Thursday update

SHORT TERM: volatility continues, DOW +116

Overnight the Asian markets lost 1.5%. Europe opened higher and gained 1.9%. US index futures were lower, then higher overnight. At 8:30 weekly Jobless claims were reported higher: 293K v 284K, and the Philly FED was reported lower: -3.5 v -5.9. The market opened just one point above yesterday’s SPX 1859 close, rallied to 1868, then dropped to 1849 by 10am. The market then rallied to SPX 1880 just before 11am, dropped to 1867 by 11am, and rallied to 1890 around noon. After that the market dropped to SPX 1860 by 2:30, rallied to 1877 by 3pm, dipped to 1865 just after 3pm, rallied to 1878 just before the close, and dropped to 1869 to end the day. Choppy day.

For the day the SPX/DOW gained 0.60%, and the NDX/NAZ gained 0.10%. Bonds lost 8 ticks, Crude rallied $1.40, Gold added $1, and the USD was lower. Medium term support remains at the 1841 and 1828 pivots, with resistance at the 1869 and 1901 pivots. Tomorrow: Existing home sales and Leading indicators at 10am.

The market broke its gap opening streak today, ending it at 13 days in a row. After a quiet opening the volatility began. After hitting a low of SPX 1849, the market rallied to 1890, dropped to 1860, and rallied to 1878 just before the close. From yesterday’s potential downtrend low at SPX 1812 the market has rallied in a series of corrective waves. Three up to SPX 1876, three down to 1849, three more up to 1890, down to 1860, and now on the rise again. Normal bear market uptrends retrace anywhere from 38.2% to 61.8% of the previous downtrend (i.e. 2116-1812). So far the retracement has been 25.6%. Short term support remains at the 1841 and 1828 pivots, with resistance at the 1869 and 1901 pivots. Short term momentum hit overbought during today’s rally and ended the day at neutral. Best to your trading!

MEDIUM TERM: downtrend may have bottomed

LONG TERM: bear market


About tony caldaro

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330 Responses to Thursday update

  1. Volume only about half of the past couple days for SPY.My surprise was GDX finished up slightly,though silver got sold at 14.27 a quick 25 cents.So gold and silver flat on a day you d expect a $10 selloff..But it s one day.Make it two or three and gold will have something going.S&P copying 2008 pretty close so far.I ll go with that until it doesn t.Good luck all.

  2. kvilia says:

    Have a good weekend folks. Looks like Tony’s Int A is on course to 1929. I may join the crew again after the pullback to 1880-1890?
    Take care.

  3. ogdenfripp says:

    Someone, what is the upper limit of 1901 pivot as per Tony’s update ? Thanks.

  4. phil1247 says:


    why arent you posting this on facebook ??

    dont you know this is a stock blog ????

  5. mike7x says:

    Ralph is still on top of things…

  6. captbara says:

    Miners strength and yen weakness is interesting. People must be betting on more stimulus. In that case just sell/buy the central bank news on announcement…

  7. Thank you Guys…enjoyed today….I was actually free as I was not well today….will come back again at appropriate time…….

    Do not put any one wrong or right…everyone has point of view…Market will do whatever it wants to do…..Bye Good Luck…but this is not excuse for me……I will be right

  8. phil1247 says:

    1892 es is the place da boyz want it so everyone is handcuffed

    till next week……………hasta all and gl

  9. Bulls must show all the power to break my 3 point stop loss

  10. my prediction : IMHO Gold will likely go down from here (around 1100) and same for GDX i expect for both new lows

  11. 1908.85 is high we have seen…..this is final high

  12. jeffbalin says:

    While I’m thinking about it, what is the official definition of a gap up or down? Thank you!

  13. kvilia says:

    The way I read it based on collective input here, one should be taking a short entry between 1919 and 1928 with a tight (1935?) trailing stop. Either b of a-b-c should start from that point or we are going lower just under 1800 to test the support level. Does it sound right?

  14. Dont get too comfy now… another 4% on the NYSE and maybe 1980 on SP 500

  15. phil1247 says:

    above 1906 ext long target is .618 of ext short

    if that breaks above ….look out above

  16. one smart trading Idea is Short S&P at 2:30 PM with 3 point stop loss and 80 point target for short term………………….

