Friday update

SHORT TERM: another gap up and go day, DOW +158

Overnight the Asian markets gained 1.3%. Europe opened higher and gained 2.2%. US index futures were higher overnight, and the market gapped up at the open to SPX 2072. The market had closed at SPX 2053 yesterday. By 10am the SPX hit a new uptrend high at 2078 then began to pullback. The pullback lasted until noon when the SPX hit 2064. After that it started to rally again. A higher high was hit at SPX 2080 just before 3pm, then the market dipped to close at 2075.

For the day the SPX/DOW gained 1.0%, and the NDX/NAZ gained 2.5%. Bonds lost 18 ticks, Crude dipped 75 cents, Gold slid $2, and the USD was higher. Medium term support rises to the 2070 and 2019 pivots, with resistance at the 2085 and 2131 pivots. Today the WLEI was reported lower: 47.3% v 47.8%.

The market gapped up for the third day in a row this week and hit new uptrend highs at SPX 2080 before pulling back into the afternoon. At today’s high the SPX was less than 60 points from all time highs, and has rallied 210 points from the August lows. The short term count remains unchanged with Minor 3 of Int. iii of Major 3 underway. Thus far it looks like Minor 3 has subdivided into five waves [2017]: 2055-2042-2078-2064-2080. Unsure if these are Minute waves or Micros. Short term support is now at the 2070 pivot and SPX 2040, with resistance at the 2085 pivot and SPX 2100. Short term momentum hit quite overbought today, and then ended the week with a negative divergence. Best to your weekend!

MEDIUM TERM: uptrend

LONG TERM: bull market


About tony caldaro

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39 Responses to Friday update

  1. New home sales down 11.8%…lowest level in 10 months.Gold rallies somewhat…to resistance at 1168 (breakout 1170).What boom in housing? Guess interest rates have to go lower.The – div is trying to win out.Hoping for a 25-30 pt pullback this week on the SPX.Good luck all.

  2. kvilia says:

    Good weekend, maestro.

  3. torehund says:

    Had a “things are getting fixed” feel yesterday.
    Yes, and a whiff of honesty is finally drifting into the heads of mainstream. America getting back to basics (and in with the men), and no more lying through the teeth accepted. Thats sad news for the ruling politicians, and for their European counterparts; as an ideological “rug” is being pulled from under their feet (Obama is changing course, Trump on the move).
    Trump is front-running the change (not creating it), and suddenly the European politicians have no one to blame for the middle -east misery but themselves.
    Maybe it was a big plot (Obama and Putin together), luring all radical elements into the sweet spot, and then eradicating them all. Concomitantly fueling immigrants into a Europe in population decline, with an urgent need of new citizens. Is there a master plan behind it all, or is it just all haphazard “thinking and doing” by incompetent individuals.
    Europeans savers will be loathed (through currency decline), but who cares for the affluent at times like these 🙂 Its still buy the fluff and sell the meat, and maybe it will last until 2033 ?

  4. I know many were looking back in Aug/Sep at how strong the $NDX was in relation to every other index. It seemed as though AAPL, NFLX, AMZN, GOOG, FB, etc which make up the top 100 of the SPX 500 actually held strong though that entire downtrend. Think about it – the SPX falls 12% high to low, yet over 60% of the stocks in the index were down well over 20%+. How? Because of the strength of those stock in the top tier.

    So, what does that mean? I follow a ton of people since I do this for a living and the logical trade was that since those stocks held in, they were next to get killed. So I think many shorted the hell out of them and/or bought a ton of puts for hedging that when it seemed that trade wasn’t working out, they all ran for cover – literally. Hence you get stocks with monster floats like MSFT and the rest up 10% all at the same time.

    What does that mean going forward? You might have seen all the buyers ‘all in’.

    Most of my trading is shorting weekly puts or call spreads depending on the positioning of the indexes at any given time. So, personally I can care less about short squeezes. Compounding 3% a month or so adds up quickly. I just find it all very fun to watch.

    Now did anyone watch Rick Santelli today interview Peter Eliades? Might want to find that interview. I’ve followed that guy since about 1998 when Moe Ansari had him on his radio show. Market cycle guy who’s been pretty good over the years and nothing to do with EW or Fib stuff. A completely different take on cycles, kind of like George Lindsey.

    • Seems like he was on the old FNN.I remember his commercials.I think Granville had spots on there as well and some guy with astrology.Back in the stone ages it seems.I watched Ed Hart and Bollinger for Tech Talk.”The tape is tight”, Ed would say.I thought he meant around his arthritic knee….lol.Good stuff though for its time.

      • drwarmington says:

        Yes, learnedmylesson25, I started following Peter in 1982. He was one of the few that was predicting a massive move up, right at the bottom. He and I had the same broker and he allowed his broker to call me when Peter made a trade. I followed him for several years and, as you can imagine, I did quite well. His cycle work is amazing and I am following him again here at the top.

