Friday update

SHORT TERM: decline continues, DOW -57

Overnight the Asian markets lost 0.5%. Europe opened lower and lost 2.3%. US index futures were lower overnight as well. At 8:30 Personal income +0.4% v +0.2%/spending +0.1% v +0.1% were reported higher and PCE prices were reported higher: +0.1% v+0.1%. The market opened five points below yesterday’s SPX 2076 close and continued to decline. At 10am Consumer sentiment was reported lower: 89.0 v 89.7, and the Chicago PMI was reported lower: 50.4 v 53.6. The market hit SPX 2060 at 10am, rallied to 2069 by 10:30, then headed even lower. After hitting SPX 2053 at 11:30, the market rallied to 2063, then declined to 2052 just past 2pm. After that the market rallied to SPX 2069 before ending the day/week/month at 2065.

For the day the SPX/DOW lost 0.40%, and the NDX/NAZ lost 0.55%. Bonds gained 2 ticks, Crude slipped 5 cents, Gold rallied $24, and the USD was lower. Medium term support drops to the 2043 and 2019 pivots, with resistance at the 2070 and 2085 pivots. Today the WLEI was reported higher: 54.5% v 53.5%, and the initial Q2 GDP estimate was reported at +1.8%.

The market opened lower for the third day in a row. But unlike the past two days when it rallied shortly after the open, it continued to declined for most of the day until the last two hours. It is possible the current central bank QE holding pattern has taken the tail wind out of this uptrend. Also, the Nasdaq has now declined for seven days in a row, and is very close to confirmed a downtrend. Last weekend we mentioned three important levels for this week: 2111, 2074 and 2034. The market only managed to hit SPX 2100 on Wednesday before taking out 2074 on Thursday. More on this and others in the weekend update. Best to your weekend!

MEDIUM TERM: uptrend weakening

LONG TERM: bear market


About tony caldaro

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88 Responses to Friday update

  1. fotis2 says:

    CN has demonstrated what seperates a good trader from the rest.While the majority, myself included, have been trying to call a top from the 1980s CN patiently waited for his Big Down setup to occur, waited some more for it to trigger,entered his trade,placed his stop and is waiting patiently for said trade to play out.Now if the trade works out or not is not important what is important is CNs system has a 80% succes rate(This is based on previous comments of trade setups and triggers that CN has posted- before the fact-over many years) and manages to squeeze out the most of what the Market gives for the least of risk..There is a minority who have been riding the long side since the lows Gto, BG and Holy come to mind and Kudos to them..

    • Caoi Mick says:

      Who is CN ?
      Tia Kevin

      • 7dayyss says:

        He use to be a regular here. Then the nature of posters, and some in particular ran him off. He since has sporadically posted. To many trying to see who has the biggest instead of just posting what they see like some of the old timers here.

  2. kvilia says:

    I just wonder about one thing – if the damn market can gap up in the morning instead of gapping up so I can short the hell out of it.
    Have a good weekend.

  3. Here is how the Nasdaq Composite resolves into five waves up in the much simpler manner I had mentioned earlier. Just like all the other indexes. It took a while and some study to find it. But the five count can be resolved. The overlaps were just a clue there was a diagonal in there somewhere. It was a perfect ending contracting diagonal, not an expanding one. And so it likely indicates the up count is over at least for a time being. And now if wave 4 is exceeded lower, it will prove out the contracting diagonal instead of invalidating the potential expanding diagonal.

    Again that means the major indexes can be resolved as Primary V or Intermediate (1) of Primary 5.

    COMP (120 Min)  4_29_2016a


  4. Jack Sparrow says:

    I have noticed one thing about this board, everyone here is a 30 year veteran of trading whenever there is a heated discussion it turns out both sides have been trading for 30 years by this benchmark I am just an newborn but I do have a high IQ. Now I am waiting for Fiona and Page to use a 30 year line that will be the day I’ll become a bull for eternity.

  5. hooloo1957 says:

    I was wondering if anybody has any more information about Mercury going retrograde. Seems to have caught these last two moves extremely well

    • Dex T says:

      Mercury is retrograde until May 22- and you should normally leave anywhere from a few days to 1 week on either side of it. There are many astrological sites that will provide you with in depth info about this phenomenon.

      It is not always associated with large market drops but causes things to go “haywire” so market drops do occur.

      In 2008 the market rallied right through May-when Mercury went retrograde the rally ended

      Mercury was also retrograde during the initial 2011 drop- in August of that year.

      As with any indicator it’s not 100% but is something to be aware of because it helps to quantify changes in emotions/social mood.

  6. rd3777 says:

    I would be surprised if the Dow Monday would not “break” lower. The price action clearly impulsed through the neckline and made a feeble attempt to rally back to the NL…a sign of weakness and then started to impulse down again @ the close..

  7. torehund says:

    Interesting find by Armstrong, could it be the Japanese Central bank attempting to avoid the Yen to go into accelerated inflation ? That said you can’t print and behave recklessly and then stop the process that you are a part of. Both sides of the coin, NO way you can have it all🙂

  8. Mr C…is this the QE pattern you’re talking about?

  9. Chris C says:

    Tony was right about truncated 5th wave! Just 5 months early but it paves the wave to think this could be the right count.

