Friday update

SHORT TERM: market continues to rise, DOW +121

Overnight the Asian markets gained 0.2%. Europe opened higher and gained 0.3%. US index futures were higher overnight. The market opened five points above yesterday’s SPX 2041 close, and continued to rise until 11:30 when it hit 2052. At 10am Consumer sentiment was reported lower: 90 v 91.7. The market then pulled back to SPX 2043 by 1:30. Another rally carried the SPX to 2051 just past 3pm. Then a dip into the close ended the week at SPX 2050.

For the day the SPX/DOW gained 0.55%, and the NDX/NAZ gained 0.35%. Bonds gained 9 ticks, Crude slipped 40 cents, Gold dipped $3, and the USD was higher. Medium term support rises to the 2043 and 2019 pivots, with resistance at the 2070 and 2085 pivots. Today the WLEI was reported higher: 47.7% v 46.4%, and the GDPn was reported at +1.9% v +2.2%.

The market opened at the uptrend high this morning, rallied to SPX 2052, then pulled back to 2043, before rallying again. This uptrend has now risen for five weeks in a row since the downtrend low in mid-February. T short term count remains the same as Int. C has now exceeded the length of Int. A with this week’s advance. More in the weekend update. Best to you and yours this weekend!

MEDIUM TERM: uptrend

LONG TERM: bear market


About tony caldaro

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107 Responses to Friday update

  1. The DAX continues to accumulate a lot of potential energy, patience as always, being tested to extreme ..with the SPX in a central area and already in the annual gap, with DAX not exceeding 10,000 and 1st breakout target at the annual gap … it seems is waiting for the SPX decide for bull or bear trap.
    Note for another activated indicator: wolfewave M finally turned on, came close to doing so in late January …. targets 10400 and 10800 … but the key confirmation is 10000
    Other: MM50 turned bullish on Friday … possibly another strong sell to scare.

    But what intrigues me about the parallel with 2008 is the SPX has already surpassed the 61.8% and 11000 + – 61.8 of the DAX is still too far for the selloff to the new minimums continue.

  2. kvilia says:

    Finally, this is from – another reason I’m still up:
    “I think we have to take seriously the idea that the G-20 Shanghai meeting of the world’s central bankers and finance ministers in late February was more productive than anyone thought, and that maybe the joint communiqué calling for fewer beggar-thy-neighbor currency devaluations is a temporary truce of sorts. What would this truce look like? China agrees to give it the old college try one more time with domestic credit expansion and money printing, to replace feeble foreign demand for their products with goosed-up domestic demand and fiscal deficit spending. Europe agrees to lower its negative rates as little as humanly possible, and instead, concentrate on good old-fashioned asset purchases. The US agrees to sit on its hands for a while with any more rate hikes, and Japan agrees to sit on its hands for a while with any more rate cuts. Sounds like a plan to me.

    So we’re in the early days of a perfectly investable rally, driven by a plausible Narrative of central bank cooperation on currencies. Reminds me for all the world of September 2007, right after every quant-oriented multi-strat fund in the world was gob-smacked in July and August (and if you’ve seen the returns for quant-oriented multi-strat funds this January and February you’ll get my point). We had an investable rally then, too, driven by the Bernanke Narrative that the subprime crisis was “contained” and that the real economy was just in a “mid-cycle slowdown”. All good, until Bear Stearns was taken out into the street and shot the following March. Which was itself followed by a perfectly investable rally from April to mid-summer 2008, under the pervasive Narrative that “systemic risk was off the table.” Until it wasn’t.”

    • What does multi-strat mean?

      • kckim04 says:

        George, multi strat is a term used to describe a strategy that has multiple assets classes in its portfolio. For instance, you can have stocks, high yield bonds, government bonds, sovereign bonds, options and other exotic instruments like CoCo bonds, MBS, etc.

  3. kvilia says:

    The more I look at the charts, the less confidence I have in my trades. One of this cases when you should be in cash, sigh…

    • fionamargaret says:

      Late at night when you’re tired, worries can take over your thoughts.
      I don’t know what positions you have, but I am sure they will be ok – get into cash on Monday if you feel stressed about them – but maybe then, it’ll be an easy-peasy up market which you’ll feel just fine with, and be quite glad you took the positions you did.

    • vivelaamo says:

      Have you been trading using EW by any chance?

  4. simpleiam says:

    Thanks Tony! You must be pooped after all these rambunctious posts. Maybe have a drink with that Bear up there…

  5. I just wanted to be thought-provoking, not critical. Both charts are SP500 data; one hourly, one weekly. Both are ‘close only’ prices. In some ways, I just wondered if anyone else noticed the comparison.

