Thursday update

SHORT TERM: pullback continues, DOW -4

Last night FED vice chair Fischer gave a speech: Overnight the Asian markets finished mixed. Europe opened higher but finished mixed as well. At 8:30 weekly Jobless claims were reported higher: 276K v 260K. The market opened one point above yesterday’s SPX 2102 close. By 10am the SPX hit 2109 and then started to pullback. The pullback was quick, and just before 11am the SPX hit 2090. After that the market rebounded to SPX 2104 by 1pm. At 1:30 a speech from FED governor Tarullo was released: After a pullback to SPX 2096 by 2:30 the market bounced to close at 2100.

For the day the SPX/DOW were -0.05%, and the NDX/NAZ were -0.30%. Bonds lost 2 ticks, Crude dropped $1.00, Gold slid $4, and the USD was higher. Medium term support remains at the 2085 and 2070 pivots, with resistance at the 2131 and 2198 pivots. Today the MMIS was reported higher: 54.7% v 53.6%. Tomorrow: monthly Payrolls (est. +174K) at 8:30, Consumer credit at 3pm, and a speech from FED governor Brainard after the close.

The market opened higher today, then pulled back to SPX 2090 triggering a potential Intermediate wave iv pullback. As noted yesterday, the key level was SPX 2094 and support for Int. iv was expected to be in the 2085 pivot range. After reviewing the charts we also noticed, due to the choppiness of the recent rally from the Minor 4 low at SPX 2052, that Major wave 3 could also be counted at the recent SPX 2116 high. Looks like we will need to observe some market activity to determine which wave degree pullback is underway. During this uptrend the Int. wave pullbacks have been between 31 and 42 points. This suggests an Int. iv pullback should find support at the 2085 pivot range, or the plus side of the 2070 pivot. Anything more than that and we are probably looking at a Major wave 4 pullback. A Major wave 4 low would be identified by an oversold daily RSI. Currently the daily RSI looks like it has a negative divergence at the recent high. Short term support is the 2085 and 2070 pivots, with resistance at SPX 2120 and the 2131 pivot. Short term momentum hit oversold at today’s low, then bounced to neutral. Best to your payrolls trading!

MEDIUM TERM: uptrend

LONG TERM: bull market


About tony caldaro

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145 Responses to Thursday update

  1. My indicator generated a Sell signal at the close, details at – I will post an update later today or tomorrow with further details on what I see in store for next week. GL

  2. In my humble opinion ( for those who are a bit lost with technicals), watch 2107 carefully. A sustainable move and particularly a close above this level would mean to me int.iv is over and we are likely going to make new highs

  3. uncle10 says:

    Thanks Mr. T.
    no change: date of next fed meeting if above SPX 2100 = rate hike. Below 2100 no hike and still “data” dependent. ( blame it on strong dollar etc..) prolly be 2100 on next meeting to keep everyone guessing. haha 😉 good weekend all.

    • Dex T says:

      After 2 previous failures I am skeptical of a rate hike in December.

      However, the Fed Funds data posted by RC and the comments by Fed officials “seem” to indicate that many people are taking the idea seriously.

      The timing would coincide perfectly with Tony’s-and many other counts so maybe this is the catalyst for a bear after all?

  4. gtoptions says:

    SPY ~ Hourly MACD case for Int iv near complete.
    GL & Good Weekend All

  5. blackjak100 says:

    2084 + 48 (int i) = 2132 end of major 3. I would not be shocked to see it hit by tues before reversing into major 4. I’m long now and will reverse short 2125ish.

    • purplember says:

      from 2084 to 2098 is bunch of zig zag and not impulsive…. you have 2084 as int IV

      • blackjak100 says:

        So far, as I’ve said lots of times, squiggle counting is tough. What looks likes overlapping can always be 1-2-1-2 at very small degrees or a diagonal. I’m open to a slightly LL, but need to see it first.

        • quantmaven says:

          Still doing lots of complex zig-zags and triangles shenanigans. The outcome should be bullish but like purplember said for now the int IV is at 2085 but I also agree there might be a slight bias for a LL. It is not really possible to count anything so far as being impulsive.

  6. rcun says:

    RC (if you are around) Earlier you mentioned the fed funds futures had priced in 70% rate hike. In RC’s mind, what are the odds of an increase – knowing what you know today? I’m still a non-believer! You know they will come out a week from now and revise all of todays numbers! Appreciate your input.

  7. ABchart says:


    – Balanced for the rest of the day (may be range 2080/88).
    – Remember: the value is stil between 2080 an 2115. 2078 was an excess.
    – We need to break 2080 with volumes to shift lower.

    Thanks Tony and all and have a nice weekend.

