Thursday update

SHORT TERM: choppiness continues, DOW +65

Overnight the Asian markets gained 1.1%. Europe opened lower but gained 0.1%. US index futures were lower overnight. At 8:30 weekly Jobless claims were reported lower: 268k v 282k, and the Trade deficit was lower: -$35.4bn v -$41.8bn. A few minutes later FED chair Yellen’s speech was released: The market opened two points below yesterday’s SPX 2060 close, but immediately turned around and rallied to 2072 by 10am. At 10am Factory orders were reported higher: +0.2% v -0.2%. The market then pulled back to SPX 2061 by 12pm. After a rally to 2070 by just past 2pm, the market dipped to 2065, then rallied again to 2070, before closing at 2067. Just before the close FED governor Brainard’s speech was released:

For the day the SPX/DOW were +0.35%, and the NDX/NAZ were +0.10%. Bonds lost 9 ticks, Crude dropped 60 cents, Gold slipped $3, and the USD was lower. Medium term support remains at the 2019 and 1973 pivots, with resistance at the 2070 and 2085 pivots. Tomorrow, a holiday: monthly Payrolls (est. +255k) and the Unemployment rate at 8:30.

The market opened slightly lower today, rallied, cleared SPX 2063, then hit 2072 by 10am. After the that the market went into pullback mode for the rest of the day. Thus far from the recent SPX 2048 low we have had a three wave rally: 2063-2054-2072. Then the pullback overlapped the first wave up (2063), when it dropped to 2061 by noon. This makes the entire SPX 2048-2072 rally look corrective, suggesting that the low will eventually be broken before this pullback/correction ends. Short term support is at SPX 2054 and SPX 2048, with resistance at the 2070 and 2085 pivots. Short term momentum rose above neutral today and ended there. Best to your three day weekend!

MEDIUM TERM: uptrend still looks weak

LONG TERM: bull market


About tony caldaro

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101 Responses to Thursday update

  1. John Bell says:

    OK here is a chart and my next 2 month + forecast. Enjoy…
    chart link: hope it works for some here.

    If you believe that this market is heavily controlled and manipulated with stock buybacks being the bulls largest buying force and FED comments timed to keep pull backs relatively small for now, then read my forecast below.

    Overall trends:
    — April = sideways in a range with a final low near month end near 2020 area which will be the 200 MA at that time and just a bit below the monthly S1 pivot. The low could be lower if earnings are really bad and markets reacts negative to them.
    — May = up to 2150 on strength of 90B buybacks.
    Then after May the strength period ends and I expect a weaker market in the summer but with similar pattern as above repeated in July-Aug but at a lower price level. With 2015 market low happening in October at 1900.
    (I expect to see 1800 or below in 2016 just before QE 4 comes back as ECB QE is phasing out or fading out due to lack of bonds to buy. And QE comes in to save the market for the Nov 2016 election.).

    So I am expecting similar to last January and Feb in April and May. With April again having tough overall poor earnings worse than in January. The stock buybacks about 80-90B like QE push the market in May as execs panic about their low stock prices.

    The setup facts:
    1) buybacks have a blackout period where each company cannot buy stocks. This period is the same period that Execs cannot sell stocks. The period is usually about 2+ weeks before an earnings report (or as soon as they figure they will know pretty accurate earnings) to 1 to 2 days after reporting (when it figures market has had time to fully read and absorb the earnings statement). Each company sets it own official governance rules.
    2) most earnings are reported from mid April to early May with most of the larger companies reporting April 13-30 with the most buyback power.
    3) buybacks will start trickling in toward the end of April and begin panic massive buying in May if stocks are down. As long as the bond market is good enough for the companies to sell more debt bonds to get money to buyback stocks.
    4) FED central bank also has a black out window stopping HFF (high frequency fed speak) for 7 days before a Fed meeting. FED meeting is April 29.So no more FED chatter after April 22 till the meeting on April 29.

