Friday update

SHORT TERM: it’s Brexit after all, DOW -611

Overnight the EU referendum votes were counted and the UK decided to leave the European Union. Asian markets dropped 4.3%. European markets dropped 6.0%. US index futures were sharply lower as well. At 8:30 Durable goods were reported lower: -2.2% v +3.4%. The market gapped down at the open to SPX 2064, traded down to 2055 and then started to rally. The SPX had closed at 2113 yesterday. At 10am Consumer sentiment was reported lower: 93.5 v 94.3. Just past 10am the market hit SPX 2073, and then headed lower. Throughout the day the market worked its way lower, with 8 point rallies in between lows, until it hit SPX 2033 at 3:30. Then a quick 16 point rally to SPX 2049 was sold into a SPX 2037 close.

For the day the SPX/DOW lost 3.5%, and the NDX/NAZ lost 4.1%. Bonds rallied 52 ticks, Crude dropped $2.50, Gold surged $59, and the USD was higher. Medium term support drops to the 2019 and 1973 pivots, with resistance at the 2043 and 2070 pivots. Today the Q2 GDP est. was lowered to +2.6% v +2.8%.

The market gapped down at the open today following the global sell off in equities. The turnaround from yesterday’s optimistic rally was quite dramatic. Yesterday’s rally took the market within 8 points of the uptrend high at SPX 2121. Then today the SPX confirmed a downtrend. This certainly looks like bear market activity. Inflection point cleared, but bifurcation still in play. Tough market! Enjoy your weekend!

MEDIUM TERM: downtrend underway

LONG TERM: neutral


About tony caldaro

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115 Responses to Friday update

  1. Open question. When we hit new highs THIS YEAR how many bears will remain? ANSWER: Every single one. Tony might, just might get rid of the “NEUTRAL” reading but I doubt it.

    We see what we want to. There should be a big spike tomorrow. Thought it would start today but obviously wrong. We should hit 2070 in one or two days time.

    The shake up affects those poorly treated banks, currencies, oil, and gold. Our domestic economy is not only doing OK but we should see inflation here and the FED enable to raise rates. Look at the Income and Outlays report coming up. Very telling. BTW, restaurants and shopping areas were packed. I guess they didn’t get the word that we are crashing.

    Why do I have to defend the obvious. Consumers are spending at an accelerated rate not seen in a long time. Try to reconcile your recession scenario around that.

    Great opportunity to go long and stay long right after the 4th of July celebration. It should be in the variety of February to June. End of that leg should be around 2250.

    Knock me on my short term calls. Long and intermediate calls have been pretty darn good. Place your best. New highs this year is the odds on favorite. An 80 percent chance of happening regardless of world events.

  2. Who dares doubt the cycles??????

    In 2014, Christine Lagarde gave a speech on “the magic number 7.” It, along with work by Jonathan Cahn, led us to the Shemitah seven-year cycle and the Jubilee year, which the globalist elites are well aware of.

    What we’ve discovered since is that there is even more to the “magic number 7″ than just years… it appears to correlate right down to months, weeks and days.

    The last major market crash occurred on September 29, 2008. On that day, the Dow Jones fell 777 points, of all numbers…. its biggest one day point drop ever.

    On Friday, in the aftermath of Brexit, the Dow fell over 600 points. What’s interesting about Friday’s date?

    It was 7 years, 7 months, 7 weeks and 7 days since September 29, 2008


  3. Tks Tony the core problem remains a potentially break of the Chinese fx peg due to USD shortage, all the global banks have steeped back from providing dealer support to the markets due to the capital cost, so very thin liquidity, brokers sending out margin calls and with US margin debt coming off records highs the pressure should remain on equities. Shorts should hang in there as we are only 1 day into a new bearish trend.

  4. Tom Smith says:

    Tony, I am astonished at your comments. A one day panic reaction does not constitute “bear market activity”. You know as well as everyone else that whatever the result the market was always going to over react. The $SPX is down only 1.63% for the week, which could be pretty much any normal week really. The GBP is where it was against the dollar a month ago.

