Thursday update

SHORT TERM: gap opening streak broken, DOW +77

Overnight the Asian markets lost 1.8%. Europe opened lower and lost 1.2%. US index futures traded in a 40 point range overnight, but were relatively unchanged heading into the open. At 8:30 weekly Jobless claims were reported lower: 275k v 282k, Export (-1.3% v -0.4)/Import prices (-0.4% v -0.3%) were lower too. The market opened two points below yesterday’s SPX 1942 close, rallied to 1948 in the opening minutes, then started to pullback. At 10am Wholesale inventories were reported lower: -0.1% v +0.9%. Just past 10am the SPX hit 1937, then started to rally. At 11am the SPX hit 1957, pulled back to 1943 by 11:30, then rallied to 1965 by 1:30. After that the market headed lower again. At 3:30 the SPX hit 1945, then bounced to close at 1952.

For the day the SPX/DOW were +0.50%, and the NDX/NAZ were +0.90%. Bonds lost 11 ticks, Crude rose $1.55, Gold added $3, and the USD was lower. Medium term support remains at the 1929 and 1901 pivots, with resistance at the 1956 and 1973 pivots. Tomorrow: the PPI at 8:30, Consumer sentiment at 10am, and the Budget deficit at 2pm.

The market opened about unchanged today, bounced, then took out yesterday’s SPX 1938 low by one point. After that it rallied to SPX 1965 by early afternoon only to rollover and head back into the 1940’s again. This downtrend’s corrective activity continues to suggest it is not done yet. However, if the market can decline in five waves from yesterday’s SPX 1989 high we could see an end to it quite soon. Short term support is at the 1929 and 1901 pivots, with resistance at the 1956 and 1973 pivots. Short term momentum rose from oversold early to above neutral, then ended at neutral. Best to your Friday trading!

MEDIUM TERM: downtrend

LONG TERM: bull market


About tony caldaro

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135 Responses to Thursday update

  1. uncle10 says:

    Thanks Tony.
    It’s going to be a doozy next week and its all the feds fault. 😉
    Good weekend all.

  2. johnnymagicmoney says:

    lots of people not scared but still plenty of bulls and FED will probably find a way to ease people’s ears. VIX is ready to fall over. Chinese are manipulating markets, and the SP is about to break out of that wedgie ………………….today’s action was indiitive of Pre May ……………global risks dont mean shit right now

  3. Dex T says:

    A few minutes until close and no resolution today. Monday will be a gamble which way it breaks.

  4. torehund says:

    ..good weekend Tony and all 🙂

  5. johnnymagicmoney says:

    Yep as i thought……..up to 1956 down to 1942/1945 now back up to low 1950’s maybe even the 56 pivot again but at some point this F-er is gonna break out some way………… someone said it could strong close and break this wedge/triangleflag/diagnol or whatever people wanna call it

  6. johnnymagicmoney says:

    1956 hit again like clockwork……………… low 1940’s ………………might even be able to hit 1940’s and rally one more time end of the day into low 1950’s

    soon its gonna pop or drop …………………..F!!! Which way????

  7. gtoptions says:

    Thanks Tony
    That should do it, down we go into next week to finish this mess. 😉
    Good Weekend All. 🇺🇸

  8. blackjak100 says:

    Market up with 5 new highs and 135 new lows on NYSE – quite the divergence

  9. EL MATADOR says:
    • blackjak100 says:

      Mat, next week is the most bullish week of the year. Then the following 3 weeks are the worst. Does seasonality win out next week or the shemitah cycle ending?

      • Im not going to be long Monday Morning . Big news out of China Sunday. Possible Wave 3 of C Shemitah cycle ending. If we can close under 1935, I will go into the weekend short, otherwise I will be neutral at todays close. Good luck all

      • EL MATADOR says:

        Historically I agree, but since we are in an ongoing Primary correction which also historical is bearish, leads to a grudge match between the two deviating historical trends, which is likely, IMO, why we are seeing these violent whiplashing sideways grind up into Sept Opex which is still mimic of the 2011 fractals. If I was to put a triangle on this price action I would label it like this;

  10. Hour ago I was going to make a comment:Sitting at 16230 on the Dow…a close below 16500ish would cement more downside next week.But then option 2 came to me—-a rally of 200 points to finish the week above the bearish weekly chart formation I ve been watching.It would be amazing if they pull that off today.Only thing I m watching with stocks.Good luck all.

