Friday update

SHORT TERM: fourth gap down opening this week, DOW -531

Overnight the Asian markets lost 1.8%. Europe opened lower and lost 2.7%. US index futures were lower overnight as well, and the market gapped down at the open to SPX 2016. After a dip to SPX 2013, still holding the 2019 pivot range, the market rallied to 2025 just past 10am. After that the 2019 pivot was broken as the SPX dropped to 1993 by 11:30. Then after a rally to SPX 2009 just past noon, the market made another low at 1990 at 1pm. A rally to SPX 2005 followed, but the next decline entered the 1973 pivot range by 3pm. Then after several bounces the market closed at SPX 1971.

For the day the SPX/DOW were -3.15%, and the NDX/NAZ were -3.90%. Bonds gained 13 ticks, Crude lost $1.00, Gold added $6, and the USD was lower. Today the WLEI was reported lower: 49.6% v 50.1%. Medium term support drops to the 1956 and 1929 pivots, with resistance at the 1973 and 2019 pivots.

The market opened with another gap down. At the open it held the 2019 pivot range, but after an hour of trading that support gave way. The market then continued lower until it hit the next support at the 1973 pivot range in the last hour of trading. Quite a selloff today after the six month support level around SPX 2040 broke at the close yesterday. Looks like Primary IV is underway, unless the market can rally strongly next week. Short term support is at the 1956 and 1929 pivots, with resistance at the 1973 and 2019 pivots. Short term momentum hit extremely oversold today, and closed there. Best to your weekend!

MEDIUM TERM: downtrend

LONG TERM: bull market


About tony caldaro

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110 Responses to Friday update

  1. Don’t know where price will finally find support. Zooming out, if P4 retraces 0.382 of P3, it would be in confluence with major trendline support.

  2. fotis2 says:

    Thank goodness for the Marines on the French train, best story this year. OO-RAH!

  3. originally printed here on July 24:

    “standard_and_poor says:
    July 24, 2015 at 12:26 pm
    i have rarely been net short since spring of 2009.
    standard_and_poor says:
    July 24, 2015 at 12:23 pm
    mid-day market update for friday,
    fairly sized downswing is likely within the next days to weeks, i am net short :
    see bottom of blog’s comment section”

  4. M1 says:

    NAZ long term support was hit today and this index is now 10% down from its all time highs of mid july.
    In my opinion the end of the correction should be around the corner if is not already done.
    The preferred count is still in play but at an inflection point . A further decline will suggest primary wave iv is unfolding (alt count Nº1)

    Yesterdays chart

    Todays chart

  5. M1 says:

    Alternate count

    Yesterdays chart

    Todays chart

  6. Well 346m shares on SPY today…if this is still a bull, we should bounce Monday at some point…probably after an opening drop…or if China gets more dovish-overnight futures.Good luck all.

  7. Greg Polites says:

    Hi Tony; congratulations on holding to your expectation of SP2040 (or worst). Looking forward to your weekend update. At the close today my SP and DOW indicators generated a signal forecasting a minor bounce (or sideways move) to be followed by new lows. Oil and commodities have been generating the same alignments recently and their resulting price action was (is) ugly. Details at:


  8. lunker1 says:

    Looking left the Feb low was 1981 and the December love was 1973. Price could bounce to 2063, 2079, or 2093.the Dec -Feb highs.

    If this to decline is the CD of an ABCD from 2019-1821, then the D target is 1936 (the top of the 1929 pivot)

  9. Well, we have a bradly turn date on the 26th. Opex could be a major high or low. Leaves major 4 option open for a rip roaring bull feast next week. Everyone now ubber bearish

    • Along those lines, and I realize this is a long shot from here but who would have guessed 121 down this week into an OpEx?

      The Bradley date on 8/12, 8/13 or 8/15 (depending on who you asked) was accompanied by a five week low at 2052 (below 2064), and saw a higher high this week up to 2103. That higher high (or lower low) in the next full week is the first 100% expectation I have for any Bradley from an extreme in the past three years. Check.

      The outlandish part though is that the final higher high (or lower low) is expected in no less than 5 days from the Bradley at the extreme. So far 2103 was on day 3. So based on this, and its been 100% the past three years, I’m expecting above 2103 this week. I can’t imagine this would work, but if it does its a miracle or something. Cannot figure out any way it would happen but maybe miracles happen.

      The real kicker though would be if we did see above 2114 this week or early in the week after (MJTplayer can set me straight if I’m wrong). That would be a Bradley extreme high. So then I’d be expecting the reaction down.

