Friday update

SHORT TERM: fourth gap down opening this week, DOW -310

Overnight the Asian markets lost 0.4%. Europe opened lower and lost 2.0%. US index futures were lower overnight as well. At 8:30 the PPI was reported higher: +0.3% v -0.4%, and Retail sales were reported higher: +0.2% v +0.1%. The market gapped down at the open to SPX 2032 and continued lower until it hit 2021 in the opening minutes. Then it tried to rally. The SPX had closed at 2052 yesterday. At 10am Business inventories were reported flat, and Consumer sentiment was reported higher: 91.8 v 91.3. At 10:30 the SPX hit 2034, and then declined to 2014 by 12:30. After another rally attempt to SPX 2024 by 2:30 the market headed even lower. In the last hour of trading the SPX hit 2009, then bounced to close at 2012.

For the day the SPX/DOW lost 1.85%, and the NDX/NAZ lost 2.25%. Bonds gained 27 ticks, Crude lost $1.30, Gold rallied $6, and the USD was lower. Medium term support drops to the 1973 and 1956 pivots, with resistance at the 2019 and 2070 pivots. Today the WLEI was reported higher: 49.2% v 48.8%, and the Q4 GNP was reported higher: +1.9% v +1.5%.

The market gapped down at the open for the fourth day this week. After opening below the mid-week low at SPX 2037, the market dropped to the 2019 pivot range. After a bounce it tested the lower end of the 2019 pivot. Then after another bounce it broke through the 2012-2026 pivot range. Needless to say, a downtrend was confirmed today. Just keep in mind that bad news is good news in this bull market. More on this in the weekend update. Best to your weekend, and do some shopping!

MEDIUM TERM: downtrend

LONG TERM: bull market


About tony caldaro

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81 Responses to Friday update

  1. fotis2 says:

    Thanks Tony! 3BR weekly valid target 1980 daily DT valid target 1921… I still consider the weekly DB valid target 2173..any ralies to 2040 I suppose will be sold early next week again nothing set in stone but bearish early in the week…

  2. Checked the volume today…nothing extraordinary and not enough to call a bottom.I was surprised at SPY about 160m.When it bottomed the first time in late August,volume was over 450m.More downside ahead it seems.

  3. mike7x says:

    Thanks Tony! Next week should be more “fun” than this week. Look out for Monday?

    • kvilia says:

      I cant really explain it but having traded on and off since 2006 makes me feel that this whole setup does not look like a buy on dips. I remember the expression “don’t try to catch the falling knife” was posted a lot on the boards in the year 2000.

  4. fionamargaret says:

    Bearish triangle breakdown on December 9th, pointing to 1921??

  5. mjtplayer says:

    Tony – why not this count for a major 4? In the SPY, a perfect ZZ where C=A

  6. Tony, broken record here I admit, but what’s your next best count if Major 2 is wrong? Thanks again,

    • tony caldaro says:

      drop below 1867 and bull market is probably over

      • stormchaser80 says:

        Be still my heart 🙂

        I gave heads up using my own approach to Hindenburg Omens starting last Winter that a major top was coming. Sure it was slow to develop, but ended up being May 2015. Confirmed bear market shortly thereafter.

        No false signals between 2009 and late 2014. GLTA!

  7. torehund says:

    ..testing times, then whats better than a fast track introduction to the art of economy.
    Cheers everybody, and good weekend to Tony, the bulls and the bears.

  8. timmy321 says:

    Tony, do you think the meat of the downside movement is done?

  9. caldaro you thoughts on how much more oil can fall? pretty soon I can get gas for free?

  10. My thinking is—1951 gap fill–why not?It needs to be filled sometime and if,after this correction,the market embarks on more upside to 2200-2500,what better time than now?Also…asked Mr C about +div on daily S&P but if for whatever reason ,unlikely as it is,the S&P dropped to a low enough level,the +div would disappear.That s important to consider.
    HYG:Been trying to see if there s a +div on HYG.You re correct Fiona and I mentioned it earlier,P&F had HYG going to 74-76.But it could bounce up to breakdown area of 82ish–enough for a Christmas rally-then more selling.
    GDX:No change for me.In it until late January.Hoping for a post Fed rally,if not immediately then in January.
    Good luck all.