  10. Although nothing had invalidated, on previous charts, I am re-assessing counts on the weekend. Based on the daily ES being below the 18-day SMA, and headed (at some point) towards the lower daily Bollinger Band, according to the slow stochastic, it does appear – as I said prior – that “a” top is in. I had turned “cautious and even slightly bearish”. Before going too far, let me say I post this chart with great caution – because I know some of you hate or don’t recognize diagonals – as do I. They are a pain to count. But I post this chart not only because of the position of the daily ES, but also because today’s wave was longer than the prior down wave, so it exceeds a simple C = A.

    SP500 (30 Min)  4_29_2016 TC

    It’s not only me, but also the moderator who cites the “choppy” decline. That is sometimes a sign of a diagonal in progress. But further, it was almost impossible to count the internals of the wave properly until the idea of a diagonal came to mind. If you recall, it started on the five-minute chart counting the first ‘a’ wave as a small diagonal itself. It had too many overlaps for an impulse wave. But further I had written on here (paraphrase “Monday has the possibility of first of the month inflows from pension funds, 401k’s, etc. and Friday is the last day of the month” i.e. relative to position squaring.)

    It turns out – when counted in this manner, wave (ii) is 0.618 x (i). So that helps. If it should be that Monday brings upward overlaps because of the inflows, then look to see if a wave (iv) becomes longer than wave (ii). If it does, a diagonal is a good possibility, and if it doesn’t, then a 1-2-i-ii alternate becomes more favored.

    I am also currently reviewing the Compq chart, and will post it later. I think I may have found a “simpler” answer to the “five up”.

    • EL MATADOR says:

      ET, you might want to look at the NYA. I think it has the cleanest count

    • kvilia says:

      How many invalidations one can have to prove himself wrong? Just curious.

    • Jimmy Porter says:

      I don’t mind your ending diagonals expanding or contracting. However, I have learned that the only place these types can occur and be valid is either as a wave 5 or a wave c. Since you are showing this at wave 2 has me thinking twice. Ihaven’t looked at your nas chart closely but looks good at a glance

  11. aahmichael says:

    Today’s action accomplished the 2 things that I mentioned had to occur today for my preferred count to stay in play:
    1) Follow through on the downside
    2) McClellan Oscillator closing below zero.

    So, despite the power of the previous non-stop 11 week rally, it’s interesting to note that from 1PM yesterday, to the low this morning just before noon (a total of 5 1/2 hours of trading,) the SPX erased ALL of the gains from the previous FIVE WEEKS. Yes, you read that correctly: 5 1/2 hours of trading erased all of the gains from the previous 5 weeks.

    Yes, it’s still possible that we’ve just done a flat ABC (3-3-5) down from 2111, but until the market proves otherwise, I’m still operating from the premise that the entire rally from 1810 ended yesterday at 1:00PM at 2098.51, and we’ve done a wave 1 down from there to this morning’s low.

  12. nyjsec314 says:

    Bonds want to rip. Do stocks want to dip? Monthly close on spx looked bad and weekly was disgusting. I wouldn’t want to be long here.

  13. captbara says:

    The switch back to long term bear market might be the signal to go long.. since long term bear market rally did bring us the top… All in good fun TC, have a good weekend.

  14. 123 abc says:

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

  15. OneAndOnlyUniverse says:

    OneAndOnlyUniverse says:
    March 4, 2016 at 3:57 pm
    Last thought – DXY has no shot of 120 this go round, but it can drop like a rock from here- kinda like 1998

    let’s update – be careful – the $ is everything-

  16. nsteve24 says:

    60 pt drop and still no Green b
    surprising as many of previous Green b’s were posted after a mild sneeze

  17. The SPX successfully tested the 40 day MA at 2052.78
    As expected.

    • More crap from a clown. Chart constructed after the fact in feeble attempt to look like he nailed it. It would have been the 45 or the 50 or the 55 if it played out differently.

    • aahmichael says:

      Huh? The 40 day MA? What the heck is that? Oh wait. I see what it is now. It’s the result of trial and error until you found a number, after the fact, that corresponded to today’s low…yet does not correspond to any high or low anywhere else on the daily chart in decades.

      Yesterday you claimed SPY successfully tested the 21 day EMA…as expected.

      Bluehorseshow (@Bluehorseshow) says:
      April 28, 2016 at 4:33 pm
      SPY tested the 21 day EMA as expected and bounced for the time being.
      This MA has held all pullbacks since Feb.

      • johnnymagicmoney says:

        Go Mikey go


      • EL MATADOR says:

        Mikey, are you trying to weed out the scams…. LOL

      • Your accusations are baseless and without merit.
        You take one post of mine and jump all over it with no interest to learn about what I have shared.

        I’ve been using the 10, 21, and 40 period MA’s in my trading and have been doing so for over 30 years.

