Thursday update

SHORT TERM: gap up opening, DOW +212

Overnight the Asian markets lost 0.3%. Europe opened higher and gained 2.2%. US index futures were higher overnight. At 8:30 weekly Jobless claims were reported higher: 272K v 262K, and Durable goods were reported higher: +4.9% v -5.0%. Then at 9am the FHFA was reported higher: +0.4% v +0.5%. The market gapped up at the open to SPX 1937, ticked up to 1939, and then started to pullback. The SPX had closed at 1930 yesterday. The pullback lasted until just past 10am when the SPX hit 1925, and then the market started to rally. With five to seven point pullbacks along the way the market rallied to SPX 1952 and closed there.

For the day the SPX/DOW gained 1.20%, and the NDX/NAZ gained 0.90%. Bonds gained 10 ticks, Crude rose 90 cents, Gold added $3, and the USD was lower. Medium term support remains at the 1929 and 1901 pivots, with resistance at the 1956 and 1973 pivots. Tomorrow: Q4 GDP (est. +0.5%), Personal income/spending, and PCE prices all at 8:30. Then Consumer sentiment at 10am, a speech from FED governor Powell at 10:15, and a speech from FED governor Brainard at 1:30.

A few minutes after today’s gap up opening the first rally of Intermediate C completed at SPX 1939. Then after a pullback to SPX 1925, the market rallied to a higher high at 1952. This gives us three waves up from yesterday’s SPX 1891 Int. B low. Normally after a seven wave A advance, a seven wave C advance usually follows. This uptrend remains on schedule for a high sometime next week. Check yesterday’s update for resistance levels. Short term support is at the 1929 and 1901 pivots, with resistance at the 1956 and 1973 pivots. Short term momentum ended the day quite overbought. Best to your Q4 GDP trading tomorrow!

MEDIUM TERM: uptrend likely underway

LONG TERM: bear market


About tony caldaro

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317 Responses to Thursday update

  1. simpleiam says:

    Will be interesting to see if spx gaps-up over the 1956 pivot on Monday. How many waves do we still have to go? Tony said likely 7, and yesterday was 3. Seems I counted 5 total so far? Anyone?

  2. spindoc73 says:

    Maybe the pattern will change, but these types of moves have been conditioning this participant to expect a sharp move in the opposite direction.

  3. 1999 is a perfect top Based on two Fibonacci convergences and a 13 fib day cycle from the Lows

  4. OneAndOnlyUniverse says:

    Pro Tip , Iwm trades 108.80 -110.05 , save your powder and babbling

  5. blackjak100 says:

    big -div on 60 min MACD…is 1963 the top? Possible, but I like one more HH first next week. Don’t always get it though.

    • johnnymagicmoney says:

      a vote for Trump is a vote for Clinton

      Trump is a disgusting human being. Egomaniac a hole.

      • Page says:

        100% agree … 😀

      • hk1122 says:

        You are so right

        • johnnymagicmoney says:

          Last night’s debate Rubio moved in the right direction and Trump was wobbling but the moderators kept saving Trump. Moreover every time the energy got high they would then direct a question to Kaisch or Carson which just sucked the energy back out and gave Trump reprieve after reprieve. So disappointed in Kaisich’s delusion. He just can’t accept that he can’t win so he keeps allowing the establishment split to favor Trump. I wish someone just looked in the camera and said I understand the attraction of Donald because you are tired of politics and you are angry but this is a man who was given 200 million dollars as a young man. 200 million folks. have any of you ever had 200 million dollars? Is self made man someone who inherits 200 million? he is a rich spoiled kid and he still hasn’t grown up. If you think he cares one iota about your plight or your troubles he doesn’t. He cares about one person and that is himself. Most people on here have given their life to public service. We could have decided to enter the private sector and make fortunes but we decided to make a difference and serve the public. All Mr Trump has ever cared about is his pocket book – not yours. He is running cause he has a big ego not because he wants to make America Great Again. And let me tell you America is great – I am tired of him painting this picture that we stink. We are the greatest country on earth. One last thing Donald you can’t stop running your big fat mouth about how much you want to take America’s jobs back from China and Japan and and Mexico? Is this true? That you are so concerned about jobs in Mexico and the American worker? (Pull out one of the Trump ties). if that is the case why is the Trump tie say “Made in Mexico”?? Donald doesn’t care about you at all – he is an obnoxious immature spoiled rich kid who is disgracing the republican party.

          • The Kennedy kids were given $600M and they and their children have run it down to below $100M.

          • It is highly doubtful that most most people on this site are career civil service people. There are a lot of good civil service workers but civil service managers are among the most self- serving people you will ever find. With some exceptions of course.

