Friday update

SHORT TERM: quiet options expiration, DOW -29

Overnight the Asian markets lost 0.2%. Europe opened lower and lost 0.4%. US index futures were relatively flat overnight. At 8:30 the NY FED was reported higher: 9.6 v 0.6, then at 9:15 Industrial production was reported lower: -0.6% v -0.5%. The market opened unchanged from yesterday’s close at SPX 2083. At 10am Consumer sentiment was reported lower: 89.7 v 91.0. By 10:30 the SPX had pulled back to 2078. It then bounced back to the opening level by 11:30, before heading lower again. Around 2pm the SPX hit 2076, then bounced to end the week at 2081.

For the day the SPX/DOW were -0.15%, and the NDX/NAZ were -0.20%. Bonds gained 8 ticks, Crude dropped $1.15, Gold rose $8, and the USD was lower. Medium term support remains at the 2070 and 2043 pivots, with resistance at the 2085 and 2131 pivots. Today the WLEI was reported higher: 52.5% v 51.6%, and Q1 GDPN was reported higher: +0.3% v +0.1%.

The market opened flat today on options expiration Friday. Pulled back about 5 points, rallied to unchanged, and then pulled back again. A fairly quiet two day 12-point trading range for an options expiration. Still counting three waves up from the recent SPX 2032 low: 2061-2040-2088 with possibly the 4th wave underway now. Short term support remains at the 2070 and 2043 pivots, with resistance at the 2085 pivot and SPX 2104. Short term momentum hit oversold during today’s pullback and ended around neutral. Best to your weekend!

MEDIUM TERM: uptrend

LONG TERM: bear market


About tony caldaro

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102 Responses to Friday update

  1. jjjzzzwww says:

    That’s Not Bullish

    • locanbbs says:

      This bull market is unique by being the first one to have been so “scientifically” (i.e. academically) bred, watered and fertilized, quite “over-cultivated”. Such plants are known to be quite fragile and subject to attack by … (what’s the word for it?).

    • vivelaamo says:

      No point shorting anymore. Just wait for longs over and over again. Crazy.

  2. purplember says:

    Simple question: did we hit market euphoria in 2015 or are we in that phase now??

    in 2000 and 2007 market tops, the phase 3 euphoria was when retail investors and everyone & their mother thought stocks would go up, up, up. i’m not sure if we hit that phase in 2015.


    • Hi Fiona, I am not familiar with this oscillator. Practically if it turn down again is it a good or a bad signal for the price ?
      Thanks for sharing

      • locanbbs says:

        Hi, Francesca, again. I see a so-called “Fishhook” going down as an almost necessary PART of a buy-signal. We will speak about this later. Going up I see little or no significance.

      • fionamargaret says:

        .Francesca, first of all go into the “more”section, and then the last paragraph – strong potential for a large decline (which lines up with the COT data).
        The positive spin on this is he is quite often wrong – maybe because of the interference in markets generally.
        Interesting you and locanbbs are going to work together – we are pairing off – Spring??xx

  3. Thanks Tony. Since 2007, three weekly SPX gaps didn’t close within 19 weeks after opening. 2092 will become the fourth if it doesn’t close next week. Two of those three are still open now at 1258 and 1633 from 2012 and 2013 respectively, and the third of those three was open for 263 weeks.

    All three of those three were retested within no more than 40 points within 22 weeks. We just came within four points of closing 2092, so maybe that was enough, maybe we close it next week.

    But there’s a punch line. Its that 1865 below has not been open for going-on nine weeks, and was never retested. My call is 1900ish minimum by the end of June, though I’m thinking its gonna be a lot worse than that, like on the way to the 1600s in a C wave.

    • fionamargaret says:

      1600….the other side of the coin….see my post of last weekend.
      Always good stuff.

  4. fishonhook says:

    “Still counting three waves up from the recent SPX 2032 low: 2061-2040-2088 with possibly the 4th wave underway now”
    I know I have missed 101 EW class several times but aren’t corrective waves supposed to be 3 waves?

  5. rd3777 says:

    The NDX100 has a nice symmetrical looking top formation….5 into the top and 5 and 3 on the other side coming down.

  6. Looked at the new COTS tonight for gold and silver.80% bullishness.If that doesn t cause a selloff like it had in 2011-2015,it will never sell off because of COT charts.But sentiment has been through the roof for 2 weeks and not much damage.They really make it tough to stay invested with all this info that may or may not be applicable in a bullish market.Tough call.

