Friday update

SHORT TERM: gap down opening, DOW -203

Last night FED vice chair Fischer gave a speech: Overnight the Asian market lost 1.3%. Europe opened lower and lost 0.9%. US index futures were lower overnight, and at 8:30 the PPI was reported lower: -0.4% v -0.5% and Retail sales were reported higher: +0.1% v +0.1%. The market gapped down at the open to SPX 2041 and continued to decline. The market had closed at SPX 2046 yesterday. At 10am Consumer sentiment was reported higher: 93.1 v 90.0, and Business inventories were reported higher: +0.3% v 0.0%. The market continued to decline until 11:30 when the SPX hit 2027. Then it rallied to SPX 2041 just past 12:30, before heading even lower into the afternoon. Nearing the close the SPX hit 2022, then bounced to close at 2023.

For the day the SPX/DOW lost 1.5%, and the NDX/NAZ lost 1.7%. Bonds gained 13 ticks, Crude dropped $1.00, Gold slipped $3, and the USD was higher. Medium term support remains at the 2019 and 1973 pivots, with resistance at the 2070 and 2085 pivots. Today the WLEI was reported higher: 47.1% v 46.5%.

The market gapped down at the open today for the second day in a row. By late morning it had entered our Major wave 4 support zone between the 2019 pivot and SPX 2040. After the market started to rally we placed a tentative green “Int. a Major 4” label on the hourly chart. The market then completed its rally to SPX 2041, not closing the gap, and made a lower low at 2022 in the last hour of trading. Still within the range. The market has now done the minimum requirements to complete either Int. a or Major wave 4. We have three waves down from Wednesday’s SPX 2087 high: 2027-2041-2022. Also the daily RSI is oversold, and the hourly MACD is sufficiently oversold as well. Short term support is at the 2019 pivot and SPX 1993, with resistance at SPX 2040 and the 2070 pivot. Short term momentum displays a slight positive divergence at today’s lows. Best to your weekend!

MEDIUM TERM: uptrend

LONG TERM: bull market


About tony caldaro

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92 Responses to Friday update

  1. torehund says:

    …blue Monday and bullseye ?

  2. I am in my town for Diwali Festival here in India. Still everyone waiting for new highs…which will not come in next 4 years…..we are in long painful bear market…….No one is in my camp…By 2nd December many one will start believing that Bull market has ended……

    Stocks make index. if Stocks are in bear market how can index be in bull market. India is grinding lower and lower. I am playing for Nifty target of 6570 downward. Lots of put option bought for November and December series……

    This is my opinion..take advise of your financial adviser before making any decision….

  3. gmchd says:

    Looks like a 50% pullback for gold at 1071. The 1999 low of 252 and the 2011 high of 1889 based on a spot price chart I found. Opinions please?

  4. mondayrabbit says:

    Long time lurker, first post. This statement is regarding the % drops for major waves 2 and 4. The last Major 4 waves have 5.4% and 7.4% going backwards from now per Tony’s SPX weekly chart. Major 2 waves have been larger at 6.1%, 10.4% and 17% backwards again. Ordinarily I would expect M4 to be in the neighborhood of 5-10% pullback. If M4 cannot overlap M1 then the max M4 can drop would be about 5.8%. A 5.4% drop would put M4 at 2002 and 7.4% would be 1960. I question the labeling of M1 at SP 1993. I really respect Tony and need to sign up for his studies. I realize there are many other numbers that quantify wave counts, but % and fib numbers for pullbacks and rallies have also been consistent so far. Please shed some thoughts on this for me.

  5. Based on CPCE readings .. unless we crash monday… today/sunday night should mark the bottom of this wave!

  6. torehund says:

    Political Ineptocracy at Work: One more ill timed “caught by the word” happening here in Norway.
    The case is that the Government uttered that many asylum seekers (40 percent) would be returned to their country of Origin after being denied asylum. Then to avoid the immigrants from fleeing the refugee camps, the Prime minister now advocates sending them to Prison (so that they can not flee the camps).
    This implies: Fleeing from war and poverty, and you end up in Prison. Where is humanity nowadays ? Will politicians never understand that their actions always changes the medium they are trying to control ? They create their own chaos, exacerbating it every time they open their silly mouths.

