Friday update

SHORT TERM: gap down opening, DOW -290

Overnight the Asian markets lost 0.2%. Europe opened lower and lost 2.4%. US index futures were lower overnight and the market gapped down to SPX 1973 at the open. The market had closed at SPX 1990 yesterday. In the opening minutes the market dropped to SPX 1963. At 10am Leading indicators were reported higher: +0.1% v -0.2%. The market then rebounded to SPX 1979 just before noon. After that the market traded down to SPX 1953, before rebounding to end the week at 1958.

For the day the SPX/DOW were -1.70%, and the NDX/NAZ were -1.35%. Bonds gained 22 ticks, Crude lost $1.95, Gold rallied $7, and the USD was higher. Medium term support drops to the 1956 and 1929 pivots, with resistance at the 1973 and 2019 pivots. Today the WLEI was reported lower: 47.8% v 48.0%.

The market gapped down at the opening, continuing yesterday’s post FOMC selloff. Thus far it looks like the market is impulsing to the downside from yesterday’s SPX 2021 high: 1987-2000-1963-1979-1953. This would fit the anticipated flat to complete Int. C, Major C, and Primary IV around the 1869 pivot range. More on this in the weekend update. Short term support ended the week at the 1956 and 1929 pivots, with resistance at the 1973 and 2019 pivots. Three of these pivots fit quite well in yesterday’s top and today’s decline. Short term momentum ended the week with a slight positive divergence. Best to your weekend and week!

MEDIUM TERM: downtrend

LONG TERM: bull market


About tony caldaro

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74 Responses to Friday update

  1. I don’t think we get a rate hike I December as well

  2. lunker1 says:

    cool Ghostine chart from the 16th

  3. lunker1 says:

    As Lee says your bank account is what’s most important in this game…and have some good laughs along the way. If you’re good you don’t need to toot you’re own horn because others will. “Like I said….” Sheesh.

  4. I’m not sure how many people go through the exercise of taking one day’s price chart and seeing what they can see from it. Probably most just want to know things like, “Is it still P3?, or is P4, yet? Wait, wait ..I heard it could be P5?”. That’s all well and good. Those are valid considerations. But, if any one watches the market in real time during the day, how many questioned the fact that, “the opening was exciting, and lower, and then, well we sort of drifted”. Why did we drift? The daily candle does look like a fierce one, although on futures it stopped right at 1950 (depending on when it the session you take the settle).

    Review the price chart below, and before you do, keep in mind that gaps “tend” to be in the wave three position – just that one simple fact …

    SP500 (5 Min)  9_18_2015 TC

    Then combine it with the knowledge that the lows at the end of the day seemed to be occurring on divergences from both the Elliott Wave Oscillator, and from the slow stochastics. Next, although I did not show it, the price move down does not contain a 1.618 extension. It stops at C = 1.27 x A. This is ‘often’ a sign that a true impulse wave lower has not been made. Next, note that within the wedge, every ‘numbered’ wave ticks past the EMA-34, providing good form and balance to the count in the wedge. So, why ‘was’ everything past the open so choppy and overlapping? Elliotticians might know.

    • timmy321 says:

      No idea what it all means? Think you still expect a higher high to complete the A wave of intermediate B. Let me know if I am wrong.

    • pimacanyon says:

      Thanks, TraderJoe. Helpful and instructive. Good weekend to you.

    • frommi2 says:

      TraderJoe i like your posts, but i think you are seeing much too much EDT`s. Don`t get caught in the microwave structure while missing the bigger waves.
      Your post shows pretty clear that you got caught offguard in a long position because you thought wave V of your wave C is missing and now you try to bend your count so that you still feel confortable in your position. I did this myself in my earlier years of trading, You better get rid of this behaviour or you will pay for it.🙂

      • Bogus. Just trying to explain the chop at the end of the day. How do ‘you’ explain it, or do you even bother? If you think there is a better way, post a labeled EW chart of it. And how ‘does’ your count get a gap in the third wave?

    • Excellent presentation, TJ. I love knowing this pattern possibility because if this pattern occurs it would have driven me nuts trying to figure it out. Now I can be on the look out. Do you believe wave (C) will come down to wave (2) of wave (A)?