    As far as I’m concerned this is an absolutely golden gift to load up on stocks for the rest of the decade and beyond.

  5. Bob Sagget says:

    Volume / breadth on the NYSE today, relative to the averages, was truly remarkable. The volume today was 87.9% of the average.

    The $SPX bulls were only allowed up for air 4 times.

    • fionamargaret says:

      The best money to be made today (that i noticed) was oil……but it is a wicked market, and not to be trusted….x

  6. fishonhook says:

    Very simple TA that works.


    When it was in a bull market it was well above the 200DMA
    came down and hung around the 50 DMA for a few weeks and then rallied again. Never even touched the 200 DMA.

    Bear market , pierces the 200DMA, and rallies up to the 200 DMA to be rebuffed and sent back down. This time made it only up to the 50 DMA and pushed down. That’s why longer trends are more important than frenetically chasing and trying to label every squiggle.

    • fionamargaret says:

      Absolutely Fish, but life isn’t perfect…if you catch it around 89 or a bit lower, it is good for a few dollars as long as the market has straightened itself out…I buy it for a day trade if the market is moving solidly up.
      The brokers are doing margin calls all weekend, so better to stay away until things settle down a bit…..x

      • fishonhook says:

        I wish I had kept some puts to see what happens on monday with some skin the game, but I was just happy to get out with some skin left after the pounding the Puts took for the last few weeks.

        just didn’t want to risk a weekend CB event. B of England says it is ready with $250 BILLION stabilization fund. probably means paying it to Investment banks in the City to stabilize bonuses!

  7. fishonhook says:

    Pug’s tweet from June 23rd

    $SPX wave iii-(3) of mi or 3 of major [5]-P5-C1 target is 2135, where iii = 1.38*i. Wave (3) target is 2142, where (3)=2.62(1). P5 top 2162

  8. Bob Sagget says:

    Fiona – Any updates from Raymond James?

    • kvilia says:

      You, Bob, you😉

    • fionamargaret says:

      Why do you ask Bob… would like to know their outlook??
      Talk to me…..

      • fionamargaret says: case this is what you want Bob….if you just want to chat, write me back…..I sent in the link to Carl Futia earlier today, or maybe it was yesterday…funny thing with Carl, he was thinking a correction for about the last 10 days or so, and was short….x

        • kvilia says:

          Fiona, RJ will be repeating this at 1900, 1800, 1700. They are brokerage firm, there is not a one word saying why exactly they think this is a buying opportunity. I did not really ask for it and in no way trying to negate your publication. I’m just trying to find a logic in everything, and empty words don’t make it for me.
          I also think that since Fed is in interest rate conundrum, the Brexit only added the fuel to the large uncertain picture. Moreover, financial insitutions are just unaware of what to expect from this scenario. There will be a lot of changes, and the current state of uncertainty leads markets to a sell-off. Jacked up markest at the end of the credit cycle, it was not high enough for everyone to call it a pause? 1 day selloff is a buying opportunity? One can pull an artificially orchestrated rally once, I doubt it is the case now. And if anyone thinks that economy, balance sheets, annual reports drive this market, leaves in the lulu land. There are powers that rule th markets and they have flesh and bones. At some point they are getting defensive and some defensive/aggressive. Most of them define the trend and win all. Who’s side are you going to be on this time?

          P.S. Hope I’m not going to look like an idiot with markets breaking ath on Monday🙂

          Good night.

          • fionamargaret says:

            Hi Kvilia, I have no connection to Raymond James, and presumed Bob to be asking for their outlook. I don’t think he was being sarcastic….but then I never look for that….and Bob is a good guy…
            I am glad you did better on your UVXY…I do remember I mentioned to you Carl Futia thought we were going down…x

            • kvilia says:

              Got it, just trying to loosen up the crowd. Emotions flying. Need to smile at the end of the day whether it was winning or slightly loosing day (risks controlled). Have a good weekend. There will be plenty of opportunities for bears and bulls next week.

