Friday update

SHORT TERM: gap up and go Friday, DOW +396

Overnight the Asian markets gained 2.4% on the BOJ’s venture into negative rates. Europe opened higher and gained 2.1%. US index futures were much higher overnight. At 8:30 Q4 GDP was reported in line with expectations: +0.7% v +2.0%. The market gapped up to SPX 1900 at the open and continued to rally. The market had closed at SPX 1893 yesterday. At 9:45 the Chicago PMI was reported higher: 55.6 v 42.9, (one of these numbers is probably wrong), and at 10am Consumer sentiment was reported lower: 92.0 v 93.3. The market continued to rally until just past 10am when the SPX hit 1918. After a pullback to SPX 1910 by 10:30 the market moved even higher. The rally continued throughout the day, and the SPX hit 1940 and closed there.

For the day the SPX/DOW gained 2.45%, and the NDX/NAZ gained 2.30%. Bonds rose 19 ticks, Crude gained 40 cents, Gold added $4, and the USD was higher. Medium term support jumps to the 1929 and 1901 pivots, with resistance at the 1956 and 1973 pivots. Today the WLEI was reported lower: 48.0% v 48.1%.

The market had its fourth gap opening in a row today: 3 UP, 1 DN. The market opened at SPX 1900, hit 1918, dipped to 1910, and hit 1940 – it’s highest level since this potential uptrend began at 1812 seven trading days ago. After the market hit SPX 1917 on Wednesday, the FOMC statement created a lot of choppy activity into Thursday. We noted four potential short term counts at that time, and today settled on one: Intermediate C still underway. We updated the SPX hourly chart accordingly. More on this in the weekend update. Best to your weekend!

MEDIUM TERM: potential uptrend inflection point cleared

LONG TERM: bear market


About tony caldaro

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90 Responses to Friday update

  1. fotis2 says:

    SPX 4hour IHS target=2004 needs a close above R1 for further upside if not could retest S1 IHS neckline

  2. M1 says:

    It was noted yesterday: “NAZ short term status has been uncertain for the past four days. Today is slightly bearish imo and it should get direction (up or down) within the next two days”.
    Any doubt abt the new uptrend or countertrend rally ? None in IMO

    • M1 says:

      It was being noted since the begining of the week: ” NAZ short term status: Uncertain. Upside potential: +4700 (NAZ) – Downside potential: abt 4200 (NAZ)”
      Did the market show us the road map today ? It did IMO. +4700 (NAZ)

  3. James Reed says:

    Regarding this post: “Cci is saying that no meaningful bottom is in. It’s a great bottom calling tool. In bull markets -150ish is a good entry. In bear market you HAVE TO SEE a bullish divergence before seeing a bottom, Not just a bounce. It’s not in place yet. First ice seen someone mention CCIweekly. Best bottom indicator I’ve seen out there when used properly”
    What is weekly CCI?

  4. uas2014 says:

    Hi tony Tks very much for your blog.
    What do You think about ibov índex?
    Ibov index still in downtrend?
    And about mxn curncy and brl curncy?
    Tks again.

    • frankrizzo31 says:

      I’m curious about Brazil as well. But economic pain seems to follow Olympic host countries as Brazil will have the summer games this year. Think Russia, Greece, may have to wait a few more years.

    • tony caldaro says:

      Brazil has been in a bear market since 2010.
      Yes they missed all but the beginning of the worldwide bull market.
      Don’t have a very long term count as the index is relatively new: 1999.
      Would expect, at least, a retest of the 2008 lows, and probably lower.
      Lots of political and monetary problems in the country.
      Sorry, do not follow those currencies.

  5. mike7x says:

    Thanks Tony! $NDX Weekly…

    • valunvstr says:

      Chatt doesn’t go back far enough for reference points to be relevant. Have one that goes back to 2007? Bet you’ll find a different conclusion.

    • sjc1159 says:

      I am actually starting to think that the 2010 correction was Primary II, and that we are going through Primary IV now. The 2015 crash could then be considered the 4th Wave of an extended P3. The NDX makes a better case for this count than the other indices. On the NDX, the 2010 drop was actually larger than the 2011 drop. And the NDX was the only major index to make a new high in Dec. 2015.

