Friday update

SHORT TERM: lower open then rebound, DOW +80

Overnight the Asian markets lost 0.7%. Europe opened lower but finished mixed. US index futures were lower overnight, and at 8:30 monthly Payrolls were reported lower: 160K v 215K. The market opened 9 points below yesterday’s SPX 2051 close, rallied back to 2052 in the opening minutes, and then headed lower. At 11am the SPX hit 2039 and then started to rally. At 3pm Consumer credit was reported higher: $29.6B v $17.3B, and the SPX hit 2058. Then after a pullback to SPX 2053 the market bounced to close at 2057.

For the day the SPX/DOW gained 0.40%, and the NDX/NAZ gained 0.45%. Bonds lost 6 ticks, Crude rose 25 cents, Gold rallied $11, and the USD was higher. Medium term support remains at the 2043 and 2019 pivots, with resistance at the 2070 and 2085 pivots. Today long term investor sentiment was reported higher: 54.8% v 54.0%.

The market opened lower today, made a new low for this decline at SPX 2039, then rallied into the close. Needless to say it was another choppy day, among many this week, with a generally downward bias. The choppiness, however, is starting to look organized. More on this in the weekend update. Best to your weekend!

MEDIUM TERM: downtrend probably underway

LONG TERM: bear market


About tony caldaro

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126 Responses to Friday update

    • fionamargaret says:

      Really interesting Stan – are you involved with horses?
      Just looking at the data you have provided, I should be able to come up with the order of finish.
      Just scanning the data, there are many anomalies – look at the percentage of greys.
      3 or 4 horses with the same father – children from anudder mudder.

  1. nsteve24 says:

    Am up early. What time is the coffee served?

  2. TMF says:

    Bitcoin coming up the right side. Over $470, $500.

    • torehund says:

      Jimmy this chart is interesting at it gives a 3-D impression. As you can see the dramatic middle part looks close , whilst the right end looks like its moving away from us, thats a good sign indeed.

  3. cj32 says:

    Wave count from CBZ

    • fishonhook says:

      But he/you also said this , this am…..
      It was not a gap down and go, but a gap down and bounce…


      ES slid into a new low at 2037.50,SPX is likely to have another GAP DOWN&Go.
      Enjoy the wonderful ride of iii of(iii)of [iii] of 1ofInt.(iii)

    • I don’t think 1 of 3 of the higher 3-down is finished.

  4. Sometimes when you back off a bit, and look at a different time frame, other possibilities arise. So, the triple zigzag downward, can also be construed as a ‘contracting’ leading diagonal A wave lower. The alternate for a triple zigzag is most often a diagonal.

    SPX - Four Hourly - May-06 2236 PM (4 hour)

    To do this kind of work, you have to be ‘willing’ to look at the options that are out there, following the rules and guidelines, and decide from among the best possibilities, taking into account the new information at the time, and not just blindly stay with a count, even if predicted some things successfully or even if it was a count you feel pride or ownership in.


    • phil1247 says:

      so if this is the case would you would expect a sharp rally to occur
      analagous to the sharp collapse after an ending diagonal?

  5. torehund says:

    Thank Tony.
    Friday political considerations from the inside.

    • zvyezda says:

      Tore, I agree with you that anything could be on the table. It would take a false flag event to pull it off. Over here it would either be an acute event of sufficient magnitude or manufactured civil unrest. The “Go button” gets pushed either to hide the real causes of a financial panic or when time appears to be running out to pull it off.

      Over there they can always blame Brexit or the orc army that has been intentionally brought in to cause enough chaos that the only “solution” is the overthrow what remains of European national sovereignty for complete Big Brother EU dictatorship.