  7. nsteve24 says:

    Kyle Bass just interviewed on Wall Street Week

    • fishonhook says:

      and what did he say?

      • mrtraderguy says:

        He said it’s a good thing to let bad banks fail. I’m not sure he is right. Bank failures can cause panic that can ripple through the system. However, CEOs (of banks and companies) should go to jail or lose everything if they acted negligently and if enough go to jail that would prevent most future occurrences. But that is likely wishful thinking. The rich take care of their own.

  8. rd3777 says:

    I like my count alot….a continuous bull advance. This is a monthly chart of the Dow Diamonds. Wave (A) top was 17960…the top of wave [Z] is 17950….so far. But that evening star with confirmation today is a solid sell signal.

  9. Keith Win says:

    Thanks Tony, for your generous sharing. I have been following your blog for some months but have to admit I know too little of EW to make meaningful contributions. I would like to ask if anyone especially those from Europe could tell us more about the recent Austrian bank bail in?
    It seems to be given a low profile but I am watching development closely as I believe some other shaky European banks will join the game at some stage…..a potential major catalyst although this remains a ‘minor news’ until the market reacts.

    • rd3777 says:

      Europe just initiated the new BIS bail in of shareholder equity,a Austrian bank failed. That was a first for Europe,not the last I’m sure. Preety sure the U.S. has this in place also. Come to think about it. Yellen and her partners in crime brought the POTUS and V.P. up to speed on the legal trappings of such a criminal plan.

  10. Greg Seymour says:

    And now Keystone calling for at least an intermediary top:

    I would guess we pop a bit first into next week?

  11. Greg Seymour says:

    One of the best TA chartists I know is looking for a 300 point decline (i.e. taking out Feb lows over the next few months), the decline commencing very soon from SPX 2090 to 2092 (almost there on SPX), and has already made target for the decline on RUT:

    Springheel Jack’s TA and Tony’s blog line up more often than not. Maybe as much of 80% of the time. The best TA working well with the best in Elliot wave…

  12. Here is my 2 cents. Jan 1 st 2016. World started to get scared we were going into recession. So we drop to 1810, draghi and other central bankers step in and we are we’re we are now. 1st quarter gap sucks, but always sucks talk of only 2 interest rate hikes this year plus the optimistic outlook for future earnings oil at 41ish has provided a very bullish catalyst. The problem in my opinion is Japan,Europe and China are going to take down the US economy. QE in Europe and Japan are not working anymore because the US economy is stagnet. In the past QE could piggy. Back off the us economy, but not in today’s world. They will collapse and take us with them. we haven’t made new highs in almost a year, can’t see it happening in this environment. But this 7 year bull won’t die easy. Need to get everyone on the bullish page, make bears capitulate,then head south for good. .i could see this going to 2116 before heading down. Over 2016 we could very well go on to make new highs and this would be a blow off top, still can’t imagine that happening. So I expect more chop up until 2000-2116 before heading lower. Cause maximum pain then collapse.

    Have a good weekend all

    • NEWBIE says:

      US Dollar is going to Sh*T, gold back Chinese money coming on Tuesday.

      • if us$$ going to sh*t then it will take more of them to buy revenue producing assets like US stocks no?

      • rd3777 says:

        The BRICS have already signed on with the IMF and their SDR monetary system. I doubt the Renimbi would be gold backed @ this time because that would be internally highly deflationary….not good when you have the largest debt bubble in the world.

        The renimbi was the strongest currency in the world since 1966 on as Franz Pick listed #1 in his world currency book for years.

        The SDR is probably 1 or 2 years away as that is the world planfor reflation,atleast they hope so. All currency will be devalued in some degree and bad debt that hasn’t been liquidated will be transfered to the IMF and debited against their allotted credit. Another attemt to make gold obsolete….but will fail after this new system goes the way of all fiat attempts. Where gold and silver have value is internally as stress builds in the U.S.,in case there is collapse or anarchy.

        • NEWBIE says:

          The Federal Reserve met secretly with Obama at the Pentagon and members of the Joint Chiefs. Vice-President Biden was in attendance as well. This speaks to the gravity of the situation, because the President and the Vice-President almost never attend the same meetings for security reasons. Also, it is highly unusual for the President to ever meet with the Federal Reserve. The Federal tells the President what to do. So, one has to ask themselves, what does the Federal Reserve need, from the President, that they cannot supply for themselves? Answer: Maybe they need the use of the President’s military assets because they know sh*t is about to hit the fan.