    • Dex T says:

      They have no choice Torehund. Many of the people will likely try to escape the camps since they have no interest going back. The duty of the Govt. is to first protect their own citizens. They cannot and should not take responsibility for the actions of other governments.

      The prison may be harsh but is only temporary until they are sent back.

      • torehund says:

        Whatever a politician says there is a counter-reaction that just exacerbates the problem. Its only action that solves…never talk. You can’t talk away an acute appendicitis. The sooner the surgery the lesser the magnitude of the problem; but who wants to see the surgeon, when the internist is so nice… It aint easy, thats for sure. Politicans are just politicians, not disturbing the monthly indicators.

      • fotis2 says:

        In Malta FridayThe Europeans offered numerous African countries an incentive of 1billion euros to ”take back ” African failed asylum seekers to their various countries of origin which offer the African representitives flatly REFUSE ….Pandoras box has just been sprung open….

  7. ABchart says:

    Thanks all.
    An American music group from California, named EAGLES OF DEATH METAL is hostage at the moment with 100 other people in a concert hall named Bataclan.

  8. Trump said on TV yesterday that he would bomb the “shit” out of them.
    Guessing/wagering right now that the scatological language will not be criticized on the Sunday news.

    • purplember says:

      this nation needs a leader that is TOUGH. being nice isn’t working. ISIS is not a JV team like obama thinks. anyone that doesn’t think ISIS is coming thru the mexican border are kidding themselves.

      • There were 4 (Islamic)terrorists who killed 60-100 people.Whatever anyone says about “not giving in to terrorists” or any of the other quotes tthat are dished out like “we won t change our lifestyle”…it doesn t matter to the religious nutjobs.They consider this victory and will take it everyday of the week.The more people you have in your country that have the potential for doing this–the more it will happen.

  9. mjtplayer says:

    S&P down another 12pts AA on the Paris attack news, trading at an equivalent of 2,011. Sunday evening and Monday a.m. futures will be very important, it does have a similarity in some ways to Aug 21st & 24th, but we’ll have to wait and see if things calm down by Sunday evening.

    It’s looking more and more like this is int C to complete major 4 and not int A, just saying it has the wave C panic feeling to it. This also assumes we don’t blow apart Monday morning and gap-down 30 handles, questioning the major 4 count altogether.

  10. torehund says:

    Good weekend to Tony and all.
    Its volatile times in Europe, lets hope the waves resolves with no more casualties.

  11. Slightly lower lows on the SPX at the close today, with positive divergence. And the RSI and MACD levels are similar to those of Major 2. This suggests to me that Major 4 of P-5 ended today. So “year end rally” and ATHs are on deck. GLTA

    • llerias7 says:

      Yeah, but see Paris under attack does not help it at all…shall see…

      • tommyboys says:

        These things happen at bottoms…

        • torehund says:

          Its derived from poverty, no hope and no future. Spreading from the Middle east and now affecting Europe. Desperation is always the fuel leading to radicalization.
          France is on the brink of something, the rage of the poaching man hitting the bird-protectors foundation activists just days ago illustrates a nation in which “ill temper”, previously contained and suppressed finally boils over. It was probably the start of the French spring.

      • nsteve24 says:

        there were 59 murders in the city of Chicago in September, why no affect on the market? media was silent, only in America

        • tony caldaro says:

          thought that was over one weekend

        • ewmarkets says:

          Murders don’t have an equal probability of happening to every citizen. That is, the chance of an average Chicagoan getting murdered is infinitely lower than the chance of some specific Chicagoan. However, if 59 people per month will be murdered at random in Chicago (e.g. terrorist attack) and everyone who dears to step outside his home has an equal chance of being murdered, I bet people would quit their jobs there and move. And in fact, it would create great fear and perhaps crash the stock market.

