Thursday update

SHORT TERM: another gap up opening, DOW +180

Overnight the Asian markets lost 0.1%. Europe opened lower but gained 0.6%. US index futures were higher overnight. At 8:30 weekly Jobless claims were reported lower: 267k v 279k, and the CPI was reported higher: +0.4% v +0.1%. The market gapped up at the open to SPX 2110 and continued to rally. The market had closed at SPX 2100 yesterday. At 10am the Philly FED was reported higher: 15.2 v 6.7, and Leading indicators were reported higher: +0.7% v +0.7%. The market continued to rally to SPX 2127 by 12:30, then started to pullback. At 1:30 the SPX hit 2118. After a bounce to SPX 2124 by 3pm, the market pulled back to end the day at 2121.

For the day the SPX/DOW gained 1.00%, and the NDX/NAZ gained 1.35%. Bonds lost 4 ticks, Crude gained 45 cents, Gold rose $14, and the USD was lower. Medium term support remains at the 2085 and 2070 pivots, with resistance at the 2131 and 2198 pivots. Tomorrow is Options expiration.

The market gapped up at the open for the second day in a row. The rally cleared yesterday’s high at the open and continued to SPX 2127 just past noon. The market then pulled back to SPX 2118. With last week’s SPX 2115 high being exceeded, it alerted us to a potential change in the short term count. We noted this level yesterday. This suggests a potential impulse wave is now underway, for the first time since early February. Should the market exceed SPX 2127 in the coming days, before declining to SPX 2104, then we will have witnessed five waves up from SPX 2072: 2104-2089-2127-2118-xxxx. This would also suggest the downtrend completed at SPX 2072, and a new uptrend is underway. Since today/tomorrow is the quarterly options expiration, it will be interesting to see what unfolds. Short term support is now at SPX 2118 and SPX 2099, with resistance at the 2131 and 2198 pivots. Short term momentum continues to display a slight negative divergence. Best to your Friday options expiration trading!

MEDIUM TERM: downtrend, but market trying to impulse

LONG TERM: bull market


About tony caldaro

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132 Responses to Thursday update

  1. alexh110 says:

    If you label yesterday’s high as minor b, this correction looks a lot like the Int ii wave from 2012.
    That had a similarly strong minor b ending in week 4, then sold off and bottomed in week 7.

  2. Spx will be 4+% higher next 6 weeks….Money

    tommyboys says:
    April 24, 2015 at 7:57 am
    Still looking for someone to take my Dow 19k by Memorial Day gentleman’s bet ✈️

    Darkness (@SirDarkness) says:
    April 24, 2015 at 8:15 am
    Happy to take that bet , I have seen your stocks picks and knowledge of markets . I would like to add a sweetener . I win , you can never bring up the fear/greed index, never print sophomoric Market Watch articles , and you learn technicals.

    you reneged- not good form

    tommyboys says:
    June 15, 2015 at 10:37 am
    Complacency? No fear – “the masses”?

  3. Anyone still believe rally for 2072 is impulsive….it never had the chance from day one IMO

    • fotis2 says:

      That is actually a disgusting pic Newb.

    • blackjak100 says:

      Yes, I do. Obviously this correction is not part of wave iii like I first thought, but think it is wave iv. Target still 2140ish if 2111 holds where wave i = wave v.

      • I would like to see anyone try providing an impulsive count for wave i and iii at the micro and nano level….it’s not there IMO

        • blackjak100 says:

          Why so complicated? Trade below 2104 before above 2127 makes it a 3 IMO. Very simple.

          • it’s not complicated, either the wave structure displays impulsive behavior characteristics or it doesn’t. Too many times I’ve seen people wanting to stick an impulsive bumper sticker after a jet fueled rally wave only to discover later that it was not.

            If you look at the rally from 2072.14 to 2115.02, that wave shows impulsiveness and I am to label an impulsive count but I have it as an a wave.
            While the rally from 2072.49 to 2103.67 is sloppy and no matter how you break it down I just don’t see any impulsive behavior in it. And thus far no one has proven it to be impulsive to me yet.

