar index, trend followers are minting gold. Because they don’t look for tops or bottoms. Folks like EWI, as soon as they see 5 waves then they get cautious and issue statements like reversal is coming. Also when market started going up from 2009 low, as soon as they saw 3 waves up around 1200 they started issuing next bear market is coming. Now we are at 2100. But reality is the waves get extended and extended and extended. Trends continue longer than most people think.

  31. makiori says:

    I am posting this because I have also noticed that advances are getting smaller .
    This is going to be a bit complicate as I don’t know how to upload a file, so I will do my best to describe what I think is a possible, but non necessarily a plausible, count.
    PI,PII and start of PIII as per Tony count.
    On a daily chart draw a trend line from the low of ’09, touching the lows at the end of August 2010. Leave it there and go back to today.
    Now place a vertical line on the 18th and on the 20th of March 2015.

    The high in September at 2109 was the start of Major 4 and the 15th of October @ 1820.66 the end of it.
    So IF, IF, IF we are now in Major 5 of PIII, Intermediate i was over on the 12th of December (36 days/259 points), followed by an irregular intermediate ii that ended on the 2nd of Feb @ 1980.90.
    Intermediate iii ended yesterday or is about to end. (so far 16 days/139 points)
    We need Int iv and v before March 18-20.
    Int iv is going to be very short and shallow, and Int v, a blow off.
    I do try to apply Gann along side EW, as with everything I am just dealing with probabilities, so feel free to discard completely if this does not apply to you.
    March 18th is 5 rotation of 360 from the 15th of October (5 Int of Major5) and is also FED day.
    Price wise, 2 rotation of 360 (this is not the place to explain why 5 rotations on time and 2 of price, but remember the observation about the advances getting smaller) from the low of 1820.66 gives 2184.79.
    March 20th (contract expiry) is 2 rotation from the 02/02/15 and price wise, from 1980.90, one full rotation is 2178.99

    I think the 18th/2184.79 is more important. but let say that I have a window of 48 h and a price target of +/- 6 points.

    Now go and check where the trend line from the low of ’09 intersect the 2 vertical bars (18&20 of March).

    Just a possibility,therefore Project, Monitor, Adjust is still the untouchable rule #1.

    all the best

    • pooch77 says:

      March17-18 bradley turn

    • bhupal777 says:

      Thanks makiori. Now I do believe that “A picture is worth a thousand words”. (:- You should post the chart. May be using wordpress account?

      I also believe that if Major 5 doesn’t stop going up in March then we just have to extend it and extend it until it stops going up. I have seen many such EW calculations and projections (predictions) from EWI/Prechter. Looks very similar (not the exact count though, I mean the basic concept in coming up with exotic numbers and predicting turn points). May be this time it will start for sure the much awaited P4. As many and many people waiting for the P4 correction the bull train just chugging along with few passengers.

    • fionamargaret says:

      makiori, if you want to upload a file, here is how I do it…
      at the top of your computer, press ‘file’, and then “mail link to this page” and send to yourself.
      Drag the version provided on to Tony’s blog.
      Easy Peasy.x

      • makiori says:

        my pc and yours must be different, I can’t action the same process you have suggested.
        very frustrating and not so easy peasy… sorry

  32. mike7x says:

    Thanks Tony! Interesting Fibs…2000 High In The Nasdaq 100 May Be A Ceiling As Well As A Target?

  33. simpleiam says:

    Thanks Tony! Good evening to you All.

  34. fotis2 says:

    Thanks Tony so tmrw it should show its hand lets see.

    • I really cant see how we go much higher, but I’m sure we do. 4 th qtr GDP will be at 2 percent Yea. Greenspan said today the world economy is in a recession, although the stock market is not in a bubble. Definitely interesting times.

      • tommyboys says:

        Not even close to a bubble. 2000 was a bubble and you can’t even compare today’s valuations…

        • Correct, Greenspan said we are not in a bubble and I agree, compared to 2000 we are not in a bubble, but. Bob pisani says there is a 5050 chance for negative growth this year. if that were to occur and markets went up another 10-20 percent, there would be a lot of stocks in bubble terrortory. The chase for high returns will continue I suppose and markets will go higher I suppose. It is what it is until it is no more

          • tommyboys says:

            If “ifs and buts were candy and nuts” we’d all have a merry christmas…

          • tommyboys says:

            Many view index levels in a vacuum. At 4-5% Fed rates we’d be getting high in valuations. At .25% we have a LONG way to go. I think these markets will surprise most bulls how far it will go. Bears will be long bankrupt thus non- existent.

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