      I have no idea how the second 100% thing from the 2052 extreme low is gonna work though. No idea, so I’m expecting the first failure of that in three years this coming week.

  10. blackjak100 says:

    I said it earlier to my father, but Rory Handyside just tweeted………………

    Tiger woods is leading a golf tournament and the S&P 500 is down for the year. I am living in a bizzaro world.

  11. purplember says:

    Tony thanks for your help and guidance in the future. you stayed with your believe a week ago for 2040 or less when it looked like market may be going much higher. interesting 2 days to say the least. i said 2 days ago it sure feels like early 2008 or 2011 and was kinda beat up for it. maybe after today they feel it……

  12. mjtplayer says:

    CNBC to broadcast a special Sunday night at 7pm “markets in turmoil”. That’s a signal the low for major A was either today or coming early next week. I think the last time CNBC ran a Sunday night “special” it was during the Ebola scare in Oct.

    • True…but they had them all the time in 2008.However, since this is not a confirmed bear market yet…you might be on to something.What s Gartman saying?

      • mjtplayer says:

        Gartman thinks the bottom is in with oil since it printed below $40 today. We could certainly bounce from here, but calling a bottom might be premature.

        • John Bell says:

          almost always do the opposite of Gartman and it works out better.

          Just my 2 cents. We are at the tail end of the large oil use period. Then oil use tapers off pretty soon all the way into fall. Then gradually picks up some as we head into winter. So if they keep the pumps pushing oil out full like they are now and that is very likely, then the oil glut will grow as we head into fall and that will put downward pressure on oil, $20 oil is possible maybe not this year but next. The game of oil chicken is on – pump as much as you can to maintain market share until your wells or companies go under. Then scrap those and pump more with the remaining wells. The game of chicken goes until major companies and countries go under (Venezuela and others for example). The supply is cut back because of all the bankrupt companies and countries.

          The oil price insurance for most is about to be renegotiated for the next fiscal year. Many companies survived on oil insurance paying if the price went below say $60 or $70. Now they have to negotiate another price insurance contract at a price so low now they cannot make money already. Oil price insurance companies took a beating, so like flood plain insurance for a house. It will get real expensive next year because now your house was found to be in a flood plain.

          So low oil prices probably for up to 1-2 more years to complete the shake-out consolidation..

          • John Bell says:

            one last oil final note. The oil glut recently is mostly due to decreasing demand rather that increasing production. When demand for oil decreases and if it stays low a while longer and keeps decreasing that tells you something about the economic strength of the world. Sinking growth.

          • …and the bond yields keep falling….and WLEI is falling.I haven t checked the sky yet…

          • nsteve24 says:

            John, decreasing demand is incorrect.

            Global Petroleum and Other Liquids Consumption
            EIA estimates global consumption of petroleum and other liquids grew by 1.1 million b/d in 2014, averaging 92.4 million b/d for the year. EIA expects global consumption of petroleum and other liquids to grow by 1.3 million b/d in 2015, unchanged from the previous month’s STEO. Growth in 2016 global consumption was revised upward by 0.1 million b/d compared with last month to an average of 1.5 million b/d. Projected real gross domestic product (GDP) weighted for oil consumption, which increased by 2.8% in 2014, is projected to grow by 2.5% in 2015 and by 3.1% in 2016.

            Consumption of petroleum and other liquids in countries outside of the Organization for Economic Cooperation and Development (OECD) grew by 1.4 million b/d in 2014 and is projected to grow by 0.8 million b/d in 2015 and by 1.2 million b/d in 2016. Iran is expected to experience an uptick in economic activity and petroleum consumption, assuming implementation of the Joint Comprehensive Plan of Action (JCPOA) between Iran and the P5+1, which was announced on July 14.

            Despite the slowdown in economic growth in the second half of 2014 and thus far in 2015, China continues to be the main driver of non-OECD consumption growth. China’s consumption growth is expected to average 0.3 million b/d in 2015 and 2016, below the 0.4 million b/d growth in 2014.

            After falling by 0.4 million b/d in 2014, OECD petroleum and other liquids consumption is expected to rise by 0.5 million b/d in 2015 and by 0.3 million b/d in 2016, reaching an average of 46.5 million b/d, the highest annual average level of OECD consumption since 2010. The increase in 2015 stems from both economic and weather factors, with the United States contributing most of the annual consumption growth. U.S. consumption is expected to grow by an average of 0.4 million b/d in 2015 and 0.2 million b/d in 2016. Several other OECD countries saw economic conditions improve as they emerged from recessions, particularly countries in Europe and to a lesser extent in Asia. In addition, colder-than-normal weather early in 2015 across Europe contributes to a projected 0.1 million b/d increase in consumption in OECD Europe in 2015.

