Thursday update

SHORT TERM: gap down opening, DOW -40

Overnight the Asian markets lost 1.2%. Europe opened lower and lost 0.6%. US index futures were lower overnight, and at 8:30 weekly Jobless claims were reported lower: 282k v 291k. The market gapped down at the open to SPX 2051, dipped to 2049, bounced to 2059, and then headed lower, all in the first half hour. The market had closed at SPX 2061 yesterday. By 10:30 the SPX hit 2046, and then started to rally. By noon the SPX had closed the opening gap and then reached 2067 by 2pm. But in the last hour the SPX hit 2057 just past 3pm, bounced to 2062 by 3:30, then closed at 2056.

For the day the SPX/DOW were -0.25%, and the NDX/NAZ were -0.30%. Bonds lost 18 ticks, Crude rallied $2.20, Gold rose $8, and the USD was higher. Medium term support remains at the 2019 and 1973 pivots, with resistance at the 2070 and 2085 pivots. Tomorrow: before the open a speech from FED vice chair Fischer at 6:30, Q4 GDP (est. +2.4%) at 8:30, Consumer sentiment at 10am, then a speech from FED chair Yellen at 3:45.

The market gapped down at the open today, found support at SPX 2046, then rallied to 2067 by the afternoon. Today’s low represented nearly a 70 point decline from Monday’s SPX 2115 high. We could count five small waves down: 2099-2108-2049-2059-2046, before the rally to 2067. Before the open we updated the charts to display a potential: Minute A (2120-2040), Minute B (2040-2115), and Minute wave C underway. At SPX 2040 Minor 2 would form a flat, at SPX 2035 Minute C would equal Minute A, and at the OEW 2019 pivot Minor 2 would form a zigzag. These are the three levels we are monitoring. At today’s low the hourly RSI 5 hit its lowest level in more than 14 years. That’s some serious selling. Should we make a lower low soon, this would set up a nice positive divergence. Short term support is at SPX 2035/2040 and the 2019 pivot, with resistance at the 2070 and 2085 pivots. Short term momentum rebounded to near neutral during today’s rally. Best to your trading the often volatile GDP report!

MEDIUM TERM: downtrend probability increases

LONG TERM: bull market


About tony caldaro

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106 Responses to Thursday update

  1. fotis2 says:

    Well glad that’s over I should of gone to the gym….

  2. nardobeme says:

    Well, for what it’s worth… I have a positive open signal for Monday. GL and GW to Tony and all.

  3. johnnymagicmoney says:

    I bought a butt load of TNA when IWM was in the red today hoping the money slut jawboned away yet another day. She’s a money slut until she is no longer a money slut

  4. lunker1 says:

    fish your SOX ED isn’t. EDs have 5 sets of 3 waves. yes a rising wedge but not an ED

  5. Page says:

    We have seen the low in SPX, I am expecting huge rally to take off BIG time.
    Have a nice weekend all.

  6. johnnymagicmoney says:

    today’s market zzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzz and one more z

  7. Always remember, why work if we can live on benefits and why trade if market direction is unknown. Sunday night SPX,future will be up about 12 points, sell there, enjoy your weekend.

  8. scottycj1 says:

    This looks like a wave 4 on the shorter term charts—triangle/pennant. A push to new lows here and then rally into mid next week before another drop.

  9. Certainly a very tepid bounce from oversold conditions.If the bots and Fed don t start cranking this up the last hour, looks pretty poor for Monday.Wouldn t mind a couple more percent down by mid next week.Have a good weekend.

  10. lunker1 says:

    close above 2062 4hr candle resistance is bullish and below 2056 is bearish

  11. Nice wave 3 down on the INDU taking it down to the low for the move at 17579. Not sure if wave 4 is finished. If not, I would expect a test of 17766/2066. Expect wave 5 to start from that area if its not in play already.

  12. Thanks, Tony!
    The market will not be impatient about busting it’s next move.

  13. nardobeme says:

    It’s the now or never time. SPX @ downtrend resistance line right now. If it breaks through, I’d say a close of around 2070, failure, 2040…

  14. torehund says:

    Dollar could very well be done correcting, is Greece going belly up ?

  15. fionamargaret says:

  16. mjtplayer says:

    “What was support is now resistance”

    The bottom TL of the ED pattern was 2,062 at yesterday’s close and currently stands at 2,063 and will be 2,064 at EOD (rising at 2pts per day). Thus far, it seems to be holding the rally in the SPX in-check.

