Friday update

SHORT TERM: market back to resistance at 2100+, DOW +19

Overnight the Asian markets gained 0.4%. Europe opened higher and gained 1.0%. Market front running more central bank QE? US index futures were flat overnight, and the market opened one point below yesterday’s SPX 2099 close. Soon after, the market started to rally. At 10am Construction spending was reported lower: -0.8% v -1.8%, and ISM manufacturing was reported higher: 53.2 v 51.3. The rally continued until 10:30 when the market hit SPX 2109. Then it started to pullback for the first time since Tuesday. At 3pm the SPX hit 2099, then bounced to close at 2103.

For the day the SPX/DOW gained 0.15%, and the NDX/NAZ gained 0.45%. Bonds gained 9 ticks, Crude rose 85 cents, Gold rallied $19, and the USD was lower. Medium term support remains at the 2085 and 2070 pivots, with resistance at the 2131 pivot. Today the Q2 GDP est. was lowered: +2.6% v +2.7%.

The market opened slightly lower today, then rallied to SPX 2109 within 4 points of retracing the entire Brexit decline. From Monday’s SPX 1992 low we now have four waves up: 2027-2016-2109-2099-xxxx. A rally back to SPX 2109 would make it a bullish advance, a decline from here a corrective one. More on the current short/medium term action, and other things, in the weekend update. Best to your three day weekend!

MEDIUM TERM: uptrend probably underway

LONG TERM: neutral


About tony caldaro

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64 Responses to Friday update

  1. fotis2 says:

    Burns’s “7 steps for surviving a drawdown”:
    1. When losing in trade after trade, lower your trading size by 50%. Trade smaller until a winning streak begins. Go even smaller if needed or even take a break from trading.

    2. Only risk 1% of your capital per trade. While this is standard, you must avoid the temptation to trade big to make up your losses. This usually compounds the problem because the market is not cooperative with your style during a down trend.

    3. Stay disciplined with your entries and exits. Do not get sloppy.

    4. Do not abandon your method, you have to stay the course so when your method comes back in favor you will start winning again.

    5. Do not take losses personally. It is not your fault that the market is not conducive to profits if you are trading your proven system.

    6. Do not fall into the temptation to let losers run. Cut your losses at predetermined stops regardless of the pain.

    7. Do not stop tracking your watch list for the markets you trade, be ready to take the right entry when it presents itself. Many traders get so beat up on a string of losses that they stop focusing on their watch list and stop taking high probability entries. You have to be ready to jump back on the boat when it is ready to sail again, just don’t drown while your waiting on the shore.

  2. bud67 says:

    HGX – Housing market, approaching highs,
    not seen since 2005. Thus, think Real Estate,
    is nearing a top in late 2016, or early 2017…

    • torehund says:

      According to Armstrong top end real estate has already topped out, whilst the outskirts is still rising. A downturn into 2033 is on its way.

      • bud67 says:

        Armstrong, was wondering where I
        heard that name before. Yes, he is very
        possibly correct, too. For simplicity,
        the HGX index, words quite well. So does the NY A/D line as well, Tony has
        charts on that index, as well – I use’em…

  3. TripsTrading says:

    This week a High for July 5, wave V-III-1 up, and then a Higher Low into July 12 is my base scenario.
    Enjoy your weekend!

  4. Every once in a while I check with the Greedometer site.He doesn’t do too much public analysis anymore,but today predicted:Within 2 trading days,there will be the opening salvos of a 1929 style crash…unless QE is announced this week.FWIW.Well,it would sync with the new P&F PO.Good luck all.

  5. cosmos77 says:

    thank you Tony for your hard work. I do appreciate you sharing your analysis of this confusing market. The tutorial discusses the difficulty with counting corrective markets. The current one is a great example. Looking forward to the weekend update. Have a safe holiday.

  6. It’s not exactly ‘fireworks’ but when a couple of us pointed out that $NYAD was at a new high for the cycle, and we were not familiar with any bear markets that started with a new high in the a/d line, we were chided to ‘just wait’ because the ‘common stock’ A/D line was the ‘correct’ one to use – and presumably that just wasn’t going to happen. Well, here you go folks — the NYSE Common Stock A/D Line has made it’s new high over the May, 2015 high. What do the technical experts have to say now?



  7. Jack Sparrow says:

    futures have a slight different count – cash equivalent

  8. Can’t wait to see everyone’s conspiracy theories on what happened this week to explain the dip being bought with 15 hands…

  9. torehund says:


    Looks yummy.

  10. Jack Sparrow says:

    Fiona TLT?

  11. torehund says:

    Will EU, start to reel them in…

    • dan pulford says:

      President Obama pleaded for England to stay in the EU. England was wise enough to ignore his plea. England does not want to be ruled by the ‘New World Order’. The trade agreements (TPP) and laws of the ‘NWO’ are not voted on, by the people. England was smart enough to keep their sovereignty. Obama wants to be head of the United Nations and plans to do just that when his term of Presidency of the USA is up. That is why he is pleasing the EU now. He wants their votes. A man with an agenda as big as his narcissistic personality disorder.

  12. vivelaamo says:

    When uptrends are ‘probably’ underway after a 100+ move in 3 days then I have to confess I have no idea what an uptrend is.

  13. torehund says:

    Good weekend Tony and all.

  14. Anyone care to offer your take on the historical usefulness of turn dates, such as Bradley dates, square of 9 dates, sun/moon/stars dates?