      An essay on it in English also available in French and German:

      • torehund says:

        Yes, if one read between the lines of how politicians act, it becomes apparent that the piggy back effect of their insane actions in the middle east is something they just can’t handle. Its like an immature Surgeon simply walking away from the operating table after inadvertently sewering an artery…Its too much for them to handle, and they are inherently not just geared towards advanced problem solving.
        Politicians are generally lame unless an issue can be solved by flimsy talk and dissipates all by itself.
        The times of plenty has by natural selection favored the ultra spineless to appear in the limelight.
        At this stage achieving power its paved for non politicians like Trump, a person which thrive in times of hardship (when thinking back on his life it was at times of financial breakdown and misery he learned the most, and was forced to raised his game).
        Blaming someone else, or an unexpected event; well Cameron loves the problem deflector..if the ruler can’t cope, the population will reflect it.
        Politicians in the West have the word TILT on their T-shirt, and this could lead to Civil unrest/ Martial law, haphazard wars and conflicts.

  6. I forgot who said I was wrong about another c&h on gold,but agreement came today from Jesse.Looks like one to me.Good luck all.

  7. NEWBIE says:

    I’m one of the last bears standing, me and Tony C. Any other bears out there?

    • I’ll put it this way.I think we hit 1400 before 2400.A Trump panic selloff?My best guess…followed by credit market distress (oil).Fed unexpectedly raises rates (lol).I don’t believe they’ll do it–but if they did.
      * 1900
      * 1700
      * 1500

      * 1300

    • I’m bearish no two ways about it, and don’t care if we hit 2080 or 2090 first.

      We are going into week 12 of an open weekly gap at 1865, and its the only one open the past three years still. A few have closed at week 13, and after that three the past few years have closed at weeks 19 or 20. This includes the 2092 that closed at week 19 a few weeks ago.

      Plus, there’s a monthly gap at 1932 from March, again the only one still open from the past three years. January’s gap down closed in March after two months.

      That 1865 comes into view if Tony’s coffee club post tomorrow calls for a 3 of 3 down to start Monday and it comes true, otherwise thinking maybe in June.

  8. rd3777 says:

    We either head up from here or we go down in a big 3rd wave. The only thing that makes me guess bearish is the 5 of the top. this last up marked my E should be a C wave,it could have finished @ the close today. They have tied these markets to crude and the volitility is very evident.

  9. Jack Sparrow says:

    Fiona how did you came up with 2040 if you care to share that is if your method is not under proprietary…. .
    In terms of wave count, seems like bears are forcing a count here it is now becoming more probable that in SP we completed A under double wxy ..and in Nasdaq it was a simple 5 wave structure,,, B underway and then C to come (which will be the sell May thing) and will also help form a reasonable inverted HS…

    • fionamargaret says:

      2040 is the 23.6% retrace, and the pattern dictated somewhat how low the market could go without the whole pattern having to be redone. High of pattern 2185, with 2040 as the low.. The pattern kept repeating thus it was my first choice.
      Now there is another base we could choose… 2000 … 38.2% retrace, but then if that happens, another pattern will establish itself, and then I can tell you the high – a different algorithm.

      • Along those lines, I understand Mr. Trading Points is one of Tony’s former students perhaps from long ago.

        tradingpoints ‏@tradingpoints 8h8 hours ago
        bigger picture spoos. Today’s low was 23.6% retrace of the rally from 1794.75 Feb low basis Jun contract

        • fionamargaret says:

          He sounds interesting FO Bella – is he all numbers? What outcome did he suggest to you? If he was a student of Tony’s, really interesting how he turned quant.

      • stan502 says:

        pretty heady stuff

        • fionamargaret says:

          Yes Stan, buy and hold GLD…163 is the price.

          • fionamargaret says:

            ..I don’t know how this showed up here….was for your liking the chart of GLD (scroll above).

        • fionamargaret says:

          ..the most interesting thing about sequences…… you work them out, and are discussing the viabilities, and then later the technicals come into play with them.
          I know when Jack asked the question, he probably wanted a technical answer – I had been suggesting the correction would be contained at 2040 for a while, it was the best pattern using the numbers…….x

  10. BUY signal is coming up not confirmed yet. In next 2 weeks, if SPX touches 2046, that will be SHORT signal. If not, No SHORT signal.

