Friday update

SHORT TERM: gap down opening reverses higher, DOW +103

Overnight the Asian markets lost 0.2%. Europe opened lower and lost 0.7%. US index futures were lower overnight, and at 8:30 the PPI was reported flat. The market gapped down at the open to SPX 1945, then dropped to 1939 by 10am. At 10am Consumer sentiment was reported lower: 85.7 v 91.9. The market then started to rally, and hit SPX 1956 by 1pm. After a pullback to SPX 1947 by 1:30 the market rallied again. At 2pm the Budget deficit was reported lower: -$64.4bn v -$128.7bn. The rally then continued into the close when the SPX hit 1961.

For the day the SPX/DOW gained 0.55%, and the NDX/NAZ gained 0.60%. Bonds gained 10 ticks, Crude dropped $1.15, Gold slid $2, and the USD was lower. Medium term support rises to the 1956 and 1929 pivots, with resistance at the 1973 and 2019 pivots. Today the WLEI was reported lower: 48.0% v 48.3%.

The market gapped down at the open today, hit SPX 1939 two points above yesterday’s low, and then moved higher for the rest of the day. A consolidation day inside yesterday’s SPX 1937-1965 range. The market continues to look corrective. Short term support rises to the 1956 and 1929 pivots, with resistance at the 1973 pivot at SPX 1993. Short term momentum dropped to oversold early then rose above neutral. Best to your weekend!

MEDIUM TERM: downtrend

LONG TERM: bull market


About tony caldaro

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47 Responses to Friday update

  1. tommyboys,same thing if you draw it in the line chart(daily close)

  2. no matter what happens, This FED HIKE, and rumors of fed hiking is go to create MASSIVE opporutnities on the stock market.

    Here is a cool chart ==> says aapl is a chart that has lots of profit potential going into the end of year.

    I sold my aapl in 2014, but licking my lips, because its sold off so hard this year. I think I should get into a buying mood soon. I do not want to miss out on the rally coming.

    • tommyboys says:

      Not sure you can draw the tops line over one tail and “through” the next. Tails count. That high tail – albeit just one data point – likely alters the symmetrical to an ascending triangle. But who knows.

    • ewmarkets says:

      TA books I read say that when a triangle has passed 2/3 of its space, it loses its potency. Here, we’re almost at the apex, way passed 2/3 point. However, price has been in a range and, sooner or later, price shall come out of its range.

  3. fionamargaret says:

    Thanks Tony and everyone – good good weekend all x

  4. torehund says:

    Just an observation from here in Europe: There is a sincere and optimistic surge among the population despite the Economic decline; it seems like the misery of Syrian refugees is changing the perspective. A collective whiff of compassion is blowing, especially in the Northern countries. Germany is surprisingly accommodative, contrary to preconceptions of many….
    It could be the glue that Europe needs right now, keeping it together.

    • torehund says:

      …there is always a bull-market somewhere🙂

    • Isn t there a fear of Europe becoming just a Middle East Lite? As in California which is now Mexico Lite? A loss of identity thats been in place for centuries in Europe.France–not France, England–not England.Is this all right with you? Most people in history fight to preserve their homelands.The ramifications of this are enormous.Will we soon see Akhmad Muhammad as Prime Minister of England ? Not an overreaction.Many of the main cities in the US have become black majority run and have deteriorated as the population became majority black in a few short years.Crime and murder and poverty up.What can all the refugees bring to the table to benefit the country they want to live in? Probably very little based on immigration elsewhere.

      • tommyboys says:

        I think its based on the particular culture. We have a large and growing area called Mexican Village which is almost its own economy. These people are neat, hard workers and mostly entrepreneurs. They keep their properties up and are honest. Many eastern block cultures are the same. There are others however – some obvious- that are not. I don’t know what to do about some of those. Its actually a biblical breakdown of those cultures through the lack of present fathers and the breakdown of the family.

        • I just find it interesting that with many cities and countries that are projected to be 50%(or higher)Muslim in the near future, what countries will be recognizable to the ones from the past that fought so many historical wars but allowed themselves to be taken over by allowing immigrants to invade without a fight.It will be England in name only…the same with France.Meanwhile nothing is solved in Syria or Lebanon.It s our new philosophy on everything–kick the can instead of solving the problem.

          • Tommyboys…a question for you.If the Mexican village is such a success and exclusively Mexican…why couldn t it be a similar success in Mexico.To come to the US, not assimilate with language and other ways of life…including probably paying taxes is not a plus for us as a country is it?So why not stay in your own country and improve it rather than come here and do what you describe as”having their own economy”.

          • tommyboys says:

            Likely something to do with a currupt government.

          • tommyboys says:

            They do pay taxes and their area is like an oasis in the midst of what could be likened to a bombed out vietnam – caused by a different culture.

  5. gtoptions says:

    Thanks Tony
    The question I keep asking myself, wouldn’t the PIV take up nearly as much time as the PII?
    So my thought is the SPX needs a tag of the ‘falling’ weekly 13ema which is now at 2032. Using the 2011 analog, the SPX tagged the 13ema on the third week after the weekly 8/8/11 plunge, so a hit of the 13ema should come in next week. Too many other comparisons to mention, so I’ll leave it at that. Just some thoughts from a crazy day trader.😉
    Good Weekend All.

