Friday update

SHORT TERM: gap down opening, DOW -212

Overnight the Asian markets gained 0.2%. Europe opened lower and lost 0.9%. US index futures were higher overnight, then lower after monthly Payrolls were reported lower: 151K v 292K and the Trade deficit widened: -$43.3B v -$42.4B. The market gapped down at the open to SPX 1909 and continued to retreat. The market had closed at SPX 1915 yesterday. At 11:30, after a few bounces, the market hit SPX 1880 and then tried to rally. Around noon the SPX hit 1892, and then headed even lower. At 3pm Consumer credit was reported higher: $21.3B v 13.9B, and the SPX hit 1873. A small rally into the close ended the week at SPX 1880.

For the day the SPX/DOW lost 1.55%, and the NDX/NAZ lost 3.35%. Bonds gained 4 ticks, Crude dropped 70 cents, Gold rallied $17, and the USD was higher. Medium term support drops to the 1869 and 1841 pivots, with resistance at the 1901 and 1929 pivots. Today the WLEI was reported lower: 47.7% v 48.0%, and the Q1 GDP est. was reported higher: +2.2% v +1.2%.

The market started off with a gap down opening for the third time this week. After trading down to SPX 1880, the market bounced to 1892 by noon. After that it traded down to SPX 1873 by 3pm. Monthly payrolls not only came in lower, but much lower than expected. As noted yesterday, a drop below SPX 1904 would suggest Minor C, from Thursday’s SPX 1927 Minor B high, is heading lower. More on this in the weekend update. Best to your weekend!

MEDIUM TERM: tentative Major wave labels remain

LONG TERM: bear market


About tony caldaro

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57 Responses to Friday update

  1. bud67 says:

    Selling My AGET software program, Interested?

  2. torehund says:

    Mitchell and Apollo 14 traveller passed away today, peace to him.
    Looking into his post Astronaut life its strange for a grounded scientist to turn toward the extraterrestrial.

  3. rd3777 says:

    I continue to be amazed by this fractal chart of Toronto Dominion Bank. Febuary and March will not be kind to shareholders.

  4. The current reading for this rate of change indicator is not the highest ever, but it is higher than all of the other recent readings except for the big blowoff in late January 2015. So we are seeing now a sentiment condition consistent with important tops in gold prices.
    –Tom McClellan today(talking about gold prices).Be careful all.

    • Hi LML, glad you did well with the GDX.

      I bought McClellan’s letter once a while back. Seems he’s carrying from his mom and dad, a couple of geeks from the ’60s. Weren’t any chart services back then. So I suppose they got a mainframe (or some such) and put it in the basement. Tom is probably still doing the same. Meaning that, I’m wondering, he makes his own. He probably doesn’t buy a chart service. He gets the algorithms and does the calculations himself.

      Long story short, his ROC is nothing like what Stockcharts says. Either that, or he had a couple of shots of Yukon Jack (being in the Pacific NW) before publishing yesterday.

      This is monthly ROC and MACD according to stockcharts,

      Everything I’m seeing with $Gold says there’s a lot more where the past week came from. Only problem is this is not a free market anymore. The FED is rigging the whole show. If they just raised rates like they should (channeled some Paul Volker), the gold rally would go away. But they probably have painted themselves into a corner.
      Bureaucrat speak: “I’ve fallen and I can’t get up”

      I’m long Rand Gold. More on that later.

      • Just waiting for a little backing and filling and I ll be adding that 80% I took out Thursday.Good luck Tom.Mr C says “if this is Primary B,we have a year of this to the upside”.I ve been waiting for this B wave for awhile.Better be in it to win it…lol.

      • fionamargaret says:

        I posted GLD on free charts for Bud and John (weekend update) – about to break out on my P&F…..

  5. kvilia says:

    You guys are funny. Want 1600 now and 1200 next day? Just about everybody is looking or already sold/short. I am waiting for the confirmation, nothing has been decided yet.
    Tony, the other day you gave three targets for upside targets, and to my question whether 1949 (closing price for that same day), was the fourth target, you replied there were only three targets. Are you expecting another puch up or sticking with the tentative labeling to declare 1949 was the top of the latest bounce?
    Thank you for your analysis and answers, as usually with respect –

  6. Bob Sagget says:

    Tony thanks for more excellent guidance! I have to agree with fishonhook (below) aamichael NAILED IT! Allow me to re-post what he posted from the Thursday thread..

    “I had previously thought that the corrective rally from 1812 had ended at 1947 on Monday. However, I was wrong, as the market needed to extend itself (time wise) for tomorrow’s NFP. Now I believe the corrective wave structure from 1812 ended precisely at today’s close. I have no idea what the numbers will be tomorrow morning, but if my preferred count is correct, then the market is going to go straight down tomorrow in a big way. (of course, as frequently happens at the close before a NFP, there is another count pointing in the opposite direction, but I have to really force that one, so it’s not even worth detailing at this point.)

