Friday update

SHORT TERM: third gap up opening in a row, DOW +218

Overnight the Asian markets gained 0.6%. Europe opened higher and soared 2.8%. US index futures were much higher overnight, and at 8:30 Export (-0.4% v -0.8%)/Import (-0.1% v -0.2%) prices were reported lower. The market gapped up at the open to SPX 2006 and continued to rally. At 12:30 the SPX hit the 2019 pivot, pulled back to 2013 by 1:30, then moved higher. Heading into the close the SPX hit 2022 and closed there.

For the day the SPX/DOW gained 1.45%, and the NDX/NAZ gained 1.80%. Bonds lost 11 ticks, Crude rose 70 cents, Gold dropped $20, and the USD was higher. Medium term support rises to the 2019 and 1973 pivots, with resistance at the 2043 and 2070 pivots. Today the WLEI was reported higher: 46.9% v 46.5%, and GDPn was reported unchanged at +2.2%.

After the market failed twice this week to take out last Friday’s SPX 2009 uptrend high, the selloff to 1969 yesterday suggested the uptrend may have topped. Yesterday’s afternoon buying, however, carried over into today’s open, and the market did make a new uptrend high within the first few minutes of trading. By 12:30 the SPX had reached the 2019 pivot, pulled back six points, and then hot 2022 where it closed. Since this week’s pullbacks did not reach the SPX 1963 level, and drop below, we have yet to post a tentative Major wave B label. Today’s rally pushed the SPX into the upper range of the expected highs for this uptrend that were posted for the past few weeks: the 2019 pivot and SPX 2028. Will review the charts and publish our findings in the weekend update. Best to your weekend!

MEDIUM TERM: uptrend

LONG TERM: bear market


About tony caldaro

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95 Responses to Friday update

  1. Well a look at the COT chart for gold couldn t get any more bearish.Open interest through the roof…everything else at extreme bullishness.Looks like it needs a few weeks to cool everyone off.What does that means for stocks?I d have to say its bullish–which would be amazing.The other scenario is stocks AND gold drop.But gold looks like it may be done for a while.Good luck all.

  2. torehund says:

    The reflexivity of sharing knowledge in todays internet environment may actually reinforce the propensity for the opposite reaction to occur.
    20-30 years ago charting was done in privacy, and schooled traders and their thoughts were not aired on the internet on a daily basis. In a chaos determined environment like stock-trading, we (the boots) are creating reality much more uni-directionally than ever before. So could the huge market swings for the last 16 years be attributed to the internet era ?
    Internet should make us all think in a more diverse/individualistic way, as we have so much more access to differing opinions, but is the opposite happening at the subconscious level ?

    • CampFreddie says:

      Tore, good post. Well done on Dryships btw, are you considering this is the turning point for dry bulk ?

      • torehund says:

        CampF: LOL, there is a massive feast on reverse splitting, printing of millions of shares to whom we don’t know. Its SEC involved in ripping off shareholders, and no chart nor EW can encompass what is unfolding in front of us…
        Dry bulk Index might have turned, but with the corruption going on its hard to think the rip off will cease. Dry ships had a market cap of 100 mill, then it jumped to 1,5 billion whilst the shares themselves are further plummeting, stay away.

        • torehund says:

          ..sometime in the future the SEC will be left out to Dry.
          Winston Churchill once uttered “If you are going through hell, keep going ” :):):)

  3. kvilia says:

    Please bring sense.

  4. For all of you who are short or will be … even if we get a minor pullback 50-70pts.. don’t let that emboldened you… Because like i said Weeks Ago … NEW HIGHS COMING IN 2016

      • Sal Mazzurco (@Sal22Mazzo) says:
        February 12, 2016 at 10:15 am
        Downtrend for A could have ended at 1810 (I personally believe it did) and we are now in a multi month phase corrective rally to 2000 for B wave . Is anyone else seeing 1810 as the low now?
        Sal Mazzurco (@Sal22Mazzo) says:
        February 12, 2016 at 10:22 am
        3 wave rally… first wave back to 1910 down to 1880 up to 2000 .. Ideally

        • I believed we were in a bear market at that time because of the research here done by TC and reading other research and technicals .. But the game for me changed at the end of February and i strongly believe we will make new highs this year and top it early 2017.. then the bear market begins. GL To You All

  5. last one…

    • fishonhook says:

      Did you see what he said after the close?


      Today’s close in the $SPX sends me back to the drawing boards.
      6 retweets 43 likes

      • Yes, this is what I’m trying to show. That at the top in December he was ridiculing the bears, then he switched bearish and now he’s confused.

