Thursday update

SHORT TERM: relatively quiet day, DOW +80

Overnight the Asian markets gained 0.2%. Europe opened higher but lost 0.2%. US index futures were higher overnight, and at 8:30 weekly Jobless claims were reported higher: 285Kv 278K. The market opened one point below yesterday’s SPX 1913 close. After a tick up to SPX 1914 the market dropped to 1901, and then started to rally. At 10am Factory orders were reported lower: -2.9% v -0.2%. The rally continued until 10:30 when the SPX hit 1927. Then market then pulled back to SPX 1904 by 11:30. After a rally to SPX 1920 by 1pm, the market pulled back to 1904 again at 2:30. Then the market rallied to SPX 1916 just before closing at 1915.

For the day the SPX/DOW were +0.30%, and the NDX/NAZ were mixed. Bonds gained 10 ticks, Crude lost 50 cents, Gold rallied $13, and the USD was lower again. Medium term support remains at the 1901 and 1869 pivots, with resistance at the 1929 and 1956 pivots. Tomorrow: monthly Payrolls (est. +192K) and the Trade deficit at 8:30, then Consumer credit at 3pm.

The market opened relatively flat today, dropped to SPX 1901, rallied to 1927, then ended the day at 1915. Initially it looked like the three wave Minor B advance from Wednesday’s SPX 1872 low had completed: 1918-1901-1927. But the pullback from that high does not look like it is in any hurry to go down: 1904-1920-1904-1916. As a result we will hold off on posting a Minor B label until SPX 1904 is broken to the downside. Short term support remains at the 1901 and 1869 pivots, with resistance a the 1929 and 1956 pivots. Short term momentum dropped from slightly overbought at today’s high to neutral. Best to your trading NFP tomorrow!

MEDIUM TERM: tentative Major wave labels remain

LONG TERM: bear market


About tony caldaro

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266 Responses to Thursday update

  1. the last hour,,, Have a great weekend!

  2. Gary Lewis says:

    Looks, really bad, so I’m nibbling on some long SPY calls here.

  3. Gold is exactly at the same degree of overvaluation as last january 2015 you know what hapeenned immediately after? Gold fell 160 points or about 17% in less than 2 months

    • aahmichael says:

      I disagree. The way I see it, Gold is in an entirely different place than it was a year ago. It made a major bottom in December, and has broken out to the upside. Stand in front of that train at your own peril.

    • rabbittrader1 says:

      NOT HAPPENING Double bottom IN Dec. Past all resistance- next correction maybe to 1145 to 1155 but probably only 1155 before moving on up to 1200 area then higher into Oct. probably testing previous high. Advise buying KGC,AUY,GSS,HL, CDE,EGO,NG,NGD,etc.40 YEARS EXPERIENCE AT THIS STUFF. . RABBIT.

      • no i didn’t buy any of the companies you mentionned not a single one.sorry … I only buy the very best companies at a huge discount”miners is my job i’m a professionnal in mining industry and i ‘m chasing only companies with 4000% upside potential anyway TY

        • tomasso60 says:

          aem, nem, fnv, (best in breed)
          all the rest are really good for trading -GG comes up pretty good too

        • rabbittrader1 says:

          Well then you could buy RGLD, ABX, NEM,and many others in the higher capitalization area, but I think one can make 800 % to 2000% on many that I have mentioned . Good Luck. Also I am long April Comex Futures and will roll these into later months as we proceed upward. Rabbit

          • tomasso60 says:

            don’t get me wrong on these Rabbit. I have been long gold and silver stocks from a while ago and trade them quite a bit. for the large percentage gains, yes to all the ones mentioned. core are the ones I call best in breed.
            have traded the golds and silver stocks since I was 17 which is a long time ago.

        • Jim Guthery says:

          winningtech – you still in with gg as being best of breed?

