Thursday update

SHORT TERM: gap down opening to end year, DOW -179

Overnight the Asian markets gained 0.2%. Europe opened lower and lost 0.5%. US index futures were lower overnight, and at 8:30 weekly Jobless claims were reported higher: 287K v 267K. The market gapped down to SPX 2052 at the open and continued to decline. The SPX had closed at 2063 yesterday. At 9:45 the Chicago PMI was reported lower: 42.9 v 48.7. The decline continued until the SPX hit 2046 at 10:30, then the market started to rally. The rally continued until just before 1pm when the SPX closed the opening gap at 2063. Then the market headed down again in this roller coaster session. Heading into the close the SPX hit 2044 and closed there.

For the day the SPX/DOW lost 1.0%, and the NDX/NAZ lost 1.2%. Bonds gained 10 ticks, Crude rose 40 cents, Gold was flat, 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 lower: 49.1% v 49.4%, and GDPn remains unchanged at +1.3%.

The market gapped down at the open for the second day this week. It continued yesterday’s pullback, from Tuesday’s SPX 2082 high, until it hit 2046 in the first hour of trading. Then the market rallied back to unchanged at SPX 2063 to close the gap before heading lower again. During the initial decline we noted the SPX nearly totally retraced this week’s rally from 2044-2082. This suggested, and we updated the hourly count, that the rally from the absolute low of SPX 2005 on 12/18 might have been the beginning of the rally to SPX 2082. This would produce a potential Minor 1 count: 2023-2006-2067-2044-2082. And Minor wave 2 is currently underway. Either way, the SPX 2044 level still looks like an important level for this potential uptrend. Will take a better look for the weekend update. Happy New Year everyone and best to your life/happiness/wealth in 2016. And don’t forget to share!

MEDIUM TERM: up/down trend returns to inflection point

LONG TERM: bull market


About tony caldaro

This entry was posted in Updates and tagged , , , . Bookmark the permalink.

32 Responses to Thursday update

  1. B Seagle says:

    UVXY-Starting the New Year with a Bang?

    • hkloon says:

      Hi B Seagle, thanks for providing useful information. However, think the image resolution is on the low side, can’t really see them clearly even after enlarging… anyhow, happy new year…

  2. ariez5 says:

    Thank you, Tony, and all the posters who contribute here.

  3. kvilia says:

    Thank you Tony, Happy New Year all!

  4. mjtplayer says:

    HNY everyone! Here’s to a happy, healthy and prosperous 2016.

    Thank you Tony for all that you do.

  5. Happy New Year’s folks!

    I believe yesterday was indeed a leading diagonal. The consolidation overnight (no bounce) was a big clue for what would happen today.

  6. Greg Polites says:

    Thanks Tony for your outstanding 2015 work and looking forward to 2016 at your blog. For the weekend update I’m interested in your view and details on Oil, the USD, and deflation. From my work ( I’ve detected further 2016 weakness in oil and strength in the USD. The Pring series both the deflation;inflation indicators and business cycle stage, point to deflation in 2016. Not a good picture for stocks.

    • tony caldaro says:

      HNY Greg,
      Did not get into Crude that much. But it normally bottoms in late-December.
      No change in the USD outlook, bullish into 2018.
      Deflation? With industrial metals GYX and Copper in uptrends, and possibly to be joined NG, Platinum and Crude, not really concerned about deflation.

  7. Thanks TC!
    Short triggered, entered hedged position. Stop loss for Monday close comes in at 2058.43 with current numbers. 2071.15 would need to be reached in order to trigger reversal.

    Crazy year but closed out at +24.76% with max 4.37% draw down. Should have been above 30% but I thought I was smarter than the system. Trader’s greatest enemy? Himself. 😉
    Looking forward to next year and appreciate all the sharing; some amazing contributors here. I am humbled and have much to learn. HNY!

  8. chrisk44342 says:

    Well, I hate patterns but on an hourly chart in sure does look head and shoulder-ish.

  9. rabbittrader1 says:

    We are left with the “Abandoned Baby ” also inverted Head and Shoulders formation from yesterday, as we approach the final countdwn of the year toward the deflation of 2016. A fantastic profit making opportunity in gold shorts, crude oil shorts ans SPX shorts into January. IMHO.