  8. jeffbalin says:

    I’m anticipating Maj 4. For one, The daily MACD is very high over 30, it hasn’t been that high in at least 5 years (that’s all I can see) and looks like it’s trying to cross. Other lines are pointing down trying to cross. These aren’t usually short term blip crosses. Could be a deep int 4, but I can count 2116 as 5 waves up as well as top of int 3. Would not have noticed until Tony put the Maj 3 option up. This Tony guy knows how to make me think harder. Good teacher.

  9. Covered my short term ES position at 2079.25 this morning. 3 – 1.27 expansions there. Pretty straightforward. The 64,000 question is: Is there enough potential upside in Int. W.5 of Major 3 to justify hold longer term “long” position into next week and risk getting caught in gap down open if this turns out to be Major 4.

  10. Jim Guthery says:

    Are we in Major 4?

  11. EL MATADOR says:

    Believe it or not, but this chart is a bullish/bear count indicating every important inflection point all-in-one snapshot.

    FWIW, we had 3 wave up from LOD so LL yet to come.

    • gtoptions says:

      When SPX hits 2200 will you stop with the Bearishness? LOL 😉

      • EL MATADOR says:

        That chart is a lot more bullish than bearish. Notice I didn’t even place a [B] at 2116 simply because that probability is like 0.00001%, IMO. Notice that the chart is favoring a (A), (B), (C), so IMO P5 is most likely to be forming a wedgie.

        My screw up on the P4 low was my stubbornness to expect a LL below the August crash for SPX which did not materialize but at lot of other important indexes did breach their August crash low below is a list just to name several:

        Wilshire5000, Dow Jones US Total Stock Market, RUT, BKX, NBI, IXHC, OSX, SVO, EPX, MID, RUA, RUI, XAU, HUI, SPBUYUP, SP500#15, SP500#35, SP500#40, NIKK, STI, HGX

        So I was not entirely wrong but I did f-up on expecting to see SPX august crash low breach so no excuse for me there. better luck next time I guess.

      • tommyboys says:

        An agenda in search of a pattern…

        • EL MATADOR says:

          huh, what does that mean? I suppose my calling of the Rounding top P3 and P4 to match P2 in points in lieu of % was an agenda too then, right?

        • lunker1 says:

          TB i’m sure you’ve noticed when someone pounds the table incessantly every day they’re typically wrong. For some reason some people feel the number of posts gives their theory more merit.

    • Now to me, looking at your chart, we bounce at 2077–then to new highs.

  12. did you guys noticed how low volume is on down days? This is positive for the bulls,.The other positive point is that down days and not excessive to the downside..
    Moving down gradually and slowly is another good point for the bulls

  13. phil1247 says:

    initiated 25% SHORT 2091

    nice bounce off TARGET at 2078

    TARGET 2071

  14. ABchart says:

    USD/JPY: live 1.23

    Monthly: bullish target 1.30+
    Weekly + daily: bullish target 1.26
    Hourly: extremely overbought. Need a pull back to 1.2180 / 1.2200

  15. Hi guys well spx 2087 is actually losing its embedded stochastics and bellow T iine (8ema) at 2090 or so the selling and lowest buy point not reached in my view

  16. mjtplayer says:

    LOD is SPX 2,083 – that either completes int iv or we have 1 more poke lower, probably targeting 2,075 – 2,080. Minor C = A at 2,077, so we could have 1 more LL today or Monday to finish int iv.

    Int v to complete major 3 into the Turkey Day holiday weekend?

  17. magnus1234 says:

    I believe we are in int iv based on DAX30. Will buy again at 2060-2070 (SPX).

  18. Well an interesting jobs number.DXY up to 99.2.Gold down to 1086.Glad I got out of GDX at 15.88.I m actually a little surprised stocks have reversed.But this is one screwed up stock market.A bond yield rising to 2.31 shouldn t be bearish for stocks, but since the whole bull has been based on artificially low interest rates–who knows what stocks will react to(and to what degree).In the “normal” days, equities would be up huge after a number like this morning.Certainly not recessionary, but when a recession starts(caused by outside factors as in 2008), jobs are a lagging statistic, so trying to predict a recession from NRP is impossible.Now stocks continue to fall although the DAX is up.A head scratcher.

    • DAX up cause is export oriented and eur is down.

    • Dex T says:

      The market has run up the past month on mainly bad news and when some good news arrives it sells off. I guess that means it’s been “priced in”.

      News is always secondary to TA and the waves.

      • Now the question is-with Sept payrolls down to 137,000-was October an outlier?Until October, the trend in jobs had been down all year.Wonder if this is panic selling in bonds the same way there was panic buying a few weeks ago when yields fell to 1.96%

        • Dex T says:

          October seems to be an outlier in many regards. We”ll have to wait and see.