  17. valunvstr says:

    This Fan Line is not coincidence. That market has traded between the fan lines amazingly. Now that the market broke the 38.2% fan line with conviction it is likely headed to the 50% in the low 1600’s which is interestingly the H&S target. If Tony is right about a 40%+ decline, the 61.8% fan line is in the low 1200’s next year. The concern I posted earlier about this bounce going to 2000-2010 is because if the neckline doesn’t hold the 38.2% fan line is sitting right up there, and just like the 2008 rally failed at it’s fan line after a 10% rally, this fan line should hold after a 10% rally. If the market in fact gets that high.

  18. valunvstr says:

    Here’s the monthly. In both cases, if you click on the chart you can enlarge it.

  19. valunvstr says:

    So I think I figured it out. Check out this chart. Regardless of what you think of my posts this the best I’ve seen. I will also post the monthly chart next.

    • chrisk44342 says:

      If that’s the best I hate to see your worst (: p.s. broadening tops generally are anchored to a top.

      • valunvstr says:

        No idea what you mean?? I haven’t seen a chart with a fib fan line that dates this far back be this accurate. That’s all I was eluding to and the fan lines are nice to have as resistance and support levels. Especially if they coincide with other technical analysis an investor might use.

  20. valunvstr says:

    Anyone watching the complete intraday collapse of Joy, CHK, UPL and others? To me, it;s just evidence underneath it’s still a mess and yesterday was just a junk counter trend rally.

  21. H D says:

    DJI did not LL, SPX actually has monthly +D, 2134-1872 89 day hit, 2116 -1812 55 day hit, 34 weeks in total, -15%. Not popular but I’m holding onto PIV, by a thread. It was a massive PIII.

    • johnnymagicmoney says:

      I am leaning on it being a bear myself but these are the reasons I wonder if many on here are wrong including myself

      1) Like you are stating, the October 14 move down seemed so quick time wise that after the long P3 (in both time and price) it just seems forced to help make sense of the counts that have been difficult to label
      2) If the Bear started May of 15, it doesn’t make sense to me that we had so many retests over such an extended period of time (June, July, November, and December so close to the ATH) especially a retest 5 months later this past October. For (what is supposed to be) a nasty nasty Bear to be underway, and then 5 months later come back and retest so close?? If you look at 08/09 once the Bear was in, it got going quick. Same thing with 87, or even 29. I think the 00-02 topped in March of 2000 and then it retested later in the year but failed (I might be wrong) but other than that fractal isn’t a close retest so long after the top a bit odd?
      3) This refers to Number One, after such a long P3 (and such strong sentiment behind it), it would definitely make sense to me that the P4 was tricky in time and had a retest months later. Primary 4 has no retest and does a V and lasts a month? Again its possible people are forcing the counts to make it work
      4) It wouldn’t be the strangest thing in the world to hit All time highs and fool the masses which are all saying its a bear. When have so many traders and media outlets been so right about the beginning of a bear market so close to the top?? Come on

      Just sayin

  22. phil1247 says:

    1906 es target of ext long ….it broke 1885 but no downside follow thru

  23. captbara says:

    Nikkei/yen still leading. Maybe front running a non-event BOJ meeting next week

  24. Just Watch…smart money is holding it between 1890-1910 to make large short positions in the market…It is holding for long time bcoz it requires time to take large positions

  25. stmro says:

    There’s way too much chest-thumping on here recently. It got me thinking about the difference between a blog writer and a blog commentator.

    The blog commentator can aford to be 100% certain. If things don’t proceed according to plan, he can just disappear for a few days/weeks until things are moving in the right direction again.

    Not so for the blog writer. Tony has to write a daily post whether he’s right or wrong – there’s nowhere to hide when there’s an easily accessible audit trail :).

  26. aahmichael,

    Is that a valid 3br reversal on hourly ? Looks like it to me.


  27. johnnymagicmoney says:

    This is what I posted Wednesday………………..

