Friday update

SHORT TERM: good Payrolls report propels market, DOW +63

Overnight the Asian markets gained 0.5%. Europe opened higher and gained 0.9%. US index futures were higher overnight as well. At 8:30 monthly Payrolls were reported higher: +242K v +151K, the Unemployment rate was unchanged at 4.9%, and the Trade deficit was reported larger: $45.7B v $43.4B. The market opened four points above yesterday’s SPX 1993 close, immediately pulled back to 1987 by 10am, and then started to rally. The rally continued, with small pullbacks along the way, to SPX 2009 by 2pm. Then the first notable pullback, since Monday, took the SPX to unchanged at 1993. Then the market rallied, with the help of Crude, to close at SPX 2000.

For the day the SPX/DOW gained 0.35%, and the NDX/NAZ gained 0.15%. Bonds lost 13 ticks, Crude rallied $1.65, Gold dipped $2, and the USD was lower. Medium term support remains at the 1973 and 1956 pivots, with resistance at the 2019 and 2043 pivots. Today the WLEI was reported lower: 46.5% v 46.6%, GDPn was reported higher: +2.2% v +1.9%, and the MMIS was reported lower: 51.5% v 52.5%.

At 8:30 this morning the positive Payrolls report stoked another wave of optimism in the market. ES futures spiked, then retreated, then rallied again. The market opened slightly higher, pulled back, then moved to higher uptrend highs into med-afternoon. Having cleared the short term resistance at SPX 1999 just past 11am, the market had set its sights on the 2019 pivot range. While this uptrend has now progressed to the upper range of expectations, i.e. the 2019 pivot and SPX 2028, it still looks like a bear market rally. Will end today with a quote, and cover the details in the weekend update. Best to your weekend!

Psychology during bear market rallies seems to follow a fairly consistent pattern. “During secondary reactions [upward] in bear markets,” wrote DOW Theorist Robert Rhea in the 1930’s, “it is a fairly uniform experience for traders and market experts to become very bullish.”

MEDIUM TERM: uptrend

LONG TERM: bear market


About tony caldaro

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57 Responses to Friday update

  1. Read the last paragraph. Your reading just what you said yesterday! Oh my! Classic not being a contrarian.

    Sent from Alan’s iPad

  2. Tony, with regard to your quote on the Friday report… Daneric has been correctly calling this a wave 2/B for a few weeks at least, and now that we finally reach the Apex… he says on Friday night maybe this is a Bull market. That sounds like the type of psychology your talking about.

  3. lbhkinqa says:

    Hi Tony, Is there a reason for the oil bottom only being Minor A and not Primary C?

    Hopefully the reason is not proprietary. Thanks.

      • lbhkinqa says:

        Is that Singapore? If so that is a picture which has looked the same for the past 40 years when oil was $10 and $150. Doesn’t tell me anything about where oil is going

    • tony caldaro says:

      Yes, commodity prices have collapsed. The CRB, which no one follows anymore, is at 1973 lows. The fault, is the excess demand created by China’s build out of currently 100+ vacant cities. No more building, no more need, and supply is over abundant.
      Worldwide demand is also contracting as the Global PMI was reported this week at 50.
      In the meantime the world is awash with Crude, and worldwide reserves are filling up fast. What will happen when reserves fill, and/or economic contraction continues?

      • lbhkinqa says:

        So it’s a fundamental not technical reason for Minor A? OK. As ever thanks for the info and your generosity in answering all our questions

  4. Robert Rhea was an expert on Dow theory.

    So, what is the present situation in the market according to this theory?

    Dow theory tells us that a market trend comes to an end when Dow Industrials and Dow Transports do not make simultaneous new highs/lows.

    In january, Transports made a new low as compared to the august low, while Industrials did not.

    So, according to Dow theory, the bear market came to an end i january.

    • steplaland says:

      So if market bottomed in Jan, then there was no bear market because it would mean we are still in a bull market.

    • Sve…., Once DOW theory trend is IN PLACE, it remains in place till violated in opposite direction. In this case, DOW trend change to SELL was generated in August and that remains in place till DOW Ind/tra both close above their high.

      Once trend changes, confirmation is not required every time (in the direction of change). If you don’t know ask. I will train you for free

  5. Yesterday I was going to ask what the significance of a double negative divergence was but I didn’t get a chance to. Today the market just ignored the divergence and marched forward. That seems quite bullish. I have been long but not with a large investment and I went short today. Keeping my fingers crossed.

    • Sorry Tony, I am try to tell you about this guy Simba Simba but have trouble posting comment

      • This guy Simba is a disgrace, he has been benefiting from the charts I posted and ride this bullish wave up yet recently he got very cocky and intimidating. In every forums there are people betting both ways yet he tried to intimidate and pressure people to side with his trades

        • I told him on Wednesday afternoon nicely what he was doing is wrong and he said sorry at that time and also on Thursday morning that won’t repeat that attitude yet only a few hours later that afternoon he was back making fun with some people in my chat room while I was away without realizing that I gave many people there moderation power and he got blocked for good and all his comments got removed.

