Friday update

SHORT TERM: bear market confirmed, DOW -391

Overnight the Asian markets lost 1.1%. Europe opened higher but lost 2.3%. US index futures were sharply lower overnight. At 8:30 Retail sales were reported lower: -0.1% v +0.2%, the PPI was reported lower: -0.2% v +0.3%, and the NY FED was reported lower: -19.4 v -4.6. At 9:15 Industrial production was reported lower: -0.4% v -0.6%, and Capacity utilization was lower as well: 76.5% v 77.0%. The market gapped down at the open to SPX 1889, dropped to 1877, bounced to 1888, then hit 1873 by 10am. The market had closed at SPX 1922 yesterday. Also at 10am Consumer sentiment was reported higher: 93.3 v 92.6, and Business inventories were reported lower: -0.2% v 0.0%. The market rallied back to the opening level at SPX 1889 by 10:30, dropped to 1858 by 12:30, and then started to rebound. In the afternoon the market rallied to SPX 1876 by 2pm, dipped to 1867 by 2:30, rallied to 1883 just past 3pm, dipped to 1873, then bounced to close at 1880.

For the day the SPX/DOW lost 2.25%, and the NDX/NAZ lost 2.90%. Bonds gained 21 ticks, Crude lost $1.55, Gold rallied $11, and the USD was lower. Medium term support drops to the 1869 and 1841 pivots, with resistance at the 1901 and 1929 pivots. Today the WLEI was reported lower: 48.5% v 48.6%.

The market gapped down at the open to end the week, after five successive gap up openings that had a net effect of -1.0%. After the first half hour of trading the market found support just above the August/September lows and tried to rally. The rally attempts failed as the market broke below that SPX 1867-1872 low, and hit 1858 just past noon. After that the market rallied into the close to finish at SPX 1880. Lots to cover in the weekend update, holiday on Monday, best to your three day weekend!

MEDIUM TERM: downtrend

LONG TERM: bear market


About tony caldaro

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174 Responses to Friday update

  1. Bob Sagget says:

    Please forgive the Newbie question in advance. Is there a source online somewhere to chart $SPX futures? i.e. pre/post market. I have but I don’t think it has pre/post market data.

  2. jobjas says:

    In EW charting wave tops need not always be price top.

  3. valunvstr says:

    I always appreciate how to the point you are with answering questions. I have three for you.

    1) Under what circumstance(s) might you be wrong about being in a bear market? (full disclosure, I agree it’s a bear market)
    2) When in the past has OEW incorrectly stated a bear market, as is being stated now, only to flip back to bull?
    3) I don’t hear any talk, although I don’t read every post, of the MAJOR year long Head and Shoulders top that broke today. Traditional technical analysis says you should wait for the neckline to break and that is what I did. Head and Shoulder price target is around 1640. Despite not being happy about first hedging at 1877, I rode the entire bull market up and couldn’t get the top exactly right and needed confirmation. It suggests there will be no short term relief as a break of a H and S tends to lead to swift declines, despite the market already being down 12%. Would appreciate comments/thoughts.
    4) What is the expected length of the bear market? Tough to time as you even had to push the bull market end date out constantly, but still curious about your thoughts.


  4. Mr C …have a question.After Primary V…where do you start on a bear market?What are the primary waves labelled as?

  5. ewmarkets says:

    Many considered August 23, 2015 price action as a flash crash. In after May 2010 flash crash low of 1065, market bottomed 8 weeks later 5.2% lower, at 1010. Use 1867 as SPX flash crash low of 8/23, next week will be 21 weeks later. 5.2% lower would be 1783.

    • ewmarkets says:

      Using SPX 1814, 5.2% lower is 1720. 😦

    • ewmarkets says:

      Also notice, the May 2010 flash crash did not take out the prior low while the bottom 8 weeks later did. 1867 also did not take out prior low of Oct. 2014 while the calculated bottom 21 weeks later at 1783 would.