      • BJ, SPX closed at 2109 today. Do you think it has not yet broken 2111? Usually, if triple witching down, coming Monday should down further.

        • blackjak100 says:

          2109 must hold and we need to see green on mon. The wave yesterday showed characteristics typical of third wave as MACD clearly moved higher and it broke above base channel. It’s not unusual for wave iv to retrace more than 38.2% of wave iii. I was right for 3-4 months and now wrong for the last 2 weeks. Maybe my losing streak is not over yet.

  4. The evil behind the scenes. Just a small comment for the numerate sorts and others who may not have thought of this.

    When a market is sufficiently high, individual mutual fund accounts are loaded (high). if a market does nothing but go up and down day after day, effectively going nowhere, each account actually accrues losses due to compounding. Naturally, this is true even if the moves happen over three days at a time or over a week or two at a time. The phenomenon is simple but useful to the team on the other side who captures those losses as gains.

  5. mjtplayer says:

    Clearly the options expiration action was yesterday, the market makers did a great job of running the market higher to get their calls in the money while paying out little or nothing on the puts they wrote. Same story with the June VIX futures on Wed, smashed after the Fed meeting, putting their VIX shorts into the money and paying out nothing. The house wins again!!

    The real action begins on Monday, once the OPEX shenanigans are behind us. Big Greece meeting on Monday, market will be waiting to see what comes out of it, or doesn’t come out of it.

    Plans already in the works for another meeting on Thursday, in case Monday’s meeting produces nothing. I tell you, these politicians are completely stupid. If you want a resolution, don’t schedule a back-up meeting!! Just draw a line in the sand at that meeting and say ” now or never”. Instead, Greece will probably agree to nothing on Monday, now knowing there’s a meeting Thursday to fall back on. Unreal…

    I wouldn’t have these idiots negotiating my son’s school lunch options, let alone the fate of a country. Stupid, stupid, stupid….

  6. JeffMilano says:

    Maybe all MKTS around the world will not open on monday, due to Greece getting out of EU.

    • makiori says:

      with all the due respect, I think the above is extremely highly unrealistic. Whatever happens markets will open and in case of severe volatility markets trading halt at exchange levels already exists. And if markets halts were to be likely violated do to severe unbalances the Plunge Protection Team will step in and smooth vol.
      Professionals had years to prepare for such event, the markets will open
      E-mini S&P 500 Futures (ESU5) 211300 221900 /
      200700 196500 183750 168900

  7. Thought I’d stop by here. Haven’t posted in awhile – been busy with my trading. Here’s a trade for y’all

    The technical perfection of a hammer bottom.

  8. TRAN is in trading around 8460. Its low for this move down so far came on Tuesday at 8252.67. This is close to 2 gaps which are still in place from October last year. First one is at 8227.84 with the second situated at 8026.20.

    • TRAN not the only index that has an unfilled gap from Oct 2014. SPX has two unfilled gaps 2021.66 from Feb 2, 2015 and 1905.03 from Oct 20, 2015…I am expecting at minimum for one of the two of these gaps to be filled this year. I have no problem with these cheese cake factory bulls making one last measly ATH

  9. Page says:

    I think selling will intensify this afternoon and next week could get ugly, my target for SPX 2045-2065.

    • Nice call Page….or should i just call you “Larry”. Could get 2065 by Monday if we get a weekend Greece default panic bloodbath ….watching spy 209.80-210..need to close below that..which equates to spx 2104 area

    • zepfan123 says:

      As I said yesterday..if we get down in that SPX 2045-2065 area next hands down get the Golden Crystal Ball award. And thanks for using actual SPX numbers for your prognostications/targets with a shorter time frame. Those are what really count as reference points when it comes to looking at a new trade. Lots of interest in the SPY 211 puts that expire today so that might preclude us from getting a hard drop into todays close. Emphasis on “might”.

  10. Maybe one more short squeeze today and then tank it?

  11. Thanks TC!

    Current position:
    Long entry: 18JUN, 2108.25 (ES)
    Stop Loss: 2102.69/2099.29 (SPX)
    Reversal: 2089.69 (SPX)
    Optimal Exit for Position: 2154 (SPX)
    It is possible I might not hold for the Optimal Exit given the potential for a run to the upper Bollinger band as was pointed out on the weekly chart. I would be comfortable taking that profit should it materialize. Happy Friday and good weekend all.