          • Igor says:

            Hey Ilia, if you are going to forecast the market moves, be ready to look like an idiot from time to time😉 Hope your work on when to fix profit is going well btw.

        • Jack Sparrow says:


      • kvilia says:

        Fiona, I thought Bob was sarcastic and joked using De Niros’ line. No offense, everyone needs to relax.
        Have a good weekend, hope you are catching some of the waves of this move.

      • Bob Sagget says:

        Fiona – thanks for posting the report. Correct. I was not being sarcastic and thanks for complimenting my integrity. The feeling is mutual.

        The RJ report seems consistent with CNBC today. Namely, not a buying a opportunity just yet. Making progress in that direction.

  9. manunidhi21 says:

    Namaste Tony.
    You marked long back as Bear market then why specify Bear market activity.

  10. purplember says:

    there was a RC sighting today.

    RC any update on the credit markets ?


    Erin posted his observations of top on June 23. 2016

    Just to open Bank account in Britain can take up yo 6 months. America even worst, some Banks won’t even open you bank account if you have say $30,000 in cash. Regulations they have to obey, we do need change! Marxists style leaderships crush old time values to death.

  12. Thanks Tony. I don’t read the comments much anymore – but I never miss your update.

  13. torehund says:

    Thanks Tony.
    Today was a new win for the trend towards nationalism, generally its neither all good nor all bad. It is what it is, sharing your crops with others isnt such a good idea if you consider yourself an outperformer or are imposed un-tolerable skewed burdens.
    I think England has reached or exceeded its limits for what socialism can provide, and is heading towards the opposite.
    For peace advocates Brexit was a giant step towards abolishing Nato, EU minus England is a gift to Putin too🙂.

  14. What I wondered before Brexit:
    If it failed…what would happen?I thought the dollar would rise,but didn’t know if gold would also.Didn’t see how both could happen.Didn’t cut back on GDX though because I’m of the mindset that gold surprises should be on the upside (barring Fed meddling).
    WHAT HAPPENED:Flight to safety for both big time.Actually as the dollar pulled back from over 96,so did gold drop from $100 up to around $58.
    WHAT HAPPENS?Hopefully a couple big up days next week,then I’ll take profits for a short period of time.
    Good luck all.

  15. Laras Elliott Wave Tip!

    Money management 🔑 to success!

    I’m sure Tony would agree!

    • Velocity Too says:

      The only good rule in there is “3. Exit a trade as soon as you recognise it has gone wrong.”. And, Lara is not a good Elliottician, please don’t subscribe to or follow her blog. Nothing against Lara, she’s just not good.

    • wanderer says:

      I would say, among Lara’s rules, only #4 makes sense: “Do not meet margin calls”. The rest of her rules are typical trading mass stereotypes that can be easily proven worthless.

  16. joecthetruthteller says:

    Today’s negative open will mark just the eleventh time in the last 20 years that SPY has gapped down 3% or more at the open. In the ten prior occurrences SPY averaged a gain of 2.54% from the open to close (median: +2.61%) with positive returns eight out of ten times. The most recent occurrence was last August when SPY gapped down 5.23%. On that day, it traded up 1.07% from the open to close, and then from the close that day out one week,it posted a return of 4.31%.


  17. Another Interesting Elliott Wave Count from Sid full Video he thinks June 21,2016 might have been top of Wave V and Sept 20, 2016 going to be bottom of sell off.

    I don’t know if Sids right or wrong!

    Just passing along his video

  18. Larry Williams famous for winning Robbins Trading Championship in 1987 with 1100% return Larry is sending out special report cost $35 he feels he has CRASH set up !

    I don’t know if he’s right or wrong, just thought I would pass along his lastest email alert

    • Velocity Too says:

      Swing, are you paid to promote other people’s blogs on this one? Or, do you just subscribe to 50 different blogs so you can completely confuse yourself and others?

  19. blackjak100 says:

    After a 75pt down day, markets aren’t really ‘oversold’ here. Just look at hourly and daily RSI. I expect the hourly to hit 6-8 before a 15+ bounce. my target remains the same for now 1985ish.

