Thursday update

SHORT TERM: gap up opening sold, DOW -5

Overnight the Asian markets gained 0.2%. Europe opened higher, rallied, and then dropped 1.9%. US index futures were higher overnight, and before the open on the ECB actions. At 8:30 weekly Jobless claims were reported lower: 259K v 278K. The market gapped up at the open to SPX 1995, rallied to 2005 by 10am, and then started to pullback. Around 11:30 the SPX hit 1976, rallied to 1984 by noon, then hit the low for the day at 1969 just past 1pm. At 2pm the Budget deficit was reported slightly higher: $192.6B v $192.4B. The market continued to rally after that low and hit SPX 1993 by 3:30, then dipped to end the day at 1990.

For the day the SPX/DOW were mixed, and the NDX/NAZ lost -0.20%. Bonds dropped 14 ticks, Crude slid 35 cents, Gold rallied $20, and the USD was lower. Medium term support remains at the 1973 and 1956 pivots, with resistance at the 2019 and 2043 pivots. Tomorrow: Export/Import prices at 8:30.

Wild day! The market gapped up at the open on overnight buying and comments by the ECB’s Mario Draghi. By 10am the SPX nearly hit Monday’s high of 2006. Then the market sold off, taking out Tuesday’s SPX 1977 low, and hit 1969 in early afternoon. After that the market rallied all the way back to positive territory in the last hour of trading. Quite a volatile day after a very quiet week. Thus far, the market has failed to reach Friday’s SPX 2009 uptrend high on two attempts: Monday and then again today. The action since that high has been quite different from anything we have observed during the entire SPX 1810-2009 uptrend. The decline from the high could be counted as a Minor 1 (1977), Minor 2 (2005), and Minor 3 underway. Still waiting for the market to break SPX 1963 to post a tentative Major B label. Short term support is at the 1973 and 1956 pivots, with resistance at SPX 2009 and the 2019 pivot. Short term momentum hit oversold at today’s low, then ended the day above neutral. Best to your trading!

MEDIUM TERM: uptrend may have topped

LONG TERM: bear market


About tony caldaro

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369 Responses to Thursday update

  1. magnus1234 says:

    What would you do if you had US $ 1bn in cash in margin and had a fat pipe to your own HFT up in your hands? Well first I would skip the political stuff and my ego. Trade and skip the BS boys and girls. Have a good one.

  2. fotis2 says:

    Back to the drawing board ..

  3. Just heard on WBBM as I was driving around that an International Oil group said they think inventories are shrinking faster than anticipated and Iran’s oil is not impacting like they thought it would.Pretty soon Yellen will say there s a shortage of crude.Have a good weekend all.

  4. phil1247 says:

    target 2035 spx…………can we hit it in 15 min??

  5. johnnymagicmoney says:

    Even at a resistance area the S&P can’t even tell off 2 handles ……………….absolutely amazing

  6. herringjd1 says:

    Bought SDS at 19.75. Thanks Tony and all.

  7. elmer510 says:

    I guess many of us want the market to decline – and are confused when it’s not acting like expected.
    But regarding Tony’s analysis – he’s been very clear about the SPX 2019 pivot as one possibility, and even higher. So there’s no reason to blame mr Caldaro for his comments here.

    From Weekend Update:

    “SPX 1999 level on Friday. Which is right around where the market ended the week. The next pivot, at 2019, is the upper range of where we expected this uptrend to top. There is also one Fibonacci ratio we mentioned last week. Int. C equals Int. A at SPX 2028. If these two levels do not hold the uptrend, we are simply left with the overhead pivots posted on the hourly/daily charts.”

  8. jobjas says:

    From yesterdays significant bottom at 1968 ( drop of 40 points & break of long term TL from 1800) SPX has completed 5 waves up (wave 1 longest here) ,back tested TL again in SPX .
    Posting ES charts as waves clearer
    Should be the end of the long awaited B.
    Unlike others I believe overnight market movements in ES (displayed in cash market as gaps ) do put in significant waves that cannot be ignored in wave projections..

  9. mjtplayer says:

    Well, there it is, we just tagged the SPX 200 day MA at 2,020

  10. johnnymagicmoney says:

    For those of you who think the 2019 pivot is going to hold dream on

    Im reducing some of my shorts

  11. steplaland says:

    Friday trading is boring. Snooze

  12. simpleiam says:

    Think we might need one of those famous gap-up openings on Monday to get over entire 2019 piv level. In this market, anything is possible. GL All!

  13. purplember says:

    interesting the RUT, Transports or QQQ have not made new high.

  14. john b says:

    think this is a little w4, if so then 5 could be 30 area +-

  15. vivelaamo says:

    I see sentiment is started to change bullish on this blog. Time to start setting shorts. Love this blog for triggers.

  16. Dex T says:

    Great points from Stratfor. The ECB continues on it’s path of desperation looking for a different outcome by doing the same thing over and over.

    “The question across the Eurasian continent, then, is this: What exactly is going on? Ever since the financial crisis, global markets have been greatly determined by central bank actions and interest rate drops. And quantitative easing programs have been obsessively anticipated, discussed and number-crunched. For example, it is hard to imagine a 33 percent rise in the rate of bond purchases, one of Draghi’s new measures, achieving such meager results had it been announced a year ago. Central banks have now been disregarded twice in two months, leading many to ask whether they have reached the end of their effectiveness.”

