Thursday update

SHORT TERM: another gap opening, DOW -170

Overnight the Asian markets lost 0.1%. Europe opened lower and lost 1.0%. US index futures were lower overnight, and at 8:30 weekly Jobless claims were reported lower: 276k v 282k. The market gapped down at the open to SPX 2105, hit 2102 in the first few minutes, then rallied to nearly close the gap at 2113 by 10am. The market had closed at SPX 2114 yesterday. After the rebound the market headed south and hit SPX 2094 by 1:30. By 3pm the SPX had bounced back to 2099, it then dipped to 2093, then ticked up to close at 2096.

For the day the SPX/DOW were -0.90%, and the NDX/NAZ were -0.75%. Bonds gained 14 ticks, Crude dropped $1.55, Gold slid $8, and the USD was lower too. Medium term support remains at the 2085 and 2070 pivots, with resistance at the 2131 and 2198 pivots. Tomorrow: monthly Payrolls (est. +230k) at 8:30, then Consumer credit at 3pm.

The fourth gap opening this week was the only one not to close the gap opening before the market moved on. This one missed by one point. After the attempt the market headed below SPX 2099 for the first time in three weeks. During this morning’s decline it looked like Minor wave b had completed at SPX 2122 yesterday, and we updated the hourly chart. Thus far from the SPX 2135 high, we have a complex flat to 2099 for Minor a, a zigzag up to 2122 for Minor b, and Minor c underway. Some Fibonacci relationships suggest support at SPX 2064 (c = 1.6a), SPX 2050 (c = 2a), and SPX 2028 (c =2.6a). However, we continue to prefer the SPX 2040’s, or possibly the 2019 pivot range. Best to your trading the Payrolls report.

MEDIUM TERM: uptrend appears to be rolling over

LONG TERM: bull market


About tony caldaro

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91 Responses to Thursday update

  1. Do not think me crazy but Dow can make a 5% correction should you lose the 17.928k the weekly target 17.156k 064\2015

  2. mjtplayer says:

    VIX daily BB getting VERY tight, less than 300bps now. The VIX could move a bit lower short-term, but get ready for a nice pop higher in the near future- resistance is up around the 17 – 18 area.

    I’m ready, time for some volatility to trade!!!

  3. ABchart says:

    Do you like football? 🙂
    If so, tomorrow’s final of the champions league between Bercelone and Juventus, live from berlin.

  4. zepfan123 says:

    Ok..looks like we’re semi back on track to the downside for today. But it’s next week I think that tells us if we’re going to stay south of Dow 18K and SPX 2100 for a while. Still hope to see a close at or below SPX 2080 today but right now I’d be pretty happy with any close below the SPX LOD of 2085.67.-

  5. skullweb1 says:

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  6. Downside should be limited to range mentioned by TC (thanks!) as I don’t see move below 2000 given the overhead gaps. Either way, sticking with the strangle as little to no effort required.

    And, these calls by Armstrong (and his magic computer) are starting to give me a warm fuzzy in staying with it until expiration. Armstrong is on same level as Gartman in my book. 😉

    • mjtplayer says:

      Armstrong says June will be “choppy”, so yes, lots of up and down moves to play in both directions. That said, the trend is down into the fall and his “sovereign debt big bang” on 2015.75 (Oct 1st). I certainly wouldn’t be long stocks into that potential event…

      • fishonhook says:

        I have posted on Armstrong’s track record before and you can check by an easy google of Armstrong’s track record. he may be right this time but he has been wrong or so vague as to make the predictions of little worth IMO

  7. Page says:

    OK, Rally across all sectors about to begin. NEWB you’re welcome to join 🙂

  8. $$$NEWBIE$$$ says:

    Her comes push to 2070 area, buckle up

    • zepfan123 says:

      Sounds good Newb. Right or wrong,I’m holding all my short trades (SPX and SPY) into next week. No reward. SPX 2070 anytime next week would work for me.

  9. mjtplayer says:

    Martin Armstrong thinks we topped in May and is expecting a low in Oct (i.e. P4) – just as I think as well, based on my wave count. He thinks Oct could be a “1987 event” (crash), but is a buying opportunity as he sees higher highs going into 2016 – 2017 (i.e. P5) before the end of the bull market.