      • Good question. If / when there is a (B) wave of the Intermediate degree triangle, we will take a Fibonacci ruler and measure it’s retrace from the market top in May. Then, we’ll turn the Fibonacci ruler around and apply the same retrace to the down side to make a contracting triangle. That will be the target – regardless of where it matches up on the (A) wave. It helps me take the guesswork out of it. Measure .. measure ..

  5. ariez5 says:

    OK, I have to chime in. EL MATADOR, I find your posts always interesting. You are one of the posters I always read. BUT how does a fractal really help you? Do you say, “Because the market did so and so in 2011, it will do it again now?” There is no frieking way that can be a good strategy, because the market will follow the fractal – UNTIL it doesn’t. And if you are counting on the fractal, at that point you will either get killed (which you seem like too good of a trader to submit yourself to) or you will respond to general rules of price action, momentum indicators, Fibonacci retracements, etc. And if you are responding to those general rules, then why do you need the fractal in the first place?

    • EL MATADOR says:

      Ariez, the way I use fractals is simple. A fractal is basically like a pattern in which the current wave form (which includes the pattern, TI’s such as RSI & MACD and space-time {aka price and time}) must mimic the “symmetry” of the reference fractal and as long the aforementioned is mimic relatively close the fractal will continue to hold until it deviates substantially enough that it becomes irrelevant. The fractal is to be used as a guide for predicting a probable swing trend in space-time “similarly” to the way chartist apply any given pattern. In this case the fractal measured move prior to Thursday’s 2020.86 intraday high was 1839 near Tony’s 1841 Pivot to be met by mid-Oct. But now since Thursday’s 2020.86 intraday high the measured moved is now targeting 1865 near Tony’s 1869 Pivot and just below the 1867 prior low by late Sept/mid-Oct. My gut feeling right now is that it will be somewhere in between 1869 and 1841 Pivot. But let not forget that as with any given pattern the fractal also requires to be monitored. Not sure if you recall one of my post back on Sept 7th or 8th when I tried trading against the fractal and got burned and realized immediately that the fractal was still the dominant pattern. In all my research I don’t ever recall seeing a fractal executed so precisely and for as long as this one. This behavior reinforces my belief that the markets are vastly controlled by the algos and no longer by human irrational/emotional behavior.

      I hope this helps. If something needs further clarification let me know and I do my best to elaborate further.

    • EL MATADOR says:

      Ariez, I forgot to mention the first time I was expecting “symmetry” between the Primary waves was back in February per my post below. One thing that I forgot to comment on in my post below is that when IHS are recorded near tops they typically always morph into the terminal HS pattern. Also IMO most traders had failed to see the 2011 fractal as relevant due to the following reasons;
      1. Many traders were too focus on the never ending ED and never noticed the multi-HS complex formation.
      2. Many traders outright refuse to acknowledge the possibility of the multi-HS complex formation.
      3. and Many traders considered the multi-HS a divergent from the 2011 simple HS hence rendering the fractal irrelevant.

      EL MATADOR (@LoLo_MATADOR) says:
      February 13, 2015 at 1:36 pm
      This is interesting but maybe just maybe P3 will top it off with the same pattern that it started with just like P1 did. Notice that Primary 1 start and end with an IHS nearly textbook perfect …… while Primary 3 started with a skewed/angled IHS and it appears the it just might top it off with a similar skewed/angled IHS but with alternating shoulders.

      Daily Chart:

  6. A lot of posters here seem to think the bull is dead. Take heart Sandra, I am confident that higher highs yet lie ahead. As posted here in real-time Wednesday, I closed out the entirety of my large bullish position at 16,650, but bear in mind that the Dow is still SEVEN HUNDRED points above the still-in-control major Buy signal of Aug 25. Personally am hoping for more downside Mon/Tue so I can buy back what I sold on Wed at 16,650. &/ and w/e all!

  7. Mat, I think you’re one of several good posters here so don’t take this the wrong way but you seem to make more vague calls than others then claim prescience in hindsight, an oxymoron by definition.

    Going forward do what rc & bj did yesterday, what I did on Jan 15, Aug 25, etc., and what nardobeme (where you been?), red and gto do regularly: a day or so before an expected move, post that; say “the market will go ____ starting tomorrow.” That’s where the real money is made.

    If you’ve made such calls then copy/paste some here, I don’t recall your having done so. Have a great weekend and keep posting.

    • EL MATADOR says:

      Let me know if this is too vague for you and I’ll fire more at ya.

