Thursday update

SHORT TERM: gap down opening, DOW -174

Overnight the Asian markets lost 0.1%. Europe opened higher but lost 0.8%. US index futures were lower overnight, and at 8:30 weekly Jobless claims were reported lower: 267K v 276K. The market gapped down to SPX 2055 at the open and continued to decline. The SPX had closed at 2067 yesterday. Around 12:30 the SPX hit 2043 again, bounced to 2050 just past 1pm, but this time broke that support declining to 2034 by 3pm. At 3pm Consumer credit was reported higher: $17.3B v $10.5B. Then a rally into the close ended the day at SPX 2042.

For the day the SPX/DOW lost 1.10%, and the NDX/NAZ lost 1.50%. Bonds gained 18 ticks, Crude slipped 30 cents, Gold rallied $16, and the USD was higher. Medium term support drops to the 2019 and 1973 pivots, with resistance now at the 2043 and 2070 pivots. Tomorrow: Wholesale inventories at 10am.

The market gapped down at the open for the second time this week. This time, however, it broke through the support at the 2043 pivot, hit its lowest level in seven trading days, and then bounced into the close. We can now count three waves down from the SPX 2075 high: 2043-2067-2034 so far. To keep the momentum going to the downside the 2019 pivot would be the next support level that needs to be broken. After that there is a large gap for the next support at the 1973 pivot. Short term momentum ended the day rising toward neutral. Trade what’s in front of you, but invest on what you believe is ahead.

MEDIUM TERM: uptrend weakening

LONG TERM: bear market


About tony caldaro

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213 Responses to Thursday update

  1. captbara says:

    The only concern I have being a bear here is that it is TOO obvious.

    • vivelaamo says:

      It’s so obvious the retail investor will think it’s too obvious and go long. Then the big buys will bring it down.

      One last time dedicated to my best pal page. All together now…chop chop chop drop!!!!

      Goodnight all, enjoy your weekends.

    • mrtraderguy says:

      LOL – ya think?

    • The rally from February has made the retail investor confident in the market. I work in banking and customers keep wanting to jump in…. So not so obvious to the common people…

  2. vivelaamo says:

    Happy with this close but it’s a shame yesterday’s gap down didn’t get filled. CCCD!!!

  3. captbara says:

    100 pt gap down over the weekend. Hope it’s not some attack again.

  4. johnnymagicmoney says:

    RUH RO

  5. kvilia says:

    Hey, hey, is someone seeing the bull flag on the SPX hourly?

  6. sixpack says:

    Actually, it looks very constructive technically if you look at the longterm moving averages like the 400 day for instance. Many on here kept referring back to the 2008 fractal like this would be a similiar rally prior to the next big dump (Looking back usually doesn’t work by the way). So if you look back now, this time the market is back above those longterm averages and holding at the moment. In 2008 that was not the case. Market went up there and touched those averages and then went lower in 2008. So yes, this time is different. They are all different.

    It’s easy for traders or investors to draw a conclusion and then go on the technical search for things that support that conclusion. Its human nature to wanna do this, but for traders it’s bad hockey.

    Everyone have an awesome weekend!! Sixpack

  7. NEWBIE says:

    Auditor: Government Will Owe More Money Than Entire Economy Produces

  8. sixpack says:

    I figured out awhile ago that betting against the good ole USA too often is not a good idea.

  9. johnnymagicmoney says:

    2nd half of 14 “we are going to see a pickup in the first half of 15”

    1st half of 15 “we are going to see a pick up in the second half of 15”

    2nd half of 15 “we are going to see a pick up in the first half of 16”

    1st half of 16 “we are going to see a pick up in the 2nd half of 16”

    bulls are based on never ending optimism in a declining environment……………..keep buying bulls. You get smarter by the minute

  10. sixpack says:

    “I skate to where the puck is going to be, not to where it has been.” Wayne Gretzky

    • fishonhook says:

      Are you dissing EW??

      Lunker where you? get the stun gun.

      • sixpack says:

        No, not at all. It’s one of my main technical tools. I was referring to the current economic info. It’s not where we are at right now….it’s where we are going to be in the future. Same goes for earnings. Johnny picked up on the inference.

        • johnnymagicmoney says:

          Uh yeah and all of the hope has not only not materialized but it got worse so do you not unwind that which you bid up which didn’t happen? If you use the same logic a buyout falls through but you keep buying the formerly acquired company??

    • captbara says:

      EWers like to play hockey before the puck is dropped.

      • fionamargaret says:

        …and then discuss in minute detail what the score was, or if there was a score, and what that means…..

  11. simpleiam says:

    WTI up over 5% today, and spx up with it. Not surprising.

  12. sixpack says:

    ECRI’s weekly leading index ticked up again today!

  13. EL MATADOR says:

    Latest forecast: 0.1 percent — April 8, 2016

    The GDPNow model forecast for real GDP growth (seasonally adjusted annual rate) in the first quarter of 2016 is 0.1 percent on April 8, down from 0.4 percent on April 5. After this morning’s wholesale trade report from the U.S. Bureau of the Census, the forecast for the contribution of inventory investment to first-quarter real GDP growth fell from –0.4 percentage points to –0.7 percentage points.

    • kingfrogcash says:

      IMO banks will beat next week. First Interest rate last Q4. Less write downs than expected on oil exposure because a few recapialized. Dollar was on average was lower in Q1 compared to Q4 for International business.

      • EL MATADOR says:

        but less consumer/business overall borrowing, less M/A’s, less IPO’s, less govt bond issues, less corporate issues, … got it KFC , bigger profits😉

        • kingfrogcash says:

          I said the banks will beat, not earn more than last year. The estimates were already lowered. What changed was the Dollar and the increase in Oil prices.

