Thursday update

SHORT TERM: gap up and go day, DOW +192

Overnight the Asian markets lost 0.3%. Europe opened lower but gained 1.2%. US index futures were higher overnight. At 8:30 weekly Jobless claims were reported lower 264k v 265k, and the PPI was reported lower: -0.4% v +0.2%. The market gapped up at the open to SPX 2111 and continued to rally with only three point pullbacks along the way. The SPX had closed at 2098 yesterday. At 10:30 FED governor Powell’s speech was released: Heading into the close the SPX hit 2121 and closed there.

For the day the SPX/DOW were +1.05%, and the NDX/NAZ were +1.45%. Bonds gained 13 ticks, Crude slid 75 cents, Gold rose $7, and the USD was lower. Medium term support remains at the 2085 and 2070 pivots, with resistance at the 2131 and 2198 pivots. Tomorrow: the NY FED at 8:30, Industrial production (est. +0.1%) at 9:15, then Consumer sentiment at 10am. And, if Options expiration activity did not occur today, it will tomorrow.

The market gapped up at the open today but did not close the opening gap, as it had done the past two days. Today it just continued to rise from the opening to closing bell. Did options expiration come a day early again? Each Opex seems to have a big day, up or down, on Thursday or Friday of expiration. Nevertheless, the market took out yesterday’s high at the open, after three down days, and took out Monday’s SPX 2118 high in the afternoon. With today’s rally we stretched out the upper trend line on the hourly chart, and it now crosses at SPX 2130. Allowing for some potential overshoot in the ongoing diagonal triangle scenario, we feel the upper limit of this uptrend is the OEW 2131 pivot range (2124-2138). Anything more than that and we would be forced into looking for an alternative pattern. Short term support is at the 2085 and 2070 pivots, with resistance at SPX 2118/2121 and the 2131 pivot. Short term momentum ended the day extremely overbought. Best to your Friday trading!

MEDIUM TERM: still an uptrend

LONG TERM: bull market


About tony caldaro

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147 Responses to Thursday update

  1. simpleiam says:

    60/40 Bullish for next week. Always have to give the confirmed trend 10% just for being what it is.

    • zepfan123 says:

      That sounds about right to me. Statistical odds definitely favor upside action going into the week prior to the 3 day memorial Day weekend…especially during uptrends when the markets are right a new ATH’s.

      • simpleiam says:

        The 10% is because we’re in a confirmed Bull market, and for no other reason. GL zep. The levee is close to breaking here.

        • zepfan123 says:

          As I said..I agree with the 60/40 odds we go up next week. Doesn’t mean I’d like to see it. But the shorts dropped the ball really badly last week when we were down in the SPX 2070 area,so I have little confidence we get back down there again next week.- But maybe Monday will shock the majority and be down 500 Dow pts. 🙂

    • JeffMilano says:

      I am looking for a lower opening on Monday.

  2. berniebaruch says:

    Buy, Hold or Sell?

    Getting a new low this week.

    • $$$NEWBIE$$$ says:

      Yes im still holding, I actually moved around some money and bought more at 9.14 today.

      • simpleiam says:

        Newb, you do know that should WS have a “crash”, your trade, should you choose to sell, will probably be disallowed? Yeah, figured you knew that, so, I know you know not to sell immediately. Sure you understand if I don’t wish you luck, Furrballs. Ciao!

      • uncle10 says:

        newbs, hopefully you are just kidding. you freed up more money to put in UVXY? an instrument that is designed to go down.

        • $$$NEWBIE$$$ says:

          Jeff, yes pain but no emotion.

          Uncle, I am not kidding, I understand why you guys are issuing warning due UVXY’s performance- it has been horrendous, I appreciate everyone’s concerns but I have reason to believe this is about to double or more soon.