          Personally I trust the total combination of macro data and the wave counts. While there may be arguments as to degree it’s clear from any count that the bull is reaching an end.

          • So a month from now when we get Nov jobs, and if it s weak, it would be just in time to take a rate hike off the table again.My bullish scenario for GDX at that time.Good luck all.

    • kevinm76 says:

      Of course you did….wow! How could you be so smart to get out just before the dump.

      Bold faced liar you are…Your posts speak for themselves

  19. Five waves down on cash now measures acceptably from the point of the last high; the wedge in the wedge (or fractal) that has been shown on the hourly futures charts. The five waves form an “Expanding Leading Diagonal” of the 5:3:5:3:5 form, where wave (5) is longer than wave (3), wave (3) is longer than wave (1), wave (4) is longer than wave (2), and wave (4) overlaps wave one. All of these simple requirements have been met. But, since wave (5) can be any length, as it is longer than wave (3), then downward movement may not be over yet.

    SPX - Fifteen Minute - Nov-06 0901 AM (15 min)

    Very often expanding Leading Diagonals are “A” waves, so this may only kick off a corrective sequence.

  20. ABchart says:


    ABchart says:
    November 5, 2015 at 9:41 am
    Bearish target at 2082 !!

    Done 😉


    – Bearish target at 2080 today.
    – Bearish swing target at 2072.

    No other imbalances right now.

  21. blackjak100 says:

    VIX still red – has to be int iv doesn’t it?

  22. kvilia says:
    Watching NUGT getting crushed and wondering where the meaningful bounce will come. Looks like a blood bath at the moment.

  23. mjtplayer says:

    No doubt the market is pricing-in a Dec rate hike. Banks and the Dollar are ripping; gold, utilities and REIT’s getting slammed.

  24. ABchart says:

    Hello everyone!

    Algos paradise on all assets. Amazing NFP day!

  25. torehund says:

    (Euro)pe in search of a plumber ?

  26. manunidhi21 says:

    Namaste Tony!
    “Currently the daily RSI looks like it has a negative divergence at the recent high”
    Why I don’t see that marked on chart at recent high ?

  27. Fed is really late. Apparently they didn’t have the foresight to see that the finance sector needed a rate rise (about a year ago) to increase profitability that could’ve offset these huge losses they’re going to eat from Energy sector loans. In true political fashion, they recently moved the goalposts for the biggest of the big banks…raising reserve requirements and forcing them to have functional living wills in the event of…an event. The Fed assures us that it will prevent systemic risk and contagion. The next thing the Fed has done (and this should be enough, right?) is release the statement which clearly forwarns of impending doom. It’ll be important later on, during congressional testimony:

    • EL MATADOR says:

      Here is the kicker, everyone always knew that the banks had to raise $XXX Billions by XXXX year, yet they allowed them to payout divs and buyback shares, why?

  28. One more final High was expected which did not come. Today is ultimate day for that to come. If today it does not come, then we have already seen the highs in S&P.

  29. johnnymagicmoney says:

    Tony……..he’s grrrrrreat!

  30. mjtplayer says:

    EL MATADOR says:
    November 5, 2015 at 4:12 pm
    An so it has begun, credit rating downgrades of all those pig debt issuing BuyBack Corporates

    Standard & Poor’s downgraded ratings on Kellogg Co. K, +1.02% Thursday, citing higher debt levels following recent acquisitions and continued share buybacks.

    You got it EL Mat, when the buyback express comes to a halt – who will be the incremental buyer then? Nobody – we enter a bear market.

    One thing (of many) that made the 1920’s stock bubble so powerful was stock buybacks, that and retail margin requirements of 10% (i.e. 10:1 leverage). The good times weren’t going to end – right? So why don’t use all our cash, plus issue debt and buyback stock, that way we can inflate our share price while extinguishing the dividend on said shares – it’s a win-win! Just one problem, when the good times turn to bad, companies had used all their cash to buyback stock and were left with a mountain of debt, so they didn’t have a safety cushion for the next downturn nor could they make the debt payments. The downturn that resulted was arguably the worse depression in US history, driven by debt defaults and companies going bankrupt. 14 of the 30 DOW components went bankrupt in the bear market that followed from 1929 – 1932.

    Today is different, as many companies have cash, it’s just trapped overseas. So, they’ve been issuing debt to fuel the buyback express. As a result, in the next downturn, companies will have to choose between cutting or eliminating the dividend OR bringing cash back home from overseas to help meet it’s obligations – of course getting taxed anywhere from 35% – 50% in the process, between Fed & state taxes. About 44% for CA based tech companies (35% Fed taxes, 8.84% CA state taxes).

  31. ewmarkets says:

    Offering another possibility: minute IV pullback.

