Friday update

SHORT TERM: gap down opening ends week, DOW -141

Overnight the Asian markets gained 0.6%. Europe opened lower and lost 1.2%. US index futures were lower overnight, and at 8:30 the PPI was reported higher: +0.5% v -0.4%. The market gapped down at the open to SPX 2100, and continued to 2096 in the opening minutes before trying to rally. At 10am the SPX bounced to 2101 and Consumer sentiment was reported higher: 94.6 v 90.7. The market then declined to SPX 2091 by 11am, bounced to 2099 by 11:30, then headed lower again. By 3pm it found support at SPX 2092 then bounced to close at 2094.

For the day the SPX/DOW were -0.75%, and the NDX/NAZ were -0.70%. Bonds lost 3 ticks, Crude slid 75 cents, Gold ended flat, and the USD was lower. Medium term support remains at the 2085 and 2070 pivots, with resistance at the 2131 and 2198 pivots. Today the WLEI was reported lower: 50.9% v 51.0%.

The market gapped down at the open today for its third gap opening this week. After opening at SPX 2100, the market traded down to 2091 and then went into a trading range for the rest of the day. The decline from Thursday’s SPX 2115 high to today’s 2091 low was the first notable pullback since the market started the Tuesday rally at 2072. This suggests, as noted on the hourly chart, that Minute wave c is underway. The short term count still looks fine for this downtrend. More on this and a short term alternative in the weekend update. Best to your weekend!

MEDIUM TERM: downtrend

LONG TERM: bull market


About tony caldaro

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43 Responses to Friday update

  1. torehund says:

    …the is still hope for politicians to exit us all from a neurotic-depression 🙂

  2. Possible double bottom on the daily Dow Jones.

    chart link

  3. M1 says:

    Happy weekend everyone !!

    Abt nothing has changed during the last two weeks

    • M1 says:

      A pullback of abt 194 points on the NAZ was expected.
      It has retraced 140 points in the first wave down so far.

  4. GYN LAB says:

    After making the same mistakes for all beginners, I started making money on short-term ES trades consistently on a monthly basis since the turn of the year, and I am using only a few simple tools.

    1. EW fibo retracements/extensions to pinpoint my entry/exit. The most common ones I use are .618 .786 for retracements and 1.0 1.382 1.618 for extensions. It is not always the case but usually you have better success rate. Requires patience and sometimes letting trades go and not chase for them if the market does not hit the fibs.
    2. Hourly MACD divergence. You wait for one more HH or LL with divergence, which lowers the risk and also gives you a better entry/exit.
    3. EW wave counts. Minute and Micro counts are often too hard to get on top of, so I tend to concentrate more on Minor waves, only sometimes Minute waves. Of course Mr T’s blog is essential to this tool.
    4. NO POSITION. I learned this after months of mistakes and losses, that if I don’t feel confident to execute a trade from these above 3 tools, I sit on my hands and away from the mouse.

    Since January my account is markedly going positive, with less no. of trades (2-3 trades per week max) more discipline my results are improving a lot. For me luckily it did not take 2 years to start getting the idea, and the tools above would be a good help for you guys too.

    GL all and have a good weekend!

  5. there still are some very very very good stocks out there, with the lower crude oil, take a look at the FEDEX chart. WHOA!!! => ==>

    with lower crude, tranports costs go down, and profits go up. That chart looks awesome!

  6. gtoptions says:

    Thanks Tony
    Good Weekend All.

  7. zepfan123 says:

    Thanks Tony. And I hope the medium term trend is down too. I too read the odds that way for now. Looking forward to the weekend edition.

    • bhupal777 says:

      So ultimately it all boils down to…. are you making money using EW on the time frame that you are trading. If the answer is yes good for you and wish you Good Luck.

      For me I consistently lost money using EW on a daily and hourly charts. I gave it a try for more than 2 years. It could be very well fault with me or I might be in early stages of my learning and made all the silly mistakes that a novice trader makes. So I am not making a vague statement that EW doesn’t work for trading. It just didn’t suite my personality. So I stopped using EW for my regular trading. Instead I just use EW on a weekly bars to know the trend and to get a rough idea on where we are in the trend.

      As Jeffrey Kennedy says “EW should be used like a canvass for an artist and you need to have other tools to draw a good picture”.

      Now I don’t make any trading decisions as soon as I see 5 waves up or down and 3 ways up or down on a daily chart. No offense but I went to lot of trade shows and listened to lot of podcasts from successful traders and I am yet to find a rich EW trader. Please don’t show me one example like Paul Tudor Jones.

      My current style is to look for the trend and then look for consolidations on a daily and weekly charts and enter the trade upon a break out. That way I am not over analyzing the chart. Also I don’t use any indicators. All of them are after the fact. So I just look at the price action. That way I have more time to spend on money management and risk management. I learned a lot by following and reading Peter L. Brandt. As per him Charts are not predicting vehicles rather risk management tools.

      Good Luck All.

      • kjb0 says:

        Should have read my book ” The Day Trading Illusion “. You would have saved yourself a lot of money and grief. Tony has it right. Be an investor not a trader.

        • zepfan123 says:

          I’m sure most of us here are long term investors but also enjoy doing some short term directional trades on the side sometimes based on the “signals” of our choice. Not a thing wrong with that. Keeps one mentally involved as well as can be fun as well as profitable many times.- And when Warren Buffett writes a book..i might read that one. To this day..he still has not.

      • jobjas says:

        No doubt money and risk management are a priority.
        Yes, If one could trade each of those waves one could be a millionaire trading a single ES contract in a very short time ! I do not trade ES regularly (only wave 3 when I do)as I am still working on perfecting entry and exit . I have been using EW for 4 yrs or so & What I share here is to encourage others to explore and perfect EW and share ideas that all can benefit from. Tony has developed OEW and I am trying to do my own way to use basic EWP.
        Since all indicators are lagging , I had to overcome it some way – what I realized was that I could afford to identify wave 4 after the fact but from there can project wave 5 end in real time – that I could call the hallmark of my method. And the beauty is that because of the fractal nature I could use this even in the smallest waves.
        Of course every one has their own style and method of trading .Since this is primarily EW
        site I post what I have learned and encourage others to consider EW.

        • bhupal777 says:

          jobas, That is really impressive. Appreciate sharing your trading style. You are definitely a nimble trader and do good homework.
          I don’t feel any humility in saying that I made lot of mistakes in my early days and I am getting over it one by one and I see the difference in my trading account. Good Luck.

  8. tony caldaro says:

    hahaha not me for sure

  9. blackjak100 says:

    TC, does your alternate suggest ED still underway with wave iv ending at 2072. It solves a lot of issues seeing it this way instead of 2135 where wave iii now ended. Today was b wave pullback. If pullback ended at 2091, new target would be 2162. It’s possible b wave pullback ends lower on Monday as well.

  10. nardobeme says:

    Thanks Tony. Sure glad I remained short. I went long $SPY at 210 today. Good weekend all!

    • zepfan123 says:

      You remained short..AND went long SPY at 210..where it closed ? So you hedged your short position it sounds like.

      • nardobeme says:

        Sorry, my post today was related to last nights post; I received a sell signal yesterday morning, but had been awaiting a buy that I thought would arrive sooner than later. Buy signal did not come in until later today… We’ll see what Monday brings. GL

  11. mike7x says:

    Thanks Tony! Lot’s going on next week. FOMC meeting. Greece. And last, but certainly not least, Lady Gaga and Tony Bennett open a series of four concerts at Radio City Music Hall in New York City. Together. Really. At least one of these events are sure to create a downtrend low. 2040?

Comments are closed.