          • rd3777 says:

            The Fed is very concerned about the TBTF banks as their liquidity did not meet standards and was rejected this week. Not only have they lent recklessly again….malinvestment,homes,energy sector,corporate buybacks,ect,ect. They are also well aware that DB in Germany is teetering. The FED is not stupid when a extinction event is staring them in the face,even though,they created the enviroment for it to happen..

          • is this a first or have there been other meetings between fed, pres, and vp in the last 8 or 9 years?

            • NEWBIE says:

              I know the president has met with yellin a few times over his presidency but I don’t think they included the vice president and I believe they were not emergency meetings they were planned well in advance. The most recent meeting was last minute and appeared to be urgent.

          • dwr51 says:

            where did that info about this meeting come from?

  13. Page says:

    Thanks Tony. Have nice weekend.

  14. To Locanbb,
    Hi Locan, sorry just read your message. Yes, very nice to work together .
    I am expecting a very minor pull back for the C of 4th, Monday and a sudden new high, could go to 2100 ES and more. This will go fast and last to end of the season (sell in May) and will complete Major 3
    After this a more substantial pull back for the Minor 4th wave of Major 1 of P V. followed by Minor wave 5 of Major w 1 to substantial new high before any dramatic pull back, And all timing/season would be respected, pull back to June, good summer, sad mid August and buoyant September.
    And if I am wrong there are 2 other possibilities.
    1. We had all of the Major 1 of the P V and we will have a substantial retrace followed by an amazing Major wave 3 high high and away
    2. Major 3 fractioning., consequently the last pull back could be no so huge, but high high and away will start sooner than expected.
    I will look at the chart tomorrow and post the level to watch

    • Sorry, Minor 3 fractioning….

    • locanbbs says:

      (F.C.:) I am expecting a very minor pull back for the C of 4th, Monday and a sudden new high, could go to 2100 ES and more. This will go fast and last to end of the season (sell in May) and will complete Major 3
      [We already had a minor pull back today. That was still B of 4th? That means you expect a greater pull-back for C, maybe to 2050 on Monday?
      That would fit well with my cycle system, which shows bottoms on Tuesday and Friday (= Full Moon)–could come on Thursday, or even Tuesday or Wednesday already. My indicators on the 4H chart show a possible bottom around 2055 (close) then, staying within the given uptrend on that chart. Probably the intraday low would go down to around 2050, to the probable pivot of TC.]:

      (F.C.:) After this a more substantial pull back for the Minor 4th wave of Major 1 of P V. followed by Minor wave 5 of Major w 1 to substantial new high before any dramatic pull back, And all timing/season would be respected, pull back to June, good summer, sad mid August and buoyant September.
      [This could fit for May 3-6 (= New Moon), when we have a similar constellation as above(cyclical bottom on Tuesday, New Moon on Friday). May 4-5 is also a monthly cycle bottom, which makes it even more certain when combined with the other two bottoms. June 14-15 is even more certainly a bottom–almost a sure thing, though it could extend to the beginning of July. After that, let’s see.
      Between those cyclical bottoms we should of course have rallies.]
      (F.C.:) And if I am wrong there are 2 other possibilities.
      [I will save your other possibilities for that eventuality. What would show you that the first scenario is wrong?]
      [This answer is based on your original comment, without your newer additions, which I will now consider. – What do you think: Is my answer still relevant?]

    • locanbbs says:

      Looking at the 1H chart again (below), it seems quite possible that trendline “A” will be broken dynamically upwards on Monday and, after a brief pullback, it will be “off to the races”, with Spx obviouslly impulsing and “the sky is the limit”. Observe closely!

      • locanbbs says:

        Notice: The last bar was in the last hour of trading, when the “smart money” (supposedly) has to show their hand, but still discretely enough so that the upward trendline was not broken (yet)!

        • locanbbs says:

          Nevertheless the volume was very low.

          • Local, I am not trusting this Friday trading hours. As said in other post, the price was pinned for OPEX. So the all day has been false.
            Let see Monday, I do expect a pull back, 2060/2055 ES before the rally will start. We are at important resistance line and without any pullback prior to engage it, will make me think at a fake break out.

            • locanbbs says:

              You are right, still the consolidation was welcome because the indicators are generally overextended. If the (generally bad) news is overrun by good buy signals on Monday-Tuesday, this speaks for the strength of the market.

  15. nsteve24 says:

    B waves inBear Markets approximately 2 to 4 weeks, should end in the 1st week of March, to still going higher in back half of April, Wow!