    My count:

    • zepfan123 says:

      Interesting MJT..thanks.

    • Thx MJT, seem that Armstrong, you, me and a few others are somewhat on a similar page = )

    • torehund says:

      MJT: Its a bit more complicated than this, if I understand Martin right. The date is fixed but he don’t seem to be certain about before and after events and what happens at the exact date, and remember currencies are involved too. Like today, its still a good day for investors outside the US to be invested in the US despite the indices going negative as the dollar more than compensates. Sure its tricky even having the specific date nailed in…However he expects a decline in the Dow might happen. That said one may loose the Dow 34 000, if it pans out somewhere in the future…

  10. Tony one of my morning post is still awaiting moderation, can you approve when you have a chance? thx

  11. fishonhook says:

    The limitations with drawing straight lines to forecast the future

    • torehund says:

      Sure traders may have an opinion and thats telling too, but if the public looses confidence in the Euro by fleeing it, that is much more important to its fate than what traders do or don’t do.

      • The Euro, having severed its ties to the Nation State, is an excellent vehicle as a mechanism of exchange. As a store of value, not so much. But that’s not its intended purpose. The Euro isn’t going anywhere; unlike the dollar. 😉

  12. torehund says:

    The Greece scapegoat getting angry. Too many videos are out of the EW- curriculum, but this I just had to post… 🙂 🙂

  13. berniebaruch says:

    Just in: Newby buying the dip. Story developing

  14. bfquant says:

    Our latest from HT Trading. Part II of a Lower Risk Way to Play Defense:

  15. Wedgie looks good and should be a cheap long

  16. Some of the DJI stocks already in their own little “Rounding Top” world
    MMM chart:
    TRV chart:

    So which sector has been providing the bulk of support over past several weeks, IMO, it has been the financials but their time is almost as many of them appear to be in their final wave like GS which has a near 8% influence in the DJI index.
    GS chart:

  17. zepfan123 says:

    Alright..good to see the S&P futures stayed in the red for the opening. Would love to see SPX 2080 or lower today…but it’s next weeks action that will be more telling as to whether we’ve put in an interim top with that SPX 2130.80 ATH close made on May 21st.- I’ve still got a ton of stock in my long term portfolio ,but with me holding an S&P and SPY swing short trade here at the moment,I’m rooting for a pullback here for a week or two.

  18. ABchart says:

    NFP @280K+++
    USD up
    European indices were lower than yesterday.
    ES value remain lower between 2103 and 2085

    ES new scenario:

    Important: if USD rise again, the value will shift slightly downward in 2101> 2083.

  19. JeffMilano says:

    The question is if a ATH will be made or this is the top and going to P4. Cycles favor one more ATH in 6 days and the a correction of a wweek or two weeks. One indicator was telling me that a down day or two was in the works and yestards was perfect to fool everyone except newbie. So I am expection more of the same perhaps today week in the morning and recovering after 2PM.

  20. fotis2 says:

    Thanks mr.T.Daily CCI close bellow -100 here it gets tricky it can still bounce up but more likely for one more leg down 2065? 2045 now stands the 200ma on daily. Personally cant see a setup either way so sidelines till the CCI closes inside channel again on daily for a long.

  21. ABchart says:

    Thanks Tony and all contributors.

    ES/SPX: (may be) oversold bounce today, but one more down leg next week, before another ATH.

  22. Okay everyone…since March anytime we went below the 50 day on the S&P it has taken no more than 4 days to get back above it.My view is if it doesn t bounce that fast…somethings different and more bearish.So we wait and see.Good luck all.

  23. CB says:

    thanks Tony feb-may-june (so far ….) TL

  24. chicotheman says:

    At this moment still guessing there is another new high ahead to end P3.

  25. On the failure of the SPX by only one point to close the gap at 2014, I will quote Maxwell Smart: “Missed by that much”.

  26. zepfan123 says:

    Ok..Newbie get your Louieville Slugger out tomorrow and Monday and beat that SPX below 2070 on the close. Then we can really see whats what with this market.