  2. zvyezda says:

    I’m just logging on for the day and noticed a -25.00 hit in the ES in the final 45 minutes. Granted it would be very easy to manipulate something on what must be very thin Globex volume so I don’t know if these levels will stand even in the Sunday evening session.

    On the other hand does someone know something that we do not?

    Tony, Buona Pasqua! A very Blessed Easter to you and to all.

  3. GYN LAB says:

    NYAD ATH.. looks like a nice bear trap with NFP icing on the cake. 2035 is .618 retrace of Minor 1, c=a in Minor 2, +ve div should hold as well. Maybe too perfect for the bottom??

  4. torehund says:

    To disagree With Peter B is a very tough call, but he isnt using Elliott Wave, lets see.

  5. mjtplayer says:

    Hey Tony – Happy Easter!

    Regarding your comments on the NYSE A/D line making new highs. With all due respect, the NYSE A/D line is a bogus number if you’re trying to measure the stock market. The NYSE includes a whole host of non-stock vehicles in that A/D line, many of which are bonds or bond proxies that have benefited overall from low rates: preferred stock, closed-end funds, bond ETF’s, etc. Also, you have ADR’s and international ETF’s included in that figure.

    If you want to gauge just stock market breadth, the Nasdaq Composite A/D line is much better. It’s about 2,975 stocks with virtually no other types of non-stock, ETF or ADR vehicles/issues to cloud the water.

    The Nasdaq Composite A/D line has been declining since peaking in late Dec, with lower highs in late Feb and mid March, even as the average made new highs in both circumstances.$COMPQ.htm

    You can also use the S&P 500 A/D line, but the Nasdaq has 6-times the number of issues and is a better gauge – IMO.

    Happy Easter!

  6. berniebaruch says:

    The more newbie emails, the more any short should be nervous.
    This show has been replayed more than “The Hangover” on TBS the past 3 years.
    Personally, I would like to see it drop down into the 2040 zone with the 125MA and the lower end of the BB. At that point, the market will tell you where it wants to go.
    Lots of felt between now and Monday at 930.
    Get off these boards and enjoy your family.

    • Bernie.., ya, thats the point.. get off this board enjoy easter, enjoy weekend..

      i was short FTSE at 6880 which stopped out at 6940. Went short at 7020, made some..but did not wait till 6720. SPX was partially covered at 2057, it is at 2049 now, am i sad? No. Dax short is still there, so ok.

      get off the board, markets and run riots during weekend, will see if reach safe given brain damaged pilots!!

  7. nardobeme says:

    In reading through recent comments here, it reminds me exactly of this past December-January period when SPX was flirting with breaking the 2000-1980 area, touching at least six times. Then, (several) bloggers were madly convinced it would crash to the 800 and even 400 level! Now, many are calling for a flash-crash of sorts… I highly suggest trading what’s in front of you, not what you FEEL or THINK will happen… There will always, always be bad/good ‘news’; it’s just how the markets gyrate IMHO.

    Thank you Tony as always, and Happy Easter to all.

  8. fotis2 says:

    Everyone bearish again??

    • zepfan123 says:

      Describe bearish, Couldn’t the market drop 5 or even 10 % without it being a drama queen perma bear event. It happens all the all time in bull and sideways market times.- Hopefully as far as long term stocks..we’ve all been in some for at least 3 or 4 years,and have lots of wiggle room profit margins in case they lose 10,20,or 30%. Thats happens. This would probably not be a good place to start buying a bunch of stock for the first time ever unless you are a billionaire trust fund baby and don’t really care if the PCLN you bought at 1150 goes to $400 over the next 2 years and would still be filthy rich even if the S&P really did go back to 666. does appear we may widening the range of the Dow and S&P for a few months which makes for a good trading environment. Not a bull or bear market..a trading market.

