Friday update

SHORT TERM: gap up opening, DOW +113

Yesterday, after the close, FED chair Yellen gave the following speech: Overnight the Asian markets gained 0.8%. Europe opened higher and rallied 2.9%. US index futures were higher overnight, and at 8:30 Q2 GDP was reported higher: +3.9% v +3.7%. The market gapped up at the open to SPX 1950, then pulled back to 1942 by 10:30. At 10am Consumer sentiment was reported higher: 87.2 v 85.7. After the pullback the market rallied back to SPX 1950 by 11am, dipped to 1943 by 12:30, then hit the high of that day at exactly 1953 just past 1pm. After that the market dropped straight down to SPX 1922 just past 3pm, then rallied to 1935, before closing at 1931.

For the day the SPX/DOW were mixed, and the NDX/NAZ were -0.90%. Bonds lost 9 ticks, Crude gained 65 cents, Gold dropped $7, and the USD was higher. Medium term support remains at the 1929 and 1901 pivots, with resistance at the 1956 and 1973 pivots. Today GDPn was reported lower: +1.4% v+1.5%, and the WLEI was reported higher: 48.1% v 47.8%.

Wild day! The market gapped up at the open for the second time this week (Monday and Friday). It then hit the SPX 1953 level we noted yesterday, and immediately dropped 31 points to close the gap and turn negative on the day. After that it rallied to SPX 1935. This week’s decline to SPX 1909, rally to 1953, then decline again, set up some nice market parameters going forward. Will elaborate further on this in the weekend update. Short term support is at the 1929 and 1901 pivots, with resistance at the 1956 and 1973 pivots. Short term momentum dropped from overbought to below neutral where it ended the week. Best to your weekend!

MEDIUM TERM: downtrend

LONG TERM: bull market


About tony caldaro

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29 Responses to Friday update

  1. torehund says:

    ..a last nail in the Euro-coffin has a habit of originating from an unexpected angle. Finland is a lagger in Euro economy and internal tensions are rising. Also a twist in media that Volkswagens troubles spills over to distrust of government too. The comfortable truth isnt comfortable to the European public for much longer.

  2. Holding a few OEX puts as catastrophic insurance!

  3. ewmarkets says:

    It is really very hard to be optimistic about the market. Subprime debts are in the process of blowing up, starting with oil industry debts. There are a lot of subprime auto debts and sky high college debts to attend online universities with dubious value.

    Debt blowup probably will trigger the next bear market, if it is not here already. What would trigger P5?

  4. Anticipating the Weekend Update is like waiting for Christmas Morning….especially with that “tease” earlier today – I suspect that it’s going to be one of your all-time bests! Great call on 1953 today…amazing. Looking for 1869-1840ish next week hopefully

  5. Caldaro a quick Yogi Berra story told by Michael Kay here in Ny.

    When Phil Rizzuto became ill toward the end of his life, he was put in an assisted living facility, which was about 30 minutes away from where Yogi lived. And every single day, because teammates were important to him, he would drive there, and he would play cards with Phil. And then when Phil would start to fall asleep, Yogi would hold his hand and when Phil would finally go to sleep, that’s when Yogi would leave. Every day. That’s what teammates meant to him

    hopefully this touches some members of the board and we can be like teammates and support one another . they don’t make players like the scooter and yogi anymore

  6. the days of “liars poker” prepared me for listening to Janet Yellen and the other fed members. 35 years ago feels like it was yesterday. CAldaro how about my mets?

  7. My weekly wrapup:
    First the bad news:HYG continues lower.Transports and Russell break bearish wedges to the downside.Another week below 16550(actually rising weekly and monthly triangle, so bottom line now about 16600).Monthly MACD continues to trudge lower.SPX 2% down for September(avg is -5.8% after a 6% neg Aug)
    The GOOD news:Sentiment is horrible(or so I hear).Is that enough? I m of the opinion that this little correction is not scaring anyone.After 2000 and 2008, this is more irritating than anything.
    So this down year progresses on.Next step is the monthly close below 16600 which would be huge.We c o u l d rally next week and save that chart and the bull market.Or put the finishing touches on a great 6 year run with a selloff and introduce us to the bear in no uncertain terms.
    It WILL be interesting.Good luck all.

  8. Lee X says:

    Nice job
    Thanks Tony

  9. Gary Lewis says:

    Well I couldn’t resist. Bot some cheap October out of the money calls during the final seconds. Yes, all the trend lines are going south, but I couldn’t resist . . . Imagine that, me buying calls. Oh my.

    • tradeanimal says:

      Hope they earn you a nice return!

    • fishonhook says:

      I almost bought puts at the 1953 level but couldn’t sign in to my danged account.

    • klopharmd says:

      Obviously it’ll crash when you don’t have puts. I have many oct and some nov puts. Mostly QQQ 90s. Gl to all and my positioning should allow the Bulls to sleep well this weekend.

    • torehund says:

      Good luck Gary, and good weekend Tony and all on board.

    • pooch77 says:

      think we go down hard next week

    • Gary Lewis says:

      Thanks all. So you EW’ers can perhaps help this EW novice out. I’ve seen some comparisons to what was happening in “P2” but do know that “P2” and “P4” are suppose to alternate in form. yet sometimes I see Tony saying that P4 could end this week or soon so I’m not quite sure what the time frame should be for the “P4” But since I’ve been seeing some comparisons with the shape of P2, I took a quick look at the P2 weekly close data and I found that “close” to the bottom, SPY did a three week testing of the low formation, just like now. The first weekly low closed on 8/19 at 112.64. Three weeks later, it tested the lows and held at 115.92 and the following week, it rallied to 121.58.

      It dropped for the next two weeks but then four weeks after that, it was up to 128. So going long at the 3-week signal then would have paid off (both short term and long term), albeit, there was a little pain, especially inter-week. But following the 3 week test, it did pop 6 SPY points the very next week and 13 points six weeks later. I could live with that.

      What am I missing here as far as time/price for P4? I’ve been in this game for 35 years, this basing pattern has often been a good buy signal for intermediate term moves. What say you EW experts?

      • Before this last correction, many were waiting for 2019 to buy the dip and spx fell right through to where we are now. Now we are waiting to buy at 1867 ish. It way catch us by surprise and fall through that support as well into the 1700’s. Tough market. I’m going to play golf. Have a nice weekend to all.

  10. fotis2 says:

    Thanks Tony, exhilarating,interesting day lets see what next week brings never stops suprising.Had a decent week so on the… hic.,. good stuff today.GL, trade safe and B good gents.

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