          • uncle10 says:

            you don’t know how it works. its not about to double. when the upcoming reverse split happens it will increase the speed at which you lose money. around $10 you will lose money slow. at $50 you will lose it fast. good luck newbs

          • $$$NEWBIE$$$ says:

            Uncle, LOL I wasn’t referring to the reverse split LOL!!! I think the vix is going to go on a wild run and the result will be uvxy doubling not because of a split ahhaha lol.

            For your information UVXY’s last split took place on January 24, 2014, look at the chart and tell me what it did.

          • $$$NEWBIE$$$ says:

            Tell me where it was trading on the day it split on Jan 24, 2014. and where it was trading one week later. I know overall its history is weak but all Im saying is this beast can fly and if you can catch the ride its a blast.

          • uncle10 says:

            u funny newbs. I have no doubt you are going to make money on uvxy.

          • doubled down on UVXY today at $9.09. current cost-basis is $9.52 on 12k shares. expect breakeven or better by Weds close.

  3. arthurk says:

    Saw this earlier at Bespoke on AAII at 26.7% bulls
    ” In this week’s survey, bullish sentiment dropped from 27.1% down to 26.7%. While the size of the drop in bullish sentiment was small, this week marks the tenth straight week that bullish sentiment has been below the bull market average and also the tenth decline in bullish sentiment over the last twelve weeks.”
    Am I the only one that sees a 6 month period of declining tops and bottoms in sentiment (to the same level as today) exactly as preceded the 2011 20% correction.

  4. berniebaruch says:

    SPX BB Top 1225, Low 2083
    Vix at low end.
    Clown Volume

    Mr. Market took me to the woodpile this week.

  5. zepfan123 says:

    Must be a huge amount of SPY 212 puts that expire in 3 hours being bought so far today. Every time SPY tags 211.99..there is just an ever so slight buy program taking it back up to about 212.20.- Must have happened at least 10 times in the last hour.Gotta be nice to have that kind of power.

  6. ABchart says:


    Wave 1 : 2085 > 2110
    Wave 2 : 2110 > 2096
    Wave 3 : 2096 > 2124
    Wave 4 : 2124 > 2110? (underway)
    Wave 5 : 2110? > 2135? (= wave 1)

  7. sweinv says:

    Hi Tony!
    What do you think about the DAX?
    Possible triangle from the morning 5/5 @11751 and today start of wave e?
    Maybe only the B-wave of major A-B-C or the last part of the correction???
    SPX is strong and if it not break down DAX can put in the e-wave inte the triangle around 11300?

  8. uncle10 says:

    Thanks Mr. T.
    Strong like bull
    Got to love Santelli
    Good weekend all.

    • There’s a bit of misunderstanding about that. Wave 3 doesn’t have to be larger than Wave 1. Wave 3 just can not be the shortest of the motive waves 1-3-5. If w3 is shorter than w1 then w5 must be shorter than w3 so that w3 isn’t left the shortest. So the result is when w3 is shorter than w1 you will have a very small w5.

  9. Thanks TC; 2 steps forward just 1 step back? Perhaps up to Memorial Day…
    I am Long (hedged) after entry per system (but length of stay TBD given recent bouncing around)… Optimal target for my position is 2160 and current Stop is 2105.04 (significant break or EOD value)
    Buy above 2126.84 with Stop 2105.04 Initial Target 2165.74 followed by 2171.91, 2174.97, 2200.44
    Sell below 2092.03 with Stop 2113.78
    Will need to see continued rise so up to da Bulls; let’s go!

  10. mjtplayer says:

    Astrofib – a high today or Monday on the New Moon (Sunday night)?

  11. gtoptions says:

    Thanks Tony
    SPY ~ Tagged the upper TL of it’s ED. (Not the SPX)
    Watching 1.272 ext @ 212.80 to break for further upside.
    GL & Good Weekend all.

  12. drwarmington says:

    TC .. For some reason I cannot access your charts this morning.