    A Tale of Two Fractals

    Cheers and enjoy the chart!

    • kvilia says:

      What are you trying to say TJ?

      • fishonhook says:

        Indeed. less riddles and more of your opinion would be a good start and yes yes we know it is not investment advice.

        • So the theory of fractals says fractals are “self-similar”: you will see in a part what you see in the whole and vice-versa. R.N. Elliott discovered the first fractal; the repeating 5:3:5:3:5 pattern of a bull-market at every different degree of scale.

          The fractal theory of Elliott wave says that for this reason, you will “often” see in a smaller structure what you see in the whole structure, and vice-versa.

          So, let’s agree on what we “don’t” know first. We don’t ‘know’ that the hourly movement up from the 1810 low has ended. If upward hourly movement continues and puts on a wave iv, and then a wave v, we might then get five waves up from the low.

          Isn’t that just what the bulls are looking for to make the case for a Primary V, higher? Could such a move ‘truncate’ and not make a new high? Yes, but ‘only’ if there are a clear five waves up.

          Another point is that if OEW is / has aggressively labeled the second structure as a “bull market”, and given it all sorts of lee-way with a truncation at the top, etc,, then ‘shouldn’t’ it also give this same lee-way to the current hourly wave (if it forms properly). It is noted now in the OEW weekend update a re-labeling ‘might’ be considered.

    • john b says:

      OEW has its reasons, it does not count waves on what they might look like.

    • Simply, because the second chat has accountable five waves from the bottom to where you are indicating a and 3 accountable waves where you are indicating b. So clearly is an impulse, a is 1 and b is 2. End discussing it

      Instead the upper chart has 3 accountable waves where you are indicating a. In fact it is still with some doubts about a potential impulse because of this funny retrace that is not a 1-2. Only possibility is a single streak wave 1 to be necessarily followed by a wave 2 to become a good looking impulse. Since than it is still leave the doubt of a corrective wave ?? But which kind of animal is unclear.

      Following fundamental I have to say, there is more chances to define as impulse after a clean 3 waves retrace and not before. But chances very high.


      P>S: All indicators of all world are failing at present. None excluded. So unknown animal to face.
      Exciting !

  6. simpleiam says:

    See Dr. Boom’s new charts:
    “A Letter From My Teacher?” and “Update for that forking gold chart”. Dated March 16 & 17.


    • valunvstr says:

      This chart was to reference my prior post. Should have put them together. RUT does not have a gap. COMP also has a big one at 4340.

      Who wins? RUT with the bull flag or SP500 and COMP with those big gaps?

    • ewmarkets says:

      Thanks for the chart. To me, that pattern on RUT looks like a triangle, not a bull flag. The minimum target for a triangle breakout is, I believe, breakout point+ triangle base height, which calculates to be about 1125.

      • valunvstr says:

        Yeah, you might be right. That would fit with SP500 2060-2080 and makes more sense. Plus, the length of a pole is often up for debate as to where it starts.

  7. valunvstr says:

    Something that is very bad for the bears is the bull flag on the RUT. If it doesn’t fail, and it has already broken out, then your target is 1094-943+151 151+1076=1227 No way the RUT goes to 1227 without new highs for the SP500. That is the scariest pattern of all right now.

  8. gtoptions says:

    Thanks Tony
    Seems the Jokers usually show up around tops and bottoms. 😉

  9. Interesting that on March 17th,P&F gave out a bearish trap signal on Randgold–with a price objective of 118.The last one I saw on gold was worth quite a few x’s on the ol’ P &F chart.Goldfingers crossed.

  10. Lee X says:

    Thanks Tony

    Hey El Mat get ready next week

  11. one positive if market doesnt go down next modnay is that mr xauxau will throw away his 5 years of research and his model. samba should spend more time on that blog

  12. mjtplayer says:

    I love how the VIX closed today, potential morning star doji, we need a small gap-up on Monday and a relatively large positive day in the VIX to confirm. A close above 15 and preferably 15.38 in the VIX on Monday would be great! We’ll see….$VIX

    – NYSE Bullish percent = 63.22% (highest reading since the May 2015 top)

    – 88.98% of NYSE stocks are above their 50 day MA (highest reading in over 3 years) This indicator has topped-out around 90% 7 times over the past 6+ years. It hasn’t registered above 91% since June of 2009.

    – NYSE Summation Index at 916.80 (highest reading since July 2014)

    – The VIX has been smashed to the same area it bottomed in early Nov, same with the VXN. Never thought that would happen, but here we are.