      EL MATADOR says:
      September 15, 2015 at 9:54 am
      So far things running almost to script, post the following on Pretzels private forum. I believe I posted something similar here on 9/11. My guts tell me OPEX price/volume action very likely coming pre-Friday say maybe Thursday.

      EL MATADOR says:
      09-11-2015 01:26 PM
      If this Primary correction continues to closely mimic the 2011 Primary correction then we should continue to expect more whiplashing along with a grind higher into Sept Opex. Me thinking a near flat but green day for 9/11 followed by say a down day come Monday then grind up into Opex to complete maybe a triangle, no?

      EL MATADOR says:
      September 16, 2015 at 9:59 pm
      Good stuff MJT.
      Keep your eyes on the 34 Daily SMA and Tony’s 2019 Pivot, IMO, this is the zone to watch out for a potential price rejection (meaning amp supply).

      EL MATADOR says:
      September 17, 2015 at 9:02 am
      Kvilia, lets think a little about what you just said and about the status of your current position. e.g. let me give it a shot……like you (including myself) many had already executed a BTD days/weeks ago. Some might have already cashed out (like myself yday) while some might still be long and are awaiting to sell their longs. At the same time many in this group at looking for the next opportunity to go short but keep in mind that everyone has a different price target. So if the masses has it price target well above 2020 lets say 2040 well we know that Mr Market will not be accommodating so it means that market is unlikely to reach the 2040 price target…….so what is the take away here then, me think there are lots of supply (sellers) and lack of demand (buyers). Why lack of buyers? simple price premiums is too high. IMO, many of those “Sellers” whom are currently long waiting to sell long position and go short at much higher prices are highly like to be disappointed and left hanging as the bag holders. Just my 2c!

      EL MATADOR says:
      September 17, 2015 at 2:52 pm
      we today the first move was down to 1990ish followed by the second move up to 2020ish and now the third move is down…..So that means the rally is over

      • Yes, vague and early in my view other than mention of Tony’s 2020 pivt potential.

        If you really know this game, next time say “The market will go ____ starting tomorrow” or at a specific price level like rc did yesterday. See the difference? Again, no hard feelings, GL & w/e Mat.

        • EL MATADOR says:

          are you acting delusional? are you saying that a flat but green 9/11 does not define trend up and did we not get a green 9/11? or that a down day Monday does not define trend down and a grind into opex does not define trend up and did we not get a red Monday and a grind up into opex? I posted twice that traders waiting for prices above 2019-2020 where going to be bag holders was this not the case? doesn’t rally is over mean uptrend is over and we in downtrend? or how about the two post in which I dared people to go long and Thursday and Opex Friday per the two post below doesn’t that indicate that the trend is trend is down?

          EL MATADOR says:
          September 17, 2015 at 1:31 pm
          Ok, so who’s brave enough to go long starting today and into next week in an attempt to discredit historical stats? Anyone?…..ya’ll know where I stand.

          EL MATADOR says:
          September 17, 2015 at 3:33 pm
          Ya beat me to it MJT…..I was just about to ask if we have any takers will to challenge that extreme bearish inverted hammer

          I rather listen someone telling me that we have a bearish/bullish hammer or that Sept Opex Friday is the most bearish day of the year then some one telling me I got a buy/sell signal.

          • That’s what makes a market lol. Wish you the best. Knowing what the market is going to do in the immediate future makes far more money in this game. You sound a bit novice when it comes to actually making money but hopefully that will change for you.

            Why haven’t you responded to the point that Ariez made so well above and I the other day? Stats and fractals aren’t what truly move the market, dig deeper and you’ll see that pretty quickly and make far more money. Again GL and weekend!

          • jeffbalin says:

            El matador, the way you post is perfect. You’re a great contributor and very educational. Don’t change a thing. Posting … ‘ The market is going up right now.” ” 2 days from now it’s going down’, doesn’t teach anybody anything. Most of us are here to get smarter, not to get signals to follow on blind faith.

          • fotis2 says:

            Mat he’s baiting you and has been doing that for some time now you don’t have to re-post your calls to prove anything to anyone.