  11. Bob Sagget says:


    “The rally that looked very likely to happen yesterday morning never happened, with bears dominating the day and every promising looking start to a rally killed off quickly…”

  12. NEWBIE says:

    Almost Every blogger is bullish again as the economy is crumbling worldwide. Look

  13. blackjak100 says:

    Nobody’s mentioned pretzels count which is perfect so far so i will….and it solves the time & depth issue vs the TZZ offered by TJ. No offense to TJ as he offers valuable insight, it just doesn’t look right to me.

    Int A = 2052
    Int B = 2090ish (expanded flat)
    Int C = 2000ish

    • gtoptions says:

      My crayon squiggles must not count. 😂

      • simpleiam says:

        Oh yes they do! I think you’ve got the best chart in the bunch right now.

      • fionamargaret says:

        Where are your squiggles GTO…..I usually like your stuff, but couldn’t find them….mind you I am working on other stuff, so shall look again later…..

    • Bob Sagget says:

      Today we closed above Pretzel’s upper red diagonal. (2057,14). Therefore it’s either be nimble or bullish right?

      • blackjak100 says:

        It means be bullish for several days. The standard target for an expanded flat is 2090 right on the nose. I have no idea how he gets a 2070 1st target which makes it a running flat. Again, he admits to not always using textbook counts and I think the 2070 target is one of those times.

        • Friday’s DeMark support level was 2041, which coincided with the PRZ (buy) of the bullish bat pattern I posted earlier this week, X=2033, A=2111, B=2077, C=2100
          I normally take profits at B on bat patterns, 2077 in this case…

        • aahmichael says:

          re: “I have no idea how he gets a 2070 1st target which makes it a running flat.”

          2070 is where C=A

          2052-2082 = A
          2040= B
          2040-2070 = C

          • fionamargaret says:

            I am just scanning over this Michael – at least 2040 is an integral part of this, which regardless, it will turn out to be….
            The problem I am having is with the variable factor velocity…..

    • Thanks blackjak100…..I follow Pretzels charts as well. This count may work, but looks forced to me. I don’t like forced looking counts, as they prove, in time, to be incorrect. Specifically, wave 3 down, doesn’t look like an impulse wave…started out fine but then got too choppy looking. I don’t have a better count so, lets see what happens this week.

      • blackjak100 says:

        Pretzel’s charts aren’t always clear because of the dual bull/bear labeling. He also uses his own unique counting method at times which is also confusing. After staring at the chart for 10 min, this has to be one of those times. Translated to EW, it would be a WXY despite what I just said below. However, it would not have the ‘right look’ for a DZZ despite following all the rules. Translation to OEW remains what I posted above. I’m hoping his Mon chart clears things up a bit.

    • 123 abc says:

      Please may I request the link to follow Pretzel’s charts?

    • Jack Sparrow says:

      this just looks like xwy – i think all of us complicating things here. i think you also mentioned this as xwy before

      • blackjak100 says:

        This isn’t complicating things at all and it’s not a WXY because there is no X wave. In my eyes, this simplifies everything. I did mention the WXY, but it would not meet the time & depth requirements of a Major 2.

  14. NEWBIE says:

    Looks like everyone here is bullish again, you know what that means. Down we go and this time could be the big ONE!

  15. Jack Sparrow says:

    in the futures graph, does anybody see the last night move up as A (three waves) then this morning move down B (3 moves), and move this afternoon unfolding as C (five waves) …? making this abc counter rally

  16. blackjak100 says:

    Well if major 1 of P5 ended at 2111, you can’t have major 2 end until there is a downtrend confirmation. Therefore, int term still looms bearish while very short term looks bullish. did int A end at 2039? I think so.

    • tony caldaro says:

      Low rates encourages borrowing.
      It has worked in the retail sector, the housing sector, but not with corporations. They have been leveraging up their balance sheets with stock buybacks, rather than capital investment. Poor choice.
      On the other hand, interest not earned is money not spent. Since economies are based on cash/credit transactions. The money not earned in interest is in fact lowering the number of cash transactions. Which leads to lower growth.