    • OneAndOnlyUniverse says:

      Dex , What are your positions ?

      • Dex T says:

        Generally day-short term trade futures. Waiting a few more weeks to short the indices.

        I don’t see much upside in anything but seasonality is still in favor of the bulls through April so I wouldn’t short.

        • OneAndOnlyUniverse says:

          How can you be so negative the last several months and not be huge short ? Internet , i get it . Keep the brilliant articles that don’t mean jack coming.

          P.s. you missed a great ride on the way up. oh, i’m flatish now 6 longs/ 8 shorts but love kck6 ( pikers like you $jo )
          DAY 46

          OneAndOnlyUniverse says:
          January 21, 2016 at 9:13 pm
          * Be Careful being short *
          I mentioned this earlier :
          The oil mkt is about to go on a ripper ( put in significant low over next 5 days, the game is changing quick) and i would think that to be very positive for equities.The amount of shorts on $cl are enormous. On the upper end $spx could see 1990 -2077 and $cl 39-42 next 45-50 days.
          Good luck

          • Dex T says:

            Because bear markets take time to unfold and have large rallies. I have no interest in picking the top but waiting for the confirmation/ volatility and move down rather then holding on and experiencing months of frustration. many people here seem to think it’s going to be over in a day or few weeks. How far have the markets gone in the past year?

            They might mean jack to you but there are plenty of decision makers who read articles like these. I know a number of hedge fund managers who read stratfor and take the information very seriously. So do some of the big oil execs. You can go and tell them that you know more then they do about the oil industry.

            If you don’t like the info then don’t read it. You are just looking for validation of your bullish oil positions. Oil is going to get replaced in the coming decades so I don’t see much of a bullish future for it.

            You bought ERX over 21 and it proceeded to drop to over 12. it bounced back and you made some money (if you held) but when you were sitting on large losses you shouldn’t be so arrogant. After a drop from over $100 what are you getting so excited about?

    • gasman88 says:

      using fundamental analysis and logic in this market is futile, we can still run on this BS for few more weeks killing bears right and left

      • Dex T says:

        It tells us we are still in a bear market and not to get overly lulled. Things are completely different that they were only a year ago and this can be seen across the spectrum.

        This market complacency isn’t going to go on forever and the risk reward ratio is once again very heavily favoring the bears.

        Bullish seasonality ends in April so if the markets are around this level in a few more weeks I am definitely shorting. I have a few other triggers that I am looking at.

        Right now I expect the next month to be full of anger, hostility, emotion and frustration but little price resolution.

        • OneAndOnlyUniverse says:

          It was all right there for you – post when you out on a position – your articles are sophmoric

          OneAndOnlyUniverse says:
          January 21, 2016 at 2:40 pm
          Oil is getting to go on a rip in the next week . $spx move to 1993 will have
          many questioning counts. I covered my shorts a week early & have gotten
          hurt buying energy but still buying.
          The r2k chart below is a minor example on why one should not freak (but you can trade l/s for 8% moves )

          Dex T says:
          January 21, 2016 at 3:15 pm
          What is your target on crude oil? I recall you mentioning that you bought ERX and will hold for an extended period of time.
          OneAndOnlyUniverse says:
          January 21, 2016 at 3:57 pm
          2 scenarios i see – check out the arrows
          P.S.- the little more pain option would really hurt 8/19
          Either way see 34.11 which would help mkt and could be start
          of a much bigger move.. L erx, bought eog, oxy,pxd,xom,cop
          down on 2 up and will keep buying but no more erx.
          i’m position trader run L/S book. good luck

          • Dex T says:

            I’ll post what I please and if you don’t like it then don’t read it. I don’t need your validation. Just because you post something doesn’t mean I’m going to jump on board. it’s another opinion out of dozens. You have been wrong plenty of times before.

            Within the next few years I expect to stop following oil.

  17. sweinv says:

    If SPX establishes over 2030 we are definitily not in a bearmarket.

    Just wait and see. The american index have been on the edge last week with major technical bearsignals but maybe it was just att throw over and now we will reverse strongly to the bull side.

    We will find out soon.

  18. johnnymagicmoney says:

    March 17,2008 1256.98
    May 19, 2008 1,440.24

    14.58% move

    In all fairness to Tony he declared the Bull was over in early January of 08. The market I believe then went higher than when he declared almost 5 months later but yes the move from March to May was pretty big. I think it would be hard for the markets to trade another 2 months up here without eclipsing 2135 but anything is possible I guess. It seems that the upper trend line from 1576 was never violated in a meaningful way and the trend line was hit again in August of 08 until the bottom really dropped out. Assuming one uses the last bear as a precursor to today I just can’t see the S&P moving past the 2040 range without really questioning the bull. I just don’t see how the market could say go up to 2116 and make the case that the bull is over until it breaches 2135. Makes no sense to me.

    • blackjak100 says:

      Close above 100wk MA @ 2013 and 200dma @ 2020 will dramatically increase bullish odds especially if those levels hold next week too.

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