        It has been my experience that as soon as the 21 day MA gets broken, the SPY heads straight for the 40 day. Today, that is exactly what occurred right after the opening and for the rest of the day. Perhaps you don’t have the luxury of trading for a living or being a full time trader and able to catch short-term moves like this?

        I covered my shorts at the 40 day MA and got long.
        There also happened to be a nice C = 1.382 (A) at work as well.
        Notice that there was a pretty dramatic rally off that MA that was worth 1.70 in the SPY

        I had a great trading day keeping things simple and not getting all twisted up in Wave structure like I see many do here. Is that ok with you?

        • aahmichael says:

          Well of course you covered your shorts and reversed and got long at the dead low! I mean, I admit to just learning about the stock market yesterday, but even I already know that on the Internet, everyone sells the top tick and reverses at the bottom tick. That’s a given.

          • And then of course there are people posting as “professional” money managers like yourself that have great difficulty with Basic Math….. claiming that “in just 5 1/2 hours” from the highs of Thursday around 1PM at 2098 into the Friday noon time lows at 2055 wiped out all of the gains of the previous 5 WEEKS.

            How does a net decline of 43 SPX points wipe out the 77+ point move from March 24th to April 27th?

      • johnnymagicmoney says:

        AAmikey loves blue horshoe lol

        • I think that he and that Coyote character have a crush on me.🙂

          • Jimmy Porter says:

            hey blue, just prove aa wrong and post your two trades online. easy enough to do. print your daily trade report and prove him wrong

            • I’m not here to get into the typical “pissing-match” that frequently occurs on blogs like this and have the interest of proving people wrong. I’m here to share and exchange valuable T/A info….. hence the 21 and 40 period MA’s.

              Feel free to go back over the last 10, 20, or 30 years and explore the correlation that I claim for yourself. Either you see it and find it helpful. Or you don’t.

              I would suggest that these MA’s are much more valuable to people that trade actively than embracing a “theory” that is able to allow for a 300 SPX point rally . . . simply because the “structure” of price is labeled as “corrective”.

              Tell me, does it “hurt” less to an Elliott Waver to know that the reason why his shorts have been underwater for weeks is because the rally is “corrective”?

              Does that “rationalization” as to why an Elliott Waver missed a rally (and got positioned in the wrong direction) make him feel better?

  18. rd3777 says:

    The SPX continues it’s volitile down trend as crude sill has yet to “break” as the JPN225 has. I count a series of nested 1,2’s down. If this is correct Monday should see a “break” of 50 SPX points down….we shall see….Thanks Tony!

    • rd3777 says:

      The JPN225 did not trade last night so Sunday night is the first day back and the JPN225 so far can’t bounce….if it can’t bounce then I see it taking out the low and all hell could break loose.

  19. thanks Tony.

    ok so we came in within 20 points of the 50 day moving average. The 50DMA is the last line of the defense for the bulls, they absolutely have to hold this or the market is going to collapse again. I’m going to take advantage of this by daytrading bullish set-ups. Everyone should be expecting and be ready for this. The 200DMA will offer little support because it is down-sloping. I think the 50dma will hold and we will see new highs because at critical junctures like this the bulls always win, why would this time be any different?

  20. captbara says:

    NDX closed below BB, VXN above BB. Could set up a good buy if there’s a pop next week.

  21. stan502 says:

    Thanks Tony and all. Interesting week.

  22. EL MATADOR says:

    Once again April proves to show it’s true Whiplash form. There where several on here posting from tweeter feeds that April is historically bullish that is bs. Remember what you saw this April and the last April it was a whiplash month and historically 70% of the time it’s a whiplash month.

    • Dex T says:

      From 2005-2014 April was the most bullish month of the year for the S&P with an average gain of 1%

      From 1971 to 2010- April is the second most bullish month of the year for the S&P with a 1.56% return (December is first)

      From 2001- 2010 April had a return of 2.66%

      • EL MATADOR says:

        Dex you have to look at how the entire month performed not just whether it ended + or -. April is historically (+130 years of data) the 2nd worst performing month and historically it will whiplash you. April started off down with a down week then rallied for 2 weeks weeks only to near give back all of its gains in the final week. Yes it end + for the month but now ask yourself is April a whiplash month or a bullish month. Same happen last April.

        • Dex T says:

          It’s an average. If the month closed higher off than it began then it’s bullish.

          However, if you have 130 years behind it stating that it’s negative then it would supersede the more recent bullish data. It all depends on your time frame and the market you are trading.

          I wouldn’t trade any month based just on historicity- but it’s another tool when all other factors line up behind it.

          We are looking for the end of a B wave rally which is very difficult to do so any piece of advantage helps. Even if you consider it whiplash then it would be better off to wait until it’s mostly finished before shorting.

    • jwmcbride says:

      You and I both know matt that all that historical BS is a load of crap. Most here other than Tony and a few others know that timing is only one aspect of successful trading I have never made a dime following all that crap I never use Elliott wave alone to enter a trade

      • EL MATADOR says:

        I know what you mean mate and to a great extend they are BS but I’m a patterns trader as I believe everything in life evolves around patterns.

  23. The Buckie as measured by DX is having trouble holding 93. That spells big trouble.

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