    • tony caldaro says:

      have not ruled that out GTO

    • mike7x says:

      I think you’re on to something there gto. With OpEx and FOMC meeting next week I think we could see a significant rally to SPX ~2030-2040. For me the question is, “What’s next?”.😉

    • EL MATADOR says:

      I agree GTO, don’t fight that fractal.

    • mjtplayer says:

      I don’t know about a strong rally, one would think managers aren’t going to place large bets before the Fed meeting. But sure, we could drift sideways with a higher bias on light volume into Wed or so – kinda like today.

      I will say, the Fed decision will trump OPEX as many open contracts will have been closed or rolled-up by Thursday afternoon.

  6. Thanks TC. Visible on 24 hour charts only is a 3-3-3 or 3-3-5 flat consolidation trading range after the drop on Wednesday from 1988.63 with 3 bottoms and 3 tops. Some of the Asian indices have carved very similar patterns over the last couple of weeks (again 24 hour basis). There’s nothing remotely impulsive connected with these patterns and when they complete the market should continue in the same direction as before the pattern occurred (i.e. down). It’s possible SPX could go a little higher but definitely not over 1970 night or day. So I’m looking at this pattern as a 4, specifically 4 of 1 of 3 (of 5). Therefore next week we should have the completion of 1 of 3 and 2 of 3 and possibly 3 of 3 as well (aren’t we lucky). So next week get short and in the meantime make sure you have a nice weekend.

    • Cant figure out what do you mean. 1 of 3 of 5 of what??? and 3 of 3 of what??

      • Francesca assuming the market has been in the final decline (wave 5) since 1993 we can see a smaller wave 1 of 5 going down to 1903. Then an ABC for 2 of 5 (1975, 1911 & 1989). Then wave 3 of 5 starting from 1989. We are only in an even smaller wave 1 of 3 of 5 at present. This should conclude early next week then 2 of 3 (of 5) and then 3 of 3 (of 5). Capisce?

      • Thinking about this a bit more, for Monday’s cash market we could have a little more upward progress to make a double top around 1965 for 4 of 1 of 3 of 5. If there is no further progress then a triangle is feasible for the same count. However if there is a significant gap down opening then there are several possibilities including that gap down being 3 of 3 of 3 of 5.

          • TJ, have been looking at your option. My wary is, from 1993 to 1903 we had,on the 15 mint chart: a 1-2 – than 1-2 i-ii-iii-iv-v, for a wave 3 – than 3 wave up ( a-b-c) than 3 down again 3 up- than again 3 down and a we don’t know.
            But from 1993 to1903 I can honestly count only 3 ( 1993 to 1974 = a, 3 up 1994 to 1989 = b, and 1989 to1966 a, again, 1966 to1986 b, and a final subdividing 5 wave for c from 1986 to 1903.
            A clear a b c from the latter to1975.
            5 small down for a, from 1975 to 1947 – followed by a less clear 3 small for b ( 1947 to1956)
            and a final 5 down for c ( 1959 to 1911)

            After that I can count 5 clear small wave up 1-2-3-4 and a subdividing 5, all small ( from 1911 to 1988/89. Than a clear a b and a c of 5 small waves to 1937. Followed by un unknown activity to 1961


          • Francesca you are probably correct about most of those waves. The most important however was 1993 to 1903. Was it 5 waves or 3 waves? If 5 waves the final decline will be in progress from 1993. If 3 waves something much more complex is going on. The other important thing is the move from 1867.01 to 1993 which was 3 waves and corrective. Unfortunately there is no chance of an impulse from 1867.01 unless you rely on a truncation at 1867.08. But Iooking at the INDU chart the pattern is identical with no truncation. All this means 1993 was the high for the bounce and we must go lower from there.

  7. It’s not clear which way this pennant or flag will break next week but it feels like into options expiration may get one more push – 2040

    • Cant see your pitchfork Fred doesn’t come out :((

    • 1920 is hugely important.If this was a horse race I d give the odds as 4-5 to break it this month and then much further down.We stayed below 16550 for a second straight week…below the weekly bearish triangle bottom line.If it was a fakeout breakdown, we d be back up inside it and moving higher.Looking for a drop to confirm the violation 2 weeks ago (to 15500).The backtest went to 16600 but couldn t hold and finished last week at 16200.Good luck all.

  8. blackjak100 says:

    TC, doesn’t the SPX daily chart resemble a bear pennant?

  9. Tony, I have given a deeper look at the weekly chart and it looks like the 4 could very well have completed. Removing the noise of the hourly chart, certainly undecided, only the wick of the second candle has deep over the 0.382. At your opinion is there any chance wave 4 could be over already?

  10. chrisk44342 says:

    thx tony. I understand the OEW labeling (i think). From a traditional EW standpoint, it really does resemble a B wave triangle at this point, especially with the A wave at 50% retrace. Or then again, it may not, lol. We’ll know next week I guess…

  11. mike7x says:

    Thanks Tony! And then there’s next week…

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