          • Jeff/Fotis, read my post, it started with “Mat, you are one of several good posters here” – my intent is to help him make more money, not to raz or bait him as you seem to confuse in your comments. The immediately-above post was tongue-in-cheek hence the lol, but I apologize Mat if that wasn’t clear, sometimes tone gets “lost in translation” on the internet as most people know. I only took the liberty since Mat often does likewise with me; I don’t mind and I’m sure he doesn’t either. Otherwise he wouldn’t do so himself.

            Lastly, you are in the vast minority – most people much prefer clear, succinct, specific, effective-immediately calls as those are the mmost profitable by far (options, no time decay versus waiting a month, or five, for a prediction to eventually be correct, etc. As you learn more and more about making money in the market, you will see this. Take care and have a good weekend.

  8. GYN LAB says:

    Good evening! As Mr T correctly points out, clear 5 waves from 2021 into 1953 today. Should get a 3-wave pullback into 2000 early next week. Going by the 2011 fractals the retracement is quite deep (around .786) – in 2015 the .786 retrace of 2021-1953 stands at 2006, between 2000 and 13ema so SPX could tag 2xxx. Should be a gift to open/add shorts.

  9. I don t know if this is a real or a blip on the HYG chart,but after hours down almost a full percent.I m sure it has to do with the France rating cut.If this holds to Monday morning, we could be looking at another huge gap down opening…plus China, Japan, Shanghai.Just got MORE interesting if thats possible.

    • EL MATADOR says:

      LOL….post the following at Pretzels private forum

      Post: #148RE: Daily Market BB for Fooked Friday
      (Today 01:52 PM)EL MATADOR Wrote:
      Anyone think we get another BLACK MONDAY?

      Post: #151RE: Daily Market BB for Fooked Friday
      (Today 01:56 PM)Dundies Wrote:
      the way i’m positioned, it sure wouldn’t be a black monday for me Tongue

      (Today 02:04 PM)EL MATADOR Wrote:
      LOL…..C’mmon man just a mini-me-black, eh?

      • Greeat post Mat. Insightful. Intelligent. Brilliant really, thanks for sharing this. Lol

        • Cos Sot says:

          As opposed to yours. Please go away. You are annoying me and ElMat and many others. Matador, i’m against bullfighting but i like your posts🙂 Thanks Tony for enabling this amazing community here.

          • Relax and try not to take the internet so seriously, the above comment was tongue-in-cheek hence the lol. Mat often engages me uninvited so I’m sure he doesn’t mind when someone returns the favor; otherwise he wouldn’t do so himself. Take care.

  10. My weekly wrapup:Finished a third week below the key level(imho) of 16550.Could not stay above it.More and more downside for the balance of the month and if we’re below 16550 on Sept 30th, the bull could be done.I find it difficult to believe we retest 1867 successfully.1820 and maybe 1700 or lower is very very possible.How does this happen? China implodes in some way.Their banks are supposedly in worse shape than ours were in 2008.Can t put a timeline on implosion, but FEAR of implosion would be good enough reason to sell aggressively.We may still have anywhere from 2-8% down from here until the end of September.Good luck all.

  11. kckim04 says:

    Anyone read Prechter’s latest theorist? He’s been calling for a top for the last four years…any reason why he might be right this time (broken clock)?

  12. torehund says:

    There seems to be work ongoing concerning a joint effort Russia/Usa against ISIS in Syria. Havent found much else on the net concerning this issue, might pop up later in the week and should impact markets.

  13. Peter Sliney says:

    Barry Sanders lost 1,114 yards in his career trying to turn small plays into home runs. One of great running backs of all time. I see a definite correlation to what Barry did and my own trading.
    I work my setups make my points and then I start thinking about the 100 point run (YM) and get taken down losing my hard earned points. Not only am I always learning I’m also having to relearn the things I thought I had already learned.

    • fotis2 says:

      Know exactly what you talking about (Killed my first acc.doing just that, amongst other stupid things, ad nauseum) I look it now like target shooting the closer the target the easier to hit small moves are by their nature more predictable the little I know ’bout algo trading is they go big on small moves obviously a sound reason behind that strategy.Gets easier with time.

  14. kvilia says:

    Thank you, Tony and all – excellent work this week! I have to admit still waiting for HH and 200MA retest and waiting for a good entry point on the long side. I guess Tony will have to change his stance to the bear market so I will change my mind setup😉
    Have a great weekend, all!