      • bud67 says:

        One, needs to learn control…

  6. johnnymagicmoney says:

    Hey ya’ll where are we in the wave Count in Intermediate C??? Is this is the fourth wave of seven yes?

    (Johnny Friggin Magnet)

  7. ..and given grand BREAKOUT yesterday, today was supposed to BULLISH with SPX targeting 2300.
    This is like Ben Bernanke saying “I will flood markets with Dollar and bcos dollar is reserve currency it wont depreciate and bcos people will have monies, they will buy good and bcos PCE (personal consu. exp.) contributes 70% to American GDP, economy will grow”

  8. quantmaven says:

    I know one stock does not represent the whole market but Apple is at a crucial juncture. It finished a triangle over the last couple days. It has not broken yet but if we base on the downtrend channel, it seems it could break on the downside with higher odds but unless it broke on either side, nothing is confirmed yet… We also see the same formation of crude oil at the moment. I thought a low was in for crude oil a while ago but I don’t like this triangle formation:

  9. johnnymagicmoney says:

    so those of you who think it is oil related right now. Oil was up big and is now down 1% ………… is flat. The market simply wants to go higher – that simple. We know how this ends today……….no volume, cant sell off and ramp up into the close on nothing and no volume

    as if this would be a surprise?

  10. Hugh Jazole says:

    From a blog I follow that discusses Artificial Intelligence. This post is about how AI can affect the stock market, and may already be in use.

    “In past updates I suggested that the first applications of artificial intelligence would occur in the stock market, because mutual funds and hedge funds would fund the development of the required AI to beat the market. Of course these investment companies would not make their applications of AI public because that would either discount their value or make the government take action to remove these obvious advantages over the average investor.

    But I believe that their trail is obvious if you look at a chart of the S&P 500 for the last five years. You will see that the character of changes in the S&P 500 have changed dramatically in recent years. Both the percent of change and the velocity of change have increased versus earlier periods. You can look at this on either a linear or log chart and you will see the same thing. Note Oct 19, 2014; Aug 16, 2015; Oct 4, 2015; and Jan 4, 2016.

    This is not enough data to conclude that this is statistically significant to a 95% confidence level, but it is getting close. And it certainly is worth watching.

    As I have said before, I would not try to play the general market with what is going on. Buying a specific stock for its growth potential may be valid. But in my opinion, the overall market is now being largely influenced by AI programs.”

    • It was bound to happen. Once the dunderhead human race realized that natural intelligence is void, by definition, in markets and everything else, they resort to artificial intelligence. I’ve decided to sit out the madness for the next few centuries and wait for wisdom of no-intelligence.

      When one observes how the defense establishment used the word “intelligence” how can there be anything left to debate?


  11. There is a IHS playing out in the S&P 500.. neckline at 1948-1950 .. IHS length @ 135 points.

    Visible quite clearly on the 60 min chart.

  12. camper1888 says:

    Just bought nugt $53.00.. I hope i know what i am doing.. LOL

  13. 123 abc says:

    Current speculative 5-min count:

  14. johnnymagicmoney says:

    Trendline on Russell is 1065 (at 1038) Trendline on S&P is around 2010 (currently 1955) DOW around 17400 (currently 16710)

    2.6% 2.5% and 4.1% away respectively

  15. alent1234 says:

    been a lurker here on and off for a while, but is it possible that we’re in a major cycle wave 4. Wave 2 lasted approximately 6 months back in 2011. wouldn’t a 1-2 month wave 4 be too short?

    another thing. last time oil bottomed was in 1995 and the market took off after that. it was mostly flat into the oil price falling, but it took off after that.

    • simpleiam says:

      Not anywhere near the same setup for Oil.

    • Holly Silver says:

      Anyone give exact measurements to determine if we fail the tests on both sides. Secular bull has to show what exactly, same for new trending bear market assumptions. In other words if 2030 breaks on upside is that the determinant for just being a correction in bull market? If 1800 breaks on the downside? Why is there such a conviction that we failed the bull scenario?

      • alent1234 says:

        i think the wave 4 in the bull that ended in 2000 was an expanding triangle, or whatever the shape is called. looks similar to the last year or so as well

      • EL MATADOR says:

        Holly, you are like Lawrence from movie Big Short. No matter what Michael Burry said Michael was never able to persuade Lawrence that the Housing Market was a bubble and it was going to collapse. Lawrence mind was made up as is yours and there is nothing we can say to persuade you otherwise.