    • valunvstr says:

      Only issue is the comparison doesn’t fit. The patterns are totally different. One is a major long term topping Head and Shoulders and the other is not. One have downward sloping 50 and 200 day ma after a failed rally. etc etc. Wouldn’t draw any comparisons. Plus, not two markets are ever the same anyway.

      • ewmarkets says:

        Not disagreeing with you. Meant to say, a short term bottom may be around 1785. Yesterday, I posted the chart that compares current price pattern to July 2008 and arrived at a short term bottom of around 1800. I expect a somewhat sizable bounce from 1785-1800, afterwards, if we’re still in a bull market, it will continue up otherwise, it will turn down. In 2008, after hitting the green dot at about 1200, it bounced up to 1313 before turning down and losing another 50%.

        Also, the down sloping trendline comes in at around 1800.

      • ewmarkets says:

        PUG considers 2134 end of bull market. Some think we are still in P IV. Either way, an A-B-C move from 2134 also targets 1775 area.

    • valunvstr says:

      Also, change your setting to Log from linear on your charting so the markets move in percentage terms, not points. 1000-1050 should not have the same scale as 2000-2050. It makes for better charting.

  6. Question for Everyone… The AUGUST 2015 LOW i’ve seen by a few people shows it at 1867. , Interactive Brokers, etc all show this mistake … The REAL low is 1814.. Go and check the SPY and you’ll see the tail. Here’s the question: with this change to the correct data of 1814 being the ACTUAL … DOES THAT CHANGE THE BEAR MARKET CONFIRMED CALL???

    • ewmarkets says:

      Good observation! In any case, ES August low was 1831, which has not been exceeded.

      • Thank You. August 24th was an INSANE! day. For the 1st time in history the ES futures were halted (before market open) .. Many Many Data providers all share this Mistake of 1867 being the low.. but its flat out Wrong.

        • ewmarkets says:

          Major 2 count is definitely dead. A-B-C count from 2134 is currently the most bullish count that I’m aware of. Using 1814 as end of A, we’d have much lower to go for C in order to have C=A. 😦

    • valunvstr says:

      You’re looking at the etf not the index. ETF’s that day had all sorts of technical problems and briefly dropped meaningfully more than the underlying index. you need to track the actual index, not the etf.

    • aahmichael says:

      You’re incorrect. The real low in SPX on 8/24 was 1867. Whatever SPY printed that morning means nothing, as the ETFs got completely disconnected from the underlying indexes during the first 30 minutes of trading on 8/24. The reason for the disconnect was that the underlying stocks were halted, but the ETFs continued to trade. If you don’t believe me, then just take a look at RSP, which is the equal weighted S&P500 ETF. It traded down to 43.77, which is the equivalent of 1150 on SPX!! Ironically, the SPX may ultimately print that price if we go into recession.

  7. Watching +div on daily,weekly S&P?As I said this week,2008 went straight down from Jan 1st to Jan 20th…then rallied rest of the month.Repeat?

  8. 4bolt says:

    b-wave high count is still unchanged … Still anticipating +/- SPX1750 to be hit …
    SPX Daily ending 01-15-2016 :

    • kvilia says:

      What are the rules of c to a ratio?

      • 4bolt says:

        There are many talented bean counters on this blog that can better answer that question than I …

        [ Normally ] … c=a … And [ Normally ] c-waves are 5-wave structures … But …

        I’ve never found that to be “exact or always true” … as just demonstrated on the 3-Min SPX chart previously posted … They can run long or run short … or morph into many different combinations before they end … ?

        Most can agree on the count “after the fact” … However … Establishing a correct count in “predictive mode” [ Like Mr. Caldaro does in real time and on a daily basis ] … and without changing your mind twenty times along the way … requires more than a rule book … It’s an art form …

        Comments, Challenges, and Rebuttals that promote a mutual EW learning experience are always welcome …

        • kvilia says:

          Thanks bolt – thanks for sharing the chart. c shure looks much longer than a already, this is an emotional time for markets.