      • That being said, he’s a great trader for himself, but his public calls on his blog and twitter not to be trusted as he’s wrong more than 50% of the time. He’s got great trading skills otherwise he would not have been so successful.

        • fotis2 says:

          His succes lies in his stict adherence to trading discipline and money management however last weeks article in he did specify an expectation of a retest at 2019 forming a more coplex second shoulder..

          • Yes I know and agree. My point is if you’re not a great trader like him don’t try to trade based on his blogs and tweets re his charts. Because he will be out of a trade within minutes. His motto is ” strong opinions weekly held. My issue with him is that he’s arrogant and cocky and very sure about his trade set ups even though he is wrong more than 50% of the time. He should disclose this. He also calls anyone who risks more than 1% of capital on a trade is a fool.

  6. from Stockcats.

  7. Well Peter Brandt now scratching his head again.

    • In December at the highs he was ridiculing everyone who thought they saw a massive H&S. Then in Jan sell off he said he was wrong and that price was king so H&S was valid.

    • What you have to remember is that Mario’s ‘bazooka’ last week was born out of desperation and not done to celebrate a healthy EU, but quite the opposite.
      Therefore, don’t expect much more DAX/SPX upside…

      • Yes, but they are addressing the junk bonds market that was the riskier part of the market. So, it is possible we have bottomed for now. Other countries will follow the same pat and take us out of mess for a while.

  8. EL MATADOR says:

    Will Fed surprise us?

    A team of strategists at BAML said the Fed should surprise the markets

    • I can’t see them not raising. This is their best chance to raise again as the market is almost back to where they raised in December. If they want to build some room to lower in the future now is the time to raise.

    • ewmarkets says:

      However, traders gave a 96% probability of no hike and a 4% probability of a rate cut.

      • I’m aware of that.

      • johnnymagicmoney says:

        The fed has BECOME the market unfortunately so probably no raise. Furthermore a weakening of the Euro has also put pressure on the dollar as well which makes me think they don’t want to make it stronger with a raise. At the same time however there hVe been some inflationary numbers, oil which has been “transitory” forever in the minds of many fed officials in their minds is now probably becoming more align with their thinking with price above forty again and knowing the rig count is much lower with the combination of cap ex being reduced drastically by Exxon and chevron and the likes, plus they have said multiple times in recent meetings that they don’t want to have to raise quickly later. Moreover with the bank of Japan probably doing more stimulus in reaction to a weakening Euro (and the fact they are insane) makes me think they don’t want more of a policy divergence not to mention the pressure it would put on China to devalue more if they raised. Put all that together and it’s a coin flip. That being said they are big big wimps and probably want to telegraph a June hike instead because in the end they have BECOME the markets unfortunately. I say they wait although the weakness inTreasuries lately make me think just maybe the bond market knows something. A conundrum truly

    • captbara says:

      USD might crater from here, check out the daily HnS like pattern. As crazy as it may seem, maybe they do a rate cut?

  9. Was really liking 1999 for a perfect top, 2009 even fit…, but the 78% fib rears its head. So going back to the charts I worked out a 3-3-5 pattern perhaps from the 1810 lows to 2029, 2042, 2050 as 3 fib pivots above…

    then todays throwover causes one to review options

    On paper, looks like an ABCDE of sorts yes… but its a 3-3-5 if it plays out

    Still a Bear rally in my opinion, have not gone Full Bull here… by any means

    March 23rd and onwards things could get much rougher

    • valunvstr says:

      Not everything moves in fibs. I follow them and use fan lines, retraces etc but a trend isn’t invalid or broken when fib levels don’t work the way an investor wants. I think some on this board put way too much weight on it. Jmo.

  10. mjtplayer says:

    Thanks Tony!

    As someone who’s short and looking for major C down, today sucked. Everything is still within bear market rally parameters, but it’s lasted longer and moved higher than I expected😦

    • llerias7 says:

      Me the same…but look at this:

    • Page says:

      MJT: Next week Bears will take over the market. Not much upside left.

    • Love reading you guys. The one thing that would have me reconsidering my bear views is if we challenge or even fill that gap down for the year to SPX 2035. That looked like/looks like such a bear marker, that leaving it unfilled and above for the next bull to target later looked like a good idea.

      If we get there, I’m gonna have to reconsider. But there is that Bradley thing, we are at a 5+ week extreme, there is a ton of China data (i.e., ramifications) to come out this weekend, earning expectations are dropping through the floor, and so on. Plus Armstrong (who I don’t normally follow particularly) has something about the Euro for this weekend.