    • johnnymagicmoney says:

      3 months March to May of 08 15.5% and that was the last bear dude

      We are at the same percentage change and it’s over two months now

      Only difference is we r much closer to new highs than first big bear rally of last bear so that’s a concern for bears but not price or time

  16. The only purpose of this chart is to show by actual measurement, that IF it turns out, we get a 5 = 1, then it does blow the lid off the market. 100% x 1 added to wave 4’s triangle (e) wave goes to 2160. I do NOT know if this will happen all if one fell swoop, the market may have another way of making it happen like having an Intermediate (1) fall short of the high. But, I just wanted to provide the measurement. Further, this measurement uses the ‘lower’ of the two peaks, when the higher of the two peaks might be just as appropriate.

    SPX - Four Hour - Apr-15 1704 PM (4 hour)


  17. Hi Tony. A question from Belgium. Since halfway the month of january 2016 your count changed from the building of the long term wave “5” to a scenario where the S&P (as a reference) fell into a bear market with the first ‘a’ already set, working it’s wat to the end of ‘b’ very soon, probably falling into a deeper wave down ‘c’. My question is: WHY exactly are we in a a-b-c structure down to [sc 2], and aren’t we continuing building on a wave 1 of “5” as time structure would suggest ?

    Many thanks in advance. Keep up the good work !

    • NEWBIE says:

      Tony, Anne asks a great question. I am very interested in this answer as well. Thanks.

    • 123 abc says:

      Not currently in Supercycle-2 down, rather OEW is projecting Cycle-2 down.

      OEW was previously expecting the rise from 1867 to 2116 as Major-1 of Primary-v wave. But when 1867 was taken out, the expected Major-2 of Primary-v wave fell too far and erased all of Major-1 of Primary-v wave. So now, the entire move from 1867 to 2116 is considered as a non-subdividing failed-fifth Primary-v wave, where Cycle-1 wave ended. and now Cycle-2 down is in progress.

      As for the bear market roadmap, believe OEW is expecting three Primary waves for for Cycle-2 wave, consisting of a 3-3-5 decline as follows…

      Primary-a (downtrend)
      —Major-a (5 waves)
      —Major-b (3 waves) —we are here!
      —Major-c (5 waves)

      Primary-b (uptrend)
      —Major-a (3 waves)
      —Major-b (3 waves)
      —Major-c (3 waves)

      Primary-c (downtrend)
      —Major-1 (5 waves)
      —Major-2 (3 waves)
      —Major-3 (5 waves)
      —Major-4 (3 waves)
      —Major-5 (5 waves)

      Of course, Tony shall correct any mistakes above.

  18. How in the world can the VIX actually be *down* after the action between yesterday’s high, and now?!?

  19. rd3777 says:

    Thanks Tony, Typical setup for a bubble….Doha laysan egg,,,and everyone one runs out the door on Monday….Japan looks terrible btw and our markets have a top in place..a setup for a big gap down. Have a great weekend….I hope your short!

    • vivelaamo says:

      It’s too obvious. I think this will gap up on Monday to wipe out all the shorts, even higher on Tuesday/Wednesday and stop short of all time high, (maybe even print a new high) then we go down. Bears need to hold their nerve if still short or look to take a position if they can stomach it.

      • rd3777 says:

        Well,here’s the way I count it….and I must admit this market keeps going up…but I have a EDT and a small failed C wave to end the advance. There should be a loud bang when the bubble pops Sunday night. It already popped in Japan and in Germany. There was selling all day…….

        P..s there’s lot’s of obvious things but….everybody always says….wtf happened.

      • Page says:

        wow vive… you have turned into bull? … not bad at all 😀

    • locanbbs says:

      On my charts Japan “looks” great, giving a buy signal already. Everything depends on Monday and how the markets digest the recent (and coming?) “bad news”.

  20. 123 abc says:

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

  21. thanks Tony. Last two days were pretty tame for opex week.

    I see a lot of stress here. I’ve been taking advantage of this slow float up. I have a core swing position short but I have been daytrading the predictable march higher. I actually hope we get a down move and then slow float up to new highs because I’ve been making more money daytrading than I’ve been losing in my swing trade. I wonder if alot of other people here are doing the same thing as me and the pattern is going to change now. I really hope not.

    • vivelaamo says:

      Sensible approach

      • thanks. there is alot of daily resistance ahead so that means lots of opportunity to find bullish intraday set-up, wait for pullbacks and buy. repeat for many weeks ahead. simple plan here. you can have your core short like me because I don’t feel comfortable going against Tony, but still make a ton of money in the short term trading this thing up.

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