  6. “The next few weeks will be important to see if we can test and hold above 2030. In both 2000 and 2008, the 20 MMA was tested as resistance before going lower. Now that we are above 2000, that looks like a possibility again.”
    —from a stockcharts analyst.Sounds like a plan to me.
    Silver stayed bullish today I think,staying above the downtrend handle breakout point.But we ll find out Monday (gulp).

  7. EL MATADOR says:

    I’m already short but will add more at the 2016.71 Gap fill and/or if the lower cyan trend line breaks

    FWIW; trend lines and gaps

    If the dip buyers are spent it’s going to get ugly real fast once the trend line breaks

  8. blackjak100 says:

    Thx TC! There is hope for bears, but 2009 needs to be top. I will explain in WU. My P5 call may have been premature when studying 3min chart of one section of this uptrend which changes everything. In the end you’re labeling is correct as DZZ.

    • cosmos77 says:

      Thanks BJ. Welcome back to the bearish camp. I’m looking forward to your WU. You contribute a great deal to this blog. Up until the close today I was a 2008 “top” guy and thought a bearish setup was forming, but after the close, we lost the -D that was forming on the 60 min. RSI (5). Now I have my doubts and fear we are going higher. It’s looking strong again, yikes! Looking forward to the weekend updates (i.e., yours and Tony’s) to unconfuse me. Thanks to all.

    • ABchart says:


      When we bounced from 1810 to 1900 you were talking for a week about “Gann panic zone next week target 1746”
      You wrote many times that you are not buying this because the low is not done at 1810.
      Now, at the top or so of Major B, you are talking about PV.
      I have no question for you. I just want to draw your attention to this inconsistency.
      Critical mind is a good thing, but beyond a certain level it becomes unproductive.

    • The screaming tops in NYMOT, Bullish % indicators on SPY and GDX, Put to Calls ,VIX, Fibonacci ratios, and CNBC pundits… even Gartman… how many signals do people need for a Wave 2 top?

  9. valunvstr says:

    High Yield took in the largest amount of flows on record. Since when is the retail investor right? Never! This is such classic bear market rally behavior. Still long till a close near 2020. Then OUT. GL.

  10. Well I was rich until about 2pm–and Lucy Goldmarket took the football away.Not good that it couldn t hold a weekly chart breakout for 2 more hours.That would ve been too easy I guess.Massive profit taking in GDX.Just thought I d check in for a sec.Good weekend all.

  11. 2016 the BULL Market continues. I was looking for a bottom in the 1st week of March… Waiting to buy my second batch of longs at 1900… We never got it. Got to 1920 instead and now forget it, New Highs are on Deck in the summer.

  12. EL MATADOR says:

    Thank Tony, are Bots dropping codes?
    Today’s SPX high was 2009 ….. Y2009 start of the bull market
    Today’s close was 2000 ……. Y2000 start of the Bear market

  13. Arthur Knopf says:

    NYMO registered a -1 today. Theory is next 2-3 days should see a 1+% move in averages with small change of NYMO < +/- 4 pts. Feb 26 had a +2 change on Fri followed by an SPX -20 on Mon then +48 on Tue. No directionality is indicated but I suspect we test TCs 2019 Mon then -50 by Tue-Wed.

  14. johnnymagicmoney says:

    just a little something for all of you to laugh at before the weekend update (I wrote the parenthesis)

    The Boy Who Cried Wolf (The Donald)

    Our story starts, (in 2015)
    as I’m sure you will know,
    in a town plagued with wolves, (establishment candidates)
    quite a long time ago. (when Bush beat Gore)

    In a quaint little cottage, (Washington DC)
    just perched on a hill, (the Capitol silly)
    a spoiled young child, (Donald Trump)
    sat on the windowsill. (The Taj Majal)

    Now this child was a boy, (I meant man was a boy)
    and a fat one at that, (his wallet was fat)
    ugly and greedy, (eh hem The Donald)
    and a foolish fat brat. (eh hem eh hem)

    And this boy was bored; (maybe I should run for President?)
    I am sorry to say, (yes we are all sorry)
    that it caused such great havoc, (Bush, Christie Carson Paul Fiorina etc)
    in the village that day. (The GOP)

    He was bored, as I said, (The Apprentice didn’t offer enough)
    and he wanted attention, (if only the Apprentice offered more)
    so he shouted one word, (Liars …………could have been Losers)
    that it scared all to mention. (anyone watching the debates who had a brain)