          • 4bolt says:

            c = a at ~SPX1850 … But the micro counts ( as presented ) appear incomplete … currently suggesting that it could go lower … +/-SPX1750 has been a probable target for several months …

  9. valunvstr says:

    I’m not the bounce is coming as many think, even in the very short term. A MASSIVE Head and Shoulders Top broke today at 1888 (roughly) The neckline becomes resistance and on a throwback is usually a BRICK WALL. I have a feeling, that despite all the bearishness on TV (even Kramer is saying it’s a bear market) the market is about to cascade lower. 1630ish is the target. 2134 – 1888 = 246 1888-246=1642 (give or take of course). I have a feeling that a nice rally off that area is likely and then on to new lows where this market ends 40%+ off its 2134 high. Good luck to all. My broad market exposure is 100% hedged and will remain so until there is a VERY clear tradeable bottom and then when the bear market lows appear. Why not all cash? That would be arrogant. I have capital gains that will likely be wiped out by this bear but to assume I can’t be wrong and the market goes higher would be foolish. The way I see it, I can take losses on the long ETF’s and buy others are lower prices. Harvest losses for the long term if the gains get wiped out. Good luck to all. This is going to be one heck of a doozy bear market.

  10. purplember says:

    Boy the market can make you look like a FOOL and today i was the fool. went long thurs A.M. with stops. was looking good yesterday afternoon until big gap down. UGH painful weekend. sold some with today rebound. hoping for more rebound but some concern the floor could drop out yet.

    • chrisk44342 says:

      Hey man we’ve all been there. trading is not everything

    • John Arella says:

      That’s what a bear market does. we have all been there but you can still regain your losses. Stop trying to call the rallies and just buy bear ETF’s to take advantage of the downtrend and sit down and watch your money grow over time and a lot faster than a bull because bear markets average only 18 months so relax and enjoy the ride.

      • purplember says:

        thx chrisk /john, try learning from my mistakes. i knew i should have sold thurs afternoon at very good profit. no buy & hold in this market except maybe short. as saying goes “bulls and bears make money, pigs get slaughtered”

        • Jim Guthery says:

          Try catching waves during the day and avoid holding overnight in todays market. Don’t go for home runs – base hits are important and builds confidence!

        • chrisk44342 says:

          I was long on Thursday but I used an ETF, something i don’t always do but it was a swing trade i couldn’t watch it as closely as i wanted to. In a strong trend (down or up) just take your profits and don’t risk holding. 1% on a swing trade is still a great day.

  11. Just notice that some IDIOT send me a cake in the face on last session blogs… I suppose my comment did burn you. Sorry to hear your disappointment. Enjoy your bear w/end. Cheers F.

  12. chart from my Sunday report last week

  13. kevinm76 says:

    BOTTOM callers everywhere. You do know what that means right?

  14. 4bolt says:

    If one were to post the wrong chart in a comment here … Is there a way to edit that ?

  15. xuwu992000 says:

    Bear market or not, today’s low marked a short term low that will last for two weeks. Next bounce target would be 1950. The real turning point, though, will be next FED meeting and decision, that will finally crash the camel/bull’s back.

    • kvilia says:

      What makes you think we bottomed except being overbought, which was the case for the last week? I am also wondering if we need to visit the pivot below 1869, which was violated today.

      • Pivot was 1850, but often is front-run. Good sign if it is, It will be less people selling the run and more trying to catch it. :))

        • kvilia says:

          Tony’ pivot was 1869, invalidated below 1862, low 1857. Awfully close but the bounce off of today’s low was not impulsive. Moreover, SPX did not even pierce BB today, I dont think reversal on such dramatic move does that.
          Any way, I’m not a market expert but I did not hear a sound from Lee today 😉

    • valunvstr says:

      1888 neckline of massive Head and Shoulders. Should act as resistance and prevent the bounce you are talking about from happening.