  12. fotis2 says:

    Looks like DT on hourly confirm target 2109

  13. zepfan123 says:

    Well it looks and feels like the market isn’t going anywhere here. I see absolutely no edge here for a new short term directional trade today. Hard to say what we do next week..but the July 4th period coming up soon historically tends to see the market ‘drift higher’ more times than not ,as long as the market isn’t in a serious correction mode like in 2008…which we are certainly not in now.- Guess i’ll take another objective look at this Monday morning.

  14. Yesterday the Daffy DAX put in a double bottom just 2.45 points above Tuesday’s low (10797.85), which is the low so far for this correction which started 10 weeks ago. With yesterday’s ramp it rallied 488 points off its lows in just 7 hours counting the continuation after the Frankfurt cash close. If that’s not some sort of record for that index it must be close to it. Since that high it has given back 293 points, a neat 60%. The “wick” on the 2 hour candlestick that captured yesterday’s high is the longest I can see on my system. The 2nd longest was followed by a 1000+ point decline. Am I suggesting the DAX is likely starting another large decline? No because I really have no idea. The only thing one can be sure of is with type of volatility the market is quite unpredictable

  15. scottycj1 says:

    Financial Rep Blog
    Yes I had the 18th as a cit….likely the high of the B wave… C wave down until month end. Likely just the 1st a wave of a larger ABC wave 4

  16. Lee X says:

    Thanks Tony
    Hey gto
    No way he’s back under a different name and different bias , right ?😉
    Have a great weekend !

  17. blackjak100 says:

    TC agree with 2104-2089 as wave i & ii, but wouldn’t a new high above 2127 finish wave iii and not complete 5 waves? At 2139, wave iii would equal 1.618* wave i. It seems logical as some other posters suggested resistance at 2140ish with upper weekly BB. It appears 2118 marked the end of iv of iii and we are heading straight to 2140ish IMO. GL and cheers!

  18. hkloon says:

    Just read the latest proposal posted online by Greek Finance Minister…
    I personally think its a very comprehensive proposal to the eurogroup… to fix their economy… although eurogroup may think otherwise…

    • lbhkinqa says:

      It is missing the most vital ingredient present in every successful default/bailout (IMF or otherwise); devaluation. Devaluation is essential to the long term adjustment process. It is not the only necessary reform but no country has ever properly recovered from a default without it.

      Any scenario that doesn’t entertain leaving the Euro, is as useless as all the others.

    • tommyboys says:

      Greece sports a $220-&250B GDP. If it ALL went away this afternoon it would make a small nick in global markets for a day or two. Regardless under ANY scenario their GDP will realistically maintain 70-80% of current. Not sure why the months and months of chatter/fear on it? …other than markets needing SOME kind of fear to drive them higher…

      • torehund says:

        Greece is merely a symptom of what will eventually happen to all Western nations. It isn’t Greece by itself thats important, its the fact that we are all IN the same boat. The only solution in the Eurozone is to pay back all government debt for all countries, and then start over with clean sheets. If they don’t do this (the near debt free) Russian nation will pick up and engulf exit nation after exit nation, as they all will ultimately fail…Greece is the first domino..

        • tommyboys says:

          Coild be Tore. Greece however has been a chronic repeat offender whereas the balance of Eurozone hasn’t been THIS guilty – if at all. One corrupted mismanaged economy doesn’t necessarily imply they all are. Detroit vs. Chicago, New York, LA etc…

          • The ultimate goal in Europe is to shed the yoke of the IMF. That day is fast approaching. Then the fun begins…

          • torehund says:

            Agee, the Greecs have a long history of distrusting government, thats also why they are first out being healed from the evil…Most European governments are approaching 50 percent state employment rate, so growing the economy becomes just a distant dream, but totalitarianism a fractal reality at this junction. If folks wake up like the Greeks have done we can turn the tide, if not we will all be Zoombies, or worse still Nazis, Cheers to Greece becoming the first free Bird.

