Friday update

SHORT TERM: gap down opening, DOW -46

Overnight the Asian markets gained 0.2%. Europe opened lower and lost 0.6%. US index futures were lower overnight, and at 8:30 monthly Payrolls were reported lower: +215k v +223k. The market gapped down at the open to SPX 2079, dipped to 2076, and then tried to close the gap. The market had closed at SPX 2084 yesterday. At 10am the market hit SPX 2082 and then headed lower. By 10:30 the SPX was trading at 2073. After another rally attempt, this time to SPX 2080, the market hit 2068 at 1:30. After that the market tried to rally again. At 3pm Consumer credit was reported higher: $20.7bn v $16.1bn. The rally carried the SPX to 2078 where it closed the week.

For the day the SPX/DOW were -0.30%, and the NDX/NAZ were -0.25%. Bonds gained 14 ticks, Crude lost 80 cents, Gold added $3, and the USD was lower. Medium term support remains at the 2070 and 2019 pivots, with resistance at the 2085 and 2131 pivots. Today the WLEI was reported unchanged at 50.2%.

The market gapped down at the open for the first time since last Thursday. It then tried to close the downside created at SPX 2084. After two attempts the market dropped to SPX 2068, the low for the week, and then rallied. Thus far, the short term count continues to unfold as expected. After the SPX 2133 high: Minute a to 2064, Minute b to 2114, and Minute c underway. The downside target remains SPX 2045, where C = A. Best to your weekend!

MEDIUM TERM: choppy uptrend weakens further

LONG TERM: bull market


About tony caldaro

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41 Responses to Friday update

  1. Oil shares seem to be all touching key L.T. trendlines right now. Is it time to buy?
    Want to see some charts?

  2. I am not good at ew like most who post here. So I look at the over all picture and zoom out. While 2207 is 1.618 of P1, 2124 is 1.5% of P1. If P3 is complete, I believe price could be trading a P4. The internal counts I’ll leave for the experts. I am most likely 100% wrong.

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  4. Rodneysussman says:

    This Is fun Nats losing 5-4 bot 9

    Sent from my iPad


  5. The yield curve seems to be flattening. What’s the likelihood of an inverted yield curve in the near future?

  6. Gary Lewis says:

    Tony, I’m looking at BHP for a possible successful test of the weekly low next week at 36 (and some adding to my long term holdings in it.). Not sure how to follow all of the a b a b action on the weekly chart you keep. Are you seeing this going down lots lower? Like below the P IV marked around 20? Thanks for your thoughts.

    • tony caldaro says:

      BHP had a very weak Major 5. So the logical support during the bear market would be between Major 1 and Major 2, i.e. $26 to $37.

    • EL MATADOR says:

      Gray if your playing it for a sizable there is some potential but keep your eye on it, IMO, we have not see the bottom yet. I see 34.1 to 31.86 zone as strong resistance for a respectable bounce. But I don’t thing we have seen the lows in the commodities BHP mines (including oil), if this hold true, which I strongly believe it will, then there is no reason why BHP should not head lower along with the commodities it mines. The aforementioned then bring two addition critical price point to mind, assuming 34.1-31.86 zone is breached, the next support would be 24.60 – 23.9 support zone but we be start seeing serious global growth improvement by this price zone or else BHP will puke all the way to 16 – 13 zone….There you have it, MIS DOS CENTAVOS…cheers and gl Gray.

  7. Anyone get a look at the DXY chart for today? If that isn t a bearish reaction to the jobs number…started out at 97.5 shot up to 98.25 after NPR..sold off to 97.25.Quite a reversal.Second time its bashed its head on 98.25 and went lower.Just on technicals you d think dollar falls next week (and gold goes up?) Goldfingers crossed.

  8. I’ll be looking for a sell signal next week in the 2085-2090 area to ride down to TC’s 2045 target. Been some really nice clean swings lately.

  9. EL MATADOR says:

    Don’t get to complacent.

    “Expect more dislocations! The markets have grown fat, dumb, complacent and happy since 2009, courtesy of massive doses of monetary morphine. QE went the way of the dodo here several quarters ago. And now it looks like we may be on the threshold of the withdrawal of even more easy money rocket fuel. Since investors haven’t had to deal with an interest rate hike in more than nine years (June 29, 2006, to be exact), they could get severe indigestion from the first increase and any that follow it.”

    • NEWBIE says:

      I can already see it now this market is going way lower than anyone thinks, there will be no Primary 5. Market Top is in and soon its game over on many levels. Vix & Gold is going to skyrocket and quite possibly the USD is going to get devalued or replaced. The current wave is going to take us well below 2000. The last 8 months of the hasn’t done jack, the crushing of commodities, the crushing of volatility- this is no coincidence guys. This recovery has been a farce: 19 Trillion Dollar Federal Debt, Tons of Unfunded Liabilities (SS/ Medicare/ Budget), Cities going bankrupt, Healthcare going down the tubes, Mostly Low paying/ part time jobs being created, bogus gdp & unemployment numbers (revised- recalculated). Big change is coming, open your eyes!