    I am feeling like they have no empirically proven usefulness, like they are just another superstition with no real value. I was following a few Bradley turn dates this year and honestly they all turned out to be either non-events (ended up being right in the middle of a wave up or down), were only at minor turns and not major turns, or else were well off the mark by more than a couple days if they were anywhere near any kind of major turn.

    I’ve seen the same with many other ‘technical indicators’ such as head & shoulders patterns, cup & handle formations, ‘shark’ pattern, etc. etc. I’ve been immediately scrolling past when I see any of these turns in people’s commentary here…”Bradley turn date? Stopped reading right there…”

    • Dex T says:

      I think they have some use even though they are not 100%.

      As you mentioned many of the patterns and other TA techniques have not been panning out and there is a lot of frustration on direction.

      For me they help to quantify the “social mood” of the markets just as Elliot Wave is used to describe the patterns.

      Since it’s difficult to gauge investors “mood” looking at some of the “astro” dates and time frames provides some insight on when the change may be from positive to negative. You can notice how jumpy and emotional people get when we are near the full moon for instance.

      I wouldn’t get carried away with it or trade based off of it but it doesn’t hurt to keep them in mind.

    • aahmichael says:

      My experience with all cycle related stuff is that they work perfectly…until you put money on them.

      • wanderer says:

        Yep, that’s called hindsight bias. That’s applicable to not just the cycles, but to anything else that is thought to have a predictive value. Coupled with the over-fitting during optimization, it makes it very challenging to distinguish between what works and what does not. I go to great lengths to avoid it in my backtesting/optimization process, but it still leaks out.

      • torehund says:

        From my experience using cycle analysis like oscilliators (macd, histogram stociastics), , one is often quite a bit to early not waiting for a turn to develop.
        Delaying the investment or jump in when it does turn may remove some of the frustration but missing the ultimate bottom.

    • Our biggest failure is our failure to see patterns!

      By studying the recurring harmonious patterns inherent in mathematics, it’s possible with grasping universe is govern by whole set of laws!

      The law of consequences!
      The law of chance!
      The law of self-deception
      The law of reason
      The law of probability can be powerful instrument in hands of anyone who good judgment are so closely related information that causes price waves cycles. Certainly, no two human beings have potentialities and abilities that exactly match skill set to profit by powerful mathematical beauty in wave patterns. Much of which is still mystery! Albert Einstein express his opinion, one should always stay in the mystery. 1. Opinion broken down into wrong opinion vs right opinion 2. Reason broken down into reasoning process. 3. Intelligence. One can prepare for it but with no guarantee of success. For its level of heightened or true understanding which is the mental level of an initiate. Geometry is called bridge between the One and the many.
      Many outcomes but one right answer.

      • wanderer says:

        It’s very amusing how you always have the same answer, no matter what the question is. I bet that if asked you, “What did you have for breakfast?”, you’d say, something about the law of consequences and the astro energy. In my circles, this is known as “stinking of Zen”.

        • dan pulford says:

          LOL, wanderer you are wonderfully hilarious.

        • My brother, think of a car driving through the night. The headlights only go a hundred to two hundred feet forward, and your radio station ( weather channel) Tonys Blog! Technical analysis had been described as wind stock! Tonys Elliott Wave OEW commentary and analysis is trying its best to predict the future and present weather conditions. Because, all you have to see is the next two hundred feet. And that’s how life tends to unfold before us. If we just trust that the next two hundred feet will unfold as Tonys Elliott Wave analysis projects, You will eventually get you to the destination of whatever it is your truly want. Because you want it. Remember, along the way, your free agency is always at work. Your free to press on breaks, pull over for rest or refuel or sleep. Or turn around. Trust and believe and have faith. Tonys weather forecast and road map is time tested system of market forecasting. Based originally from discovery by Ralph Elliott subjective theory. Drive your financial car, be it super charge sport car, station wagon, carefully. Drive only to what you see ahead of you. Two hundred feet of actually light. Again, life tends to unfold before us as headlights on our cars or trucks. Driving is one of most dangerous events, so is trading and investing. Both carry unseen risk and rewards.

    • phil1247 says:

      bradley dates are turn dates

      just because the chart shows a peak
      doesnt necessarily mean its a top

      also arch crawford always mentioned
      that they only work well when there is high emotion present
      is a 110 point spx rally in 1 week enough to create high emotion ?

      we will see

  15. The stock Buybacks in the S&P 500 continue to increase when the Bears said that they wouldn’t. Buybacks in Q1 jumped 12% in the S&P YoY and was the second highest expenditure on record. For the 12 month period ending March 2016, expenditures were +9.5%. They were +10.6% Q1 vs Q4.

    For the 9th consecutive quarter, more than 20% of the S&P 500 issues reduced their YoY diluted share count by at least 4%. Q2 has seen a similar amount of Buybacks, already at over 4%

  16. Jack Sparrow says:

    oil has become the easiest one to predict so when oil goes by 5/10 dollars in next few days what will that to stock market

  17. 123 abc says:

    Thank you Tony et al, appreciated the daily and intraday guidance this week, look forward to the OEWcc (coffee-club) weekend edition.

  18. bud67 says:

    From Bud — Have a happy 4th Tony. And, stay healthy.
    Best Wishes for a long an healthy, life

  19. johnnymagicmoney says:

    England loses to Iceland but Wales is beating England


    England is having a bad bunch of days

  20. fotis2 says:

    Tx Tony have a great one!And everyone else too bulls and bears and fencesitters.

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