Thursday update

SHORT TERM: gap up opening fades, DOW +23

Overnight the Asian markets gained 0.9%. Europe opened higher and gained 2.3%. US index futures were higher overnight. At 8:30 weekly Jobless claims were reported higher: 282k v 271k, and the Trade deficit narrowed: -$41.9bn v $43.8bn. The market gapped up at the open to SPX 1958 and continued to rally. The market had closed at SPX 1949 yesterday. At 10am ISM services were reported lower: 59.0 v 60.3. Around 11am the SPX hit 1975, was extremely overbought, and then started to pullback. The pullback continued until 3:30 when the SPX hit 1945. Then after a bounce to SPX 1956 the SPX closed at 1951.

For the day the SPX/DOW were +0.10%, and the NDX/NAZ were -0.45%. Bonds gained 9 ticks, Crude rose 60 cents, Gold dropped $8, and the USD was higher. Medium term support remains at the 1929 and 1901 pivots, with resistance at the 1956 and 1973 pivots. Tomorrow: monthly Payrolls (est. +221k) at 8:30.

The market had a gap opening for the twelfth day in a row. The rally carried to SPX 1975 closing Tuesday downside gap opening. Then the market dropped to SPX 1945, closing today’s upside gap opening. Market continues its volatility. Thus far the rally off Tuesday’s SPX 1903 low continues to look constructive: 1938-1920-1940-1929-1975-1945. As long as SPX 1940 holds any pullbacks the market could continue to move higher. Short term support is at the 1929 and 1901 pivots, with resistance at the 1956 and 1973 pivots. Short term momentum pulled back to neutral after hitting extremely overbought this morning. Best to your Payrolls trading!

MEDIUM TERM: downtrend

LONG TERM: bull market


About tony caldaro

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175 Responses to Thursday update

  1. Seems like a strong wall of support has been established by algos in the area beetween 1912 and 1893 es (Globex) but any further touches of the 1912 should kick bounce hard and V reverse ( 1912 SPX ). From now on this should become unbreakable, whatever intensity could have the next move down. The pat will take to a 1st profit target of 2032 and a 2nd one of 2092. The market will find his way to it no matter what. Call it B or what else, don’t know haw to call it. The day has seen a distribution of shorts and an accumulation of long. That will be defended. The trap has taken a full trading day but it is set. Maybe someone knows of good news out of China soon that we ignore ? SPY will direct the dances at this turn. Has an anchor point at 191.80 and rising, it is from SPY that the the algos structure will move, difficult for futures traders, I am afraid. If anyone like to follow use the set 377T

  2. pbnj123 says:

    I just cannot help but notice how much this looks like the pattern of PII.
    We would be in the final stages of Major A now and next week or 2 would be up into Major B.
    Does anyone else see that?

  3. rc1269 says:

    today is shaping up a lot like Friday 8/21. gap down and then persistent grind lower all day

  4. Unless we gain 460 pts in the next 2 1/2 hours…another confirming bear weekly sell signal.Next would be a monthly close under 16500.Probably close the coffin on the bull then.Be careful all.

  5. stmro says:

    Looking more and more like a trend down day. Test of 1903 coming today. Below that, 1867.

  6. stmro says:

    Russells much stronger than SPX and DOW today. Interestingly VIX up by far more than SPX/DOW are down, whilst breadth is actually relatively strong for such a negative day. Don’t know what to make of all this tbh – conflicting signals.

    Also these last 2 weeks the US markets have been predominantly following China and Japan, which is curious as before last week, these markets have had no correlation whatsoever. It’s as if everyone woke up one morning and collectively decided that China was a ‘big deal’. All very irrational and/or orchestrated.

  7. mjtplayer says:

    Brent just broke $50, WTI desperately trying to hold $46.

    Stocks just off the LOD and the 1,929 pivot is gone. Yen at HOD trading under 119 and the Euro is now positive at HOD – both on short covering, but this is turning into more of a short squeeze in the Yen. As long as the Yen continues to rally, the Nikkei is toast.

    Looks like a lot of nervousness about being long into the holiday weekend, as China re-opens Sunday night and Japan is open as well, but we’re closed till Tuesday.

  8. pbnj123 says:

    You still think this is Primary IV playing out?
    This is looking just down right terrible.
    rc has been making some good pints that this might be something bigger.
    What are your thoughts?
    Thank you

    • stmro says:

      The move up over the last week certainly looks corrective, and most people here appear to be in the PIV camp, but expecting a lower low in wave C of an ABC.

      The thing is, I remember TC suggesting that much lower than 1867 and the bull market is over! Doesn’t leave too much margin for error.

    • tony caldaro says:

      Still looks like P4

  9. Leonardo says:

    Exiting out of my puts at $SPY 190,88, the pm low, and then rolling over to $TZA and only a few puts. I *think* a smallish bounce will occur mid-week of next.

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