Friday update

SHORT TERM: gap up opening, DOW +91

Last night, just after the close, FED vice chair Fischer gave a speech: Overnight the Asian markets gained 0.5%. Europe opened higher and gained 0.1%. US index futures were higher overnight, heading into options expiration Friday, and the market gapped up at the open to SPX 2089. Just past 10am the SPX hit 2097 and then started to pullback. At 1pm FED governor Powell’s speech was released, lots of FED speak lately: The pullback continued until just past 3pm, when the SPX hit 2085. After that the market bounced to SPX 2090, then dipped to close at 2089.

For the day the SPX/DOW gained 0.45%, and the NDX/NAZ gained 0.65%. Bonds lost 3 ticks, Crude slipped 10 cents, Gold slid $4, and the USD was higher. Medium term support rises to the 2085 and 2070 pivots, with resistance at the 2131 and 2145 pivots. Today the WLEI was reported higher: 47.4% v 47.1%.

The market gapped up at the open for the second day this week. In the first half hour of trading the market hit SPX 2097. Then it pulled back for the rest of the day. At the high there was a short term negative divergence, and momentum declined to neutral. Still, despite today’s pullback, there is no change in the count. Intermediate wave iii remains underway since Tuesday’s low at SPX 2046. After a 50+ point rise, there have not been any notable reversals to suggest a subdivision into Minor waves as of yet. Short term support is at the 2085 and 2070 pivots, with resistance at SPX 2116 and the 2131 pivot. Best to your weekend!

MEDIUM TERM: uptrend

LONG TERM: bull market


About tony caldaro

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47 Responses to Friday update

  1. torehund says:

    Just one more anecdote from the cavalcade of amazing news from the land up here in the North, this one is benign, shameful and Hilarious: A CEO of the Telenor company was admitted to Harvard on the background of 2 years of vocational forestry school, and a couple of language courses at a local school of Economics. In his CV it states that he had a bachelor degree in economics🙂
    In Norway the meaningful corporations are state controlled and majority owned, knowing someone in the labor party is essential in getting ahead of the bewildered crowd. In a command economy its always who you know, and to a lesser degree what you know that counts.
    Cheating and lying is essential in todays business climate, just ask any of the ruling politicians🙂
    Did Harvard just loose its luster, or is the school of hard Knocks always the best ? You decide.

  2. mike7x says:

    So he’s the GOP “trump” card?😉

  3. ES TA says:

    Tony, thank you!

    I’m trying to practice wave count. For IM III, from 2046 low, I have 2068, 2063, 2086, 2078, 2097 five waves. Am I count it correctly for minor waves? Or is it too early to tell?

  4. pooch77 says:

    Pretzel has market hitting 2005 than down ,down,down

    • francesca507 says:

      Forget Pretzel is a waste of time and intellectual energy.

    • EL MATADOR says:

      2005? Pretzel expects a test of the 2116 prior high

      • pooch77 says:

        Oops 2105 on his Friday post.

        • EL MATADOR says:

          That’s just the graphic representation on the chart and on his ST view right now

          “Do note that on the chart above, there are various ways we could get to 2/B, including an immediate decline, followed by another wave up to retest the zone around the 2116 high (2000-2120). Frankly, I remain somewhat hesitant to get too far ahead of the this market at the current juncture, because there are varying degrees of ambiguity across several wave degrees right now. This is not uncommon after several straight months of reasonably clear patterns — eventually, the market has to throw a few curve balls, and we have to wait those out. Trade safe.”

          • My favorite “expert” is Bulkowski,who a couple weeks ago said by Dec 1 the Dow will be at 16800…BUT IF WRONG-will hit 18000.That s the most hilarious site out there.Then he ll throw a chart with a prediction of a H&S a breakout,but then say “I could be wrong”.This year he usually is.How he retired at 35 I ll never know.Now he asks for donations to keep his website going.Amazing.

      • nsteve24 says:

        (2100-2120) to be exact
        2097 today may very well have qualified as his 2B, or another pop and drop Monday am should do it.

        • torehund says:

          Back to Bulkowsky, I think he is holding two patterns in his head at a time. A gap can either be a fill, or be inverted upwards as a squeeze. These pivots or higher order indecision are brutal, market never decides until it has to…Thats why I think another large 1-2 (or abc) plus minor degree 1-2 in sinking order up until 128(ATH) on the RUT is in the cards. All these Analysts mentioned here are astute, but at higher degrees decisions, things go so fast that its a 50/50. Safer to anticipate and trade towards where one thinks that the major battle will be held, if you aren’t a pure gambler.

    • Seems to me that Pretzel, Avi, Springheel Jack, Pug and most others never commit to a preferred count for more than a couple of days. Don’t believe me, that’s fine, just keep a log of their calls for about a month.

      If you’re a day-trader, then maybe their style fits you, but it doesn’t fit with my intermediate style and my desire to trade 2-3-4 times a year.

      Tony C fits my style. Just my opinion. And thanks very much Tony.

      • pooch77 says:

        Pretzel pretty spot on,Pug runs 3 counts fwiw and has been bearish as of late.SHJ has been a bit off the last month or so

        • Pooch. Well, I guess it’s all subjective. If I track 3-4-5 “experts” and they all have different wave counts and different trend lines, then how do I reconcile that? I can’t process that many different views and opinions, or develop probabilities based on those different “experts”. So I have to do my own homework based on my trading style, time horizon, etc. and I imagine that you do the same thing. I’m not sure about Tony C, but I’m pretty sure that he doesn’t clutter his mind with the wave counts of others; he does his own research. Good luck Pooch

      • EL MATADOR says:

        Sorry but you have a fault understand of Preztel. He post is long term count but not everyday. I think the problem is that many people that read his post fail to distinguish his long term view post from his short and intermediate view. Pretzel stands out from the aforementioned group. Don’t take my word for it though feel free to join his private forum and you will see for yourself just how sharp Preztel truly is.