  11. rc1269 says:

    Thanks Tony. Enjoy your weekend. And the rest of y’all as well.
    cheers, rc

  12. kvilia says:

    Thank you Tony – waiting for the weekly as usually.

  13. Lee X says:

    Thanks for Jason Heyward ; )

    • tony caldaro says:

      with the Cubbies now?

        • tony caldaro says:

          just looked $23M/yr for 8 years … you got to be kidding
          the story was when he arrived in St. Louis was if he could get back to good hitting again
          his last couple of years in Atlanta were terrible
          Cards got him on track, he was happy, and bingo hit 290, his best in years
          Ka-ching he never has to try hard again
          Every year these owners/GMs get fooled by players production in their final contract year
          and who pays? the fans as they keep jacking up the prices for less and less talent
          Guess Cards have to get the strike out king now

  14. Big up yourself Tony boy!

  15. ABchart says:


    Thank you! I try to help.

    SPX: I think we are still in the PIII, as European indices. Bull market will extend to the end of 2016.


  16. liborval says:

    so Tony downtrend confirmed – the bottom is in as usual?

  17. Bad news is good news?

    where PV died?

    good grief …and 2200 of SPX?….

  18. Millan Tomic says:

    Thank you! Some overshooting below 2020 with strong downside velocity. Likely worst is over, as someone else mentioned 1990s next week and waiting for Turnaround Tuesday/Fed catalyst

    • llerias7 says:

      I would like to see 1980 printed!…upper range of 1973 pivot. Do not forget an oversold mkt can become even more oversold or stay that way for longer than we may think.

      • Millan Tomic says:

        It is clear that market unlikely to turn w/o HYG and oil bouncing which implies FED dovish. Generally, they have been effective causing significant bounces out of oversold conditions. People are expecting hawkish but i think surprise coming that way vs expectations. So this i think will be the catalyst, otherwise will be a very sorry year end plus 2011 was a flat year implying that likely SPX will not close below 2058 (all probabilities)

      • Touched 50% retrace of the entire move from August low and bounced…….ES…..I think is done. Or at the worst between here and .618. Is from August that I am waiting….. Which luck ! :))

  19. blackjak100 says:

    2nd lowest NYMO reading of 2015 at -81ish, but closed just inside lower BB. A mon flush and close 1990-2000 would do it IMO, but not required.

    • blackjak100 says:

      I thought a downtrend confirmation today indicates major 2 not major 4??

      • mjtplayer says:

        My background is traditional EW, not OEW. Also, I don’t use truncated waves so I can’t count 2,104 as major 1 since it was 3 waves up from 1,867. Either we’re bottoming in a major 4 ZZ with major 5 to go OR we have a MI, M2, Int i of major 3 up to 2,116 and now falling in int ii of major 3.

    • captbara says:

      Would’ve been nicer to end as a contracting ending diagonal instead of an expanding one. Gotta give it much lower odds cause of that I think.

  20. rob623 says:

    Tony, We really appreciate you updates and guidance is these precarious markets.

  21. rob623 says:

    To Fionamargaret:
    If you are suggesting SPXL is a buy at $77, then SPX will be at approximately 1998. Then we could have a sizable bounce 40-50 points on SPX. Is that what you were thinking?

  22. lunker1 says:

    Tony, looking at Weekly RSI we’re near the 33-35 level of Major 2 Pri III and we’re at about the same level as Major 4 Pri III and Major 4 Pri I. Daily might need to get to 15. Perhaps a Monday flush and done. TY

  23. tomasso60 says:

    thanks Tony
    fun week I have to say.
    have a great weekend.

  24. manunidhi21 says:

    Thank you Tony.
    Many charts need to be readjusted this weekend.

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