    • aahmichael says:

      Eliades used to have a daily show on KWHY in Los Angeles, starting in the late 70s. I first saw him in the early 80s on that station. I didn’t know that he was still around. He always impressed me as more of a showman than anything else. In other words, he speaks with great conviction and certainty about his calls, and then finds a way to say he was right even when the market didn’t do what he claimed it would do. I almost never have the TV on during market hours, but by coincidence I did turn it on for a couple of minutes yesterday, and that was when he was on. I don’t pay attention to any of his cycle claims, but I did hear him mention the monthly trendline from the October 1997 low that connects to the October 1998 low. So, I drew it on my charts, and I’m impressed. Ever since that line was broken to the downside in Sept 2001, the market has tried to get back above on numerous occasions, but has been repelled every time. It nailed the top in 2007, and it nailed the top this year as well.

  5. MR C, have a question I ve never seen asked before….ready? When there s a negative divergence, does the severity of the angle of the divergence correlate to the severity of the probable drop (or increase)?

  6. torehund says:

    2-w up and 2-w of lesser degree up, thats where they normally take it down (we are here now)..and its the Euro to plummet this time around. Testing times for gold and oil-buggs too, even Venezuela has to unload huge gold reserves to cover for the deficit of declining oil revenues (according to Armstrong).
    Good work Tony and all, and good weekend too.

  7. blackjak100 says:

    TJ, your thoughts?

    • ewmarkets says:

      Blackjak100, exactly a month ago on 9/23, you posted a chart by Nate Kautz saying we bottomed at the second 1867 and impulsed to SPX 1993 for (1) then it was A-B-C in progress to complete (2). At the time, SPX = 1940 and on its way to 1872. This is now Tony’s count and it has been working well.

      I’m curious if Nate Kautz has stuck to this count, which would have really helped his subscribers who trusted him.

      • blackjak100 says:

        Nate kautz had a 1-2-1-2 count from 1867 right off the bat and switched it to a truncated 5 wave decline impulse after the 1872 low.

  8. mjtplayer says:

    Thanks Tony!

    “Unsure if these are Minute waves or Micros”

    That’s interesting, given the move, how overbought we are and how close we are to the highs. Would be difficult to see the entire move as minute i, but you never know.

    Another big drop in the WLEI, 2nd week in a row. Leading indicators this week reported at -0.2%. We’re looking at a 1%+/- Q3 GDP print next week, as it’s possible the economy is slowing further. Very slow growth, hurdling towards zero growth (or worse) would coincide well with an end to the bull. Only this time, the Fed is already at 0% rates and QE has run it’s course, clearly doing nothing for economic growth. On to the next bad idea – NIRP anyone?

    • magnus1234 says:

      I believe we should stop worry about interest rates or NIRP. What really matters is exchange rates…that is what the FED and all other CBs are really managing and has been doing for the last 3-4 years IMHO. The interest rates are just the tool for FX.

  9. asaraniti says:

    Tony regarding your analysis in tonight’s update, “Unsure if these are Minute waves or Micros”.
    If the waves in wave 3 were micros, would you expect that when 5 micro waves are complete, there could be a 50% retracement from that high from SPX 1972?

  10. fishonhook says:

    Well this last week was like having my head in a vice. I kept getting stopped out (head pops out of vice) and then reshorted (put head back in vice)

    Tony . Kudos , you called it. A litany of failures expecting a crash, retest, more P4 who have conveniently disappeared from the blog. Lets see what Pug has to say for himself. New highs seem on the cards.
    At least this will bring us to the end of P5 quickly and then we can short and hold’em. Maybe Von Trump will go ahead in the polls and we can some real downside.

  11. Anonymous says:

    Given that the major markets are in Bull Markets, will these areas that are in Bear markets participate (i.e. oils, mlp, retail ect.) And do you see these areas rising in a 1-3 year time frame.
    First timer.

    Thank you

  12. EL MATADOR says:

    Tony, we have a new Too Big to Fail crew and its in the tech giants
    1. AAPL $680B corp
    2. GOOG/L $500B corp
    3. MSFT $423B corp
    4. AMZN $300B corp
    5. FB $289B corp
    6. INTC 166B corp

    These six beast now have taken 12% control in SPX weighting and a whopping 42% control in NDX. At start of year it was 9% and 38% respectively.

  13. bigskeeter says:

    Big thanks to Tony & All! I really appreciate your analysis and effort to make these market movements make a little more sense for us newbs. Thanks again, Donald

  14. If today’s high holds, SPX is in a Bullish Butterfly pattern, X=1820.66, which means P4 = 1735

  15. ABchart says:

    Thanks Tony!
    A spiritual song for you:

    Good weekend all!

    • tony caldaro says:

      thank you AB,
      We are dancing thoughts.
      Energy fields learning, experiencing and exchanging information with each other and with the entire universe.
      We are each, a miniscule holographic portion of the whole.
      We are all connected through time and space with each other. There is no separation.
      In fact, there is no “we”, there is only One being.
      And there is no “being”, there is only Infinity.

  16. berniebaruch says:

    Monster call on this rally, Tony. I wish I had been on the train the last 50 handles. Another shout out to the participant with the 2105 call on the spx by Friday. Buy a round of cocktails this weekend.

  17. tomasso60 says:

    thanks Tony and have a great weekend as well.
    looking forward to the weekend read, with a nice cup of coffee.
    coming up in a couple of hours go to game six and hope to tie this series up.
    cheers all

  18. tylerh says:

    Have a good weekend tony

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