          • torehund says:

            ..Ever heard of the European spring, its right in front of our noses, and just what the Doctor ordered. Distrust of the old, so the world can start anew.

  19. robnaardin says:

    Hey, Rob, long time, no music… What’s the best hardcore punk act that you can find that you’d like to dedicate to Janet today, eh ?😉

    Not punk, but how about American Badass by Kid Rock…. …because she’s going to give the next generation, a big FU? eh?😉

    • CB says:

      Nice!…”With the gift of gab from the city of truth”..I like that…she should listen to it….lol …the Kid’s still got it🙂

  20. bhupal777 says:

    Thanks Tony.

    Last week I warned you guys that there is no guarantee that the minor C wave is going to materialize. In fact you shouldn’t be using EW for short term trading on an hourly chart.

    I didn’t made a killing today but I am on the right side of the market and did better than the overall market. Doesn’t mean I am right rather it kept me away from predicting the market’s next move. Also I didn’t bet my farm on the false hopes of participating and benefiting in the 3rd waves or C waves that EW preaches. If it is that easy then every body would be following EW and making lots of money. So I advise you all concentrating on risk management and positing sizing.

    Good Luck All.

    • nardobeme says:

      Golly gee. Warnings, advise… Where the heck have I been? Only a good trader will trade $kre and never make stock predictions… 🙂 Giddy up.

    • BHUPAL

      I have discovered the holy grail of trading that works better than EW. Go to the bank and get a new half dollar. At the open flip it in the air. heads go long tails go short if it lands on its edge go to Vegas.

  21. Surprised by today’s rally, not wrong very often but twice in past 6 months it took a day for signal to take hold, let’s see what happens tomorrow, expecting reversal down.

    Scotty, you showed today as CIT, you think it starts tomorrow?

    I was expecting a gap-&-go this a.m. but wrong direction, lol.

    Nice call Page & BJ!

    • reddragonleo says:

      I like to call them “rogue waves” FRB. I was only expecting the 2110 gap fill to be the upside target, maybe a little higher to the double top from the 11th at 2115 SPX, but certainly not up to 2126 today. It’s SkyNet running bear stops I guess. But my analysis says we’ll rollover tomorrow at least for a pullback.

      Since it’s option expiration day I do expect some “pinning” of the various ETF’s and Stocks to certain levels where the market makers don’t have to pay out very many put holders. Where that’s at is anyone’s guess? But with it being a triple (or quad?) witching day I do expect them to hold the downside to a minimum. Next week though should be down.

      • Agree on all points Red. Still holding my bearish position (July), usually honor stops but pretty ssure today was an overthrow to shake out bears and suck in bulls before reversing a day later, we’ll see. GL

    • student8888 says:

      frb, i hope u keep posting ur buy and sell triggers. I sure have benefitted from them in the past. So keep them coming. Summer to october are primetime for bears to show up. Thx again for posting ur calls intraday for us to follow along at our discretion. Still think we test the 200 next week and hopefully your system will come up with a buy signal at that point.

  22. torehund says:

    Pravda the Soviet news agency doesn’t exist anymore, thank God🙂 However the Russians might have changed during the years, maybe they are onto something Now ? Latest is their renewed interest in the USA moon landing, not to spread any doubt around it ( as if it could be just another Hollywood gimmick) but for purely investigative efforts of enlightenment, lol. From my experience with humans in general, isn’t it always the one thats frozen out (Putin) and stands alone that has truth on its side ? Well, lets see🙂
    Is the Emperor without clothes yet again…

    • torehund says:

      Maybe the Moon landing, was just a hoax just because too many still believes it to be true..Then it enters a bear-market, just like any stock that has too many followers for an extended period of time…:) I am a bit in the surreal mode tonight, but isn’t that what markets are about, please Bear over with me🙂

    • vinniesj says:

      There is an almost limitless supply of Helium 3 on the moon, it’s priceless as an energy source and next gen nuclear weapons. You’ll remember this post after you look for yourself….

  23. M1 says:

    …and NAZ hit new all time highs today !!!

  24. camper1888 says:

    Hey newbie, are we gonna go down tomorrow or NOT ? LOL

  25. 7dayyss says:

    Thanks Tony and the regulars!