  20. rd3777 says:

    Well since all the kings men have switched their computers to the GBPUSD…I think this chart might allow a pullback to 1.4000 before it starts down and the Euro might pop up to… It’s time for the big money to by cheap puts….I look for a gap up and crap monday….it might last a little longer.

    • phil1247 says:


      im not great at ew
      but wouldnt it be simpler …..with same result

      to have your b as 1…..then abc up to 2??????????

  21. nyjsec314 says:

    Happy for you tony. This must have been hard to keep the position you’ve held on bear mkt

  22. Guys, why are bla, bla blaing at infinite when this is only a M2 ? Yes, unfinished, but just an M2.
    Someone or something will come out when we will be around the 8/9% retrace.
    Nothing as happened yet, just a stupid, simple, dissentient referendum. Thats all.
    All it saying is, people are sick and tired to work from morning to night just to cover the costs of bread and shelter.
    I know Financial Whales aren’t happy with it, but simply to have to change perspective will not harm anyone.
    All changes are for the good, stagnation is far more dangerous.
    Anyhow, a sane retrace was already strongly expected. The referendum has been the just the excuse that cause it.
    Wave 3 will start sooner than expected going as fast as we are.
    B up soon, C down just after. Than, we will be over and 3 will show up.
    Just simply count: 1-2-3-4-5 &1-2-3. Even a child can do it…..

    • captbara says:

      This 1-2-3 is one of a few possibilities, as usual.

      Interesting to note that 1810 to 2111 was 70 days. If M2 started at 2111 then Jun 28 will be another 70 days.

  23. Igor says:

    I see Tony has placed a black b on the recent top. The SPX is on its way to the February low according to the OEW.

  24. fishonhook says:

    Black Friday for sure which could be followed by a crash on Monday.
    Because I finally sold out of my trapped losing puts, for a tiny profit.
    Suspect many bears did that, just thankful that they could get out of these positions, which may leave the market without short-seller buyers on Monday.

    • Velocity Too says:

      Today will have a ripple effect that will go on for weeks, if not months. Remember the time of year we are in now, too. Even if it pops on Monday, have the huevos to hold on to your shorts. 2 cents.

  25. Thanks Tony

    DJI bullish count,if P5 was not truncated,trendlines in daily close prices

    c of C wave?today was “a”,rebound for “b” then an another drop?

    SP500 possible bullish butterfly formation

    this pattern have 2 possible PRZ(1,27XA or 1,618XA)

    1,27XA = 38,2% retrace and 1,618XA = 50% retrace

    point B was not exactly 78%,but to me the pattern is valid


  26. kvilia says:

    Thank you, Tony.

    So there is a pretty good understanding that 1970 is the target for this move. The big question is about Monday, and although I’m leaning towards continuation of the selloff, this feels just a tad risky to enter a new short position Friday afternoon – yes I sold my UVXY lot mid 14s trying to pick it lowerm which did not quite work out.

    Have a good weekend all!
    BTW, really expected high teens from UVXY this morning – I dont see to much fear yet.

    • kvilia says:

      A question for technicians. Can May lows provide a temp support for the SPX? In this case 2070s may be retested again.

    • Bob Sagget says:

      kvilia – I agree with you. UVXY/TVIX pop when the month 2 futures pop. Really? Brexit didn’t set off month 2? This is ridiculous. Let’s hope reality sets in next week and we see UVXY/TVIX up 3-4X.

  27. bud67 says:

    From Bud — Interesting SP500 market pattern. It appears the guru’s
    are not certain of the developing pattern we see. Thus, calling it
    either Bullish/Bearish. But, that said. FYI. My Meta Stock program
    gave a sell signal 6/9 – the last signal. Therefore, one could have been
    long up to the close on 6/9.
    Now – I have been of the opinion, this is a Bull market. But – the
    rather steady levels of SP resistance 2110 to 2135, Strongly suggest
    a more probable Bear market. On 2/26 was the 1st of (4) RSI sell signals.
    The 4th, was 6/9….point being. That 6/9 RSI sell signal, was a prelude
    to the decline we saw today – the market was primed from a decline, and
    the Brit action, was the fuel.
    Best, guess is that this is, now a Bear market – again given the overhead resistance

    Keep in mind that the last major SP low was 2/11 at 1810.