  13. Apathy? What Apathy? This is disgusting!!
    After: Negative interest rate, a high in global bond markets, and some new records in many equity markets, and sharp selloff in global bonds, what do we get…?
    Warnings – from Janet Yellen and Mario Draghi about possible asset bubbles:

    Elite bankers are up to their old tricks, of projecting all their sins onto others. So we hear Draghi warning Central bankers about “being blind” to risk. And he says: “It is important that these consequences are identified, weighed, and where necessary, integrated.” Sure. Why didn;t you clsoe the barn door before the horse bolted, Mario? And Janet’s just as bad. Equity markets are “quite high,” she says. And there could be “a sharp jump in longer term yields.”
    Thank alot. I thought it was YOUR job, as leading central bankers to warn people of the dangers of drinking too much and take away the punchbowl at the right time. Instead, they are now preaching sobriety to a room of drunks. Let’s not forget whose handiwork this mess is. And whom to blame when people crash their cars on the way home from the party.

    • torehund says:

      When politicians “repairs” a financial problem, the result has always the opposite effect due to to the piggy back effect of adjustment made by the public or the investment community. When all repair/compensation efforts are used, a situation of doomed if you do and doomed if you don’t do appears. Look no further than to the Euro.

    • fishonhook says:

      Absolutely 100% right.

      They are like drug pushers who then wag their fingers at the ‘naughty’ drug users. A democracy should not put so much power in the hands of unelected people who cannot easily be removed , who’s decisions cannot be questioned and who (like greenspan who was a lobbyist before Fed chairman) are so closely related to the financial industry

      • 7dayyss says:

        Congress over the years has demonstrated repeatedly that they can’t keep their hands out of S.S, repealed Glass Stengel among others, generally have no knowledge how to run a banking system. How could you entrust them to do any better?! Please spare the details about them instituting checks and balances on themselves!
        No, I don’t have the answer either, but I sure wouldn’t trust them with the money supply!

        • fishonhook says:

          At least you have some control over them. Next election you can kick them out. You have no control over a complete fool like Greenspan who denied the Dotcom bubble. the housing bubble and said banking needed no regulating. He was a lobbyist for the S and L industry before he was elevated to the pedestal of Fed Chairman. Maybe you are too young to know what a disaster the S and L BK was in the US.

          • Kinda lost faith in the election meme after having seen what both the red and blue ‘team’ have done to the country.
            SPOILER ALERT for kids reading this blog…
            After discovering this falsehood, was left with the same feeling when finding out Santa, the tooth fairy, and Easter bunny were complete fiction. A Wonderful Life indeed… 😉

          • 7dayyss says:

            You rest my case with the S & L. Don’t you remember Keating getting congressmen like McCain and others to do his bidding for him. Like I said, some of our congressmen are no different then the crooks you mention!

    • scottycj1 says:

      Baron Von Rothchild said
      “I care not what puppet is placed on
      the throne of England to rule the Empire, …
      The man that controls Britain’s money
      supply controls the British Empire.
      And I control the money supply.”

      They are the CENTRAL BANKS

    • simpleiam says:

      Ignore those Elites, UT. I guarantee that they ignore you…

  14. Yesterday we hit the IHS neckline and stayed there all day; today we will gap up over it leaving a number of short stops for dead.. They will panic and cover, and we will get our final wave higher before it turns

    IHS targets 2175/2185, and coincides with the upper bolinger band and upper trend line resistance.. Should be enough to get all bulled up again before the rug gets pulled and we head back down to 1950 or thereabouts..

    Gold should consolidate then go higher; support at 1215 & 1209.. Targetting 1250/70 at a minimum.. A double top at mid range (1308) is my WAG, but as an outside bet, perhaps higher towards 1385 which would then have the effect of getting everyone to declare the lows in, before it tanks the big one into year end. GDX should pull back towards 19.75/20 before higher..


    • ABchart says:

      Thanks Ben!

      Not many bears on stocks. The majority of investors are neutral for a while.