  26. fionamargaret says:……Varoufakis proposal given today – thought some might be interested, as it was well reported that he basically came with nothing…..

    Don’t you think the Bankers and their ilk are just having another do-over to protect their own interests – sorry, I don’t think they give one whit about the ordinary Greek.
    I lost 90% of my trust fund in the financial collapse – Paulson and co., did not seem to do as badly as I did…….

    • bhupal777 says:

      All that analysis is fine. The question is are you making money
      With your system. If yes congrats and kudos to you. If not you should start introspecting your trading methodology and stop predicting markets next move with your predefined believes. Good Luck.

      • fionamargaret says:

        Thanks for your interest bhuppal. My trust fund was being managed, and the analysis I provide is only to add background and other ideas, to the mix of well-honed skills of the other participants here, of which you are one.
        Kindness is a virtue sometimes forgotten.

  27. At a +1058, the NYSE A-D line was much below standard for the size of the price index moves we saw today. I would not go so far as Blackjack did and call it horrible. For this rally to continue and become truly impulsive, we need to see 21 point SPX days

  28. fishonhook says:

    No one have a secret proprietary elite level ‘signal’ to share with us tonight?

    I think we have another 20 points or so at most and then the up-trend ends or we are going much higher if we stay above that level

    • I’m lost. If we go up another 20 points then what? If over 2127 then not a b wave. Can’t see this as int 3, but maybe. Risk on with no interest rate hikes this year.mthat takes way high quickly. So we have bj count up to 2160-2200 not sure what he is expecting from there P4? I don’t know I’m lost.

    • Fish, listen to yourself – you’re basically saying that we’re either going lower or going higher. Silly, yes? Certainly useless for making real money. You’re not alone, most don’t know where market is about to go, but might be better not to post at all than to open your mouth and remove all doubt. Find a method that works then play it hard. GL

      • nsteve24 says:

        There’s nothing to be ashamed about being wrong, be gracious and don’t be defensive towards those who call you out

        • fishonhook says:

          FSB- Actually what I am saying is quite clear. I think we either top about 20 points from today’s highs and that’s it or if we close higher we are entering a new up-trend.

          Higher than 2215 and we are entering a very major up-trend where bears will be thrown to the wolves.

          All IMVHO. Likely BS. But we al have our opinion and you had yours last night. But I can’t be too hard on you after the drubbing you must have taken today. been there many times. Nausea . Moving the stops up. Been there and done that. We all have .

          • That’s clearer Fish. No moving stops here, use options so downside is limkted by definition, built-in, pre-determined. Took a drubbing indeed on an absolute basis but pn a relative basis merely gave back a fraction of recent gains, probably not the last time, still no fun lol.

        • Sorry, didn’t mean that to sound harsh, just amusing how some are silent after several amazing (and very profitable) calls then come out of hiding after a rare miss. Human nature I know, but funny nonetheless. Best wishes.

  29. Peter Sliney says:

    The $VIX looks just as complacent to the down side as it did to the up. Chop ahead with a drift higher.

    • vinniesj says:

      Take a look at the VIX calls from 20 to 25 today for July exp. Huge open interest and virtually none in the puts. That’s not a contrarian sign, that’s a sign of things to come.

  30. gtoptions says:

    Thanks Tony
    Very Interesting Times! Opa!

  31. Gary Lewis says:

    So the 2040 to 2019 scenario is out? I was really tempted to go long at this level.

  32. blackjak100 says:

    All things considered, breadth was horrible today. This is exactly what you want to see with last wave in ED. RSI(5) tells us 2127 was a third of a third reaching close to 90. Did 2118 complete iv of iii? Not sure but if we open several pts down tomorrow, I would buy for a quick trade. Still like 2140ish to complete ‘a of V’ for this last wave in ED. Then, another 30-40 or pullback should be expected for ‘b of V’.

    • vinniesj says:

      You only needed about 2120 to complete the right shoulder, and the RUT and Naz new ATH’s finishes the picture of a top.

