Thursday update

SHORT TERM: the wild week continues, DOW -253

Overnight the Asian markets gained 1.2%. Europe opened higher and gained 1.5%. US index futures were higher overnight as well. At 8:30 weekly Jobless claims were reported lower: 271K v 282k, and the Philly FED was reported lower: -5.9 v +1.9. The market opened three points above yesterday’s SPX 2073 close, and immediately started to sell off. At 10am Leading indicators were reported higher: +0.4% v +0.6%. The selloff continued until about 11:30 when the SPX hit 2048. Then after a bounce to 2056 by 12:30, the market hit SPX 2048 again by 1pm. After that the market rebounded to SPX 2059 by 2pm. Heading into the close the market hit SPX 2042 and closed there.

For the day the SPX/DOW lost 1.45%, and the NDX/NAZ lost 1.40%. Bonds gained 13 ticks, Crude dropped 80 cents, Gold fell $22, and the USD rallied. Medium term support drops to the 2019 and 1973 pivots, with resistance at the 2070 and 2085 pivots. Tomorrow: concludes options expiration.

After a slightly higher open today the market had its biggest decline since this potential uptrend began on Monday at SPX 1993. It has been a wild week: +3% by Wednesday, down 1.5% on Thursday. And still one more day left in the week. After five waves up to SPX 2060 early Wednesday, the market pulled back to 2042 right after the rate increase. After that the market rallied in three waves. So we thought Minor 2 had ended at SPX 2042. Today’s action suggests otherwise. We still have the five up to SPX 2060 for Minor 1, but Minor 2 now looks irregular. Irregular second waves have been popping up lately. The market displayed one in September, then another at the beginning of that huge October rally. Looks like we are dealing with a third 1-ab2 for this uptrend. Short term support is SPX 2042 and the 2019 pivot, with resistance at the 2070 and 2085 pivots. Short term momentum is declining from quite overbought to near oversold. Best to your Friday trading!

MEDIUM TERM: uptrend likely underway

LONG TERM: bull market


About tony caldaro

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372 Responses to Thursday update

  1. Xu Wu says:

    Let me explain: the Major 4 is never completed. It is a huge triangle, where we are at the second ZZ of W-C (double ZZ) of the triangle. It points to a drop to 1920 late Dec., and then rebound to 2100 for W-D, then down for W-E, around March, 2016. After that, Major 5 starts there.
    I have a chart at, if you are interested in this count.
    I have been using this prediction to trade for the last three months, and quite profitable.

  2. Close on the low – often the stuff that leads to a Big Up set up on the next trading day, which would then be set to trigger or not on Tuesday.

  3. aahmichael says:

    For those still hoping that 1993 holds, in order to salvage the wave 2 count, both the DOW and XMI have already violated that level.


  5. gasman88 says:

    Weird or what? Quite often stocks on my watch lists are red on a up day, but today I’m seeing lots of green while the market is bleeding. Don’t forget, 3rd year of presidential cycle is usually very good for stocks, since 1947 there have been only 2 occasions when stocks were flat, all other years were up. S&P needs to close above 2058 to be positive for the year, I would expect a Santa rally next week to get us there.

    • Dex T says:

      Only until midday Thursday. Major moves will have to come Monday to Wed.

      Though with the Fed and OPEX over what will get the markets going?

  6. The LOG scale of the RUT is suggesting a major low today.

    It’s all about risk reward

    • tommyboys says:

      Yep lots of micros on my screen green today with a couple of mine breaking out! RUT down significantly less than the majors today.

  7. scottycj1 says:

    Pos D on 30 min RSI —-5 waves in last leg down

  8. rc1269 says:

    barring a very large last minute reversal the weekly candle looks quite ominous. further declines are quite likely on this set up

    • Assume crash positions, rc?

      • rc1269 says:

        hey hey CN. sup buddy. i’m not one to toss the ‘C’ word around lightly so not gonna go there. that said, i’ve been as vocal as i can without being rude to our host my belief that odds are decent the bull already ended. given that view, i don’t think a move to 1860s in coming months would be too surprising. we can re-evaluate again at that time, if it happens. 😉

        • blackjak100 says:

          rc i commend you on the view and not swaying from it. Wouldn’t this be the strangest top in bull market history? Not saying it can’t happen, but the indexes meandering around the highs so long would be quite unusual. However, most stocks have not been doing this. Bulls and bears have not been essentially right for over a year as this market has traded sideways for more than a year now.

          • rc1269 says:

            unconventional market top to follow an unconventional market and monetary policy? sure, why not?! 🙂

          • blackjak100 says:

            agree 100%, that was the train of thought I lost before submitting

          • simpleiam says:

            I always have to watch last hour, vacation or not. How about this: Profit-taking, reallocation for 2016, before going on vacation next week, and also expiration. Scare the pants off the average trader and investor, so they sell at the bottom. Then, bigger boys come in and buy back at 100+ spx points lighter. Not technical at all, I know, but seems to be a pattern here to me. JMO.

            Hasta la vista! Margaritas!

        • Millan Tomic says:

          If you are right that the bull ended at 2135 in May, then how does your count look like (Wave C of large ABC starting from May)?

          • purplember says:

            “IF” bull ended in May at 2135 i’m having a hard time finding 5 waves from 2009 low ??

          • rc1269 says:

            sadly i’m not an EW guy. i dont’ really have a “count” to offer you, sorry. that’s why i come here to learn and read. that said, i have no doubt that if the top was inded in May at 2135, somebody somewhere will be able to find a 5 wave pattern that can fit it…

        • What is of most interest to me is on which side of 17138 does the Dow close, and on which side does it open on Monday.

        • aahmichael says:

          If/when it breaks 1920, then it will go quickly to 1750 before taking any kind of breather.

      • manunidhi21 says:

        Hi RC..
        smart and core investors(march 2009 guys) already gone @1867, hedge funds stuck and they need retail to get in to offload..retail will only join if they can establish that markets go up when Jannet snezzed..
        Remember when one become rich other is getting poor in stock market.

    • llerias7 says:

      GEE…OEW 2019 pivot…gone!! Even considering this a wave 2…how can belong to a Major 3?

  9. Xu Wu says:

    End of day target: 1988

  10. phil1247 says:


    2000 target hit

    1996 next

  11. kvilia says:

    RUT is lagging=good sign for bulls?

  12. SPX 2011 looks important. You have a major .786 retracement and a small 1.27 that could be W.5:c of minor W.2. Just hate way this is turning down again in the last hour of trading.

  13. blackjak100 says:

    If TC sees five down at 2013, then it completed right at support off Aug lows. Want to see a close above 2020 for bull case to remain on life support. Need big last 30 min rally.

  14. torehund says:

    Compare retracement after the two day rally from 14/15 Dec in $RUT(deep) and then for BTK(shallow). When this downturn ends there is no doubt who will gain the most.

  15. Jim Guthery says:

    Oil holding up nicely.

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