    • johnnymagicmoney says:

      I think if the SP500 goes significantly through 1956 then this is up up and up from here (same as your DOW 16500). Look at GILD, PCLN, APPL, PFE, GOOG, AMZN, FB,
      V – they all look really good here short term breaking out of that triangle already. DIS, JPM, WFC, DIS, BRKB, VZ, and BAC are neautral like the market and T, MRK, WMT, XOM, JNJ, PG, CVX, KO, and C look like crap………………add it all up and it looks neutral but the tech, and biotech showing strength and that would imply we pop up. Is the market really ready to roll over and die? Id love to buy at lower prices but when I look at stocks like GILD I am thinking it wont.

  11. 9/11 trading days, there has been 9 prior to today. Best 1.38% (2008) and 1.36% (2007). Only 2 down days, -0.01% (2002) & -0.14% (2009). Average return 0.432% which annualises to 190%. Only a small sample of 9 but definitely market friendly. God bless those poor people who suffered on that tragic day.

  12. johnnymagicmoney says:

    Here is my big question and maybe you smart guys out there can comment. We have this triangle, diagnol or whatever you want to call it that has been going on for the last two weeks. It seems to me that the FED meeting is going to be the end of it (possibly sooner but who knows). Is it breaking to the upside or to the downside??? We defintely are at the end of it and the trading range is uber tight now……………which way is it breaking and why do you think it? The timing of the FED meeting just has to be the catalyst. Honestly I have doubted the FED not easing or being doveish becasue they are money whores but its like cry wolf. Will the wold finally come and will the FED give the market its long awaited medicine? Im lost here.

    • johnnymagicmoney says:

      Maybe its breaks the triangle today to the downside and then the FED has a rebound to the trendline and it falls over again???

      • madswiss says:

        vix could launch a 3, target would be 90.45 if 100% w1 and it takes out the recent high….

        • johnnymagicmoney says:

          why do u think up as opposed to down? I totally agree its making a massive move soon by what do you think VIX increases????

      • johnnymagicmoney says:

        chart the 30 minute chart on the VIX the last two weeks…………….is that popping or droppin? Its ready to make a massive move in the next 3 days………………..FED…………………..hmmmmm

        • johnnymagicmoney says:

          looks like 1956 again, then 1942-1945

          • madswiss says:

            china bank credit falls even as they print, gdp est lowered to 5 from 7%, also Greek banks need refunding, credit crunch that Icahn warned larry feinstein from blackrock on cnbc was a red flag

  13. learner3078 says:

    Hi Tony, I would like to hear your thoughts on the near term direction of the Hang Seng, HSCEI and Shanghai indices. They have moved up a bit this week. Are they consolidating for another move up? Thanks in advance.

  14. pruthvi says:


    Is Gold Finished ‘A’ and now entered in “B”???

  15. Mr C if you could do a favor…check out the daily GDX and tell me if thats not a +div on top of +divs?Thank you.

  16. llerias7 says:

    Interesting to consider seriously:

    Probably we face several months of Bear Mkt ahead until Springtime!
    That would put us in a Cycle 2 phase!

  17. manunidhi21 says:

    Namaste Tony!
    Now it seems that last six months were easy to trade 2050-2120 and I was complaining about Algo’s 🙂
    With your “no ” rate increase expectation, will the bottom be in for P4 in next week ?

  18. pruthvi says:



    Hope all is well ,

    Now NIfty made a low @7540, is that low =C or some more down move still remaining??

  19. Lee X says:

    Never forget ….
    USA !

    “I’m not probably as bullish as I could be because I have problems with earnings growth, I have problems with multiples, I have…all kinds of problems, so I can’t really call myself a bull,” Tepper said

    But no worries tommyboys says things are fine

    • kvilia says:

      No offense the but tommy shared his opinion and you – Tepper’s.

      • fishonhook says:

        No one knows which way it is going. Whichever way it does, I am sure someone (?FSB) will come by and say told-ya-so and be a self-proclaimed hero for a day.

      • I shared my opinion and as usual he go against whatever I say . it’s a long running thing between me and tommy boy .

    • tommyboys says:

      Didn’t say that and things are NEVER “fine”. There is ALWAYS myriad worries. You can live your life chronically worrying or recognize things for what they are and profit from them. You’ve been griping for 5 years here and what good has it brought. Wonder how you would have handled the past decade and a half as Fed Chief – or how ANY of the naysayers here would have..we. All love to play arm chair QBs don’t we? .All the best to you.