  17. gtoptions says:

    Thanks Tony
    SPY/SPX ~ retraced .618 thursday H/L
    If the high is broken then I would expect a completion of Tony’s ‘b’ wave .50/.618 @ 2080/2088 or a test of the ATH.
    GL & Good Weekend all.

  18. sibyn says:

    SPX goal 2031 today

    • zepfan123 says:

      2031 Today ? Wow..thanks for your prediction.

      • zepfan123 says:

        I could see that in 2 weeks maybe depending on how the next 3 trading days go. Lots of funny stuff could happen on a shortened end of qutr Good Friday week. They might go for that SPX 2090/2100 area one more time.

        • mjtplayer says:

          Don’t forget, we have the Greece proposal deadline on Monday. They will submit proposed reforms on Monday, the EU will need to determine if the changes are enough to warrant Greece receiving any more money.

          If it’s enough, they get more money to get them through the next few weeks.

          If not, then Greece may not be able to make their April 9th bond payment. (i.e. they default)

          Stay tuned…

    • gasman88 says:

      Q1 window dressing should start soon, I don’t see market going down much lower from here. We will bounce until Tue, then lower low

    • buddyglove says:

      Siblyn, are you still all in short Dax ?…looks very bullish to me.
      Dax hourly cont.

      • sibyn says:

        Yes sold bear yesterday then bull up to 11846.
        Bear at 11846 an all the way upp to 11940 big post bear at 11940.
        I have set all my business in a different forum in real time.

      • filipozze says:

        it’s only a wave “4” correction,maybe another low at 11.600 but this monster will go to 12.500. next round QE is starting next week. instead of buy S&P buy the DAX.

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  20. fishonhook says:

    Every index and I mean every Index seems to have an ending diagonal pattern. FTSE. SOX. RUT. etc etc. Usually when I can see it, it means everyone and their mother has seen it too. So too obvious? Life is rarely that simple

  21. zepfan123 says:

    mmmmmm..So much for last night’s big 10 point rally in the S&P futz.- Finito…and then some.

  22. fotis2 says:

    Looking at after hours futures SP looks like a CH forming a hourly close above 2059 would confirm.

  23. rounder1944 says:

    Already in a bear market, get ready for a rally next week to what I believe will be a lower high, and a good place to short.

  24. rabbittrader1 says:

    Suddenly we have been transported to Colorado? Are you guy’s all on POT ? This is a (much needed) minor correction in “THE WAVE” . Do not loose your balance. We are headed to 2230 SPX by May 10th., SPRING Your’s Rabbit.

  25. gasman88 says:

    Gap up and go day tomorrow, it feels like it. Short squeeze will be engineered overnight in the futures market.

  26. lunker1 says:

    Symmetrical triangle?

    2115 (.941)
    2046 (.941)
    2111? (.941)

  27. mjtplayer says:

    With today’s drop, the SPX has a weekly bearish engulfing candle. Watch SPX 2,055.35 on the close tomorrow, closing below means we have a weekly bearish reversal.

  28. blackjak100 says:

    Tony, any count that suggests P3 topped at 2120? I just think it’s ironic that price & time were near 1.618 of P1 on 3/2. Yes they fell slightly short, but acceptable considering length of wave and duration.

  29. esvxm says:

    Thanks Tony for the analysis!

    German DAX, S&P 500, Dow Jones Industrials, NASDAQ, NYA and TLT key levels here:

  30. rabbittrader1 says:

    A couple comments : Gold has moved up slightly over the last 5 days or so, but Rabbit is holding his SHORT position until under $1000, Crude has moved up nicely since my longs were established below $43. I am looking for $60 before end of April in a wave 4 up. SPX has droppedva bit more than expected : I EXPECT A STRONG UP ,Friday or Monday into a 2230 high May 10th. (holding long positions) My snow pyramid for Cinco De Mayo is holding ,despite the warm 55 degree weather and rain today. It will be back in the 30’s by Saturday/ Will I still have at least a 7 foot pyramid by May 5th? Marguiritta’s and Arizona Barbeque will be served ,along with Jaleapeno Poppers and Special home made SALSA. Listening to some 1956 recordings of Buddy Holly and Elvis tonight

    • rabbittrader1 says:

      Oh, I forgot. I have been short Sugar since 14.72 per pound. It is now about 12.40 or so . I have tripled my money in about two months I am still short Sugar (July) I also shorted wheat at about 5.5o .I switched to the May contract and It had a nice drop today. THIS IS NOT LUCK, but Elliot Wave, and Cycles And stochastics and just “:Being Around ” Yours Rabbit.