      • mhchangster says:

        Really agree with a post you made previously regarding unstable currencies, and why gold is likely to outperform! Thanks for sharing your experience

  4. 123 abc says:

    Guesswork that Minor-c→Minute-a ends at today’s close…?:

  5. Tony Jordan says:

    Some still want to short the gold sector. Sure, a pullback will occur. It could come on Monday. But the action in the gold miners has been exceptionally strong. ABX rallied 8% off the early session lows even though the world’s largest gold producer is up 95% since September. Its weekly RSI sits at 67 after never having risen above 60 in the historic decline since 2011. The metal is only up 11% but the miners are the tell IMO. Gold bulls start with the big caps being impressive initially. This gradually works its way down the food chain. The 84% collapse in the $XAU & $HUI into 19 January 2016 is the equivalent of the INDU in 1932 and the COMPQ in 2002. These opportunities are rear and mark lifetime lows. We have experienced an unprecedented situation where the gold miners have become virtually valueless relative to the metal as can be seen on the following chart:
    This is an extreme situation and as the pendulum gradually swings in the other direction we should eventually expect an equally extreme overbought situation to follow. Such is the nature of market forces. Miners actually don’t need the metal to perform to make huge gains. The Barrons Gold Mining Index ran up 700% from 1958 to 1968. All the while the metal stayed at $US35. How can that be? Well here’s the chart:
    Gold miners, like fortune tellers, predict things into the future varying from hours to years. The big advance into 1968 predicted the coming explosion in the gold price during the 1970s and into 1980.
    Ladies and gentlemen don’t look a gift horse in the mouth. Having said that it is indeed hard to have faith in the first bull move after a devastating decline. Nevertheless the plan should be to seek out sound entry points for long positions as the “danger” now is to the upside as unprecedented damage has already been done on the downside. Armstrong says gold will fall to fresh lows once more with the Euro and USD strength. Tell that to ABX shareholders. Seems to me all central planners, including the US Fed, are now cornered regardless of USD strength (or weakness) … and the gold miners know it.

  6. blackjak100 says:

  7. torehund says:

    Revolutions are always bottoms up 🙂
    Youth nowadays needs to take charge…change the farts of my own generation.
    European Spring approaching can’t stop it…
    Tony is needed strongly these days…keeping us all as sane as possible 🙂

  8. captbara says:

    Expecting gap up Monday, screw around for the entire week then start to drop for real on Fri.

  9. blackjak100 says:

    CNBC guest just said there’s simply not enough buyers in this market and that’s why the market is going down. Glad that was cleared up.

    • johnnymagicmoney says:

      yeah well what I thought was funnier was they had this kid on there who looked no older than 28 and the morons on CNBC asked his opinion (as if he had any investment experience in a bear) about what was going on with LNKD partly because he was a “millennial” himself and his reply was that the millennials needed to come in and support the stock and start buying it (as if the huge millenial treasure trove of wealth could actually make a difference). There were so many things wrong with the whole short dialougue I just laughed. Next guest (and I am sure the next 37 guests) will talk about keeping calm and using this as an opportunity to buy high quality stocks. Of course we have lived this story before and here it is once again. The fall of the bear and the bull that follows………………….one of the greatest opportunities that we will blessed with in the next 20 years is here once again!!!!! Don’t know if market heads back up to the 1940 level or even higher but man the fast free fall frenzy is getting closer and closer.

  10. bolderbob says:

    Hi Tony
    Looks like you have posted that a and b of Major C are over and we are in c of Major C.
    Can you tell now if we will have Major A and Major C form a double bottom (flat) or do you think Major C will be much lower that Major A (irregular). Could you share your thought on where you think Major C will bottom? Thanks Tony.

  11. aahmichael says:

    I’m expecting a major acceleration to the downside in this last hour of trading.

  12. fionamargaret says:

    1875 support……1869, 1848, 1841 next….OR do we go up to 1250

  13. 123 abc says:

    Ahoy! Tony! how many shots of rum last night?! Was worried you weren’t going to show today, hope all is well.

    Perhaps some thoughts for the weekend update: DOW has been leading breakout highs and is currently not as weak as the other major indices. Whilst the SPX is closing in on Minor-a wave’s low at 1872, the DOW is still approx 1.20% away from the equivalent.

  14. kvilia says:

    Unless I’m missing something, NUGT is getting extremely overbought here.