  21. lunker1 says:

    Tony re possible 5 waves down from 1989 was today’s high the 2nd or 4th wave?

  22. lets me put this simple for everybody. The fed is suppose it ease when growth is slowing not raise rates. The US does not have growth , does not have inflation, and does not have earnings. People are bearish and bearish for good reason. The charts will follow the emotion not predict it,

    • Unless the federal reserve rescues us from what they themselves have caused this market is going a lot lower. I hope the do the right thing

    • tommyboys says:

      Economy IS growing – this is key. Whether it’s 1% or 5% its growth – not contraction. An eighth or quarter or half or even a full point off zero is historically WAY benign. It’s still close to free. Fed plays a confidence game and raising any amount will bring confidence and relax uncertainty. Need some reduction in uncertainty. History also shows the market runs contra to sentiment.

      • Where is the growth? Where is the earnings and where is the inflation they were expecting?

        • tommyboys says:

          GDP was 5.9% in Q2. American corporations have had such an Eps winfall they’re holding record cash hoards and doing record buybacks. Benign inflation is bullish. Oil’s drop is skewing inflation numbers to flat but I’ll take it – and more if they’ll give it. This is a huge tax lifted off consumers 👍🏼

          • uncle10 says:

            tb, do you know any company that hasn’t raised cash through selling bonds/debt? When the money is” free” people/companies will take it. I wouldn’t fall for the trap of winfall earnings that brought in the cash. And then they use that cash to buy back stock. Its a great gig while it last. btw, that 5.9% gdp was terrible news for the bulls. i know you laugh but its true. time will tell as always. gl

      • Leonardo says:

        Well said T.B’s.

        • well said? You had an inventory build in the first GDP estimate, the BEA now sees a total of $136.2 billion in inventory build in Q2. This is an all time record, and a number which suggests the upcoming inventory liquidation will be truly epic, not to mention recessionary

      • rc1269 says:

        Question TB: if raising rates brings confidence, and we all know the real economy can handle a paltry 25bp hike, then why didn’t the Fed hike quarters ago? Why would they desire to suppress confidence?

        • Now THAT S a great question.My guess is they re afraid to get the dollar train rolling.

          • The only reason why FED have to rise rate asap is a problem of collaterals creating difficult access for banks to liquidity. (deflation)
            Between deflation and a possible corrective market move, they will have to go down the way of normalising rate and eventually a new qe on the non to long future if things get nasty.

        • tommyboys says:

          Can’t speak for the concensus but if we were on a clear path today we likely may have circumvented the current volatility. Market hates uncertainty. It doesn’t matter whether they raise or not, what the market wants is certainty. If they came out and said we’re standing pat for the next 12 months – OR – we’re going to increase 25 basis points each Q for the next six Qs market would rocket. Regardless stronger currency is always the preference and bullish LT for the underlying economy. Funny just a few short years ago the dollar was not only going to collapse but go away completely as reserve – and THAT was the fear. Today we fear a strong dollar – thanks media. Fear fear fear. Guess they’re both bad lol. Would you rather live in a nation sporting the weakest global currency or the strongest?

          • rc1269 says:

            “If they came out and said we’re standing pat for the next 12 months – OR – we’re going to increase 25 basis points each Q for the next six Qs market would rocket. ”

            i think that’s probably a better explanation than suggesting raising rates builds confidence. i can buy this.

            and def a stronger USD! as Lee and HD like to say – USA, USA! hah

          • uncle10 says:

            There is a very good reason why the fed hasn’t raised rates and its not why people think.

  23. Tomorrow is Fibonacci trading day 13 off the 34 month moving average 1867 low

    1810-1840 would be a nice 5th wave bottom. .618 of 3 from 1993

    That would be a nice Major A

  24. chicotheman says:

    I doubt the chop is over and my guess is 1985 +- again before heading for the low. Maybe 1935+- first.

  25. Thank you TC. Well if we are going down now is as good a time as any. A look across a broad number of charts indicates the potential set-up is there. Whether it pans out that way is another story. SPX closed today 4.35% above its low (1867). Tech however is in a notably different situation. COMPQ closed 10.5% above whilst NDX closed 11.8% above. These tech distances may have implications regarding the magnitude of what might lie ahead. BTW, 2103 to 1867 only took a week but I’m not sure it will be straight down this time. Have a nice day everyone.