      The last bunch of seasonal expirations mostly closed down or even over three weeks from where they started, and we started this one at 1948. If that works, my best guess is 1950is for next Friday.

  11. blackjak100 says:

    Still a counter trend rally until it clears 2030ish next week?

    • mjtplayer says:

      BJ – I have that rounded-top coming in closer to 2,045. But yeah, upside should be extremely limited here. Perhaps the Fed raises rates on Wed and rings the bell?

    • valunvstr says:

      Clearing 2030 doesn’t change the story. 2046 is a gal that can very easily be filled and then the market can reverse. I would just be careful about putting the line in the sand. Jmo

    • sweinv says:

      Yes, if we clear 2030 it would not be a bear market. But already now the bear market looks really strange. We have to wait and see but the bull seems to be still alive.

      • aahmichael says:

        “We have to wait and see but the bull seems to be still alive.”

        That’s what everyone was saying during last October’s rally too.

      • valunvstr says:

        That’s just not accurate. The market can easily fill the 2046 gap and still close the month under the 10 and 12 month ma. 2030 is way to low to call mercy.

  12. captbara says:

    Last major NYMO divergence lasted about 1 month in time (mid Jan to Feb low). Was a good signal!

  13. tomasso60 says:

    thanks T
    have a good weekend and look forward to the weekend update along with my favourite coffee and pup at my side.

  14. stephenk1980 says:

    Initially no one believed 1810 could be the bottom and yet now there’s talk of PV and lots of people wondering how the hell it got this high.

    Yes, technicals is a lot about the premise that what happened in the past gives you an eye to the future, but is it realistic to expect this besr market to unfold like the last one!? It bounced of x moving average last time so it must do it again. Seriously!? There are several other besr markets to reference and as our host has said, one retraced nearly 100%.

    There’s plenty of room for this to go significantly higher still and yet still be a valid bear, so this price action is not really all that surprising or unusual imo

  15. Page says:

    Thanks Tony. Have nice weekend.

  16. M1 says:

    Thanks Tony !!

  17. 123 abc says:

    Tony, under OEW rules, can the Major-b thus far be considered as five Intermediate waves?

    i.e. Intermediate-a (1946), Intermediate-b (1891), Intermediate-c (2009), Intermediate-d (1969), Intermediate-e (thus far)


    • vivelaamo says:

      I don’t know about OEW but conventional EW has an explanation and pattern for every possible move. Which is why it’s a sure fire way to bankruptcy if you try to follow it.

      if you’re that desperate to short then just wait until there is a break of the uptrend.

      • 123 abc says:

        Not desperate to short or trade, its more about an education and learning the art. In fact, the count presented assumes that Intermediate-e has only just begun its second Minute wave upwards which is usually the strongest.

      • aahmichael says:

        If I tried to fly a plane, it would surely crash, because I have no idea how to fly a plane. However, that doesn’t mean that planes can’t be flown successfully by others. Likewise, the fact that you don’t understand how to successfully utilize EW in your trading doesn’t mean that it can’t be utilized successfully by others.

        • vivelaamo says:

          EW can be utilisied because every single move can be explained after the event! It’s the perfect hindsight trading tool.

          • aahmichael says:

            Ok, so you’ve clearly stated that you don’t know how to utilize EW in your trading. However, to say that it’s impossible for anyone to utilize it in their trading is absurd.

      • 123 abc says:

        Thank you Tony for the guidance.

        Elemental mistake on my part. Of course, Major-b can only consist of three Intermediate waves since we’re expecting Primary-a to form a 5-3-5 structure.

        Intermediate-a consisted of seven waves as a double-zigzag structure:

        Perhaps we may have another double-zigzag in store for Intermediate-c wave?

        Intermediate-c thus far consists of five waves and is two waves away from forming a double-zigzag:

        If correct, then the entire Major-b structure would consist of 15 corrective waves.

        Look forward to the OEWcc (coffee-club) thoughts this weekend.

  18. steplaland says:

    Our findings?

    Do you have a team working for you?

  19. ABchart says:

    Thanks Tony!