          • nsteve24 says:

            EIA U.S. Energy Information Administration
            Release Date: August 11, 2015

          • John Bell says:

            thanks. EIA is only projection data for 2015 and 2016 and it is the recent 2015 data that is of concern and they are not showing that. And they are almost always optimistic. The early real data for 2015 up to pretty recently says their estimates are too optimistic and demand is actually falling in the last few months. But EIA will not report on that for a while yet or not publicly lest panic set in. Just like the rosy future GDP forecasts by many which always come down in reality or they fake the data by changing the calculations – USA, China, etc.

            It is very possible oil may bottom in the low 30’s this year, but really bottom next year in the low 20’s.

          • nsteve24 says:

            Sept 15 CL at 40.57, downside target hit, this is the 1.618 extension of the bounce from 49.69 in Mar to 64.45 in May. This is a solid Crab Pattern, the 1.618 Fibonacci level target usually provides a substantial reversal.
            Several potential upside targets include 44.20 and 55.33

    • blackjak100 says:

      and in 2011…but an interesting statistic I just read from Rory Handyside is the 1 st dev move in terms of historical distribution of events = 8.389% (1955.62). This corresponds to the 1956 pivot & 360 degrees down from 2134. If we blow through that pivot before bouncing significantly, I’d get extremely concerned.

      • mjtplayer says:

        That’s interesting BJ, the minimum downside projection from the H&S topping pattern in the SPX is around 1,946. Lots of prior support and projection targets coming-in around 1,946 – 1,988. We should bottom around here for major A – IMO. I’m looking for a very choppy and volatile rally back the scene of the crime near 2,040 for major B.

        If we blow through the 1,950 area, 1,920 is the next target – an official “10% correction” in the SPX.

  13. ABchart says:

    NYMO: too low for PIV

    Last chart, but there are 15 like this that are at extreme levels, who argue on the one hand for a rebound, and other hand we are not in a VIP but in M4. IMO

  14. Gary Lewis says:

    Looking at my weekly close data, I see that we are a bottom of a well defined channel. When you connect the tops (SPY) on Feb 20 at 211.24 and May 22 at 212.99 and connect the lows on October 17 at 188.47 and today at 197.63, it makes a nice channel that we haven’t broken.

    I’m also seeing pretty consistent cycle lows at approximately 40 week intervals. I’ll revive my dormant website this weekend and put in the data for your review. So far, I’ve tracked these 40 some week cycles back to 2011 and it seems pretty consistent.

    Also, we are as oversold as ever with a standard deviation of -3.60 on the 20 day average and -3.62 on the 20 week average. I’m thinkin Cycle Low ???

  15. How about some pivot pong. Assume 1970 holds 2019 for wave 4 wave 5 to 1956
    B wave 2040 then c to 1860
    Million dollar question what happens Monday. Look forward to Saturdays update

  16. ABchart says:

    Put/Call Ratio: Highest level sine april 2014. Bounce needed.

  17. nardobeme says:

    I watch Tim Knight of Tasty Trade everyday; his show is “Trading the Close” should anyone have interest. He’s a brilliant chartist/ trader imo. He does lean bearish in the nature of his trades, but, to each their own. I know it’s risky, but I am currently long $SPY, short $VIX for an anticipated move next to week to resistance (former support) level of 2040. From there, that will be another amazing short opportunity. Fingers crossed…

  18. drwarmington says:

    I never liked the sometimes comparison to 1987, but today I looked at the chart again and it is eerily the same as we have now. Look at it and you will be surprised. Could it happen in August?

  19. I did not expect SPX 1990 to crack, but what else is new. 🙂 The bottom of the fourth and last channel I have is at 1910 and climbing now. Below that it’s all up for grabs.

    • instigator928 says:

      Nice chart.

      • drwarmington says:

        I wonder where it closed on the Fri. before black Mon. 1987?

        • Gary Lewis says:

          I recall returning from three months in the Dominican Republic (I saw the crash coming and knew that if I stayed in town the market would find a way to take my money). I was at the library going through Wall Street journal, collecting data and updating my charts. As I got to the Friday before the crash, a shiver ran through my body as I saw that it looked like the market was starting to recover and I probably would have been buying. So glad that I got out of town for that. The market ALWAYS finds a way to take your money. For that reason, I prefer options to limit my risk.

    • nardobeme says:

      Yes, nice chart AB. Thank you kindly for sharing.