    I keep looking at the VIX wedge dating back to October………The upper channel was around 29/30 and when it hit it yesterday it sold off. It had been getting less impulsive over the last week and so I thought it was coming to an end soon. Now it looks like it wants to head back down to 17/18 or so. Wherever that is where I see the “B” projection peak out. There are clean charts and there are confusing charts. This to me is one of the cleaner more orderly ones

    In addition to this observation Ill point out that TLT broke out of its very orderly pattern dating back to June of last year two weeks ago right when the markets started to accelerate. My guess is that it goes back down to test the trendline around 122-125 which would probably coincide with a 17/18 VIX which probably projects with the SP around the 1950 to 1980 range. When the VIX starts showing strength on some green days or relative strength along with TLT strength that is when Id get the hell out

  28. OneAndOnlyUniverse says:

    Step 1
    5-6 day gap and crap
    Step 2
    Following up on my 5-6 top…this is topped – done
    Step 3
    watch decay-

    In 30yrs I only get 55% of my trades right- i am trying to learn from all you guy’s
    that get 80 to 100 % pct of your trades right

    Thanks for letting me observe

  29. lunker1 says:

    wow serious attitudes…lol
    trade for your bank account
    be your own hero

    • johnnymagicmoney says:

      Id love to see number of comments on this board charted alongside the SP500. That would be a neat chart. That or the number of angry posts and/or Boastful posts with the SP500. Might be even more correlated than Oil!!!!

    • Sorry for my way of saying things. I also understand that anyone can always go wrong with markets. It is difficult to predict market movement.

      Now the Logic part, S&p is in down wave from 2081 (Last wave)….Now any medium term retracement will be slower….not so fast that it retraces one third of wave size in just two days. That suggests it is not retracement in medium term. Now once previous low is broken..Smart people knows that its bear market…They may have missed the train first time…so they will hold the market for 1-2 days to board the train and enjoy the journey…..Many more logics….but only this much to make my things understand..

      About Indian Nifty it corrected almost 9% in Jan from highs…In India if market closes 10% before expiry then margin calls occur and market will be down by 10-20% in one day…so smart people did not allow that to happen…and market bounced….It will end at lowest point in January expiry ..Lower than 7241…so My feeling is that Expiry may come at 7199-7200. I will lose my capital if it stays above 7300 by expiry. But I believe in my logics and will follow them…..

      May be my destiny is just that way……..

      Sincere apology for anything which may have looked wrong….

  30. gtoptions says:

    Thanks Tony
    Sorry for all the posts. Last one.
    Like Tony said, the OEW 1929 pivot is probable for the ‘a’ wave.
    SPX support broke there and is now resistance, plus approximate .382 fib.
    GL & Good Weekend All

  31. valunvstr says:

    The way I see it, only one two scenarios
    1) the market closes with a strong weekly hammer candle and the rally can go to the 2000-2010 area which is where a major fan line (38.2%) from the 1974-2007 fan line is. It would be great if I could post that chart with the fan line. It is UNREAL! This would be similar to the same 10% 1200-1313 from (7/08-8/08) OR
    2) Europe closes and the US sells off closing the day down, eliminating the bullish candle and staying below the ever important H&S neckline.

    Either way, it’s still a bear market. For those that have tried to guess my positioning based on my posts

    Remain 60% long of the 100% long I was for the bull market against 30% SDS double short at 1877.5ish and about another 6% short at 1888.5ish. I won’t trade the positions unless i am in at least the 1700’s with a major buy signal or lowish 1600’s which is the Head and Shoulders target (1640ish)

    So that makes me about 6% short at 1888 and fully hedged at 1877. 2000-2010 would suck only because I could have made more money long term with a better entry point but can’t pick them perfectly. I am interested in the much bigger trend. So there, it’s on the record. If we go to new high’s and stay above the 50 and 200 day for a couple of weeks, I will have been wrong. Oh well, only 6% short. Not selling huge capital gains and act arrogant enough to think I can’t be wrong, despite the fun I have on the board suggesting I can’t.

    Time stamp it for those that want to give me a hard time, but don’t bother me with my call unless we are over the 50 and 200 for a couple of weeks or in 6 months to a year to say “good call”

  32. Now people will be waiting for today’s high to cross by feb end so that they can criticize me very hard…but unfortunately that will not happen…..