      • aahmichael says:

        The 2010 decline was wave A of an irregular. That irregular correction ended in October 2011. The high in Dec 2015 is irrelevant, as it was a B wave.

        • sjc1159 says:

          Ever since 2011 I have considered the possibility of 2010-2011 being a Flat, but I always decided against it given that the rally seemed too steep to be a B-Wave. It’s possible that QEII caused the correction to have an upside bias.

          • aahmichael says:

            QE distorted the entire 6 year rally, and the market is now in the process of paying the price for that. Besides, they aren’t called “irregulars” for nothing. =)

            • sjc1159 says:

              My estimate is that QE extended the rally by about 2000-4000 Dow points. I think the corrections of 2010, 2011, and 2012 would have been deeper without QE; those corrections ended abruptly before reaching key support levels, and even longer-term bulls thought they could go deeper. I think the main effect of QE was to reduce recessionary fears, turning what could have been a subnormal bull market into a normal bull market. But now that there’s no QE, we have to discount a recession if economic data stays weak.

  6. pooch77 says:

    Look for a top at 2000 Friday then down,down into March.The dailys need about 5 days to top out

  7. The Dow daily MACD looks very promising. P5 possibly Int 3 of Major 1 in full swing. However, it felt like a bit of a short squeeze. On the other hand, bulls can make it feel that way.

  8. All we need is soul surfer and buddy glove to post to night about how the lows are in and so 2500 is around the corner and it will be just like old times. Newbie bearish, central bankers jacking up the market. Good times.

  9. If that rally today is not in the Stock Market Almanac as the definition of a bear market rally–nothing is.My contribution today is on GDX which in the face of everything thrown at it–was up 2.6%.That s not all.For the 3rd time in 2 weeks it rallied hard the last 3 minutes into the close.I haven t seen that kind of late buying before this month.Hope the interpretation is correct that this will continue to be bullish.But the Central Banks seem to be stirring around and they like to suppress gold in their spare time.But today was impressive.Good luck all.

  10. nickokc says:

    Tony any thoughts on SPDR S&P Biotech ETF (XBI). thanks

  11. Somebody posted a chart within the last 2 weeks showing an A-B-C Primary 4 with wave A at 1869-72. It was roundly criticized on this site as having wave structure defects. Does anyone remember who posted it and what day it was?

  12. I believe Primary 4 ended on Wednesday, Jan 27 and that Primary 5 has truly begun today, Friday Jan 29. I will give give reasoning tomorrow if anybody shows any interest.

  13. looking at the I would say we should be putting in at least a temporarily top fairly soon….

  14. NEWBIE says:

    Many of you are getting bullish in here again. Guys the market has topped- the system is on the verge of collapse and many are trying to pull waves out of their ***. Except it, GAME OVER. The Federal Reserve has failed us all- 1700 is coming in quick fashion.

  15. Justyn Byrne says:

    The inverted H&S formation on the Dow/Nasdaq played out today. The thrust target (on NQ futures) for the wedge/triangle seems to be around 4350. If this is all an ABC correction off the lows then assuming the length of A = C which is a very common relationship, C should end around 4370 (assuming I haven’t messed up the figures).

  16. NEWBIE says:

    OK guys did today get the masses long and bullish? well now its getting close to NEWBIE time. Market is about to DUMP !!

  17. Hugh Jazole says:

    How will real estate weather the coming bear?

  18. John Arella says:

    Oil Bottom with diagonal finish :). Makes me bullish for the SPX reaching at least 2000

  19. 123 abc says:

    Tony, what made you decide to go with an irregular Intermediate-b instead of Intermediate-a ending at 1917 —or can either count work?

  20. For those interested. Here is the upward count to Primary 5 (per my blog post last weekend), and statement of bullishness last weekend. As some of you know, because of the overlaps, I published a ‘work in progress’ chart which tried to count a diagonal upward, but the diagonal invalidated on the Fed meeting. I said ‘diagonals are low probability counts, but I could see one impulse count to (1) of the diagonal which was even lower probability than the diagonal count, so I was using the diagonal’ .. for the work in progress. It turns out the lower probability count is the one which has apparently come to pass. It is of minute wave i (circle-i) with a flat for minute wave ii (circle-ii). Today’s up move is part of minute wave iii (circle iii).