  15. Sandra Dons says:

    I’m probably dead

    • amy8walter says:

      Sandra, am not sure exactly what you mean by “dead”, assuming you did not exit long yesterday…keep in mine that this is still a bull market, it should come back up when the right time comes (P5=2200). You are not the only one, patience is the name of the game. Hope this help you feel a bit better.

      • Sandra Dons says:

        It’s not so simple..even if we’re still in a bull market ,,, my problem it’s time decay….i can’t wait till january,,,my calls need 2100 before december

        • jamesbondman says:

          Could you roll them over?….close out your first position and open a new one with the same characteristics except for an expiration date in January, February or March?……will make less money if the market goes back up but at least you will have more time……

        • Igor says:

          Another way to repair damage is to sell existing calls, then buy calls with a lower strike and simultaneously sell calls with a higher strike thus entering a bull call spread. This way you count on a potential rebound and if it occurs you may return the significant part of your loss if not all. Depends on the strength and timing of rebound, spread between strikes and your current loss. The option trading is risky and requires the good knowledge of options, otherwise, unprepared trader can easily lose all his investment. The implied volatility was raised significantly during the recent flash crash making options expensive. Now, when the market is entering the trading range, IV is crashing, options are loosing its value. The best way to take directional options trades in such conditions is through spreads.

          • Disagree, options are (much) LESS risky than equities when used properly, providing more upside with less downside, i.e., risk. That said, it’s great to see you back Igor, you were among the best posters since this blog’s inception, hope you’ll offer your excellent insights here regularly once again.

          • Igor says:

            Thanks FRB, I was, may be, somewhere in between the 20th and 30th in the poster rank if we recall all legendary posters🙂
            I’m going to hang over here more often in the future, good to be back, miss the clash of opinions of Tony’s forum🙂

        • Sandra Dons says:

          Thank You all…reading this blog I ask my self if the best thing i could do is sell calls and buy puts…..maybe the better way to stop the loss….if the “scenario” is SPX under 1800

          • Sandra, you cannot go right or left only reading blog-posts. You should know what to do and why by your knowledge before engaging in mass leveraged investments in the wrong time. As told you prior, look for professional advise. Pay a little someone else you trust to repair the potential damages. Or you play casino. Than please don’t cry.

  16. torehund says:

    Good weekend Tony and all !

  17. mjtplayer says:

    Moody’s downgrades France after the bell, from AA+ to AA (AA1 to AA2). SPX down another 7pts or so from the close.

  18. mjtplayer says:

    Thanks Tony!

    The WLEI continues it’s relentless grind lower. We bottomed out around 45 in Q1 – no? Getting ever closer…

  19. tomasso60 says:

    nice work El Matador
    helped with a nice trade on CNR (T.O.) short.
    many thanks

  20. EL MATADOR says:

    thx Tony, looking forward to your weekly update. I also hope that this week show people the important of interpolating historical stats and fractals in trading. I know TI’s and EW, etc etc are all great tools but historical stats and fractals are tools too.

  21. rc1269 says:

    Thanks Tony. enjoy your weekend hombre

  22. Now did McClellan call it or what? To the DAY. Just like mid Aug. No one else called this stuff as he did and he doesn’t look at EW. He uses what the large institutions are doing with Eurodollar investments 6 months to a year earlier. Wow. What’s he say now? This decline will last into April next year. Or at least this ‘phase’ of the market in a decline phase. That competes with all this wave 5 talk. We’ll see. But what I found was interesting from Pretzel’s Wed update…

    • rc1269 says:

      “No one else called this stuff as he did…”

      that you’re aware of. i assure you, plenty did. cheers

    • EL MATADOR says:

      Sorry but McCellen needs to get in the back of the line, several of us here have been ahead of his calls.

      Post my Tranny chart a day before Pretzel. Note they are quite similar. I stated here before that Pretzel and I share a very similar EW-style. Our counts tend to be in sync a lot.

      EL MATADOR says:
      September 16, 2015 at 1:21 am
      Trannies, everything you need to know is on Da Chart

      • The difference is McClellan called in A MONTH AGO and TO THE DAY – BOTH declines.

        • EL MATADOR says:

          I’ll but it simple…post McCellen articles where he makes his calls in advance and we can match it up again my 2011 fractal posts and see who shot with better accuracy. You didn’t need a more technical fractal written script beyond the 2011 fractal it was too damn accurate. I can assure McCellen calls don’t match up.

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