    • ashram says:

      tony caldaro says:
      At today’s low the hourly RSI 5 hit its lowest level in more than 14 years.

      My platform shows that happened on 9/17/01, four trading days prior to a low that produced a 24.5% rally in fifteen weeks. The market bottomed on 9/21/01 with a huge gap down, so if past is prologue an important low should be close in time but not necessarily price.

      • CB says:

        Thanks Ashram. I think you bring up an interesting question. As far as long-term charts, the market started trending down in late 2000. Now the market is still up-trending. So I am not sure how to compare short-term OS conditions under such different market conditions.(?) In addition Sept 2001 had other circumstances affecting the market as well..

        Fischer, btw, is speaking in Frankfurt tomorrow, early AM b4 the cash market opens. Yellen’s speech starts at 15;45 EDT.

        Thanks Tony.

        • zepfan123 says:

          The 9/11 NYC disaster was a huge and unexpected “negative for the market. Caused all kinds of economic downturn ripples in the U.S. for a few years. The markets can anticipate and discount all kind of potential future events,but it didn’t see “that” coming.- Of course now..the market is pretty fearless,and another so-called 9/11 would have a muted effect at best most likely. But at that time..that was the continental United States version of Pearl Harbor. A sucker punch from hell.

      • torehund says:

        +1, great find.

  31. nyjsec314 says:

    Hey Tony,

    Quick question on Crude…obviously the big winner today….you have a B wave in place at 52.40 on the daily and weekly chart, do you still believe in that count?

    Thanks so much as usual

  32. bhupal777 says:

    Tony, Thanks. Sentiment is waning. If it doesn’t improve next week bad news becomes bad news and good news will have no impact on the market means we might see bigger correction than what I am expecting. But stops will take care of themselves. No need to deviate from the initial trade plan.

    Recent entries (EWI, FEZ) didn’t held the breakouts and now they are below 200 day SMA. Mostly I will get stopped out of those positions in next couple of days. Good Luck all.

  33. Hi,Tony,dowtrend probability increases?for the Diw too? not good,i was expecting Dow at 19k using fibonacci expansion,it nearly got there,maybe it will not reach, thanks



  34. arthurk says:

    As I said last week. the ED stop at SPX 2040 was “too perfect” and had me smelling a rat and now it’s there for all too see. Break of ED at 2060+ sets up a huge bear trap, and I admit my oversold indicators including 3-dy avg of ATM SPY put/call are at levels of Mar 11 (250%) right before rally to 2110+. However, sell off in bonds is puzzling.

    If, as I suspect, this is concern about Bullards comment about raising rates, this sell off could continue to Apr 3 when employment data comes out. (Yes, markets are closed for GF, but govt still releases data same as in 2012 GF). This is a perfect setup for a huge reversal similar to mid-Oct (+150 SPX pts) if the data comes out weak.

  35. Tony,
    I hate to beat a dead horse but I’m going to re visit a question I posed a month or so ago. Is it possible that all of the action since the Dec High of 2079 is an irregular/expanded and possibly running flat Primary 4 which hasn’t completed yet?

  36. torehund says:
    Thanks Tony.
    Next few days Will be telling…not an easy chart, for sure.

  37. mike7x says:

    “There is no guarantee that the developing shift in the Smart Money Indicator will continue higher. Indeed, we discussed a potential turn in July which did not follow through. This recent turn, however, is much more dramatic and convincing. If this move in the SMI does follow the course of its predecessors in 2000 and 2007, this could be a negative development for stocks…”

  38. llerias7 says:

    Tony, what do you think about eurostoxx: finished Int.III or is just a pullback in the middle of an extension? Thanks.

  39. Lee X says:

    Gracias Hombre and gang

  40. teej911 says:

    So I am understanding correctly. C could be done as of today since we hit 50% retracement but we can’t really say we are in 2 until we break above ~2120?


  41. gtoptions says:

    Thanks Tony ~ Excellent Observations

  42. 56rambler says:

    Thank you, Mr Caldaro

    Are you looking for wave C to complete sometime in the next few days? And then would that complete minor wave 2? What would be your expectations for timing and prices for minor wave 3?

    Thanks again!

  43. alexhartley1 says:

    Thanks Tony. Any thoughts on the ‘serious selling’?

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