    • After staying above the 50 day last week,GDX has done well for me.Need a breakout above 1225-1230 on gold for some real fun.Fingers crossed.Today, after poor earnings for some miners, it was BTD!!! Hope you re even HALF right Ben on your WAG…but maybe could get there.Good luck all.

  15. ABchart says:

    Thanks Tony and all.
    The euro and European indices rise since yesterday = unusual. Maybe the euro is approaching the end of the rebound. Unless all this is done only for the opex 😉
    NYMO: strong.
    BPSPX: investors do not believe in the upside potential (stock buybacks)
    SPX: more upside to 2135 in the comming hours imo. Then we will see.

  16. Will the SPX follow like this? It’s Wonder.

    • Well that’s bullish. Just like 0 percent GDP for the 1st half of the year. Means no interst rate hikes. More free money. Where else are you going to put your money. 6! Years later and a 4 trillion debt, what do we have. Higher stocks. I think we are going to need a bigger boat. (I love jaws)

    • CB says:

      Interesting.Thanks bj. Looks like that epic fall in oil prices has been trying to tell us something …about China’s hard landing, perhaps…

  17. We should all create a new bord game to replace monopoly. Board filled with the 30 Dow companies plus utilities. We can have cards that say bad retail numbers, bad pip bad GDP go to new highs. Or fed speaks Dow up 100 point. Qe 4 move Dow up 1000 points. Stock misses earnings and revenue but authorize 10 billion buy back and up dividend. Stock up 10 percent. Fed creates a bubble stocks crash. Feds get 1 million dollar job at Goldman sacks. A combination of life and monopoly. Someone more creative then me would make a ton of money.

  18. robnaardin says:

    NYMO & NAMO Buy signals today. Cross above Zero… …

    Thanks Tony..

  19. stephenk1980 says:

    I’m with Tony on this one. I think we drop much sooner, but as an intermediate wave drop and not a PIV style drop, just a healthy pull back to shake out the longs / short covering that will activate once we hit new highs. Looking for this in the coming weeks leading up to the FOMC meeting.

    • stephenk1980 says:

      Having said that, nothing in the market is pre-determined, so if the FED does something unexpected, that intermediate drop could always morph into something more ugly.

  20. torehund says:

    Just looked at the TAN (solar) weekly chart, macd seems to defy gravity and if it breaks out a pretty heavy wave 3 will unfold. Stochiastics at max but I think it just might be IT.
    If we think traditionally with all energy plays going together, coal looks ripe too. And then its difficult not to see oil participate. If the USD goes too (which is almost too hard to imagine), Europe will be struck by some heavy inflation a double whammy 🙂 Lets see how it plays out, definitely exciting times.

    • torehund says:

      ..and if Europe gets heavy inflation and the ECB—does nothing with the sub-Zero interest rates, there goes the Euro, and the smart folks will start printing the 0,3 Eurodollar T-shirt, lol.

  21. $$$NEWBIE$$$ says:

    Guys is there one person here not expecting a higher high tomorrow? It seems like everyone has their bullish goggles on looking to go higher.

    • There are several bears on this site and many more out there in the larger world.

    • zepfan123 says:

      If one is truly bearish..or even a wanna be swung trading short for a month or so and think we can chop a 100 pts or so off the S&’s not whether or not tomorrow is up or down thats’s whether today or tomorrow is truly at the very least a medium term interim top…and we start dropping hard next week. If we rally hard into next weeks 3 day Memorial Day weekend to major to ATH’s on the Down SPX and COMP,which statistically has pretty high odds….it’s going to very painful to be short. I thought the odds last week were very high to start trading and closing below SPX 2070,but now I’m not sure we see that number again anytime soon. The Bears..shorts whatever have a lot of work to do to get the ball back in their court now. I don’t consider myself a bull anymore…I’m just not feeling all that confident we get a good sell-off soon now.