    I generally do not tell my trading position…but I am very smart will know me in next one year…I have bought 7300 put option of nifty at Rs, 20 of this month January series for target of 100 on expiry day……Now this is clear cut trading position I have taken…see the result..

    Pl do not trade as per my advice..I just understand the market well…take advise of your financial advisor…..

    will not tell further any trade…..If you do not like IGNORE ME

  33. rc1269 says:

    my original 1940-1950s bounce target could be in jeopardy. prob best to keep a close eye on any trading longs right here.

  34. phil1247 says:

    bottom should fall out when 1885 fails…..its ext long 15 min

  35. Today’s high will not be crossed for next one month at least i.e. by feb end.

  36. rc1269 says:

    Some more economic history, for those interested:

    Since the great depression there have been 17 times when earnings have declined for 3 straight quarters (excluding the current 2+ quarters we’re in)

    1. Of the 17 times that earnings declined for 3 quarters, in only one time did the decline cease at just 3 quarters (1967); all others kept going, with an average of 5 quarters of decline

    2. Of those same 17 times, 14 occurred within three months of a bear market

    3. Of those three times that did not result in bear markets, can anyone guess how many were at the end of a bull market rather than the beginning?

    • captbara says:

      0. Ok now tell us the answer 🙂

    • xela0 says:

      Wait, does bear market also mean that things start to make sense again?? 😉

    • rc1269 says:

      so for those too lazy to figure it out on their own (which appears to be everybody) – only 1 time out of 17 did we get 3 quarters of declining earnings toward the end of a bull market that did not result in a bear market. (1952 for those curious). though there was a 14% drop the next year.

      so the goods news is that, historically speaking, we have a 1/17 chance that we only drop by 14% over the next year or so. 🙂

    • aahmichael says:

      Thank you for this post, RC. I think it’s the most important post I’ve read in a long time, because it looks at the market from a FA perspective, rather than a TA perspective.
      So that I can better understand the ramifications of these facts, I’d like to ask a couple of questions:
      1. When you use the term “bear market,” what does that mean? Does it mean a decline from a high of more than 20%? If so, do you know what the maximum, minimum, and average declines were for the 14 subsequent bear markets?
      2. When you say that 14 occurred within 3 months of a bear market, does that mean that a bear market started no later than 3 months after the 3rd declining quarter, or that the market had already declined by at least 20%, no later than 3 months after the 3rd declining quarter?
      3. Besides 1952, when were the other two times where a bear market did not occur?


  37. captbara says:

    Trying to find support off 15 min 8 EMA

  38. John Arella says:

    Looking for a flat or negative finish today, added to my shorts :), 1 hour moving average and bollinger bands holding this advance so I feel confidant that this rally is over 🙂

  39. A little patience with the clx 30 dma. Clx update. SP500 daily pitch.

  40. Buy signal in place above 1893.50 with stop around 1871.02. Target 1 is 1924.29.

  41. phil1247 says:

    is it a wedge with throwover???

    you are about to find out

  42. phil1247 says:

    took of f half long hedges 1897 es

  43. purplember says:

    any thoughts on how high Int A of Major B goes? tony next pivots after 1901 ?

  44. Dex T says:

    Bear markets are brutal! I can only imagine what the figure will be when the U.S. drops much farther!

    Nearly $8 trillion wiped off world stocks in January, U.S. recession chances rising: BAML

    “Reflecting the increasingly bearish sentiment engulfing world markets, some $7.8 trillion was wiped off the value of global stocks in the three weeks to Jan. 21, BAML said.”

    “We cannot rule out a recession in the next year. Accidents will happen, and we are concerned about the lack of policy ammunition to deal with a major shock,” economists Ethan Harris and Emanuella Enenajor said in a note on Friday.

  45. rc1269 says:

    what should we care more about…

    a) draghi jawbones about doing more of something that had little impact the first time
    b) spx earnings (so far) down 4.43% this qtr, now negative for three straight qtrs. (3+ quarters of shrinking earnings without a bear mkt…?)

    keep perspective, and take what the market gives you

  46. Broke above 1901…probably a big day on tap now.Nas may go up 150-175.Bear market rallies are like this.Relentless up day i think.

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