  26. blackjak100 says:

    9/11 saw monster gains in 2007 & 2008 – one was during P4 and the other in bear market. Will tomorrow repeat 2 days before shemitah cycle ends?

  27. Caldaro just an opinion do they raise rates or not ? What’s your gut say?

    • bob623 says:

      Yes, they will raise rates!

      • mjtplayer says:

        Tony – you really think the Fed is spooked and will chicken-out? They’ve been leading-up to this for months, if they back-out now I don’t think markets will like it – IMO.

        • tony caldaro says:

          Dudley has already said, increase unlikely

        • why would the market not like it? this is the reason we are selling off and down big. what has changed? more bartending and waiter jobs? the economy stinks none of the numbers are real. I am not sure if the will or will not it actually does not matter in the grand scheme of things. but the market is pushing the fed around. World banks have said not to do it. would you think the world banks would make the comments if they did not already speak to the fed.

          • tommyboys says:

            Per Tepper today global turmult driven by China selling reserves. $12T hoard will do it. Fed pretty meaningless against that. Forget Fed…

          • Tommy boy a week ago you told me China does not matter .

          • tommyboys says:

            Imo China GDP doesn’tatter to the Us Economy. If they’re liquidating substantial portions of their dollar reserves it’ll make a dent – albeit temporarily. That said they likely won’t be getting crazy with it all at once.

          • rc1269 says:

            You are correct TruthT, TommyB did indeed say China liquidating reserves didn’t matter. He was corrected. But apparently he needs to hear the news from Tepper before he believes it – even if Tepper is weeks behind.
            But some people only like to buy brand name, so it’s understandable. The next time you want to hear what Tepper will say in a few weeks time just ask and I’ll let you know.

          • soulsurfer says:

            no you THINK that’s the reason, because that’s what the media has been telling you. but the media is simply trying to connect dots. clueless as usual. has anybody actually asked every trader, or a very representative sample size of all traders, why they sold? that’s where your answer is. but nobody has done that, and thus nobody knows. maybe it’s because of china? media thinks so too, but they are clueless here too. did they ask enough traders? no they just make things up: oh china slowing down, US markets down, then it must be related. many have actually been buying, me included. market is down: cheaper. prices i like it. ask yourself, where will it be in 10yrs from now? higher then now. guaranteed. takes time to make a million. 10yrs is good enough for me 🙂

          • fotis2 says:

            Agree with Soul the Media hardwires people into believing the ”News” is responsible for every squigle in the Market.Always the headlines to the tune of:”Because of……here you can add anything from Greece to Fed to China to El Nino etc,etc etc ad nauseum…Never a headline ”Market sold off because the MACD has been on sell 3 bars in a row or a DT or went UP because of CH , hit long term support line etc.”

        • Gary Lewis says:

          Wouldn’t that be a stunner! Fed does not raise rates and the market sells off. I think that they go 10 basis points. Market rallies.

      • Then I don’t think they raise in December either. We’ll likely get some weather event, Partial Govt shutdown or geopolitical/global market turmoil in Q4 that will keep the Fed waiting for confirmation in Q1 (data dependent). If the U.S. Economy slows and/or the Markets are teetering/trying to regain traction following a “brutal” Pri IV, this gives the Fed a viable reason to delay into February. They won’t want to further exacerbate the problems by killing consumer confidence or taking away Santa Claus’ rally. I personally don’t believe that Pri IV will be brutal, but 300 points on the S&P is catastrophic to those who can’t remember what it feels like.

    • mike7x says:

      Raising rates (25 basis pts.) is the right thing to do. Now is not the right time to do it. The FOMC statement will try to calm the markets saying the economy (including jobs) is still improving, but global concerns weigh. A Fed decision will continue to be “data” dependent and a rate increase could happen before year-end. Markets should be volatile, with an upside bias. Opex should help.

  28. tradeanimal says:

    Thanks Tony…your calm analysis has been very beneficial. Sold my long term portfolio at month end as price closed below the 8 month SMA. Been a great profitable ride for the past several years (tax man cometh now!). Will wait on your analysis and the weeklies to re-enter. Best to all.

  29. H D says:

    Hi Tony, no gap and an SPX +10 day,,,, maybe our bots r back.

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