    Tony’s blog this weekend…

    • C_H_M says:

      LOL I think that was thursday to a tee

    • AB .. if you do short this is a good area .. but def how a tight stop loss because i still believe new highs are coming …ABchart says:
      February 26, 2016 at 9:02 am
      WTI: chart from February, 13

      Sal (@Borgetto23) says:
      February 26, 2016 at 9:16 am
      AB .. i believe 2016 will be a bull market .. I See Oil stair stepping higher to $45 by May
      rc1269 says:
      February 26, 2016 at 9:20 am
      $45 is still very much a bear market price for oil, just fyi. if you said we were going to $90 thta would be one thing. even a 50% rally in crude from current levels still leaves that industry in a lot of pain
      Sal Mazzurco (@Sal22Mazzo) says:
      February 26, 2016 at 9:22 am
      I meant to write /ES Bull market
      rc1269 says:
      February 26, 2016 at 9:30 am
      i knew what you meant. i was referring to ES/SPX as well. oil jumping to $45 is still indicative of an equity bear market is my point.
      ABchart says:
      February 26, 2016 at 9:16 am
      ES: 1950 done. We can bounce from here, or from 1943/45 target minmum 1990 maximum 2014 next Wednesday maximum Thursday. Then huge and fast drop (not a joke)
      Sal (@Borgetto23) says:
      February 26, 2016 at 9:17 am
      2016 will be a Bull Market : Target 2160
      ABchart says:
      February 26, 2016 at 9:22 am
      I respect your view. But if you believe that, you must have an invalidation level to avoid suffering a big drop. Maybe stay cash next week to see where the market will move.
      Sal Mazzurco (@Sal22Mazzo) says:
      February 26, 2016 at 9:26 am
      Thanks AB .. MY Plan is to add to my current position a few more contracts around 1900.. Will know more the 1st week of March, where i actually buy could be 1880 or something above at 1900 … My invalidation would be a close below 1860
      ABchart says:
      February 26, 2016 at 9:38 am
      If you want my opinion, although we are here to share and not to give advices, do not do that. This is extremely risky. A crash is imminent…
      Sal Mazzurco (@Sal22Mazzo) says:
      February 26, 2016 at 9:52 am
      Thanks AB .. I’m keeping about 25-30pts as my downside risk .. maybe i’ll buy a Vix contract just in case

  20. Lee X says:

    Thanks Tony

  21. valunvstr says:

    Everything is at resistance. Might be wrong. We are all human but risk return at this point favors the bears.

  22. llerias7 says:


  23. fishonhook says:

    The PV-ers much derided on this blog are gaining currency

  24. valunvstr says:

    Let’s see if I’m ALWAYS wrong. I took my 75% long off at the close and went 35% new short. I can only use mutual funds so I can’t catch intraday lows or highs. So, while I think the 2046 gap has a real chance of getting filled, I consider a closing price of 2022 a gift given how close to the high’s we are. If I’m wrong, it’s by 80 points. If I’m right, it’s by 400-600 points. I can live with either outcome.

  25. Tony: Looking forward to your weekend write up. Glad I went flat. Just need to be neutral and wait for some evidence that a top might be in. The whipsaws were a warning. Chop, chop, chop goes the money; just like felling a tree.

  26. kvilia says:

    Thank you Tony.
    A bit devastated indeed, as I remember how 3-4 weeks ago folks including me doubted SPX making 1950. 72 points later and a few bucks lighter…
    There is no reason for not having stops, that’s for sure.
    Have a good weekend Tony et all.

  27. EL MATADOR says:

    Thx Tony; remember it’s the year of Monkeynomics

  28. Could it be that we are not in a Bear Market? As this current Uptrend seems to take longer time than expected which is more typical for Bull Market. Alternatively could a Bear Market turn to be a Bull Market?

    • ABchart says:

      What was expected? 4 weeks. Today we are 4 weeks from February, 11 low.

    • johnnymagicmoney says:

      As I stated earlier in 08 there was a 15% rally that lasted three months from March to May. Also from the fall of 15 to 2116 it lasted 25 trading days and moved 13%

      13% and 25 days would be 2045 this Friday.

      Granted I’d like this to end next F-ing week but the time or price of this isn’t surprising in retrospect. Now that I think about it those trend lines from 2035/2116 I should have given more credence to. My bad. In 08 even though the top was late 07 the trend line from the top was challenged in August of 08 I believe almost 10 months later. We are friggin 10 months from the all time high now. Logic would say this ends in the next week or two at the most but new things happen all the time.

      Perplexed right now

    • valunvstr says:

      Could it be them at your skepticism is further evidence that we are in a bear market? 🙂

  29. phil1247 says:

    . By 12:30 the SPX had reached the 2019 pivot, pulled back six points, and then hot 2022


    you said it…………..this market is ” hot”

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