      • Gary Lewis says:

        I can’t help but marvel at all the financial disasters we’ve been having, Greece, Puerto Rico, collapsing commodities, failing hedge funds, …, and the market shrugs it off. Any of these events would have crashed the market 10 years ago. I agree that one morning, we will wake up and it will be “game over” without any prior notice. Don’t know how they can possibly continue this charade much longer.

  10. fishonhook says:

    Kept my ill timed shorts on at the close. The market feels like it wants to have a nice drop out of the range BUT Cb trump everything. A CB announcement this week-end and we are off to the races again

  11. Thanks Tony, still makes a ton of sense to me. Didn’t see the lower low this week for my Bradley study, so last Monday (at day 5) was it for a two-week reaction extreme. Other than that, this looks perfectly normal especially if we get some kind of low early next week.

    The one caveat for a wave 3 up though is that credit might need to stop tanking. High yield and junk are still on the lows, and Fil Zucchi on twitter reports credit conditions for IG CDX, and he is showing what looks to be a ton of stress building in the credit protection world, mostly based on energy issues.

    • Been watching HYG also…energy price drops like we ve seen have ALWAYS led to dysfunctional markets usually within a year.A good warning sign.

      • EL MATADOR says:

        These deflationary commodity prices in conjunction with the Fed’s rum punch of raising interest rates is going to cause a bankruptcy domino effect in the energy/mining industry.

        • Yes…dislocation is the word of the past and future.

        • tony caldaro says:

          You seem to forget the futures markets.
          If some companies have not hedged production, with the numerous opportunities since Crude was $100, then they need new management anyway.

          • EL MATADOR says:

            Tony a lot of the global giant’s screwed up and get their hedging time backwards. E.G. many mining/energy companies have only started looking hedging their reserves in the past year or less well after their respective commodities had already entered a bear market. This would have been fine had they hedged near the top and/or if commodities are to drop drastically further but how much further could most of these commodities prices drop. And here is the kicker if and when the global economies start entering commodity inflationary pressures these hedges are going to “rob” these corps of any future profits from rising commodity prices. And it’s not just the mining/energy corps that historically get their hedging wrong, airliners are notorious for get their hedging wrong.

            Here is a article from Delta airlines losing money and their oil hedge back in the 1Qtr.


            When corps incur hedging losses they list them as “one timers” or “special expenses” so the adjust EPS don’t look so bad.

          • EL MATADOR says:

            Tony, Would like to add one other thing, if corps had gotten their reserves hedging timing right they would need to be reporting those multi-billion dollar write-downs on their reserves since the hedging would of had offset any write-down losses. But base on what they have been reporting we know every well they have been screwing up big time.

    • tony caldaro says:

      Corporate credit risk has been rising since mid-2014.
      Junk bonds have been declining since around the same time, but are substantially off their lows of December.
      People often see what they want to see in data, technicians just look at the charts =)

      • I hear that Tony, and appreciate your thoughts. Fil is a TD guy mostly, and correlates IG CDX to the SPX for risk. The IG CDX data is more of a notable thing right now then the slow burn in junk and high yield for a long time. The IG CDX is at levels as of yesterday and today that have correlated with multi-week or multi-month corrections though, so I guess the idea is that the credit stress probably has to correct quickly, probably at or around the time we see that 2045 area hopefully next week.

      • tony caldaro says:

        Well these guys lost money because they bought futures in a bear market … duh!

  12. tommyboys says:

    BINGO 😎

  13. kvilia says:

    Thank you, Tony.
    All: And the trivia questions of the day: Where do you think is RUT Fib 38% retracement from 10/15/14 to 6/23/15 (ATH)?
    Have a good weekend.

  14. mike7x says:

    Thanks Tony. C=A

  15. stephenk1980 says:

    Thanks Tony. Looking forward to weekend update. Maybe this minute C might sub-divide.

  16. Tony,
    Looking at this weeks action I was wondering if the case for a B wave triangle is gaining any probability?

  17. Tony,
    Still think PRI IV is 50/50? Thanks

    • vorfahrt says:

      I’ll answer for Tony 😉 Yes it’s P4, 150%. 😉 No I have no idea but it sure feels like it. A long, drawnout sideways correction like P4s like to be. Then 2 more years of P5 and another correction. But there’s a bull in bonds to invest in as well. There’s a bull market somewhere as they say.

    • tony caldaro says:

      60/40 against details in weekend update

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