  20. zepfan123 says:

    What a difference just 2 days can make. Whole different ball game now. What has been strong support (SPX 2070) for most of the last 4 months into just last Wednesday now looks like Mt. Everest, a 100 points above us now at todays close of SPX 1970.
    I posted this comment right after the close yesterday :

    zepfan123 says:
    August 20, 2015 at 4:00 pm
    Thanks again TC for your own great market analysis and for providing this forum to post our own market views,opinions and trades or trade ideas…etc. Lots of multi-month support levels on several key indexes broke today so it could to get very interesting. We may finally have a breakout. Maybe. Can’t wait to see if we go back up to the SPX 1945/1950 area tomorrow morning..or just gut this pig hard again right out of the gate..
    My opinion is that no matter what happens tomorrow…we’ll tag the 1980 area minimum by next week.
    Of course we all can’t wait to see what Monday does, but with todays close, I think any one who does any kind of market analysis would have to agree that a return to the Oct 2014 low of SPX 1820 that me and a few others have been talking about for the last week is on the table now.-

    • EL MATADOR says:

      Agree Zep….a re-test challenge of the Oct 2014 low is 100% on the table NO EXCEPTION!!!!…..64Trillion QE question is at what price level are the CB’s going to intervene to alter this market direction.

      • Gary Lewis says:

        Agreed. I think that they will keep smacking it down until the Fed gives in and says that things are too weak to raise rates this year. Then P5. To the Moon Alice!

      • zepfan123 says:

        Yea,El Mat..thats the 64 trillion dollar question alright. I’m sure anything under todays close of 1970…someone out there sees a potential strong support level every 20 or 30 points lower.. I’ve seen SPX 1950 mentioned a lot by a few as strong support. If we break that..then it will be 1920 for some. But we all know and can see why 1820 could be on the table again by looking at a 12 month chart.- If..and I stress if we were to go much below 1820..a lot of regular investors would start get concerned I’m sure..and you would think if the Fed really does have any more QE tricks up their sleeve that can absolutely stop the market from falling and make it rally hard…they would use it there.Or maybe tehy’d do it at 1850 so it doesn’t quite hit tee panic button levels officially.Looking forward to Mondays action and I also will look forward to seeing what Asia’s market and Europe are doing before we open. Those markets are getting killed just as bad ,if not worse than us right now. We’ve got a global sell-off happening here at the moment.

  21. CNBC says S&P approaching correction…no further comment from me.

  22. gtoptions says:

    Thanks Tony ~ Enjoy your weekend.
    So if this is a fractal repeat of 2011, then the SPX should bottom within the next 4 days, bounce around until October, retest the lows and then its off to new highs. I do see a more bearish alternative developing in the monthly charts, but that could disappear by the end of Oct.
    GL All

    • That monthly MACD looks horrific.If it does a mirror of 2009s bottom, the next three months could be painful for bulls.Once 2009 monthly crossed up from extreme lows and broke away ,the bull market was on.Here, it looks like the exact opposite.I ve been waiting to see if we were going to recross up and negate a possible bear market warning and.I m not saying the bull is over yet but the odds are increasing every time the MACD goes lower and lower.Been looking for this since February when January gave us the back to back down Januarys…and Shemitah…lol.Good luck all I hope some people paid attention to my contributions…wouldn t blame you if you didn t.

  23. Two days in a row for INDU/SPX/COMPQ where the last print was the lowest print. Like to know the last time that happened. Played a bit smarter today than yesterday. Also was very tempted to buy the close but as mjtplayer noted earlier one sleeps better with a cash position. Looking at 5 or 6 different indices the concensus appears to indicate this monster 3 of the past 48 hours has completed. The prior 4 is way, way back at 2033. That’s potentially a 62-63 point rally for a wave 4. That would be something. To my mind this sets up next week for some large whipsaw type moves. Traders will have to be on the toes as the 4 could take days and days to complete given the potential range. For Monday however it should be a buyer’s day.

    • HW says:

      Yep, so close to pressing the buy button at 17.13 for ES contracts but managed to fight it, hopefully will have a good entry on Monday for a bounce to 2019 pivot before the final w5 into 1956 pivot

      • perversionofthemean says:

        Don’t wait until Monday for an ES contract, if that’s your goal. They start trading at noon EST.

  24. 56rambler says:

    Thanks, Mr. Caldaro,

    When we complete Major A of Primary IV, what kind of bounce will you be looking for in Major B?


  25. pimacanyon says:


    So you’re favoring the P4 count now? Major 4 is no longer a possibility?

    Thanks, and good weekend to you!