      • CB says:

        “Not a bull or bear market..a trading market.” . : ) well said, Zepfan (Led Zeppelin fan ?) : )
        Permabulls and permabears, in a trading market

          • CB says:

            lol..that’s what he thought, too, Matador..but then he started to over-think it, I guess… 🙂 This market is like a Gemini, going from zero to 60 and then back to zero b4 you know what hit you….challenging😉

        • zepfan123 says:

          Thanks. Yep..big Zep fan. A few of these folks talk like maybe they should just buy some IBM and not look at..or talk about the market again for 20 years.
          Anyway..looking forward to seeing how Monday comes out of the gate.- If it’s down..I think we’ll probably at least get back down to the late Jan 2015 lows in the SPX 1990 area before we get a chance at a concrete support bottom for another chance at a run to new ATH’s. Of course if that level broke..and I stress “IF”…it could get a lot trickier finding one.- I say we’ve seen the last of the 300 to 400 pt Janet Yellen rallys for a good while. Those were pretty stupid anyway if you think about it.Not a bearish view..just a realistic view. The market staying a 10 to 15% trading range for a while would not be a bad or bearish thing at all here.

          • CB says:

            Thanks ZF. Will keep that in mind.
            Yellen rallies, yup, that’s quite a phenomenon..😉

  9. Have to lean with newbie. Simplest wave structure suggests wave 3 down … actually 3 of 3 of 3. I have 1 of 3 starting from Monday’s 2089 and 3 of 3 starting from Thursday’s 2072. Thursday’s 2061 afternoon low concluded 1 of 3 of 3 and then 2 of 3 of 3 took us to the jobs report. Identical set-up in the INDU & NDX (& DAX I think also). Technically the 3 U.S. indices have moved down post jobs report to the region of recent lows so there’ll be bulls out there hoping those horizontal lows will hold again but from an EW perspective its hard to make a realistic count to endorse this possibility. This is the 4th hit at these lows for the INDU and 3rd for the SPX & NDX (all 24 hour basis). If 3 of 3 only equalled 1 of 3 the targets would be 17262/2024. Currently we are at 17594/2046. If the market does break below 17540/2040, thus giving more weight to the likelihood of the 3 of 3 scenario, day trading dip buyers might want to take their time and tread lightly. to begin with. We have seen time and again where the 3 of 3 scenario, both up and down but particularly on the down side, grinds its way on and on and on … and on relentlessly.

  10. SPX Gaps down Monday below the trendline and makes a lower low below 2050ish. Tony’s chart would then show positive div. Negativity would be at extreme levels. Newbie traders will add to their short positions (many of them here on this site). They will call for a crash. Actually they already are. What’s in store for them will be a sight to see. It’s entirely possible Monday is the low for April. It would be the perfect set up. The day after jobs numbers are notoriously negative but reverse the following day/weeks during April seasonality.

    The market needed this Drop to get the likes of newbie traders like sibyn to proclaim their amateur(RCH? WTF?) charting is right on cue. This enables a snap back rally thereafter created by a combination of short covering, QE4 talk,ZIRP to infinity and fresh funds flows for the new quarter and month.

    Bears….Enjoy your time in the camp site. It won’t last.


    • I love comments like this. It shows the full and utter complacency and pure nipple sucking of the federal reserve. Newsflash: the Federal Reserve and Central Banks don’t care about you! They are running out of ammunition, they are trapped. Fiat money printing can only lasts so long and take us so far. Market has tripled since 2009, how much more do you want? Well you gave us your thoughts, know please share your wave count.

      • Newbie….I’m going to say this. I have compassion for the hurt you have felt since March 2009. I really do. I once was in your shoes. However, your track record is so bad, it’s now comical. No offense please.

        You will be right in your crash call but you need events like 2008 to emerge first. Credit crisis/spreads blowing out. A clear motivation to get out of the market. There is none of that now. We need overvaluation in the overall market to stop people from putting money to work again. P/E of 17 to 19 currently isn’t going to do it. I believe the S&P 500 was around 30 plus p/e back in 1999-2000, so back then it was ripe. O top of that you had the nasdaq. This time it could be biotech but again it still can and will get much more expensive.

        Sorry I just don’t see it now.