    “Wolf! Over there! (“Ted is a Liar Marco is a Liar”)
    Run for it! Be scared! (“Liars Liars”)
    The innocent are victims, (his constituency)
    for he really doesn’t care!”(“they are losers)

    Then the villagers all screamed, (“he’s a con artist”)
    they ran all about, (they telephoned Mitt Romney)
    children sat crying (Ted and Little Marco)
    and the air was filled with shouts. (“Trump University Trump University”)

    The boy watched them happily, (looked at the poll numbers)
    for he knew it was a lie, (really am a republican he said to himself)
    he laughed and he laughed, (“can’t believe my voters think I’m republican”)
    till tears came to his eyes. (“OMG they really think I’m a republican”)

    When they found out the truth, (after he was elected president)
    they shouted and grew loud, (“impeach impeach”)
    they needed a swat team, (Congress)
    to sort out the crowd. (mad Trump voters)

    He tricked them once more, (“my hands may be small but I’m really quite large”)
    but the third time they knew, (1) GOP nomination (2) General Election 3) Relection
    “We’re not stupid, you know, (actually since it took 3 times they were stupid)
    we’re not listening to you!” (so they decide to vote in another bad candidate in anger)

    “But I’m serious, please help! (he hadnt passed that commercial real estate tax exemption yet)
    There’s a wolf near that tree, (its the Mexicans, Japs, and Chinese that are to blame)
    Please, Oh, Please! (in this story Donald’s please is really talking loudly over reporters)
    It’s coming for me!” (“you all are being very nasty” Donald blurted)
    But the villagers didn’t care, (“impeach impeach”)
    and they shouted with glee. (as they voted for Snoop Dogg as president)
    “Then you shouldn’t have faked it- (the wall was akin to Stonehedge in This is Spinal Tap)
    No one believes you, you see!” ( this is when they believe in Snoop of course)

    The morale of this story, (a similar story told in Germany in the early thirties)
    is simple to see, (apparently not so simple for simple minded simpletons)
    don’t ever cry wolf! (in Psychology this is called transference)
    and you’ll live happily. (except of course for us Americans thanks to uneducated angry red necks who don’t pay taxes)

    • torehund says:

      What came to Germany in the 30s was silently sneaking upon them, and very few kept the lucid eye…Mentality, or sentiment if you will, changes as we go…Its much more determined by practicality than by overriding ideology.
      In the end, what remain is “the law of the jungle”.

  15. llerias7 says:

    SPX1999 or SPACE1999 ?
    It is all about a disaster, really!…

  16. 123 abc says:

    Guessing that Major-b may have topped today, sloppy squiggles here…


    Thank you Tony et al, look forward to the OEWCC (coffee-club) weekend edition.

    • cosmos77 says:

      Thanks abc, your chart labeling was spot on today. After the 2008 “top” and subsequent rejection at 2000, I thought we might be seeing a big down setup forming, but now, after the close, it looks like we lost the -D that was forming, so now I have my doubts. I’m really looking forward to Tony’s WE update to not only offer market guidance but psychological support. Thanks Tony for this great blog. Thanks abc.

  17. OneAndOnlyUniverse says:

    Last thought – DXY has no shot of 120 this go round, but it can drop like a rock from here- kinda like 1998

  18. mjtplayer says:

    The VIX is holding-on by the slimiest of margins, but more importantly made it’s low early and rallied the rest of the day, closing green on a Friday when the indices rallied – very impressive.

    The VXN has been stronger than the VIX (NDX weaker than the SPX), still holding the mid 20’s and also closing slightly green today.

    The bears need to take-out the uptrend line from the Feb 11 lows to get some real downside going, this level currently lies at SPY 198

  19. tomasso60 says:

    Thanks once again Tony.
    have a nice weekend and look forward to the update.

  20. thecustomer14 says:

    Did the S&P really just finish at 1999.99? On a Friday, no less? 2000 is obviously a very important psychological inflection point, so what are the bots trying to say?

  21. Thanks Tony! On Fib levels, came within a point or so of the 61.8 retrace of the ATH at 2135 to the 1810 low. For the lower subsequent highs though, we are already over 61.8% retraces it seems.

  22. gtoptions says:

    Thanks Tony

  23. Lee X says:

    Thanks Tony
    looks like a beauty weekend in your neck of the woods
    Enjoy !

  24. fotis2 says:

    Thanks Tony and have a great weekend everyone.

  25. steplaland says:

    Indeed. Would add that in bear markets, multiple bottoms get called as “That’s the bottom”. This rally for sure is making 1810 to be the 1st “that’s the bottom” but we know there will be plenty more.

  26. llerias7 says:

    Indeed, Mr. TC. At the point of the participants begining to doubt about The Bear, I would add.

  27. Page says:

    Thanks Tony. Have nice weekend.

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