      • When this wave is over, we will go back to at least 2050. So from hear its a 70 point move at least. Question is only do we top out hear or 2170. 50 point upside, 70 plus point downside. In my opinion shorting anywhere in this area isn’t a bad idea if you have a 3 week horizon.

        • nardobeme says:

          Not I, said the fly. Pullback to 2110 OR full retracement to 2100, 50/50. If 2110 is held, then I expect the uptrend to continue in a healthy fashion…

  22. blackjak100 says:

    Thanks TC! I will just say don’t underestimate the overshoot of an ED. I show the upper trendline will be at about 2133ish tomorrow. There is no rule to the overshoot, but a guideline of 1-2% is not unheard of. I found this tweet today dated 1/3 from somebody I never heard of predicting the market. Prediction looking solid so far.

    • torehund says:

      Bouraq is $Wheat the canary in the coal mine too ? 🙂 Being a long term chart looker, yes it had to happen at some time, it doesn’t have to be now, but it very well could.

      • torehund says:

        ..and that sugar chart has a large scale abc down, then 3 -x-waves in a row, very probably just prolonging the inevitable; sugar going big.

      • bouraq says:

        Don’t know about canary Torehund. All I know that it just bottomed for the long term. I have been watching it for a long time. This is a different price action all together.

    • Page says:

      Thanks Bouraq.
      Before NatGas corrects it may test 200 DMA 3.36 currently 3.01, this will make bears run for cover.

      • bouraq says:

        We will see Page. Sure it may go to 3.30 area which is expected by all the bulls. To em it looks stretched. Needs a breather.

  23. Below is an article I had book marked back in May 2014. Many may be aware of the analysis. Interesting read.

  24. Lee X says:

    Thanks Tony
    Cubs beat the best team in the East 2 x’s in a row , I think newbies new name should be Eddie Mush 😉

  25. mjtplayer says:

    Thanks Tony!

    Small change in my count, in minute c to complete minor B. If we move above 2,126 and through 2,130 I may have to switch my whole count towards yours, this being an “E” wave.

    I agree with you Tony looks like the OPEX market goosing came-in Tuesday, yesterday and today. If any remaining, they will be out within the first couple hours of trading tomorrow before heading-out for the weekend!

  26. Page says:

    Thanks Tony.

  27. Good rally today, but the inability of the Transport sector to mount a strong rally tells me that the tug of war between bulls and bears is not over yet. Thus we will continue to see more hard to decipher consolidation by the averages. i still have the long position that I have held for 6+ years plus one long swing trade position of sizable amount held since Feb 2015. So this deceptive sideways action is stressful for me, especially since my swing position is not that far into the black.

    • zepfan123 says:

      Well 6,5, or even 4 years ago was the time to go long on most stuff for long termers….so you ought to be pretty worry free with a lot of profit margin and plenty of wiggle room if we ever correct hard in 2015. With that set-up you can just put on loose staggered stop limit orders and sleep real well. You are in as good of position as anybody out there if you’re really still holding a long still from over 6 years ago. That was the freakin bottom at Dow 6500 and SPX 666. Pop a’ve got nothing to worry about unless the Dow drops about 12,000 pts tomorrow.

      • Zepfan: I am a long way from losing any of my own money on my original investment, although it would drop faster than the Dow. The mid-cap growth fund I bought on Feb. 17, 2015 is only 3 % in the black, so a sharp correction could put it into the red before i realized what was happening. And it is an investment of substantial size.

  28. gtoptions says:

    Thanks Tony
    Tough one! Technicals appear quite bullish, although appearances can be deceiving. 😬

  29. fotis2 says:

    Thanks Tony don’t think I was the only one got hammered today man the setup looked nice but per usual when it looks rosy and certain that’s where you get smacked anyway hoping for a better day tomorow.GL.

  30. Mr C., your pivots, resistance & support levels continue to be amazingly accurate! Well done, Sir.

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