        Have a good easter

        • No offense taken… For the record I have not been short since 2009. That’s funny you are making some wild assumptions. As for being on the wrong side of the trade, I trade both ways ( bull and bear) although yes I lean bearish and have definitely gotten creamed several times over the last few years but guess what I’m still solvent!. Unlike many others I do not change my username to mask my trades or identity and start over fresh I stick to my guns. With me you know what you are getting, I admit when I’m wrong and hide nothing. I have had many successful trades along the way or I wouldn’t be here, I’d be broke. I post my counts wrong or right, I don’t just rant and rave. I have been a bear in a bull pen here so I naturally get singled out and taunted but that’s ok, I can handle it. Good Luck to all traders!

        • Believe it or not, there is a bear case to be made, weather anyone cares to believe it is a different story. And yes this time is different. Current sp 500 pe 19.51. No qe. Interest rates going up. 1st qtr earnings 86 percent of companies have warned. 2nd and 3rd qtr earnings now being reduced. I could go on, but there is no point. none of that means the stock market doesn’t rocket to 2600 by July 2016. But what it does mean, is that things are different. If investors wish to push the pe up to 25 in order for a decent return they will. Or if people become afraid and panic, we could drop like a rock. This bull is unlike anything prior. I’m also sure it will end unlike anything prior. Bulls have never had a reason to worry. Worst case market drops 8 percent by next week it was at new highs. Buy the dip has been a guaranteed money maker. Just remember Things are different and there is a bear case to be made. Best of luck

          I also believe market will reach the 200 day call it 2019 and that area will be bought hard looking for that v shaped recovery. What happens after is what will determine the direction of the market

    • blackjak100 says:

      I agree with your gap down mon, followed by a rise to 2075-2090 by end of day tues. However, there’s nothing in the charts suggesting the rise from 2046 is impulsive which means the trend is down. As simple as I can explain it.

      • kvilia says:

        “This makes the entire SPX 2048-2072 rally look corrective, suggesting that the low will eventually be broken before this pullback/correction ends.”
        So you are not agreeing with Tony on the nature of this uptrend.
        I am afraid that last few days of action prove to be if not alarming but at least suggesting a tight risk management approach. It appears to me the market is setting up for a larger move, and so far the inability to break through the upper PP and prior highs shows a great deal of hesitation. I would say that from the trading point of view, this is not a great situation to hold equities. I will personally look for Monday-Tuesday to make up my mind and exit long positions unless we get a substantial rally. Just really hoping we are not getting a -300 day on Dow.
        Happy Holidays, everyone, and thank you, Tony, for having the door to your office open to us.

        • tony caldaro says:

          Don’t have a door =)
          happy holidays!

        • blackjak100 says:

          I agree completely with TC on his statement. I think a double three is incomplete because the decline from 2089-2048 looks like a clear 3 so it be an X wave. 2048-2072 would then only be ‘a of Y’, gap down mon for ‘b of Y followed by brief sharp rally for ‘c of Y’

  11. llerias7 says:

    Tony, Is there an weekend update tomorrow?

    • tony caldaro says:

      Almost done.
      Will post it today when stock charts finishes their update

      • 56rambler says:

        Wanted to express my gratitude to all of your hard work. I hope I speak for others when I say we truly appreciate your insights! Have a good holiday.

        • bob623 says:

          Totally agree with you 56rambler. Tony has helped all of us maneuver the intricate “ups and downs” in the market. Thanks, Tony, for your dedicated efforts to serve the traders on this web page.

  12. SPX – Weekly Chart: S1-2032, S2-2004, S3-1963. Any projections for Monday
    Enjoy the long weekend and Happy Easter to all

  13. A three day weekend, still time for Yellin to come up with QE 4 by 930 monday morning….lol.
    Interesting to see where we bottom on this.Bad economic numbers cancelled by no Fed rate increase.That s been the story of this bull market.The spin doctors have already put out a good one today saying”I d rather have us miss by 100,000 on jobs and have a .3% wage gain for the 140 million working Americans”
    I m still watching to see if the monthly (spx)MACD starts to really roll over.That chart has bothered me for quite a while.
    Have a great Easter Tony and everyone.