    • kevinm76 says:

      lol….rabbitt…..Deflation 2016. Every fool in the financial world is saying deflation..blah blah blah.

      2016 the year where WTIC goes back to at least $50. Come on nowww you know the game. The big boyz are buying all of the crap that was dead in 2015.


  10. xuwu992000 says:

    HNY to TC & all! Update: Crash-landing delayed for 2016; BLACK MONDAY expected (to 2020 at the minimum)

    • ABchart says:

      Please, stop talking about a “crash” in each of your posts. The definition of a crash is -20%, and the last time it happened was in 2011.
      Currently we are in a small correction…in an uptrend.
      if it can help you:
      – 0 to 5% drop = consolidation.
      – 5 to 20% drop = correction.
      – More than 20% drop = crash.

      Change your words, hange your world:

      Happy New Year!

  11. blackjak100 says:

    Happy New Year to the OEW blog!!!! No need to rehash everything because I haven’t been right short term. I will take care of that by drinking heavily tonight. Still think Major 2 ended at 2005/2006 however. I’ll leave 2015 with this if you look at the daily chart which matters. The fib ratios fit very very nicely just as they did when the potential Major 2 ended! This could mean 2016 starts off with a bang and truth be told it much for the bull case.

    Minor 1 = 2006-2067
    Minor 2 = 2067-2044 (38.2% retrace exactly as an expanded flat with no truncation 2044.20-2081.56-2043.62. Ironically, c=1.618*a as an expanded flat should with a clear 5 from 2082 and big +div) NYMO still positive after today’s rout.

  12. rc1269 says:

    My parting comment for 2015:

    All three major US indices concluded the year with bearish three-month (that is, a three month setup on the monthly candle chart) candle patterns. We have evening stars on NDX and DOW, and an upside-gap two crows on the S&P. Three month candle patterns are generally pretty strong signals.
    The DOW, for instance, concluded 2007 also with a 3-month evening star pattern (Oct-Dec ’07), which of course framed the top of that bull market.

    • blackjak100 says:

      Thx RC…I just posted my parting comments 2 min after you and obviously we have opposing views. I can say that either 2016 should be up big (if I’m right) or down big (RC1269 is right). Cheers and Happy New Year!

    • Gary Lewis says:

      RC, I’ve been watching this three month pattern all along so I concur with a lot of what you are saying. But in my work, I find this pattern is more successful if we really made a run at the Aug/Sep low and held above the previous low. This month was a pretty weak down move so I’m still holding out for some real test of the monthly low (SPY 191) in January.

      I think we’ll see next week as we have the three bar setup, i.e., a three week test of the low (SPY 200.02). If we hold here, then I think it’s time to go long. If we break down, then I’ll be looking for a test of the 191 SPY Sep monthly close. I think that would be extremely bullish and set the stage for the 2300 level that many here are looking for.

      Happy New Year to all.

    • aahmichael says:

      In addition, on a shorter term basis, every index put in a weekly hammer to the downside this past week, which is the exact opposite of the weekly hammer to the upside that they all put in for the week ending on 10/2.

  13. GYN LAB says:

    HNY Mr TC and all!
    For an alternative bear count, int b could move to 2082 in a flat, with int c of Major 2 down in progress. I think Major 2 at 2005 is too messy as a failed flat, and timewise it is too short compared to Major 1. IMO early week strength into 2070 pivot area could be sold on Turnaround Tuesday.

  14. Vox Zeit says:

    Forced bullish count, Major-3 → Intermediate-i → Minor-2, in progress ?:

    HNY to everyone and the OEW group.

  15. gtoptions says:

    Thanks Tony
    Happy New Year All!

  16. simpleiam says:

    Thanks Tony! HNY!

  17. mike7x says:

    Thanks Tony! HAPPY NEW YEAR all!!!
    Live long & prosper. May the Force be with you.

  18. HNY Mr C …The year went about like I thought after the January indicator signaled lower…plus oil…plus the dollar.Surprising it just didn t enter a full throttle bear in Aug/Sept.As the Cubs always say “wait til next year”.Good luck all.

Comments are closed.