  26. fotis2 says:

    Great!Thanks Mr.Caldaro my crystal ball predicts a flood of posts (With a lot of ”I told ya”) on the weekend update.

  27. tradeanimal says:

    Thanks Tony…Your calm hands on the wheel are truly a blessing! My monthly indicators confirmed a sell signal as of today’s close. I will now await a bounce to sell into and close out my long term SPY position. What a nice ride from 2011! Thank you.

  28. ABchart says:

    Thanks Tony!

    Too much volumes on the futures.

    What are the elements that make you looking at PV rather than M4?

    • A drop below 1973 spx. Already happened, so if market will have a strong rally next week will be different count

      • ABchart says:

        Thanks Francesca!
        I try to understand if there are major elements that would tip the balance one way or the other.
        For my part, I look at the other major indices and a number of long-term sentiment indicators to compare the levels where they were in the same waves.

        • Yes, but in case of a bear market, will takes all by surprise, I am afraid. Me as well. The tenting to by the low could be bad decision as well than sell the top on a bull market. The bottom can come when the cashier is already empty by longtime. Didn’t like the close today. Could be a very huge gap down on Monday. Sentiment is still strong enough to feed the bears. I went red in many positions(bottom catching) today.

          • ABchart says:

            Since we stayed in a small range for 8 months, the break has surprised many traders. But this movement was mentioned here from a long time. Do not worry Francesca. I start looking a set of indicators and they all argue for an imminent rebound. I’m not saying that the decline is over, I think only that a rebound of 3 to 4% is imminent.
            I’ll post them this weekend under the weekly analysis.

    • I think it is the rapid and severe nature of the decline and the way it cut through support levels and pivots like a knife through hot butter.

    • tony caldaro says:

      weekly]/monthly technical indicators

      • ABchart says:

        Thanks Tony!
        – European managers do not expect a big correction but a further decrease of a few percent (3-4% on European indices). They expect the indices to the highest year-end.
        – ECB has promised to increase its QE in September to buy more corporate bonds.

  29. llerias7 says:

    New EW count needed, Mr. TC?
    I supose we are in a minor 3 of major 1 of P4, now…
    Waiting for a renewed Weekend update, tomorrow…

  30. alphahorn says:

    I’ve been on a Primary wave [4] count since the May top. It’s been painfully correct; as the SPX hasn’t made a new high, but continued to trade in a narrow range over 2 months. But, the intermediate term indicators that I follow all put in bearish crosses in early June confirming my count. It has been a very difficult year for swing traders and wave counters, but it finally appears we have some resolution.

    • Roxie97 says:

      Alpha nice charts – do you see a bounce coming? from what area on SPX to what area?

      • alphahorn says:

        I think the low will come fairly quickly, then we’ll see a triangle develop. look for a bounce in a b wave of intermediate wave (A). Looking for intermediate wave (A) to bottom 1820 after bouncing at the 1950 level.

  31. mjtplayer says:

    In pulling back the SPX chart, one sees another high/low around the time of OPEX, though this one caught everyone off-guard by being a low. We may have bottomed today or could go lower Monday/Tuesday, but we should be very close to a sizable rally back to the 2,040 area to back-test the broken neckline of the H&S top.

    One caveat: it doesn’t mean we can’t drop to 1,945 (minimum target for the H&S pattern) or even lower before the bounce.

    I think we’re close to marking the low for major A of P4, either today or next week.

  32. I wrote this on wednesday

    “August 19, 2015 at 3:53 pm
    Hi Tony, I have been a lurker for a while and I want to say your work is the best.

    Also I want to add the last 3 candles on the hourly S&P is the most bearish 3-bar candlestick pattern that I have ever seen on the S&P500. I want to say tomorrow will be a bloodbath but I know the fed won’t let it happen. This weekend is a big week for retail as kids are going back to school. Can’t have a big down day until next week, so I expect a rumor if tomorrow starts off nasty.”

    holy hell. I guess I should be proud for identifying such a bearish pattern, that was a wicked down move. But I underestimated the feds willingness to let the market decide where it wants to go. I am kind of shocked none of the fed people made a statement or a rumor came out. I remember during last October s big down move they talked about continued QE and the S&P rallied from 1821

  33. RC: So far you are looking a lot more right than wrong. No matter what happens from here on, this sell-off has already passed the point where I can claim to be 100% right. If the sell-off only turns out to be a Major 4 rather than a Primary 4, then at least I will be able to claim that I made a partially correct analysis of the meaning of the current yield spread. If it turns into a a Primary 4, then I will have to admit that I was completely wrong and that “This time was not different”.

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