  14. Futures getting bloody, Wave 3 down will show no mercy.

    • blackjak100 says:

      True but long time before mon open. I’m in the camp that thinks we are on cusp of third wave down, but still in minute ii. I believe we will print below 2048 on mon, but then rise towards 2075 to complete WXY for minute ii. I think we are still too oversd for a large third wave to begin.

    • zepfan123 says:

      Yep..nice quick 21 point drop in the last 10 minutes. Really too bad the market is closed today. Gonna be a long weekend waiting for Monday. I hate these 3 day market holiday weekends.

    • Newbie, thought you might enjoy this clip today

      Reddragonleo, nice call on NFP

    • As others have alluded, it’s a long time til Monday. Expect this to be digested and the spin factory to have everyone, incl the Bears, believing that bad news is good news…again! Get ready for the deluge of Fed vs Rate Hike commentary, with experts’ consensus of a delay into 2016 or later. Pepper that with Fed Member speeches suggesting further easing in some QE (but not called QE) fashion. I’ve seen this movie many times over the past 6 years – No reason to believe that “this time it’s different.” Bears are feeling good today but I think that bravado will morph into vitriol and disbelief over the coming weeks. GLTA

  15. sibyn says:

    Test 2050 then test 2041.

  16. blackjak100 says:

    Futes hate the jobs #

  17. torehund says:
    Bouraq this is one ugly trendline and an X. With a Euro this weak even the Greeks could manage their debt obligations.

    • torehund says:

      I think all government bonds in the Eurozone Will be payed out in full probably sequentially, and the currency takes a dive…bondholders and poor folks With deposits or “euros in pillow” takes a 70 pecent currency loss vs the USD. Its Wild speculation but that sturdy X- Wave is too attractive to dismiss…

  18. Don’t know the real impact moving forward over the next few days but I noticed for a few days now the 89EMA has moved over and higher that the 34EMA. Not sure if this qualifies for a “death cross

  19. mjtplayer says:

    Whether you’re a bull or bear, you have to admit that this week was disappointing for the bulls. With quarter-end and a holiday shortened week, which is historically bullish, they still couldn’t get the market higher.

    From my wedge pattern, the action speaks for itself. A break of the wedge last Thursday for the first time since Oct. Then, after recapturing the wedge and closing back inside on Monday, a second break below yesterday. This time, the market spent the entire day underneath the lower TL and spent it’s second day in a row (today) trading & closing underneath. 2 breaks to the downside over the past week, now a failed attempt today to rally back into the wedge.

    Baseball season is approaching – perhaps the market just had strike 3?

    • bhupal777 says:

      mjt, I am net long in my portfolio but I have to agree that the sentiment has changed last week. In Short and intermediate term, I definitely see downside potential.

    • MTJ, the market dynamics have been changing for sometime now. Back on Feb 25th I mentioned that new market leaders need to emerge in order to offset the current market leaders such as AAPL’s up coming potential top of what ever significant degree it maybe. Instead here we are still awaiting for those new market leaders to emerge and for the Major indices to make new ATHs. As a matter of fact, slowly more of the Big Boy’s are falling into their own bearish abyss trends. And APPL recent addition to the INDU (ranked 5th with a 4.7% weighting) means that AAPL now has a big influence on all 4 major US indices INDU, SPX, NDX, and COMPQ. IMO the window for new market leaders to emerge is closing real fast.

    • Kiss of Death and completing the right side of a H&S.

      …But we finished the week with enough pessimism for another 300 point rally.

      Too risky to go long, as others have noted probably will be a great shorting opportunity.
      I think a more tradable bottom will occur the day before the Vix expiration. Tuesday the 14th. Opex week, also another seasonal trade(tax day). That my friend maybe a home run for a quick 50% retrace from wherever this trend bottoms.

  20. bhupal777 says:

    Thanks Tony. I see the same that all the action looks corrective and more downside coming.