  14. Come on bears, lets close this red. otherwise its the same old movie. Major support broken the previous day, bears all excited, only to wake up to a 17 point gap up. hits resistance at 2060 and drops 12 point bears all excited this is the big one, here it comes. only it rallies into the close and gaps up Monday. Bears shake there heads in dismay. Lets change the ending this time for once. actually its pretty easy. above 2060 bullish below 2033 bearish. so 27 point dead mans land

  15. cj32 says:

    recent from CBZ

  16. mharrison60 says:

    Anyone tracking FTSE – what do you see? Seems range bound between 6050 and 6200 and driven up by oil this week so a breakdown of range may need SP C wave to properly get going.

    • tawcap says:

      Yes… Critical resistance at 6220 tested again. Since Tuesday morning it’s up 120 vs spx being flat. Going to need a drop in oil to get things going to the downside again given 20-25% exposure to commodity related sectors. I was thinking a trip to 6000 was due and then possibly a rally.. But at this rate a move below 6060 could lead to much lower prices if it coincides with spx breaking under 2000.

    • CampFreddie says:

      Ftse has had its correction, Lows are in imho.

  17. Justyn Byrne says:

    Keep an eye on this double top and head and shoulders pattern on the 10 min Nasdaq futures chart. If it plays out then there is some downside on the way soon.

  18. EL MATADOR says:

    SPX – if this is a 3 of 3 or 3 of c if you prefer abc vs 123 then 2019 pivot on deck

    CL c=a from 35.24 low to today 39.84….

  19. rd3777 says:

    Facebook has started to come crashing down…only a matter of time folks.

  20. johnnymagicmoney says:

    I have to say sometimes we try to be so smart with our squiggles and fibs and pivots and blah blah blah but lets try to keep things folks. Look at the last two sell offs. Rounding tops and intermediate trend lines as resistance areas. That simple. Until these show to be inconsequential why wouldn’t you just assume they will continue to be consequential???? I think some people are making this way too complicated. Right now its making another rounded top and its making it right at the trend line resistance. Diagnol this and fib this and wave this and yet the most telling thing with everything to look at is the trendline and the rounding top and the symmetries associated with them. Look at the action this week……….down big, up big, down big, up big etc etc all forming a rounded top…………..I think being short here is perfect unless this propels higher and takes out the recent highs……………otherwise chop chop chop with a big fall coming in a few weeks or a month

    that’s my take

  21. captbara says:

    Waterfall below 2033. Otherwise it’s still 5 up this morning and potential ABC

  22. I don’t know what will happen (meaning I have no way to assign probabilities, since I have no sample space or probt. measure). But going by geometric patterns it seems we’ve started a decline and the first sign of support should come at 1980; I expect any real support though at 1910 or so, which is the half-way point of the rectangle supporting the range since August.

    I’d be more convinced of what I am seeing/saying if weaknesses somewhere became apparent.🙂

  23. vivelaamo says:

    The market is very likely going to fall hard in the coming months. All the signs are there and when it comes those who were still bullish are going to cry about it even though it’s staring them in the face. I’ve been short since last week and felt some pain and had to cover but have to stick to my guns on this one for the bigger picture.


    • I admire your tenacity but I believe the fed will bubble this market up to 2500 before years end. They are very concerned that baby boomers like Tony and myself will not have enough to retire if our 401 K’s loose 50% or more in a crash.

      • vivelaamo says:

        They may will do but I will be suprised if it’s from these prices. Crashes or corrections are normally short lived, we are talking a few months of pain. In the long term I hope you are right as I’m sure a lot more people will benifits from a rallying stock market than a falling one right?

      • johnnymagicmoney says:

        one of three things brings S&P to 2500. 1) FED does QE4 – don’t think that’s happening. 2) Earnings are great – don’t think that’s happening 3) Market is completely nutty crazy insane and push valuations up another 30% on declining earnings – to say that’s the most plausible of the 3 tells you something.

        • ewmarkets says:

          Don’t think market has much upside either. But downside is limited too because as Jerry said, FED won’t let the market fall too far. Market can only drop big when there is a crisis in confidence. When market responds to FED’s every word, there is no crisis in confidence. One day, when FED says no rate hikes and new QE is to start but market still drops big, that’s when SPX will go to the abyss. In the mean time, who dare selling at 1700 when Market can charge up 10% in two weeks with only 3 letters: QE4.

  24. NINJA SHADE says:

    Good afternoon! High-beta NASDAQ leading the downside, already went red just now. C=A at 2020 is right at 2019P

  25. stmro says:

    Equities have lost their correlation with oil imo. Currency flows (specifically dollar weakness and safe haven flows) are the new oil.

    • simpleiam says:

      I wouldn’t be so quick to judge based on just a couple of days. IMO.
      Have a great weekend everyone!

      • stmro says:

        I’m not basing it on a couple of days. It’s been weeks of oil flat/falling and equities rising. Meanwhile, USD/JPY has been telegraphing recent moves pretty well.

  26. manunidhi21 says:

    Namaste Tony.
    is the green b at 42 a tentative minor b ?

  27. blackjak100 says:

    NYAD +1800ish with $SPX up 9. It’s going to be tough to get more downside from here

  28. Naz slowly disintegrating.Thought it looked heavy out of the gate,but rallied.Quite a loss of momentum so far.

    • simpleiam says:

      spx up just 6 now. Very slow roll, but might pick up toward end of day.

    • johnnymagicmoney says:

      for a while the NAZ was lagging and you had the DOW and S&P overbought on the weekly RSI while the NAZ was still rising. Finally when the NAZ got overbought on the weekly and caught up with the other two it started its relative weakness.

  29. johnnymagicmoney says:

    I just bought 20,000 shares of SPXU at 28.85. Let’s see what happens

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