  32. Here’s an updated post on my blog for your reading pleasure.

    Cheers and enjoy the charts!

  33. EL MATADOR says:

    An so it has begun, credit rating downgrades of all those pig debt issuing BuyBack Corporates

    Standard & Poor’s downgraded ratings on Kellogg Co. K, +1.02% Thursday, citing higher debt levels following recent acquisitions and continued share buybacks.

    • EL MATADOR says:

      Also S&P warned GE on 10/08 that it’s credit rating is at risk if they issue more debt for buyback programs.
      and UTX was downgraded on 09/18 AMC for it debt-for-buyback program, same friggin day UTX CEO acknowledge that he could see a credit rating downgrade due to buyback program but in his expert opinion it the buybacks are a great thing.

    • EL MATADOR says:

      DISCA was also downgrade on 11/03 after announcing it’s $2B buyback program

  34. blackjak100 says:

    TC, if major 3 ended at 2116…where did int iv end?

  35. Since things are clear as mud, my 2 cents is int 4 ended at 2090. the closer we get to the top, pullbacks will be smaller. 26 points is close enough to the 2085 mark. I say higher we go in int 5.

  36. mjtplayer says:

    Thanks Tony!

    The short-term count seems clear to me, so far anyway. Dropping in int iv, with today’s low being minor A and subsequent rally all or part of minor B. Still looking at the mid 2,070’s – mid 2,080’s for int iv

  37. Dex T says:

    Major 3 possibly has ended or will end next week. Next few weeks should be choppy!

  38. GYN LAB says:

    Good evening!
    ST count as clear as mud right now… In addition to Mr TC’s count, I can also see continuation of Minor 5, where 2116 marked Minute 3 top (Minute 1 2059-2085, Minute 2 FOMC pullback 2085-2063, Minute 3 subdivided in 2063-2094-2079-2106-2098-2116) and this 2116-2090 could be Minute 4. This would mean that post-NFP make a HH in Minute 5 tomorrow and possibly turnaround big time.
    Alternatively if 2116 was a local top then it looks like a 1-2-1-2 setup so far, with a big down tomorrow marking a 3 of 3. Basically can fit wave counts in either direction tomorrow and so confusion! My preferred is to shoot up to 2120 area for a nice short opportunity.

    • If Int. iv has not ended and we shoot up after the report tomorrow then what does that mean. Only way I see now from Tony’s count is that we go down tomorrow no matter what the report says. I am confused also.

      • GYN LAB says:

        If we shoot up then it should end this major wave from 1872. It would be in Minor 5 of int v of Major 3/B where I place int iii & iv labels in TC’s int i & ii, with my int ii at 1927-1893 and we have an extended, subdividing int v since 1991

    • Thanks, Tony.
      Good evening to you, too, GYN. I believe these are the ” several small waves still needed to complete Minor 5″ that Tony mentioned in the Tuesday update. However, I’m counting the “2116 … Minute 3 top” as minute wave-3 (n3) of minor wave-3 (m3) of intermediate wave-3 (i3) of major wave-5 (M5) of primary wave-5 (P5). I thought it looked like $SPX was heading into minute wave-5 (n5) of minor wave-3 (m3) at the open this morning, but it turned into a quick b-c to finish minute wave-4 (n4). If $SPX is now in minute wave-5 (n5) of minor wave-3 (m3), it is limited to going no further than 2148.05 due to minute wave-3 of minor wave-3 being shorter than minute wave-1. This also makes it a candidate for a failed wave-5 after any five wave move up. Something tells me the blow-off top of a nearly seven year cycle wave bull run will not be meek.

  39. Tony, Thanks for the timely update summing up the possibilities.

    1. I am wondering that if the SPX should do the unexpected and surpass the 2116.48 high without going lower than 2090, would that event put Minor 4 back in effect.

    2. DId the present uptrend start at 1867 or 1872?

  40. johnnymagicmoney says:

    “The Day is Coming”

    Twenty One Twenty a target for some
    Two One Three Five who may call me dumb
    Then Major Four with a drop about sixty
    Then all time highs with dust made of pixie

    Where it will end who the F knows
    One thing I know is that earnings do blow
    Along with the asians who lie like the Prez
    Down will go stocks that’s just made of Pez

    The buy the dip crowd will echo for months
    But soon they will don a cap that says Dunz
    And then I will laugh with Newbie and friends
    Reading Z-H call for the end

    But one day I’ll buy with blood in the streets
    Cheap stocks galore I’ll feed on dead meat
    The buy of a lifetime will come again soon
    Before that you longs can look at my moon

  41. Thanks Tony. Could Int. iv pullback be done at 2090 and we have started Int. v. or you think that we have more to go down soon.

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