    There are several ways to count it, but the way I’m counting the move up from 1812, is an ABC to 1947, then an x down to 1872, then another ABC up to 1918, then another x down to 1901, and from there it’s a contracting triangle to today’s close. While 1947 was the high print of the correction, 1915 is the actual end. This corrected the 2082-1812 decline, so 1947=50%, and today’s close at 1915= 38.2%.”

  7. Well I cost myself a some $$$ selling 80% of my GDX after Thursday,but still made enough today for a decent consolation prize.The cup and handle peak for gold is about $10 away .Then a pullback for about a week.If this is going to be a bullish breakout(questionable and iffy according to Bulkowski),the trendline formed by the pullback gets broken up as does the handle.Projected level would be about $1300.Not a sure thing though by any means.Great fun though.

  8. valunvstr says:


    Can you share with the group why you expect the market to drop 50%? I understand that this wave historically has dropped 50% but in this case “history” isn’t that long. The stock market is young and when we have another 100 years worth of returns, once might say that the expected wave based on all dates (100 years in the future) will only be a 30% decline. Regardless of ones view on global warming, I will use this example. The world has been around a long time and some want to use 20 or 50 years worth of data to make a point. Well, the ice age ended and all the ice melted. How could that have happened without a human carbon foot print. All that ice melted because the earth warmed, yet there were not factories and cars with carbon emissions being released into the air. Again, regardless of what the belief, one really can’t come to a conclusion of 2050 years, such a tiny sample, when the earth has been around for so long. The stock market was trading in a range for 13 years and then broke out. Like a stock, a common outcome is a retest of the old highs. Why wouldn’t it seem likely that the market tests 1550-1600, then moves higher? I try to invest without bias and let the charts tell the story so I don’t know how it’s going to end. But why does this have to be 40%-50% and not 25% – 30% for example. Insights very welcome.

    • tony caldaro says:

      Waves of certain degrees have similar relationships during market declines.
      While the sample is small, that is the norm.
      As far as global warming, everyone has an agenda.
      Remember the Earth was once flat and in the center of the universe.
      Like a flying piece of paper =)

    • chrisk44342 says:

      EW theory is based on wave patterns. Fib ratios are integral to the theory. Like other theories, like cycles for example, the concept is dependent on a series of wave structures, with each successive wave improving the odds that the next series will take on a certain dimension. For example, once I observed that the rally out of 2009 exceeded 1.382 of the prior wave, probabilities suggested that strucure was a wave 3 of 5. Once you accept it was wave 3, then you look for a mild correction of some kind for wave 4, and then wave 5 to complete the cycle. Given that we already had a 20% correction, probabilities suggest that the prior rally was wave 5, in addition to the horrific looking monthly chart. Will that be the case? I have an expectation of what will happen. Only fools try to predict what will happen.

  9. Gary Lewis says:

    Did anyone else notice the afternoon-long battle at the three week closing test level, 187.81 on SPY? In the end, support held. Last week was the monthly test of the lows and this week is the three week test of the lows. Both were successful. Looking at weekly and monthly charts, I will expect the market to rise. We shall see. Once again, when we are having such a bottoming process, few agree with me. But I like it that way. 🙂

  10. My call dec 12 2015

    Caldaro comment at my call

  11. steplaland says:

    Bears put the smackdown today on Bulls. I like the Broncos to do the same.

  12. fishonhook says:

    aamicheal called it. Nothing like calling your shots. kudos. And Tony is back in the groove with his count.

  13. tomasso60 says:

    thanks Tony et al for all the great stuff out there.
    shall look forward to the Weekend update as per usual and once again to you and all – many thanks
    enjoy the weekend

  14. Thanks TC; looking forward to the weekend update. Have a good weekend!

  15. timmy321 says:

    The character of market has changed indeed. If it was like before, market would have rocketed higher after the test of Aug lows. This time it is getting ready to test those lows again for a 3rd time. Was short and then went long and paid the price. Ended up with huge loss. If I had stayed short it would have been a huge profit. This is indeed bear market. Plays with the mind when one is short or when one is long. Short and stay put is the only way to deal with this.

  16. timmy321 says:

    Where is BuddyGlove when bulls need him? 🙂

  17. EL MATADOR says:

    Thanks Tony, looking forward to your WU.

    I think we got a CN BD weekly. CN or Ariez can correct me if I’m misinterpreting the BD.

    • fotis2 says:

      Your HS neckline is complete at 1972 that’s freshest pattern in town for next week..

    • ariez5 says:

      EL Mat. It is indeed a weekly Big Down setup on the SPX. What frustrates me is that there was no daily Big Down at the top. I see the weekly chart, the weakness in Nikkei and FANGs, and I get very bearish. But that reversal on Feb 1 was only what CN calls a “little big down,” which, in my experience, is only a short-term signal. So I am flat SPX at the moment.

  18. mjtplayer says:

    Thanks Tony! No changes in my squiggle count, perhaps today’s test of SPX 1,872 was minute a of minor c? Very tentative minute a label though, if it holds then perhaps minute b back to 1,900+/- before we drop and break 1,872. Either way, bounce or not, the trend is down…

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