    If this is a bear market rally, it needs to turn lower soon. Fortunately, the all the CB meetings are out of the way and quarterly expiration is now behind us. No doubt the near record Q1 corporate buybacks are helping in a significant way, this is ending too as we enter the blackout period. The bears are running out of price points in which this rally needs to stop, but the bulls are running out of time.

  13. llerias7 says:

    Well…next week is bullish again b4 passover…then a correction yes, but only to Buy The Dip (!again!). Bottom line if it acts like a P5…if smells like a P5…then…next chart is a serious one published by Joe Russo on his site:

    Time (for me) to flip to the Bull Camp…moreover oil is marching toward $58 – $62 (last high of W4) wich makes a bullish case…until July-August.

  14. Thanks Tony and crew. I was banking against that gap getting filled yesterday, but that was silly of me because one of the things I look for otherwise is gap fills on weeklies. There is another one from December above at 2092, and one from February below now at 1865.

    More interesting though is that March gapped up. Only one month in the past three years has gapped and held for the whole month, and that was January 2016 which just filled this week. For March 2016, it gapped from 1932 to 1937, so that does look pretty interesting for the next two weeks since January 2016 was the only month of 36 or so to gap and hold the gap the whole month otherwise.

  15. vivelaamo says:

    Thanks Tony and all posters. This blog helped me make a killing during the so called P5 top that ended up being an extended P3 or something. Now this apparent B wave has helped me make a killing again. I love OEW!!!
    I think I’ll stay long until Tony and the gang decide it’s still a bull market again. In the next few weeks I suspect. Have a good weekend all.

  16. fotis2 says:

    Many thanks Tony

  17. torehund says:

    Thanks Tony and good weekend to you and all the contributors, bulls as well as bears.
    Looking a bit a head at the Monthly SPX it looks like the RSI will attempt to hike up to the 70 level and test it before all is said and done. Until then there may be gains, especially in the hammered down sectors like Energy and not to forget Biotech. Think the latter turned today and will start at least a healthy retrace of all the ground that has been lost.
    We welcome spring !

  18. steplaland says:

    Tony, where are we in this int c wave. Last i recall, we were looking for wave 6 of 7. Seems like the counting is no longer in your post. Thanks.

  19. 123 abc says:

    Because the SPY went ex-div today, it failed to surpass yesterday’s high. The SPX cash however made new highs today for the ongoing Major-b wave. It could therefore be speculated that the SPY may have ended Major-b wave today with a failed-fifth.


    Any further upside ought to be contained within the 2070 pivot range as squiggles suggest a final Micro wave higher if upside continues.

    Thank you Tony et al, looking forward to the OEWcc (coffee-club) thoughts this weekend.

  20. Dex T says:

    Bear in mind that April is historically the second most bullish month of the year.

    The market is very overbought and while I expect a selloff next week be careful about expecting the massive C-Wave to begin just yet.

    I think there is going to be a lot of back and forth choppiness over the next month.

    • simpleiam says:

      Dex, normally, I’d agree that the April bullishness is a factor, but after THE most bullish month of the year failed in 2015, I’m not sure that seasonality holds too much water with this market anymore. Still, the long profits were great.

  21. whats worrisome.. is everybody and their grandmother is expecting monday to be the turn….

    How does big money do a nice number on the retail traders?

    How about a 300point up move… it would destroy any and all bears left in this market…

    just saying…

  22. Bob Sagget says:

    Thanks Tony

    Major Distriubution Day today –— David Larew (@ThinkTankCharts) March 18, 2016


  23. EL MATADOR says:

    Great job Valunvstr you get the MVP award for this uptrend, called it like you saw it.

    I’ve been in a pretty bad slump trading ES for past several weeks and currently have a 40 handle drawdown on my ES short position. Definitely need to find my rhythm again cuz this pain sucks.

    Luckily for me some of my other trades have pan out well. Good potential CL put in trend reverse today with the inverted hammer. I’m looking for $38 next.
    EL MATADOR says:
    March 17, 2016 at 6:04 pm
    Hey Lee, the crude short flood almost here….something about 42ish maybe 42.25-42.84 zone … just a thought

    Tony, I got to say this uptrend sure feels like a Primary B wave in lieu of a Major B, any thoughts on this? maybe you’ll answer this it in the weekend update. Cheers and enjoy the rest of your day.

  24. mike7x says:

    Thanks Tony.

  25. mjtplayer says:

    Thanks Tony! As a bear, I’m glad to see OPEX behind us – clearly the expiration around SPX 2,050 was acting as a magnet, the market couldn’t rally meaningfully above or fall below that 2,050 mark all day.