  5. captbara says:

    Nikkei looks like a bunch of nested 1-2’s.

    • torehund says:

      There is an emerging pattern of 2s in ever declining degree, that MAY cause stocks to go extremely high, if primary 3 is starting NOW, and primary 2 has already had “an upward tilted correction”.
      If it should manifest itself there will be massive stagflation, riots, strikes until wages catches up, and if the gap remains for some time, expect distinct deflation of real estate.

      $Sugar is showing strength on the daily rsi catching 90. As with all hated commodities, sugar is so bad for you that government wants to TAX it🙂 Crazy kids, obesity, laziness, and flatulence, BLAME SUGAR. Kick them when they are down, ala the Pope and Coal.

      • torehund says:

        Human behavior repeats itself, it drifts from one extreme to another. As humans we just cannot remain sincere and objective all the time; we blame and scorn someone else for the Cycles wrecking havoc upon us. Thats our collective makeup, and collective makeup surely has some good to it as well as negative. But its never good when the hoards plays a blame game at the extremes of a cycle, just before a turn. Or is it good if it can impede a catastrophe from getting out of hand; you decide if “the greater good” is reason enough in itself and justifiable.
        Rage must externalize, and when its empty it turns into love, not because folks are inherently nice🙂 but because there is no more rage LEFT🙂🙂 PS: Never tell this to your better half, or you will extend your down cycle substantially and rapidly. But then again; a bottom that really HOLDS is probably the next rocket.

  6. pooch77 says:

    Pug has this turning down to low 1900’s

  7. Gary Lewis says:

    As I mentioned last weekend, watch out for those V-shaped recoveries.

    I’ll be watching for the three-week test of the high on Friday. Sometimes it blows right through it early in the week and then retraces at the end of the week to see if we can hold above it. Other times, it goes right through and continues. (and of course, sometimes it fails). I got in on Monday morning at 203.60, so I’ll take 211 very happily thank you.

  8. elmer510 says:

    Thanks for the update, Tony. And thanks for a lot of outstanding comments here at your blog.
    Just one question about SPX:
    It seems to me IM II of major 5 is down about 20-21 points.
    Today at IM III we had a decline of 12 points from 2097-2085.
    I thought perhaps that was enough for a minor 2 of IM III, compared to the length of IM II :
    What do you think ?

  9. ewmarkets says:

    Tony, about the low values of BDI, an Economist article in March says that this was due to oversupply of ships ordered during the blow-off top period from 2005-2008 and also due to the low prices of oil. The article says the current value of BDI does not indicate the world economy is in trouble. Of course, that was in March and BDI has decreased even more since then.

    It does make sense that one needs to look at the loads of goods shipped as oppose to price to get a gauge of the world economy.

    What is your view? Thanks,

    • tony caldaro says:

      The price of Crude has nothing to do with the BDI (Baltic Dry Index). The BDI is an index of shipping rates for raw materials, i.e. metals, coal, steel, cotton and grains. It is true that there was an oversupply of bulkers ordered during the commodity demand surge in China. And there is still an oversupply of dry bulkers. But this is currently due to the lack of demand in raw materials, and not so much an oversupply of bulkers.
      This has recently overflowed into the container sector of shipping, where finished goods are transported worldwide. The declining rates on containers suggests the worldwide economy is contracting.
      Crude tankers, on the other hand, are having a boom year. Rates are currently near all time 2008 highs.
      So when looks at shipping there are a lot of moving parts that have various implications.

      • ewmarkets says:

        Tony, thanks for your explanations. Looking forward to your weekend update tomorrow.

      • tommyboys says:

        Tony, shipping rates are certainly indirectly affected by oil/fuel prices. I know in the steel industry freight rates vary with the price of fuel. These rates are adjust through “surcharges” that fluctuate weekly or monthly depending on the cost of fuel. While these net out as far as profit is concerned they DO have an effect revenues.

        • tony caldaro says:

          surcharges above and beyond normal operating expenses
          but operating expenses for bulkers is quite low now due to the low price of fuel
          lower fuel prices help margins not destroy them

          • tommyboys says:

            Tony, we’re missing each other. I’m not versed well enough with the BDI to know what metrics it encompasses (I would think revenues not profitability) but…
            higher oil will bring shippers higher REVENUES ( not necessarily profits) as they pass on these higher costs to their customers. It will not necessarily bring them higher profits however as the extra rev is offset by the extra expense. LOWER oil reduces their expenses but during these times shippers REDUCE rates to their customers accordingly. I would argue that HIGHER oil net net brings them MORE profits as they typically MORE than pass this cost to customers. LOWER oil is obviously a lower expense but also generate LOWER revs as shipping rates are typically reduced accordingly per competition. Often however there is a lag in when oil increases shippers’ expenses and when they begin passing this on to customers and vice-versa when oil falls. This leads to chopiness in Q/Q results. All this said I guess my point is as oil rises the BDI should rise as everyone pays more and vice- versa – saying NOTHING about profitability. Unless the BDI measures profitability and NOT revenues 😎

          • tony caldaro says:

            commodity demand drives shipping rates
            when prices are low it reflects low demand – low rates

          • tommyboys says:

            Absolutely – no question…

  10. Jim Guthery says:

    Thank you Tony – I look forward to you weekend update!

  11. hakunamatata1966 says:

    Thank you Tony, enjoy your weekend.

  12. mike7x says:

    Thanks Tony! Ya think Bullard is spreading bull to try to end the “bull”? Wonder if his nickname is Bull?

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