    • alexhartley1 says:

      BJ – what larger waves do you have us in if this is an ‘a of V’ as you say (for e.g. Intermediate, Major and Primary)? I can see the 30-40pt pullback between 23-30th June and then a final up wave into 16/7 from future cycle dates before a larger turn down perhaps into 3/8.


  33. mjtplayer says:

    Thanks Tony – could also be minor B, with 2,072 being minor A

    Big expiration tomorrow plus Russell re-balancing, should provide more ups and downs. All eyes on Greece Monday, amazing how complacent markets are given Greece could default in just a week and a half – spot VIX in the low 13’s, incredible. The Supreme Court ruling on Obamacare subsidies still looms in the days ahead…

    • tony caldaro says:

      interesting juncture

    • fotis2 says:

      They demonstrating in Athens this evening ”We want the euro” and ”Lets sign a deal now” anything is posssible but the charade is pointing to a last minute ”Surprise,surprise look what came out of the hat!An agreement”.Stunned silence at first followed by a robust round of aplause from the mesmerized audience…..Mr.Joe Average walks away sadly while the fat cats with the double mouths are congratulating each other over cigars and champange.

      • fionamargaret says:

        Strange – thousands were out last evening in Athens voicing support for Tsipras.
        (not overly reported by the media).
        I think the media no longer reports the news, but spins what is required.

        • fotis2 says:

          You hit it on the nail Fiona that is what the media is best at.. spin tales for the benefit of whoever is calling the shots right now.

    • vinniesj says:

      When the banks don’t open in Greece on Monday, the market will finally react….

  34. tony caldaro says:

    let’s confirm and uptrend or impulse wave first
    but first target would be the 2198 pivot

    • Tony and friends, in the seasonal expiration study I mentioned (and linked to another blogger’s page where its linked), the three week highs coming out of expiration have been capped at 31 points since September 2013. In 2011 there were some big max returns coming out of seasonal expiration, but since then the largest have been 43 points after the 12/13 expiration and 88 points after the 6/13 expiration.

      In recent years (2012 and later), its much more likely to see 50+ points down out of expiration than 50+ points up.

  35. hkloon says:

    Tony, could it be the 2072 double bottom earlier noted could have been the bottom of a new uptrend? Market seems to like US economy recovery strength. Thx…

      • hkloon says:

        I like the new label. Now i understand why u nibble some dax earlier rather than waited for 10700. Its difficult to catch the exact bottom.

    • $$$NEWBIE$$$ says:

      hkloon, “US economy recovery strength”, I hate to break it to you but the recovery is not what it seems— that is unless you believe the numbers and the formulas of the number are not tampered with.

      • Fed Ex and Oracle missed yesterday Fed Ex wasn’t so rosy on the economy., The economy is Avg at best 2 Percent growth. Its free money that is moving the market. No fed hike this year. That being said I have no clue in where we go from here. I guess its whatever happens with Greece. A deal we move higher. No deal we move lower. Markets pushing the limits and testing nerves. I do have a hard time believing this is the start of Int 3 though. Means Int 2 was like 62 points and a few weeks. See what tomorrow brings.

        • zepfan123 says:

          Yea I thought that big FDX miss yesterday and the subsequent big drop on the stock helping keep the continued weakness in the Transports was going to be a catalyst to getting us down to at least SPX 2040 this week. Any other time in my 20 years of investing and would have been.- But the insiders like the CB’s pretty much own the market now,have a ton of minute by minute directional control and really,really don’t seem to want this market to have a meaningful pullback. This is as controlled a market as I’ve ever seen. So I guess it’s either finally a push to new ATH’s or back to the 2097/2090 area. Right now I’m not sure which one I’m rooting for.

      • trondack says:

        Is the Fed desperate and sandbagging inflation and GDP? Housing and auto sales are relatively strong at the present time. Some of the auto manufacturing truck lines are at maximum output. I’m not sure the economy can produce any higher numbers currently. So, why is the Fed afraid to nudge rates? Why is the Fed throwing 70mph fastballs to pros?

  36. 56rambler says:

    Mr. Caldero,

    If this is an impulse wave and 2072 marked the completion of wave ii, then what would your projection be for wave iii (time/price)?

    Many thanks!

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