        • In 2013 in the United states. 33,169 people died from a gunshot. Of those 21,175 were suicide. I’m guessing none of those were terrorist related. Just US citizens killing each other. Just a statistic. Not looking for a fight about gun control. My prayers to those effected in Paris.

        • tommyboys says:

          Light week

  12. blackjak100 says:

    I’m not a PUG EW fan, but technically he’s probably right here as the condition was satisfied today. If TC ends up being wrong, then this entire rally from 2009 would be corrective (3 waves) which suggests a LL below 666 and Dr Robert McHugh has been right all along with the economic Ice Age approaching.

    • blackjak100 says:

    • aahmichael says:

      I have always said that the rally from 2009 was corrective. It was corrective because the very first wave up subdivided by 3, not 5. Once that happened, then everything that occurred afterwards was part of a larger corrective wave. Nevertheless, because the 6 year rally was a B wave, and because it went so much higher than the beginning of the previous A wave, then the C wave down that has already probably started will not take out 666. It won’t come close to doing that. In fact, because the B wave was so strong, then the ensuing C wave probably won’t retrace more than 50% of B. (It’s a running correction.) Even though these labels are not the same as Tony’s, the net effect on the roadmap is the same, meaning the market is due for a 50% correction, and then it’s off to the races to new highs. The labels will be different, but the market’s path will be the same.

  13. ES TA says:


    Is Major 2 a irregular flat or zigzag? So for Major 4 is zigzag, isn’t it?

    Thanks and looking forward to your weekend update!

  14. ABchart says:

    Terrorist attack in Paris right now. May be 18 deads for the moment 😦

  15. quantmaven says:

    Whoa it is sinking hard now!

  16. lunker1 says:

    I’m pounding on the table with my view while repeating myself over and over and requoting my old quotes and reposting my old charts so you can see I really mean what I mean and I was the first to mean it and the first to see it and nobody else did because I’m right I know I’m right I’m always right the more I post it the more I’m right so I’m going to post it some more and requote myself even more I know I blew that last call but I’ve got this one really really right you better believe me old else the world will end!

    LOL TGIF! 😀

  17. pbnj123 says:

    Thank you for reply to my earlier question.
    I have one more – on the DOW weekly what is the RED circle for around the macd -60?
    Please advise
    Thank you

  18. uncle10 says:

    Great work Tony. Thx.
    Amazing how close spx has been tracking 2011 pattern. Prolly just coincidence?
    Its not going to end the same though 😦 This time around instead of kicking off a strong bull run it’s ending one.
    Good luck and good weekend all.

  19. Page says:

    Thanks Tony. Have a great weekend.

  20. aahmichael says:

    As powerful as the previous 6 week rally was, I remain convinced that it was a bear market countertrend rally. In just one week, the major averages have erased all of the gains from the previous 4 weeks. (Some a little more. Some a little less.) Trending moves always cover more ground in less time than countertrend moves do.

    • Dex T says:

      Today certainly added weight to this view.

      A 30 point S&P down day on Monday will favor it.

    • blackjak100 says:

      How many times do you have to repeat yourself? TC has laid out a perfect roadmap ahead of time and it has yet to detour.

      • aahmichael says:

        My count, which is the complete opposite, has yet to detour either. That’s the beauty of EW. Two counts that are completely opposite of each other can both remain valid at the same time for quite some time. Eventually, though, the market will invalidate one of them.

    • skmcobra says:

      I don’t understand after the SPX losing 5.2% from the high of 2117 just five days ago, how anyone can call this a bull market on the short or medium term. We will very likely see even lower next week below 2000.

    • CB says:

      that’s an interesting observation, Michael. Thanks.
      Someone is trying to get something accomplished b4 the holiday rush : )

    • tommyboys says:

      Market always takes the stairs up and the elevator down. Why? Because fear is a greater motivator than greed.

  21. I’m wondering if it is possible the NDX could have an ending diagonal with the other indexes an impulsing M5.

  22. Dex T says:

    Thanks! Looking forward to the weekend update!

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