    SPX - Hourly - Jan-29 1635 PM (1 hour)

    I have clearly labeled the alternate as A,B,C because of the flat for minute ii, which is not ideal for an upward impulse count, and because there is nothing that says that Primary 5 could not be a diagonal itself (expanding or contracting), and, since we have made – by my count – Intermediate waves (W), (X) and (Y) to the 1812 low, nothing rules out a FURTHER (X) wave up and yet another (Z) wave down to try to get the S&P500 to the 38.2% retracement of Primary 3.

    Primary 5, as you may recall, is the result of using the same Eight Fold Path on the two-weekly chart of the S&P500. A description of the Eight Fold Path was provided in yesterday’s updates on the Dollar Index, and has been shown before on this site for the S&P500. The two weekly time-frame is the one that currently provides 120 – 180 candles on the chart for step 1 of the method. Remember, Primary 5 should it occur, ‘should’ consume as much time as Primary 1. By my count Primary 1 was from March 2009 to April 2010. So Primary 5 could be a one-year wave taking us to (2009 + 8 = 2017).

    I remain open, and flexible, in “the jury is still out mode” until the “Fourth Wave Conundrum” is resolved, as per my YouTube video. But, until then, cheers and enjoy the chart!

    • spindoc73 says:

      From the quote below, this move was apparently timed out of an acute fear that the bottom was going to fall out. Alternatively, they know enough to worry that without inputs the system is doomed. Desperation?

      “In addition, Kuroda said, global economic worries prompted the bank to introduce the negative interest rate.”

      “Global financial markets have been volatile against the backdrop of the further decline in crude oil prices and uncertainty such as over future developments in emerging and commodity-exporting economies, especially the Chinese economy,” he said in a statement.

  21. uncle10 says:

    Thanks Tony.
    Nice when a plan comes together 😉
    good weekend all.

  22. Lee X says:

    Thanks Tony

  23. mjtplayer says:

    Thanks Tony! Minor a of int C could finishing up here soon, if not today then early next week. Still looking good for topping-out in major B around the Bradley turn window late next week.

    Anyone else notice that while stocks were rallying, the 10yr Treasury closed at 1.931 – that’s the lowest close since April 2015. Also, the VIX closed above 20, which is extremely impressive given the almost 400pt rally in the DOW, on a Friday, on the last trading day of the month. As I’ve mentioned, the VIX has good support in the 20 area (19 – 21) and so far that’s holding true.

    Don’t forget to sell the rallies…

  24. simpleiam says:

    Thanks Tony!

    Just posted this on Thursday Update. Take a look…

    “Check this out. I printed the long term chart out in 2013 or so, put it on my white board at work. It’s exactly the same as when I printed it out, no changes. Agrees with Tony’s spx Bear level 1100. Lots of nice charts here too.”

  25. llerias7 says:

    Tony, you mean Int.C of a corrective B-wave, right? So next C-wave completes (Springtime) a Primary 1 (down) on this Bear…is that your EW count.
    Many thanks.

  26. fotis2 says:

    Many thanks Tony am guessing plenty traffic this weekend.GL

    • gtoptions says:

      Fotis, nice work on those 3BR’s
      The weekly 20cci did close > -100. I use a weekly 5/13 cci combo, the setup is similar to the week of 9/14. SPX should test the 13ema @ 1985, unless it gaps down Monday! 🙂

      • valunvstr says:

        Cci weekly looks just like July 2008. And the prior setup late last year looks like early 2008. The back to back identical set up is uncanny. Cci is saying that no meaningful bottom is in. It’s a great bottom calling tool. In bull markets -150ish is a good entry. In bear market you HAVE TO SEE a bullish divergence before seeing a bottom, Not just a bounce. It’s not in place yet. First ice seen someone mention CCI weekly. Best bottom indicator I’ve seen out there when used properly.

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