    Tony, now has a rough job of sorting the 2 patterns out, and pointing to the
    correct one. If a Bear ( as I suspect), then we may drop to below 1960,
    find a low, and then rally to 2030-2040, but that would be it. If a Bull,
    then the SP begins to stop it’s decline near 1970, or as high as 1980.

    Time will tell, which pattern is to survive.

    To call this a Bull market – I feel would take some Fed intervention,
    lowering of rates, for example.

    Best to all — now. I shall go back into quiet retirement….end

    • I threw out a scenario a while back that the algos would not allow new highs until the MACD improved technically enough for a -div on the monthly to disappear…or we

      • bud67 says:

        well, that still may form ie: crash
        the US fundamentals are not very strong,
        and not yet weak so as to, yet see evidence of my comment…end

  28. mtu MTU says:

    [EOD] Stocks –
    SPX is probing for short term support around its MA200 which currently sits at 2020. See charts.

  29. rd3777 says:

    I sold a partial part of my position at the close…A big fat profit in one day is hard to turn down. My thoughts on Monday….if the cable rallies and I think it could push 1.400 then we could pop up and reset….either way today made this last 3 months worthwhile…time to celebrate.

    • wanderer says:

      Well done, 777. I knew you were doing something right when people were giving you hard time because your charts were “embarrassing”. Their charts, on the other hand, were picture perfect, with beautiful straight lines, showing that P5 was in progress, In this business, where only 2% survive, you want to be in a small, small minority.

      • rd3777 says:

        Thanks wanderer, I know people think I’m a clown….but I have learned over the years to study many markets especially when there are large divergences. I also study many stocks that are high flyers and that helps clarify the whole picture. My timing isn’t perfect by any means but my very recent position in PCLN paid off big time…..If Monday doesn’t reset higher….it could well waterfall….but I’m sure the manipulators will figure a way to snatch a push and make one more distribution rally…..maybe!

    • wanderer says:

      From now on, I am going to refer to you as Triple-7, because there is another RD user. BTW, what’s considered a “big fat profit in one day” for you?

      • rd3777 says:

        Well the biggest was 250K in 2004 this one was 1/5 of that….not bad for 2 days work…I learned a long time a go take it and enjoy because tomorrow it just might vanish….

    • Velocity Too says:

      It could very well rally and pop on Monday and beyond (assuming no major events over the weekend), but follow AAH and look longer term (unless you absolutely love day trading). The way to make big money is recognize the longer-term trends and hold. Been following you a while rd3777, but don’t sell now. This is just getting started, even if it pops for a bit.

  30. mjtplayer says:

    Thanks Tony! Moves like this happen when everyone is off-sides and has to scramble. Anyone short the VIX today got slaughtered, inverse VIX ETF (XIV) down almost 27% and down another 4% AA.

    Nice 5 month+ bear flag in the inverse VIX ETF, looks like more downside to come.

    • CB says:

      short the Vix? …going into the “event”?……why would anyone do that?

      • wanderer says:

        Because some people felt it was overpriced.

        • CB says:

          OK, they must be able to afford their “overpriced” mistake

          • wanderer says:

            Under the expected scenario (UK-remain), it was probably reasonable to assume that the elevated VIX would come down to a “normal” range, below $20.

            • CB says:

              OK, it’s betting on a binary event where your outcome may significantly overshoot the “normal” range …plus you may have time decay…etc. so, this kind of betting is definitely not for everyone. Can we agree on that, at least🙂

              • CB says:

                Great. Thank you for the nice conversation, W.
                And now, we can all enjoy our weekend.. =)
                I agree with you entirely: it may be reasonable to assume this or that and it’s OK to bet on an event. However, not exiting such a speculative position ahead of the event becomes… gambling .

