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

CHARTS: https://stockcharts.com/public/1269446/tenpp

About tony caldaro

Investor
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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.

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  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

    Read more at http://www.maxkeiser.com/2016/06/the-magic-number-7-brexit-collapse-falls-exactly-on-shemitah-date/#PK03OOCwrkjX5uay.99

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  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.

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  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.

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  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.

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    • 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

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  6. fishonhook says:

    Very simple TA that works.

    AAPL

    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.

    http://stockcharts.com/h-sc/ui?s=AAPL&p=D&yr=2&mn=0&dy=0&id=p25384819275

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    • 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

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      • 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!

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  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

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  8. Bob Sagget says:

    Fiona – Any updates from Raymond James?

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    • kvilia says:

      You, Bob, you 😉

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    • fionamargaret says:

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

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      • fionamargaret says:

        https://raymondjames.bluematrix.com/sellside/EmailDocViewer?encrypt=2e82b0f1-36bb-4b64-b22a-bd516a2d161d&mime=pdf&co=RaymondJames&id=Jeffrey.Saut@RaymondJames.com&source=mail
        ..in 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

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        • 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.

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          • 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

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          • 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.

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          • 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.

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        • Jack Sparrow says:

          thanks

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      • 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.

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      • 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.

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  9. manunidhi21 says:

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

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Comments are closed.