  16. 4bolt says:

    “One look is worth a thousand words”, Frederick R. Barnard; Printer’s Ink, December 1921 :

    Comments, Challenges, and Rebuttals that promote a mutual EW learning experience are always welcome …

    • jobjas says:

      even if you are a scalper / day trader such a small time scale chart will help you only label the past but cannot project the future wave . Always start with a larger chart like a daily to know where you are in the big picture.Next correctly label the recent wave top ( 2134 for most 2116 for me) Is it B of P4 or P3 ( for me).Those labels are important to project the fibs as well as the subsequent corrective waves as 3 or 5 . Once you are decided on a fib retrace and you expect a 3 or 5 wave , move down to smaller scale chart like 4 hrs and then 1 hour .- this is the way I do it ,others may be different

  17. mjtplayer says:

    CNBC special “Markets in turmoil” airing on Monday.

    That signals a possible low today or Tuesday 🙂

    • blackjak100 says:

      ha…beat you to it.

      However CPCE at 1.14 should yield a bounce towards 1945-1950 to complete 4 of 3 expanded flat IMO. now think 1800ish to complete Major A/1 which probably is 1-2 weeks away yet if I’m right. I’m surprised we can spend this much time below monthly BB on first wave down.

      • purplember says:

        blackjack, question is Is this Major A or Major C? implusing fast and kinda feels like C

        • blackjak100 says:

          I’m now onboard with bull ending at 2104 on 12/2 as TC has it marked. This solves the problem with lower VIX readings and $SPX A/D line making ATH on 12/1. Price simply failed to confirm new ATH in A/D line, but NDX made ATH on 12/2 so every other index failed as well. So where are we from here….looks to me like ‘third of a third’ completed at 1879. From there 2034-1858-2045ish? to complete 4 of 3. In other words, I’m looking for 5 down from 2104 to complete Major 1/A.

          Int i = 2104-2042
          Int 2 = 2042-2094
          Minor 1 = 2094-1993
          Minor 2 = 1993-2082
          Minor 3 = 2082-1879
          Minor 4 = 1879-2045ish?
          Int 3 = 1828 pivot?
          Int 4 = 1929 pivot?
          Major 1/A = 1779 pivot?

    • kevinm76 says:


  18. blackjak100 says:

    Markets in turmoil Monday AM

  19. Roxie97 says:

    My system is a bit different then EW analysis – but I have a possible 5th wave still alive – as long as SPX 1788 holds – the bottom could of been today – If so 5th wave measures to SPX 2262 A break above 1940 would confirm a new 5th wave in progress – then we should get a 50-60% decline If we break below SPX 1788 we should get a violent retrace up to SPX 1960 – 2000 and then big move down.

  20. Keith Win says:

    Tony confirmed bear market back in Jan 16 2008, exactly 7 years ago.

  21. fotis2 says:

    Thanks Tony this is going to be one busy weekend update and remember folks 3 POST LIMIT per each of us make it a bit easy on Tony for a change.

  22. gtoptions says:

    Thanks Tony ~ Enjoy your weekend.

  23. mike7x says:

    Thanks Tony. I should’a bought two Powerball tickets. Recession coming sooner than later…in 2016?

  24. skmcobra says:

    I like your V or B at the November high. I’m still saying this is the C wave of P4. Still a bull market to me unless it takes out 1750SPX.

  25. kvilia says:

    Tony – thank you. Anxiously waiting for your WU with possible targets for the C wave down. I am curious what the next pivot is below 1841 is as there is also 1820 support from October 2014.
    Question to all – what is typical retracement from the 1st ABC down in bear markets?

    Have a good weekend all.

  26. John Arella says:

    Bear market end target should be beginning of the wedge pattern which is spx 600 according to the chart. Best way to play this is to buy spxs or sqqq till bear is over :).

