Thursday update

SHORT TERM: gap down opening then rebound, DOW +93

Overnight the Asian markets lost 2.0%. Europe opened lower and lost 0.5%. US index futures were lower overnight as well. At 8:30 the CPI was reported higher: +0.2% v +0.4%, the Philly FED was reported higher: 4.7 v -1.8, and weekly jobless claims were reported higher: 277K v 264K. The market gapped down at the open to SPX 2062, and continued to decline until hitting SPX 2050 by 10:30. The market had closed at SPX 2072 yesterday. At 10am the NAHB was reported higher: 60 v 58. As Europe began to close it rallied, and the US market rallied as well. The rally continued into the afternoon, with two pullbacks of 6 and 7 points, and hit SPX 2080 by 3:30. Then a dip at the close ended the day at SPX 2078.

For the day the SPX/DOW were +0.40%, and the NDX/NAZ were +0.25%. Bonds gained 2 ticks, Crude dropped $2.00, Gold slid $16, and the USD was higher. Medium term support remains at the 2070 and 2043 pivots, with resistance at the 2085 and 2131 pivots. Tomorrow is options expiration, building permits and housing starts will be reported at 8:30.

The market gapped down at the open today for the first time since last Friday. After opening under Tuesday’s double bottom support at SPX 2064 the market hit a low of 2050. After that the SPX followed Europe higher into its close, then continued higher still. Asia and Europe appear to have been driving the US market for the past week. While the decline from SPX 2121 can be counted as five waves, it can also be counted as three larger waves. Thus the impulsive/corrective pattern is inconclusive. Despite this week’s gyrations the market remains in the neutral SPX 2026 – 2121 range. A break either way should be the tell. Short term support is at the 2070 and 2043 pivots, with resistance at the 2085 and 2131 pivots. Short term momentum rose to near overbought after another positive divergence. Best to your trading options expiration!

MEDIUM TERM: uptrend under pressure

LONG TERM: neutral


About tony caldaro

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224 Responses to Thursday update

  1. aahmichael says:

    For those of you who doubt that the market traces out the exact same patterns, no matter what time frame you look at, pull up a 60 minute chart of NYA, and then pull up a weekly chart of NYA. The last 4 days on the 60 minute are a carbon copy of the last 10 months on the weekly.

  2. Jimmy Porter says:

    running flat sure is looking more and more complete at todays high. I was hoping this scenario wouldn’t play out so it would rally higher to around 2094. That way there was 20 more points both ways to make money. Gap lower Monday will confirm this. Gap above the resistance channel will invalidate the running flat.

  3. micky says:

    if a ld I have it from todays low,now no 4 could be done as it have just overlapped w1

  4. Jimmy Porter says:

    Update Scenario 2:
    Covered all my longs when resistence line shows promise. Short only 5 es. Have a buy stop 1 tick above the current high of 10 contracts. I see if this makes a new high then this scenario is invalidated. Will add more shorts as areas designated on chart are accomplish. Goal will be min 50 contracts if this scenario pans out
    My last post of day when it comes to charts. Have a great weekend

  5. Jimmy Porter says:

    Update 1:
    This weeks market has been so easy to trade if you know what you are doing and put the time into laying out the charts. For example, I presented 3 scenarios yesterday. All three called for a sell off in morning. Everyone should know 2/3s of an IHS was formed by end of trading yesterday. Bulls and Bears expected a sell off back down to the very important support area of 2063,64 area. I didn’t see any possible way the bulls would allow that area to be broken on first try down. So if you were a day trader you would have sold off to that area and then covered your shorts and went long which I did. ES Futures. Easiest trade in a long time. If you didn’t see that then you shouldn’t day trade. Sorry for sounding like an ass but it is true.
    Here is my updated first scenario chart. All three are still intact. This one is calling for this being wave two up. One thing that I am watching is this mornings sell off could be interpreted as an ugly 5 waves on a 3 min chart. However, you can also say it is a 3 wave corrective b wave as well on a 15 min. chart. Everything is explained in the chart on what I am looking for and what has to be penetrated and what cannot.

  6. Nice little potential Leading Diagonal on today’s SP500 5-min chart; this includes 3:3:3:3:3 zigzag structure with v, less than iii, and iii less than i, and iv less than ii, and iv overlaps ii. This makes today’s low critical.

    SPX - Five Minute - Jun-17 1438 PM (5 min)


  7. rd3777 says:

    When crude finishes…..that’s it…..

  8. blackjak100 says:

    I think clear 3 up from 2050 which suggests this could be a flat minor 2 of int C and we are in ‘b wave’ now heading to 2043 pivot before large rally. Nothing impulsive up from 2063 ruling out DZZ IMO.

  9. dan pulford says:

    Sold TZA small scalp good too. VIXter

  10. phil1247 says:

    BOND longs ………. soon to be slaughtered

    the commercial spread is the largest in years

    note how this is a complete reversal from mid 2011

    before the big rally

    looking to sell my last few bonds into any further rally

  11. dan pulford says:

    Nice new uniform waves in this “New Wave” kinda market, VIXter

    • aahmichael says:

      You might want to review Tony’s guidelines for this blog. Among his rules are a limit of 3 posts per day, as well as not using the blog as a daytrader’s diary.

  12. dan pulford says:

    Gottaa de-exalt my self innards, then i’ll be ok. Don’t worry. VIXter

  13. dan pulford says:

    TZA about to break to up. nice maybe nicer, gonna see! It di! VIXter

  14. 123 abc says:

    If yesterday’s low on the SPY is taken out, then the following count on the SPX futures may invalidate…

    • zvyezda says:

      123, are you adjusting SPY for the ex-dividend today? I would only go by SPX or ESU until SPY reflects a meaningful relationship on the duration of the chart.

      • 123 abc says:

        So far, the counts on the SPX and SPY remain unchanged since yesterday. However, if the SPY takes out yesterday’s low, then the count would be adjusted in that index, and quite possibly the SPX too.

  15. Retrace to prior wave iv; potential ending diagonal c wave down, and now breech of bull-flag channel to the upside.

    SPX - Five Minute - Jun-17 1208 PM (5 min)


  16. EL MATADOR says:

    you had ur Fryday chance bears…. time for OPEX Fryday rally from here….
    the bear good news is that we had 3 wave up from ydays low

  17. stan502 says:

    Thanks Tony & all, interesting points. I Try to stay out of the way on opex, but will call out what looks like unusual put volume in GDX July monthly 23p fwiw; have a great weekend and Happy Fathers Day

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