    • tony caldaro says:

      see this weekend’s update

    • Incorrect, last time oil bottomed was in October of 1998 at 10.65

  16. johnnymagicmoney says:

    Ode to the Delusional Bull

    Bears are quite silly they talk of the end
    But markets are up no doubt on the mend!
    The truth is quite clear for you bears if you see
    The market is flying yippie oh yippie!
    China who China? Its not a big deal!
    Long in the markets is something I feel
    Europe deflation who cares for that?
    My wallet is bigger my wallet is fat!
    Japs in recession with deflation in spades?
    No worries no worries Longs have it made!
    Russia Brazil who cares for their plight?
    This market’s got legs this markets got might!
    Europe’s big banks falling apart?
    In this bull market simply a fart!
    Fed normalizing and currency spreads?
    You bears are just manic its all in your head!
    High Yield and Oil and risks that are great?
    What’s the big deal new highs is our fate!
    Donald or Clinton disasters next year?
    A bad prez in office is nothing to fear!
    Broken charts scattered all over the place?
    A bull market raging how can you not chase?
    Everything’s fine for price is the king!
    With stocks flying high I can afford the bling bling
    So don’t try to sell me cause the bull never ends!
    Markets are up no doubt on the mend!

  17. frommi2 says:

    Looks like a critical juncture here, day low (~1950) should hold, otherwise the bears will win. But bull scenario still intact. 🙂

    • johnnymagicmoney says:

      AB – how many handles is that upper trend line decreasing per day you think? About 1.5 handles per day??

    • aahmichael says:

      AB, you put my name on your post, so I guess I’m supposed to respond. My response is that your charts are always very pretty, however, they have no meaning to me, as I don’t believe anyone can project when, where, or how the market is going to go from any one point to another point. Personally, I’m very happy if I can just get reasonably close to the reversal points of trend, and then stay with the new trend until it ends and reverses to yet another new trend. I never know ahead of time how long that will be, though, and I also never know where the reversals will occur, or how the new trend will subdivide. Fortunately, one can still be an extremely successful trader without ever knowing any of those things ahead of time.

  18. gtoptions says:

    Tony, or anyone else think this is an expanding Int. b.
    Seems like more time and confusion is needed.

  19. johnnymagicmoney says:

    Tony – how many handles are minimum requirement for a Minor Move?

  20. blackjak100 says:

    VIX still behaving like a bear market rally underway and not P5. Could get a big down setup today

    • mjtplayer says:

      Daily RSI +div on the VIX

      It ticked below 19 this a.m. but immediately reversed, if you blinked you missed it. Has been consolidating and creeping higher all day.

      • scorp100 says:

        Many times, VIX is initially stubborn; later it gives up. Of course bear market behavior might be different, but be careful. Don’t see, what you want to see.

        • blackjak100 says:

          Look at last 2 bear markets which behaved quite differently and tell me one thing they have in common…VIX above 17 almost entire time of bear. This bear seems to be operating more like 2000-2002 as of now.

  21. tawcap says:

    Opening medium to long term shorts here. Putting technicals to one side, the rebound in price has got bears questioning themselves and bulls excited. If we were to rally say 3-5% putting us at 2040, what has changed? We would basically just be set for the next drop. Chinese growth still slowing and transitioning from industrial to consumer led.. Fed on a path of tightening, at best this will be delayed with no stimulus unless the economy significantly weakens or we are at much lower prices… Oil prices may stabilise at these levels but even at $40 a barrel this will provide little support to energy stocks once the initial bounce fades. A move under 1947 by the close would be a reversal sign for me.

  22. xuwu992000 says:


    • aahmichael says:

      I’m short again as well. @1955

    • 7-wave Int C hasn’t happened yet…we go higher from here if it does.

    • Holly Silver says:

      With the domestic fundamental data pointing to strength it’s hard to imagine a recession here. seems the only way this can happen is if overseas deteriorates much further and longer. I am on record from 2 months go stating we have 2 more rate hikes in 2016. The FED loves a sideways and pessimistic market. no bubble there. watch for future surprises on the upside with consumer strength. SPX 2030 is the big test IMO. It should drop from that target. if it holds above recent lows we are still in a secular bull run contrary to everyone else’s opinion.

      • nsteve24 says:

        inventory build is not strength

        • Holly Silver says:

          Neither is .5 percent surge in both spending and income? How about the job market? How about the want ads at historic highs? How about a year of spending being lower than income growth? Service sector has been on fire. the longest win streak ever recorded or am I missing something? We did get a flash reading blow 50 for the first time in years. If that is real we are in trouble. Without service contraction it’s a bull market and no recession. 5 percent unemployment, productivity levels also near an historic run.