  27. Doesn’t TNA / TZA chart show intraday reversal? I thought they lead market to Upside and Downside. Need a bounce on Tuesday. Made a tempting by on TNA today, in plus by 2bucks, may sell now that Tony is in Bear Camp

  28. captbara says:

    It was staring at us in the face all along in some other indicies I guess, like Nikkei, GDOW, and WLSH. SPX is much harder to read.

  29. uncle10 says:

    Thanks Tony. We going to have a record amount of comments on the board next week 😉

  30. kevinm76 says:

    BEAR MARKET!!!! There you go…Tony just confirmed the obvious.

    Watcha gonna do perma bulls?

  31. va89blog says:

    Tony, do you give any credence to the widening megaphone pattern that shows Dow 5000ish as the termination point? TY

  32. rabbittrader1 says:

    SPX 1820 next stop Tuesday

    • rabbittrader1 says:

      Hold long gold for 1112 Monday Go;d trades Sun night till noon Monday.

      • kevinm76 says:

        I gotta say rabbitt, your SPX call looks plausible but gold looks very heavy now. It had a chance to breakout during this carnage but now unfortunately it appears to be in b of 5 with c yet to come to new lows.Once the SPX bottoms next week, gold is toast. Anybody checking out the miners will be in agreement.


  33. Justyn Byrne says:

    “bear market confirmed” – doesn’t that normally mean it’s time to buy as a rally is bound to kick off? 🙂

    • llerias7 says:

      Now the “buy the dips” mantra is dead! Long live “sell the rallies”!

    • nsteve24 says:

      Yeah I’ll say! As of yesterday we were still in Primary 2, took a 200 handle drop for the revision, a bit late for the flock who followed, glad I wasn’t one of them. Covered and flipped long today the 4th time we cleared the 186.77 open at 2:33pm, should see yesterday’s high +193 next week

  34. manunidhi21 says:

    So this makes Trump POTUS due to incumbency and undertone hatred.
    Its hard to understand BOTS

    • pimacanyon says:

      I doubt Trump will be the Republican nominee.

      • manunidhi21 says:

        He will be Bots have decided. Mess in economy blame Democrats switch to republicans.
        have a war get commodities up. Then 8 years of Democratic Rule so from 2020 to 2028 will be only growth.

        Tony.. what say.. Am i close in reading Bots ?

  35. Lee X says:

    Hey R C Nice job !

  36. manunidhi21 says:

    “ouch -bear market confirmed”
    Thanks Tony.
    So the FAST rise from September qualifies as failed P5th and not extended P4. Charts to be updated agaian.

    • tony caldaro says:

      failed 5th was the concern
      failed 5th was the problem

      • EL MATADOR says:

        Thanks Tony. I’m still scratching my head about the failed 5th simply because its a failed fifth of a failed fifth. I was willing to considering a failed fifth probability under the condition that the SPX would have exceed the 2116.48 Nov 3, 2015 high, especially considering no one has claimed to ever seen a failed fifth of this degree. I recall Glenn Neely mentioning the failed fifth only as a probability but he has also never seen one. I think, I could be wrong, Glenn Neely also mentioned in his book the failed fifth of a failed fifth. Maybe TraderJoe could comment about the failed fifth of a fifth since he knows Glenn Neely’s books inside out better then any I know.

        Nuff said for today, have a good night tonigh
        really looking forward to your weekend update.

      • M1 says:

        It looks obvious it wasn’t a failed 5th.
        So why forcing the count ? It is not a good idea.
        “too many mind” =)

  37. tony caldaro says:

    LONG TERM: bear market

  38. sethbru2 says:

    Am I correct to infer this is Tony’s first Bear status/call since 2009?

  39. Lee X says:

    Thanks Tony

  40. lunker1 says:

    Thx Tony.
    downtrend done @ .886 of SPY mini flash 185.73?

  41. timmy321 says:

    Tony, you have changed to long term bear? 🙂

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