      • That is only half the story. According to the FED QE had two objectives One was to get toxic loans off the books of banks and into the hands of the Fed thereby making them solvent again using taxpayer money. and to increase the amount of money available in the hopes that they would lend the money out to corporations for investment and expansion. Unfortunately that is not what happed. Banks used excess reserves to buy back their stock just like corporations did.

      • simpleiam says:

        Agree. I think this article pointed out only one aspect of the situation, when there are many that make up the whole.

      • va89blog says:

        It’s interesting that ZIRP, QE, etc. are highly deflationary as Japan has proved for 25 years and we’re proving now, yet central banks continue with these failed policies in the hopes of increasing inflation.

  17. Daily Big Ups across the board.

    • NEWBIE says:

      Everyone and their mother bullish again reminds me of when everyone thought new highs were coming a few months ago and then we dropped 300 points on the spx. Also just like everyone was bearish at 1800 and then the market went 300 points to the upside.

      • jwmcbride says:

        Newbie help is available

      • Big Ups and Big Downs are not about being bullish or bearish with respect to personal sentiment: Big Ups and Big Downs are objectively defined and easily observed price action set ups that tilt the odds of immediate price action strongly in one direction over another. Big Ups can occur in bear markets, and Big Downs in bull markets.

        Over the long run, Big Ups are much more consistently profitable than Big Downs, largely because the long term trend of humanity is one of increase.

    • thecustomer14 says:

      What about the weekly charts?

    • blackjak100 says:

      Still on the weekly big down?

    • 123 abc says:

      CN: What is the difference between a ‘Daily Big Up’ and a ‘Weekly Big Up’ —also are you expecting 2111 to be exceeded?

    • cosmos77 says:

      Thanks CN. Still need the confirmation?

  18. mjtplayer says:

    Thanks Tony! Do you know what the WLEI print was today?

  19. TMF says:

    Bears are in trouble the beginning part of the week. Might have a small wave II or b before blasting out of wedge to fill gap at 2080ish.

    Clear 5 waves up. Impulsive.

    • NEWBIE says:

      Market has gone from 666 to 2130 and hasn’t broke that high in a year. Bears have already been in trouble for years and that cant last forever.

    • simpleiam says:

      See gtoptions post from Thursday Update. Says much the same. 2080, then,…Who knows. I give it a bit more room, 2080-2100.

  20. TMF says:

    As promised….Bitcoin explodes

  21. vivelaamo says:

    Thanks Tony. I have to join the bear camp for now. Not fooled by today’s move. This has got more downside yet. I’m short, again for now. STFR!!!

    • EL MATADOR says:

      Since you constantly kept on advocating for Us stupid “bearish losers” to BTD until recently in the past 1-3 days. How much did you lose? I can tell you this bearish loser didn’t lose squat on his draw down so I guess he is not a stupid bearish loser after all.

      vivelaamo says:
      April 21, 2016 at 2:02 pm
      I’m to busy today and tomorrow to trade but from a quick glance I see from a bullish perspective it looks like a healthy pb so UP UP and away!! Still ATH by the end of the week.Enjoy the weekend bearish losers!!!

      • vivelaamo says:

        oh ok. BTFD, UP UP and AWAY. ATH by the end of the May!🙂 All bears are losers.

      • vivelaamo says:

        By the way that post can still be in play. There can just be more downside yet. Overall I still have a very bullish bias and will keep buying the dips for a longer term trade while scalping moves down. This is NOT a bear market. ATH’s will come this year. Maybe not by the end of May but we will see ATH before we see 2016 lows again. That I assure you. Make sure you quote this post when it happens please. All the best bearish loser😉

        • EL MATADOR says:

          Well do bullish loser 😉. Just don’t forget that this bearish loser did state Today RH that we have a couple of gaps above that need filling and that today’s daily candle was hinting of a ST trend reversal. For the record I kept my ES short position and hedged it with NQ long because the NQ will outperform the ES on this ST trend reversal.