          Why the drop coinciding with external events and not on domestic data? Kind of putting the cart before the horse. Assumption that consumer will die out because of actions in oil and overseas recession? Don’t see it. As for inventory buildup and exports you are mixing apples with oranges. Overseas problem is affecting us for sure. Small part of economy however. Every single argument on weakness is a direct result of oversees problems. Has the earnings warnings intensified for next quarter? Is the dollars strength thru this whole thing an anomaly? Will the dollar fall and help exports? Please show me a consumer that hasn’t had the best 2 years on discretionary spending? travel and leisure spending way up. I don’t get it. Tale of two worlds.

          The doom/gloom crash scenario is just not there yet. Comparing this to 2008 is dangerous and not warranted. I am placing a 70 percent odds on 2 more rate hikes in 2016. lest see which one prevails.

          • rc1269 says:

            that’s all fine and good, but you can’t trade any of that. earnings stink, their shrinking, and valuations are high in a rising rate environment. the market more than doubled without much for economic strength; we can still get a bear market even with all those things you cite. cheers

          • EL MATADOR says:

            How did all those thingies you cite performed during each historical bear market? you might want to do a back history comparative rather and preaching Bull every day here.

      • EL MATADOR says:

        is both imports and exports down and inventory build up continues to rise = weakness

  23. Can t remember who said it…I think I read it on one of the Market Oracle articles/or zerohedge–but there s a rumor the Fed is “secretly” initiating a QE4 (which this time is buying oil and/or stocks outright).What s to stop them?Mr C mentioned the early 50s secret QE a couple days ago.What a way to stop a bear.When would we ever find out?

  24. ABchart says:

    ES: low at 1949.25 above 1960 the consolidation (19.50 pts) is over.

  25. torehund says:

    If not the market, lets hope truth goes into a bull-market, and GOV into a bear-market.

    • ABchart says:

      Put the video in my favorites. Will watch it later. Thanks Tore!

    • Holly Silver says:

      Is he questioning the holocaust ever happened? Why we fear Muslims? Propaganda? Perhaps the third world disruption and religious war is a phantom of my imagination. Christianity had it’s share of holy wars. Lets get real. Nothing to fear but fear itself? I think not. Terrorists under any guise does not become an inclusive war on religion. In that respect we should not be fearful. Know thy enemy and deal with it accordingly. Paranoia only leads to more irrational behavior. Love the theories on world domination thru fear and propaganda. The free world got where we are today because of our ability to adapt and change. this implies freedom of knowledge. This kook is a perfect example of that freedom. Condemning the very world that allows him to spew out? I deal in logic. not logical.

  26. stmro says:

    Gap filled. If it holds 1947 until lunch, we go higher in the afternoon.

  27. So far my attempt at short term crystal ball gazing has failed but I still think my big picture view is still valid.

  28. The SP500 cash index remains in the “two weekly” up channel from 2009, and now with a higher local high. Having broken the channel to the downside once is a ‘warning’ but is not fatal. Will price make a final Primary 5th wave or not? So much of the discussion on here has been whether it will or it won’t. As I have said here and in my weekend videos, this is due to the “Fourth Wave Conundrum”, the number of different forms a fourth wave can take: triangles, flats, zigzags, double zigzags, flats, etc.

    Right now the up count has the slight edge based on 1) sentiment – published in my blog, and 2) the fact that a Primary 3rd wave can seen to be 1.618 or greater times a Primary 1st wave.

    SPX - Two Week - Feb-26 0914 AM (2 week)

    If price were to break the 1812 lows, before making new highs, the mathematics of the Elliott Wave Oscillator would likely indicate a down move in force because the values would exceed -40% of the prior third wave high.

    Cheers and enjoy the chart.

  29. People – What ever pullback we get… ideally anything as far as 1900 … Buy it with both hands… 2016 will be a bull market

  30. gtoptions says:

    Thanks Tony
    SPY ~ Killed at WR3 196.67
    GL & Good Weekend all

  31. James Reed says:

    Thanks Tony!! Do you expect to see the daily chart get significantly overbought with a negative divergence at the top of Int C? What level do you consider significantly overbought?

  32. ABchart says:

    ES 30 minutes: negative divergence. Second pullback needed.


  33. stmro says:

    Gap close highly likely here. Then we shall see.

  34. rc1269 says:

    1963 target just about hit

    • mjtplayer says:

      HOD was 1,962.96 – close enough for gov’t work; 50% retrace achieved.

      Several resistance areas between 1,961 – 1,969

      • rc1269 says:

        haha .. i was *just about* to use the ‘close enough for gov’t work’ line but then recalled it needed an explanation for somebody last time. either way, yes it may be so. if you’re a bear this morning was a cheap short, IMO. wait to see how the day shapes up for confirmation at this point. wouldn’t be surprised to get another reversal candle on the daily. maybe a DC or an SS

  35. ariez5 says:

    Hey y’all, take a look at copper (JJC). Beautiful Inverse H/S.

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