    IMHO we got one of the best shorting opportunity today on SPX in a long time. Today’s market action and all the charts are projecting that Monday is going to be a big down day. Sold half in most of my long positions. Bought $UPRO PUT options and $TLT CALL options. Yes $TLT ready to resume higher. I am expecting $IBB short ($BIS) will get real follow through on Monday. Expecting next stop is 320. I also think EURUSD corrective rally resumed today and will continue next week. I am not sure of Gold, so sold off my NUGT position with a tiny profit. Good Luck all and Good Friday.

    • bhupal777 says:


      I am well positioned for Monday.

      For now futures are indicating that SPX down, Bonds up and EURUSD up.
      I couldn’t wish any better than that.

  21. davidmlamos says:

    Happy Easter Tony. Many thanks for all the selfless time you give for the benefit of so many.

  22. fotis2 says:

    Thanks Tony much obliged have a good one.GL to all.

  23. Thanks Tony! Haven’t had anything to add for a few weeks. Today however I took a look at the last 12 or more NFP weeks, and if there is anything to see out of how weeks like this performed compared to the next weeks. Bottom line, this week was up +4, and all recent NFP weeks that closed with gains of 5 or less were followed by pretty weak weeks, Specifically (I tweeted this): In past year+5 or lower (i.e., negative) NFP weeks all followed by -18, -26, -62, -22, And those were just the weekly closes. Post-NFP weeks have really not been a good time to own stocks the past year, save 1 decent follow-on week.

    Bottom line for what I’m drawing out of this is that weak NFP weeks tend to be followed by weak weeks. I’m thinking we’ll see 2040 break soon to (hopefully) finish this off. This is also consistent with behavior after seasonal expirations like we just saw in March.

    Thanks again Tony, in short I’m on board with you again here.

    • How does your analysis of post-NFP weeks correlate with historical Aprils, 3rd Year Presidential Cycles, enormous Put/Call Spreads, beginning of Earnings Season, stabilizing Dollar and Oil, and markets within 3% of their ATHs (despite Bears calling for immediate declines to 1,973-1,820). Looks like a great setup for an upside surprise and massive short-squeeze to me. Long UPRO since $119, will take profits at $150 or S&P 2,139 – whichever happens first. Daddy needs a new pool!

      • Haven’t checked all of them, and I’m not a bear! Just expecting the c of C to a lower low, not a crash. Somewhere between 2000 and 2040 will do me just fine next week.

        Here’s one marker for you to get to 2040 next week. Eight of the last twelve post-NFP weeks saw maximum declines of more than 27 points. From today’s 2067, that would be the 2040 we are all watching. Pretty good odds.

        I’m with Tony, and I think with what you are saying about a massive short-squeeze too. We get the lower low below 204 to end the c of C of a second wave, and what comes next is a third wave.

      • Mr Market, It’s really confusing and sad why people are not paying any attention to seasonality here. When I say sad, it’s because there are alot of newbies that are unaware or just not sure certain habits of the market. One habit that seems very consistent is seasonality. Specifically certain years linked with the presidential cycle, as you have alluded to. Election, Post, midterm and pre-election years. They are uncanny but not 100% perfect. However with that being said a down April hasn’t happened in several decades. Yes Decades!!!!

        All the chart analysis in the world means nothing to these stats.

        Your pool will be paid for by the very same people expecting a crash in the best month of the year! April.

        Currency, non farm payroll number at or below 250k, Dollar sells off huge, gold takes a ride higher and the S&P 500 gaps over 2088. The US dollar looks to be heading much lower. The US dollar and the SPX seem to be having an inverse relationship since last earnings in JAN. Right at the time ceo’s said the US dollar was hurting their bottom line$SPX&p=D&b=5&g=0&id=p39168672597 Interestingly enough the US dollar in pre-election years typically has a terrible April


  24. blackjak100 says:

    TC, agree 100% this rally looks corrective as I stated this AM. However, it would not shock me to see a rally Mon towards 2090 (c of Y). The correction looks incomplete to me so far.

  25. Lee X says:

    Thanks Tony

    Enjoy the holiday !

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