    CB meetings done, quarterly expiration now done and companies are beginning to enter the buyback blackout period. The bears should start taking control of this insanely overbought market starting next week. Market closed next Friday for “Good Friday”, so that does concern me a bit as markets tend to drift higher into 3-day holiday weekends. The good news for the bears is that by next Thursday’s close, many more companies will have entered the buyback blackout period.

    • philip912 says:

      Be careful – There could also be a drift higher thru the end of the month due to end of quarter window dressing and SPY quarterly expiration.

    • EL MATADOR says:

      FWIW, I find this interesting that today was the highest RSI-5 daily reading of all OPEX days since inception of the Y2009 Bull Market. INDU: 95 and SPX: 85 on closing base.

  26. thanks tony. Also congrats to valunstr for calling the 200DMA range for weeks and then when we got there he called gap fill at 2043. job well done now since its basketball season march madness I guess you have the hot hand 🙂 so valunstr we all wanna know when do you think this rally finally ends?

    • valunvstr says:

      Can I be as humble as to say, “I have no idea”. I will begin with my conclusion: If the SP500 closes above the 10 and 12 month ma then I would be inclined to call mercy and at least take my shorts off (I went net short at 2022 and 2040). If the market closes below those levels I will feel more optimistic about the downtrend resuming. Many will reprimand me for such a simplistic approach but it is VERY rare in a bull market for the market to close below those levels on a multi month basis while down sloping. The market can close below the 10/12 month ma in a bear market and whipsaw investors to pieces if that is the simplistic buy sell discipline they use. I do not. So, the next eight trading days will tell whether I cover my shorts and live with a hopefully very small loss or if the downtrend resumes.

      Some negatives and positives to note:
      Negatives (for bears):
      1) The VIX in the 13-14 range is unusual for a bear market
      2) 91% of stocks above their 50 day ma is very high, also unusual for a bear market. Never happened in 200-2002 or 2007-2009 but that is only two samples and that data doesn’t go back further. In fact, the market is not at higher highs but % of stocks over 50 day ma is higher which can be interpreted as bullish
      3) downtrend lines and/or necklines on the RUT, NYSE, Trans and OIL have all been violated. I’ve never been a fan of downtrend lines because they don’t seem too reliable but nonetheless they’ve been broken
      4) Misc info that is not technical: three quarters of earnings declines have already occurred and references to late 08, early 09 have popped up. Problem is that the market was already crushed and moved higher discounting better earnings picture. The market despite terrible earnings is within 5% of it’s ATH which would suggest the market believes that earnings are going to turn and the 15% decline already factored in the backward looking terrible earnings. Bear have to believe that more earnings declines are coming that the market is still not discounting. I don’t invests based on #3 but it does concern me that earnings are already down and the market never got too crushed. Does that mean a cyclical event and up turn coming? Time will tell

      Positives(for bears):
      1) Lower lows and lower highs are still in tact (the perils of technical analysis have you often having to buy back at higher prices). This is still the biggest reason to be cautious. That said, if one is to use this as a meaningful factor than they have to have the ability to trade the rallies or else you are always buying at higher prices, never lower and that is a disaster
      2) NYAD fell today to 680. Quite weak for an uptrend, however, it is only a daily number and can be terrible for years (just look at the late 90’s)
      3) % of stocks over 200 day ma for sp500 is 58% which is still below the 65% thresh hold you would want to over take for a bull market. For the NYSE it’s still under 50%.
      4) NYMO has been falling from 105 to 59 for the last two weeks, also potentially suggesting exhaustion.

      *This is a very tough spot. I will wait to see what things look like after March 31. For most people holding cash and waiting to see which way it will break is a good call. That is hopefully after having been long from somewhere in the 1800’s. I made the decision not to wait for a breakdown which might have been a mistake but I can live with it given that I at least got long for a big part of of the up move and only very recently got short and how tighht my stop will end up being.

      • valunvstr says:

        In my first paragraph I meant to say using the 10/12 month ma in a BULL market can whipsaw investors.

      • For earnings to improve—the dollar will have to be pushed down to below 92 on DXY.It s a reinflation plan (#gazillion from around the world).With luck,gold rips also.Lots of stories of CB “secret”plans to prop it all up.My big fear on gold is…everyone switches from gold and stampedes into equities.Or,as Mr C said–a lot of hedgies got smoked in January and needed to get even.After getting back to even–a reset.They all take care of each other.But now it s the weekend…have a good one all.

      • simpleiam says:

        Great post, val. Thank you!

      • magnus1234 says:

        Excellent post! One of the best posts I have ever read on this blog and I have followed it on a daily basis since 2007. Thanks for sharing.

  27. NINJA SHADE says:

    Thanks! If Major B is going to complete soon, looks like one or two micro waves away… Looking for Monday uptrend high then weakness.

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