  27. Did the DAX top out in a final wave 5 at 12390? That is the question, because if it did… its a leading indicator of a US TOP. I had 2181 as my pivot way back on Nov 10th 2014 for spring 2015 highs, we got within 47 points…. its time to do some work folks.

  28. nardobeme says:

    Bonked on today’s opening and days price action, but, one cannot always be correct; simply adjust to change(s) as best one can. I’m expecting tomorrows high to reach the 2114 area. I still am plotting retrace possibilities; very complicated.

  29. Blackjack, if your out there, is your count dead. I see some still calling this a c wave and new highs comming. We should know tomorrow. Just curious your hoping for a bounce to 2110 and reshort. Thanks

    • blackjak100 says:

      I’m here and yes it’s dead. I got stopped out at 2099 for minor loss. Not sure of any new count yet.

  30. mjtplayer says:

    Thanks Tony!

    The wedge pattern I’ve been tracking for months (and goes back to the minor A of int A back in Nov). The SPX has breached the downside several times (all over the past month), but has never closed below the lower TL, until today. That lower TL stands at 2,109 tomorrow and should begin providing resistance, as it once provided support all the way up.

    P2 began in May and ended in Oct, triggered by Greece and the debt ceiling mess in 2011.
    Why not P4 beginning in May and ending in Oct, triggered by Greece and/or a debt ceiling or budget mess? The current budget ends Sept 30th.

  31. JeffMilano says:

    Thank you Tony. Interisting day. Money management was key for me.

  32. tony caldaro says:

    depends on the correction
    market has hardly dropped yet

  33. Thx Tony, definitely lots of money being made in this big boys.

    Hey AB you do good work enjoy post and charts. FYI – here is one of my bullish charts, that I shared yesterday with some of my trading colleagues, projecting one last ATH for P3. But if you look closely you can see that it is being challenged by a potential bearish “turn-key” HS patterns symmetry (aka rounding top pattern).

    • JeffMilano says:

      Yes the rouding Top at 2134 / Tx

    • ABchart says:

      Thank you, Matador! Good graph, I appreciate!
      I’m looking at some elements before proposing a scenario for both tomorrow and next weeks. The key right now, more than ever, is the EURUSD and the bonds + Greece whose BOTs use as an excuse to make big moves.

  34. Thanks Tony! You’ve been helping me make money these days and I appreciate it!
    1 pattern I have completed today by being down 13 from last week’s close at 2107. Every one of the last 11 (now 11) NFP weeks have declined at least 13 points from the prior week’s close at some point.

    1 pattern that I want to see if its working is whether we can close above 2107 tomorrow, as 14 of the past 17 NFP weeks were positive. 2 of the 3 that were not lost all or most of the losses on the NFP day anyway.

    The big one that aligns with your writing tonight is for next week. I wrote this here the other night, but its worth repeating. No matter where tomorrow closes, the post-NFP weeks on either side of a seasonal expiration/change of season have been down for a year and a half except April 2015, and the losses in those weeks can be significant, especially the maximum intraweek losses.

    One other thing to mention if we close tomorrow below 2107. The 3 of 17 most recent NFP weeks that closed down were all followed by reasonably sizable down weeks too.

    • tony caldaro says:

      thx Bella
      so bounce tomorrow, decline next week, then take off to the upside during expiration week

      • That would look right just based on the odds of recent patterns. The down next week is actually the strongest pattern I’ve noticed for the past 18 months, along with the ramps into seasonal expirations the past 4 years.

        The bounce tomorrow is a bit suspect here though, as the 3 of 17 down NFP weeks were basically 3 of the most recent 8. Thus, down NFP weeks seem to be picking up in recent months.

    • joecthetruthteller says:

      IF S&P closes below 2083, then watch out….until then, still a bull market

  35. Page says:

    Thanks Tony.

  36. 56rambler says:

    Mr. Caldaro,

    It looks like you can extend the light blue trend line (the one that connects the March and May lows) to the right. We’re close.

  37. GYN LAB says:

    Thanks Mr T! Is it common to have extensions bigger than 1.618? I know that in wave 3 extensions of 2,3 times w1 can be found often but not sure about c waves…

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