                Thanks Tony! Enjoy your weekend everyone!

  31. stmro says:

    I wonder if the FED changes their interest rate policy yet again. From “1 hike in 30 months” to “negative rates within the year”.

    • mjtplayer says:

      The Fed will not go into NIRP, they see how much of a disaster it has been in both Europe and Japan.

    • Dex T says:

      A 0.25 change will have minimal effect on the market.

      What good did the ECB’s QE end up doing? The U.K. is going and the EU may disappear within the next few years. Corporations and and funds needs to review their finances, investments, and taxation policy not screw around with a measly rate change.

      • We’re supposedly in “real negative interest rates” already.
        MR C,are you inviting all of us to your place for an election night party in November?That should be as exciting as yesterday’s Brexit vote,stock marketwise.I’ll mark my

  32. Dex T says:

    Bad close for the bulls! Should be more downside next week. This market continues to break records!

    So as everyone was waiting captivated for Fed “guidance” on rates the U.K. snuck in a huge bear!! Those Brits!

    Looking forward to the weekend update.

  33. wanderer says:

    The trading day is not over yet! After hours, ES sold another 10 points, and is currently at 2018.

  34. Sandra Dons says:

    Tough days… Good week end to all .Thank you Mr.Caldaro

  35. I expect a sharp spike move starting early next week that can actually take out recent highs. Crazy? Perhaps. Bought at end of day SPY 211 and 212 Calls for 7/1 expiration.

    As for the so called “game changer” someone has to explain how the 2 year crash from China and contraction in EU, not to mention the crash in OIL didn’t yet change our game? Inquiring minds want to know? Lets use logic and common sense. Brits have zero effect on our domestic economy. We are a service economy at record lows in unemployment.

    How does a spike move fit in with ANY chart scenario? I am guessing it doesn’t.

    • Dex T says:

      Why use logic and common sense now after you have gone to great lengths to avoid doing so?

      Holly G. silverleibowitz…

      I’ll give you my all expenses paid vacation to a Phoenix trailer park if you end your charade and your rambling.

      If you want to bet to on a V-shaped recovery next week go ahead but don’t need the “perspective”

    • This time I am agreeing with Gary. Next 2 weeks (except Monday), will see sharp rise. UK coming out of EU is NOT economic event at all (provided you understand macro/micro finances). It will go to 2060 as minimum, but we have seen overshoots so, 2080 is also possible

    • On what basis and logic do you see new highs soon? No one even knows the full implications of this yet. At the minimum we have to watch other countries vote. Scotland have another referendum. Did you notice durable goods report or consumer confidence?
      And the Fed, who has been the engine of this run-up is running out of rabbits to pull out of their hats. Last, but not least, we have Trump who just got a big boost.
      Good luck

      • wanderer says:

        “On what basis and logic do you see new highs soon?”

        Undoubtedly, Gary will say, “Saturn is approaching Mercury”, which, according to the Bradely turn dates, will result in SPX 2170 on July 5th, 2016.

  36. cyanus66 says:

    Today Britannia ruled the waves.
    All of them, EW included.
    Many thanks Tony!

  37. mike7x says:

    Thanks Tony! Long live the queen…

  38. 123 abc says:

    Anthony Caldaro, thane of OEW; bow down to thee, all hail!

    The guidance offered by OEW is masterful. Thank you Tony et al for sharing the excellence of OEW theory, it is extraordinary.

    A key statement from the Weekend Update of June 11th provided expert level analysis:

    “We have been counting this uptrend, from SPX 2026, as an a-b-c. Yet when we include a small overlooked wave, using a bullish metric, we arrive at five waves up to SPX 2121: 2056-2047-2103-2085-2121. Which count is correct, the corrective or implusive?”

    Given the aforementioned, below is a desperate attempt to uphold the bullish Primary-v count; looking forward to the OEWcc (coffee-club) this weekend…

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