          Enjoy your weekend bullish loser …. And don’t forget to take the family out and spend some of that bullish 💵💵 on a nice dinner…. Cheers vive

    • purplember says:

      Vive is short…..i’m going long now

    • fotis2 says:

      Already?I even posted a rocket going to ATH for you dude don’t get cold feet now!

  22. aahmichael says:

    Prior to the open this morning, I posted that we had the potential to do a wave iii to the downside. That potential was eliminated within the first 15 minutes, as the market immediately filled the opening gap. There is lots of support at 2040 that the market has to plow through, and it couldn’t do it today. The daily trendline down from the 11/3 high connected to the 12/2 high came in at 2040 today. The 50 dma and the lower BB were also right there. Plus, the market stopped at 2040 countless times last year, so there is still strong psychological support there too. In addition, 2040 was the launch point on 4/12 for the last breakout leg of the rally. Finally, today is a new moon, and that frequently coincides with turning points. Add it all up, and instead of doing a wave iii down, the market stopped at 2040 and reversed.

    There is no change in my count from the 4/20 high. It’s a corrective wave that *may* have ended today, or, it’s also possible that the wave down from the 4/28 high is still subdividing. If it’s the latter, then today’s low was a wave b of an irregular flat that began at Wednesday’s low. Today’s reversal would be wave c of that irregular flat. Supporting this view is the fact that, on Wednesday, the market finally broke through the trendline that had supported the market since 3/24 at 2022. That TL had been touched 6 times in the last 7 weeks, and it stopped the market from going down each time. However, it was broken on Wednesday, and the market hasn’t been able to get back above it since. Even if the market is able to get back on top of this TL next week, that doesn’t invalidate the irregular flat count, however, it would mean that the irregular flat is of a larger degree, and it actually began at last Friday’s low at 2052.

    There are also 2 significant candlestick patterns that occurred today. The daily candlestick was a hammer, and when one of those occurs after a prolonged decline, follow through to the upside for at least a couple of days occurs 99% of the time. OTOH, there was a weekly 3BR to the downside candlestick pattern that also occurred at the close. Under normal conditions, these signal a turn in the intermediate term trend, and it means that 2040 should be taken out before 2100 is taken out.

    I remain 200% short at an average price of 2092

  23. 123 abc says:

    Abandoning the nested 1-2-i-ii count for now, price action is just too choppy.
    Instead, speculating that a Minor wave completed at today’s low.

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

  24. Hi,thanks Tony
    The Dow is holding the trendline break
    In the Dow hourly chart we could see a wedge that was breaked today,need a external pivot to confirm to reach full target, thanks

  25. bfquant says:

    Organized. Either ending diagonal for a big bounce or nested 1 2s for a crash. Same as it ever was.

  26. In previous days I said I was “cautious and a little bearish”; if Monday holds today’s lows I will change to “cautious and a little bullish”. It is possible that cash does a little “pop & drop” on Monday to finish wave the fifth wave up of a first wave, and make a second wave lower. (This is not trading or investment advice).

  27. mailming says:

    Thanks Tony

    What are you hinting by “organized”, market is looking to go up or down?

  28. The last push to New Highs will be upon us soon, I’ve said this since the end of February. Then Sell In May and Go Away.

    • joecthetruthteller says:

      May is actually not the ideal time to exit in a 2nd term election year. That point is actually in June to July.
      May in a 2nd term election year actually sees a bottom mid-month, and then a rally up into June and July. The final top of that rally is ideally due July 10. <<<<<McClellan

      • Good Point.. I half agree that it happens in July and feel more inclined for a June Top. But with that said, i still believe “THE TOP” won’t exceed May’s highs by very much … meaning we’ll see a CHOPPY TOP for a few weeks… kinda like Oct. – Dec 2015

  29. fotis2 says:

    Thanks Mr.Caldaro looking forward to you organising this chop-chop..

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