Thursday update

SHORT TERM: gap down opening but rebound, DOW -5

Overnight the Asian markets gained 0.4%. Europe opened higher and gained 0.5%. US index futures were lower overnight. At 8:30 Q2 GDP was reported higher:+2.3% v -0.2%, and weekly Jobless claims were higher: 267k v 255k. The market gapped down at the open to SPX 2104, and continued down to the low for the day at SPX 2095 by 10am. After that the market rallied to SPX 2103 by 10:30, dipped to 2097 by 11am, and then rallied to close the gap in the afternoon. Heading into the close the SPX hit 2110, then dipped to end the day unchanged at 2109.

For the day the SPX/DOW were mixed, and the NDX/NAZ were +0.35%. Bonds gained 1 tick, Crude lost 30 cents, Gold dropped $9, and the USD was higher. Medium term support remains at the 2085 and 2070 pivots, with resistance at the 2131 and 2198 pivots. Tomorrow: the Chicago PMI and Consumer sentiment around 10am.

The market gapped down at the open today, second time this week, dropped to SPX 2095, then reversed and closed the gap. Today’s decline was the first notable reversal since the rally began on Monday from SPX 2064: 2111-2095-2110. Not much to go on there so far. Yesterday’s short term negative divergence worked out fine. Yet if the market can make it back to SPX 2111 the RSI could set up even a larger divergence. Only one of the three levels noted over the weekend (2074, 2044, and 1981) have been broken this week. So probabilities for a Primary IV decline remain at 50/50. Short term support is now at SPX 2095 and the 2085 pivot, with resistance at SPX 2111 and the 2131 pivot. Short term momentum ended the day just below overbought. Best to your trading!

MEDIUM TERM: uptrend holding above SPX 2100

LONG TERM: bull market


About tony caldaro

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169 Responses to Thursday update

  1. Alert for a possible double bottom on the DOW JONES.
    graphic on the link below


  2. kvilia says:

    Have a good weekend all! Hopefully after a small pullback the markets will pull it together (sorry) and break up.
    Enjoy your bbq and a splash of something refreshing ;), after hitting a gym of course.


  3. fishonhook says:

    This market makes you feel like a fool and a genius one hour apart.

    Uncle what did you see that sent you short into the week-end


  4. With Greece mkt re-opening monday, it would not surprise me if ECB started bullish jawboning over the weekend (read Mountain of cash for backstop) to “soften the blow”. Hugh gap up monday ? just sayin’ .


  5. What does yesterday’s hanging man (aka hammer) and today’s potential doji candle have in common with the following;


  6. reddragonleo says:

    Every Friday Do This…

    1. Turn of monitors.
    2. Head to nearest pub.
    3. Enjoy several adult beverages.
    4. Look a pretty girls.
    5. Forget about this weeks trades as there’s always next week.


  7. mjtplayer says:

    VIX low today at 11.82, which is very close to the low of 11.71 two weeks ago, potential bullish “tweezer” pattern in the VIX. See you at VIX 17+ in the next week or 2.


    • Many sentiment indicators do not agree, see you at vix 9.0


      • rc1269 says:

        i think the equity market is almost structurally incapable of getting to a VIX of 9. 9.39 was the all time low, in 2006. but great insights from The Donald are always appreciated, thanks


      • mjtplayer says:

        Agree with RC, the last time the VIX traded in the 9’s was Feb 2007. In fact, it’s only traded in the 10’s once since then – 8.5 years. However, the VIX has bottomed in the 11’s (like today and 2 weeks ago) or in the low 12’s and subsequently rallied at least 25% on 31 different occasions since Feb 2007.

        33 occurrences since Feb 2007, 31 of them bottomed in the VIX 11’s or low 12’s, only 1 bottoming in the 10’s and 1 bottoming in the 9’s. This gives you a 6% chance of the VIX dropping into the 10’s or lower and a 3% chance of the VIX dropping into the 9’s.

        I like my chances, see you at VIX 17+ over the next week or 2.


        • zepfan123 says:

          Well we’ve seen the VIX run up to about 20.00 area several times the last few years when we’ve had good multi day pullbacks,like the market drop we got back in Oct 2014 to SPX 1820 for example taking it over 20 real quick…so if we drop good again doubt VIX 17.00 will happen. Just a drop back to SPX 2040 in the next week or two would probably get it to 17 or higher easy. At VIX 12.40(ish) wouldn’t take much.


          • NEWBIE says:

            The big drop is going to come from up here most likely overnight with no warning and the masses will be trapped and vix will shoot to the moon. This will be no coincidence its all preplanned an coordinated by the big boys.


        • Mjt / Zep. I tip my hat to your knowledge of Vix, You both make it sound easy just to buy very confidently at current levels and sit back and wait, but can the market really make a price on a financial instrument,with such high odds of success.


  8. ABchart says:

    Finally the Greek authorities confirmed that the Athens Stock Exchange will open Monday. They requested the assistance of the ECB.


    • mjtplayer says:

      Greece has been trading this whole time via the Greece ETF: GREK

      This ETF just made fresh 3yr lows on Monday and is very close to testing the 2012 lows. I’ve said it before, I’ll say it again, don’t buy Greece until they go bankrupt. Every bailout program implemented just delays the inevitable, but in the process further destroys the Greek economy through higher and higher taxes, more regulations and an overall feeling of hopelessness. Until they go bankrupt, wipe the slate clean and start over; Greece continues lower. It’s sad, but those are the consequences of poor decision making by politicians…

      Liked by 1 person

      • ABchart says:

        Thanks MJT.
        I do not touch the Greek stock market, but I look at the situation there because it influences th trend of the banks in particular (15% of the CAC). I read few days ago that Greek banks needs about 17 billion to reopen.
        I think the ATHEX will drop about 30% in the coming days even if ECB support in the early days. Lack of confidence.


  9. zepfan123 says:

    So the bait & switch sideways action continues.-Guess we’re all just going to have to keep guessing when the next real breakout happens. Right now I don’t feel like it’s going to be in August.- October maybe ?


  10. uncle10 says:

    Going home short the market this weekend. I’m waiting for Lee to chime in with a cheap short comment before I go all in 😉
    good weekend all.


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