  15. lunker1 says:

    GTO’s SPY weekly S2 187.34

  16. reddragonleo says:

    Tony, are we now looking for the B high you labeled in green as the likely high and we are now in the C down that should take us to new lows?

  17. H D says:

    4th test of Support is Gann rule, muey importante. Looking for buyers in the next 5 minutes to help out.

  18. H D says:

    in other news Oil is green, c’mon guys it’s all in good humor :mrgreen:

  19. purplember says:

    Minor A 1947 to 1872. minor b to 1927. C=A would be 1852 to complete Int A

  20. johnnymagicmoney says:

    Tony – question for you

    you gave three targets 1933, 1945, and 1980 (or something like that) for the major B originally

    we hit 1947 and have been down since. (I found the action that day interesting as well since it was down all day, reversed course blipped up to 1947, stayed there for a millisecond, and then headed down again closing in the red that day). You also said that it would one of the last great times to get out in the bear

    you have questions as to where we are in the count which is understandable but here is my ultimate question………

    regardless of the count how probable is it we eclipse 1947 at any point in this Bear now?

  21. camper1888 says:

    aamike, thanks for the info u have a chart that you can show us ?

  22. gtoptions says:

    Here’s my Guess. I’m assuming it’s taking the Feb 2008 route. It also aligns somewhat with Tony’s thinking it remains in a range this month. 😉

  23. johnnymagicmoney says:

    AAMikey, RC

    How do you interpret the VIX today in light of the selloff and how it figures into your short term projections here? Odd its hardly up

    • aahmichael says:

      I never look at the VIX. It means nothing to me.

    • mjtplayer says:

      It shows a lack of panic/fear, same as other measures:

      Equity put/call at .75 – no fear
      TRIN hit 1.59 this morning but now at 0.91 – no fear

    • rc1269 says:

      first let me caveat my response by saying i’m not a big believer in looking at the vix daily movements. i find it’s most reliable when viewing the very long term trend, and how/when it might start to diverge from the price level of the underlying.

      that said, my observation has been that when there is a big move in the SPX *and* a corresponding big move in the same (conceptual) direction, then that most likely shows some capitulation. eg, the SPX drops 2-3% and the VIX spikes up 5 points. that would tell me that people are more fearful of that move and hedges are being put on. same goes for the other direction.

      however, when there is a directional divergence (such as today) then that tells me it’s less likely to be a capitulative day.

      keep in mind that lots of things can skew moves in the VIX on any particular day. so take it all with a grain of salt, IMO

    • spindoc73 says:

      Volatility would seem more likely to catch some wind at its back if/when the corrective lower boundary off recent lows is breached. Until then, prudence mandates that upward corrections be respected in my opinion. The market is looking like it wants to spread out lower to me, and in that case volatility may generally underperform in this phase.

  24. GdX volume already 33m shares.Anyone know where to find a live hourly chart of Gold/GDX?

  25. rd3777 says:

    Wave E of the expanding triangle wave 2 of 3 has reversed and were are thrusting down in perfect EWT. A 1 to 55 days 3rd wave crash window has been opened up. The crash window relationship is clearly visible on the Dow Transport daily chart. A perfect 1 to 28 days,and the low should be in 27 days from here. Breaking 16,000 and then 15,000 will be the trigger. Good luck.

  26. stephenk1980 says:

    Counting this as minor c of int B. Looks like an int C up will start next week targeting 2010 to 2020. Hopefully.

  27. S&P Spot busting…looks like we go to 1865 (4th time) and go to at least 1850

  28. SPX just broke down the trendline since 20th of Jan. Down we go!

  29. 123 abc says:

    Where is our captain this morning? The excellent call of breaking 1904 sure appears like Minor-b topped at 1927, but still no label from our skipper!

  30. Gary Lewis says:

    The three week test of the low, right on time! 🙂

  31. if take a look at technicals everything is telling us that we have likely a top here slowchastics at 94 and about to cross each other ,rsi is t at 84 macd lines are very high this moves is likely to reverse at around 1155

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