Friday update

SHORT TERM: gap down opening reversed, DOW +200

Overnight the Asian markets gained 1.6%. Europe opened higher and gained 0.7%. US index futures were higher overnight until the Payrolls report was released at 8:30: +142k v +173k. The futures market immediately sold off and the market opened with a gap down to SPX 1901. The market had closed at SPX 1924 yesterday. By 10am the SPX had declined to 1894, and Factory orders were reported lower: -0.7% v +0.4%. The market then started to rebound. The rebound gradually turned into a rally. Just before 1pm the SPX had closed the gap and hit 1936. Then it declined to SPX 1927 by 1:30 when FED vice chair Fischer’s speech: The market then resumed its rally and hit SPX 1951 at the close.

For the day the SPX/DOW were +1.35%, and the NDX/NAZ were +1.75%. Bonds gained 20 ticks, Crude rose 90 cents, Gold rallied $23, and the USD was lower. Medium term support rises to the 1929 and 1901 pivots, with resistance at the 1956 and 1973 pivots. Yesterday Q3 GDPn was lowered: +0.9% v +1.8%. Today the WLEI was reported higher: 48.3% v 48.1%.

The market gapped down at the open today, traded near the lows for about a half hour, then took off to the upside like the gap down never happened. In the afternoon the market closed the opening gap, took out yesterday’s SPX 1927 high, and continued on into the low-1950’s. Quite a reversal. From Tuesday’s SPX 1872 low we have three waves up to 1927, three waves down to 1894, and now one wave to 1951. Generally this looks like a corrective rally. But one could force an impulse wave out of this choppy action. Short term support is at the 1929 and 1901 pivots, with resistance at the 1956 and 1973 pivots. Short term momentum dropped below neutral during the gap down, then reversed to quite overbought in the afternoon. Best to your weekend!

MEDIUM TERM: uptrend

LONG TERM: bull market


About tony caldaro

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31 Responses to Friday update

  1. torehund says:

    Gold: On the weekly; RSI may be rejected once more at the 50 level. Do or die for both the Euro and gold right here ?
    Tumbling around between RSI 30 and 50 for a while is exactly what makes big losses pile up.

  2. Found this discussion strictly by accident yesterday. Was in Labu only to watch gains vaporize in AM then to 25% profit by eod. Will this continue well yes, and no. Earnings are upon us and it could continue if there are bottom and top line beats early in ER season. It’s always pleasant to go into ER with oversold mkt. Well the No part is that many respected chart tea readers (c.Worth) are pointing Down. Will the lifting of the Shorts be long lived or doomed? I suspect yes into manic Monday but keeping the exit door handle in your left hand isn’t a bad idea when someone yells FIRE. Thanks to those who post your thoughts were very insightful.

  3. purplember says:

    tony, i’m a bit confused. in summary you said this looks a bit corrective but the chart shows Major 1 and 2 in the books and this is 3 of P5 up ??

  4. Gary Lewis says:

    So the successful three week test of the low proved to be a valid buy signal. Despite all of the noise that occurred this week, both to the up and down side, the market still managed to pop as expected. If you just look at the weekly close, it looks so simple, the noise that occurs in between is phenomenal these days. Hoping that Tony’s P5 call will prove to be right because all I have left is a big Jan SPY 200-220 call spread position. Beyond that, I’m done for the year and will head south as soon as the storms clear.

  5. torehund says:

    Good weekend, Tony and the Crew.
    Its all about interest rates, and todays job numbers didn’t support a hike. (As always) all expectations have to be crushed for it to actually be necessary to hike them. Market decides, and its only an uncontrollable bull run in stocks that will force the FED to act.

    • Fed govs already out trying to prop the dollar up (but not too much).”We re on track for December…”Whatever track that train is on has been derailed, but the Fed does not want gold to catch fire, so they try to keep the lie going.

    • Dex T says:

      We’ve already had an uncontrollable bull run in stocks the past few years.

      The truth is that the Fed and Wall Street are too addicted to the easy money policies and don’t want any changes. Yellen and the Fed governors don’t have the backbone to make the necessary decisions and stands up to the investment banks.

      The U.S won’t see the type of growth the Fed wants for a very long time.

      But it doesn’t matter any more- the next recession, which is around the corner, the Fed has nothing to fight it with.

  6. stephenk1980 says:

    Not going to short this rally unless it goes much higher, although I have taken my profits from the longs initiated this morning as it may never get there; however I can see the possibility that we go as high as 2040’ish (intersection of two resistance lines) and so don’t want to get in the way of this rally too early.

  7. for the negative.Volume was lousy..185m on SPY.Nothing to indicate anything special was happening.
    Under the 16650 weekly bearish triangle…again.Sept 30th already a monthly close under.To me…a bear market rally.I m out completely if it manages to get to 1970 Monday.Maybe Turnaround Tuesday…to the downside?Good luck all.

  8. EL MATADOR says:

    Big Kudos to CN, RC, GTO, Tony and ever single other caller who nailed this big ripper upper.
    I’m kicking myself for cover my 1863.75 ES longs too early at 1910 and not re-engaging long at every opportunity provided, aarrhh. Oh well there be more right.

  9. Page says:

    Thanks Tony.
    Have a nice weekend.

  10. llerias7 says:

    Today: begining of wave 3 of P5? start of wave B of P4? start of B of Cycle 2? (missing something?)

    Enjoy the weekend.

  11. blackjak100 says:

    Thx TC! It’s a toss up and could go either way looking at everything. Interesting bonds caught a bid today. Let’s just say i need to see more follow through Monday to be a true believer.

  12. mjtplayer says:

    Thanks Tony!

    The SPX achieved the 50% retrace area from the 2,020 to 1,871 decline at 1,945. Also, we tagged the minor C = A at 1,950. We could go a little higher, perhaps the .618 retrace at 1,963 but I think today was a bear trap at the lows to complete minor B and major short covering rally in minor C – which looks as though it will complete Monday, if it didn’t already. The waves are unfolding fast, beware what comes next.

    Bought VXX right at the close and sold 10/9 VXX weekly 25 strike puts. When we top out in this int B rally, the “C of C” that follows could be very ugly over the next 2-3 weeks.

    Happy Halloween – it could get scary. Boo!

  13. rc1269 says:

    Thanks Tony!

    my momma always did tell me not to force things, impulse waves included. i never was very good at following orders tho. 😉

    have a good weekend, and the rest of y’alls as well

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