Thursday update

SHORT TERM: trading range continues, DOW -16

Overnight the Asian markets lost 0.2%. Europe opened higher but lost 0.5%. US index futures were higher overnight, and at 8:30 weekly jobless claims were reported higher: 266K v 253K. The market opened one point below yesterday’s SPX 2167 close then began to pullback. In the opening minutes the SPX hit 2160, then rallied to 2168 by 10am, before revisiting 2160 by 11am. After that the market started to drift higher. In the last hour of trading the SPX hit 2173, then dipped to close at 2170.

For the day the SPX/DOW were mixed, and the NDX/NAZ rose 0.35%. Bonds gained 3 ticks, Crude dropped 85 cents, Gold slid $4, and the USD was lower. Medium term support remains at the 2131 and 2085 pivots, with resistance at the 2177 and 2212 pivots. Today the Q2 GDP est. was lowered to 1.8% v 2.3%. Tomorrow the BOJ announces their stimulus package, Q2 GDP will be reported at 8:30, the Chicago PMI at 9:45, then Consumer sentiment at 10am.

The market opened slightly lower today then pulled back to remain in the 20 point range for the eleventh trading day in a row. Thus far the entire sequence appears to look like a double three, taking the form of a Minor wave 4 flat. Apparently this market has been waiting for some sort of catalyst to clear the range. Maybe the BOJ or Q2 GDP will be it. Short term support is at the 2131 and 2085 pivots, with resistance at the 2177 and 2212 pivots. Short term momentum has been bouncing between overbought and oversold all week with no net progress. Trade what’s in front of you!

MEDIUM TERM: uptrend

LONG TERM: uptrend


About tony caldaro

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112 Responses to Thursday update

  1. Scott C says:

    Hi Tony et al,
    I am curious if you feel we have enough waves in place to be at B now or with a small spike higher? Or do you want to see us into 2250-2280? Or all the way to the max? What i mean by that is it better for the B wave to run to those levels or is it just as equivalent if it finished with one more push higher? Is there any precedence in having a short 5th here or a truncated one if we had a pullback to 2131 pivot?

    Also, are the percentages of a the B wave count 50%; the NYSE 50% and then the Dow super bullish one still as an alt/outlier?

    I Left myself in a lot of positions for that B wave count before your writeups turning neutral and us knowing about the proprietary indicator (WROC) that went off above the 2085 pivot and curious how this is tracking. Everyone seems to see resolution to the upside even in the EW world.


  2. gtoptions says:

    Thanks Tony
    Nested 1,2 complete?
    GL & Good Weekend All 😉


  3. learnedmylesson25 says:

    Foxbiz says Europe will release stress test results at 4pm EDT,including Italian banks and Deutschebank. Fact or fiction?Welllll,we couldn’t possibly handle the truth,so–fiction,I’m sure.
    Will the market ignore another -div on the daily SPX?Time to roll over boys.


  4. NEWBIE says:

    Smart money buying physical gold , silver, and uvxy. Dumb money long.


  5. johnnymagicmoney says:

    GDP estimate was 1.2 1stQ revised to .8 (ouch)

    GDP for 2ndQ was supposed to be 2.6 revised to 1.2 (ouch ouch)

    no FED rate increase = GOLD!!!


    • mjtplayer says:

      Average it out, was just had 1% GDP growth in the 1st half of 2016. Nothing has changed, the economy is still lousy. European GDP missed too. Global growth, as a whole, is very weak.


      • the wheels of the world economy are greased with dollars and debt, so they have to make the dollar attractive and push more debt. An attractive dollar means lower currencies across the board and economies abroad pumping and humming, maybe coughing here and there but if that is what it takes they the Fed might have to rise. Last rise was in a 0.9%GDP print so considering your number that might be just enough. Sometimes I agree with Gary…


        • attractive debt too…considering negative interest across the world…we might be the off white yellow shirt best suited for that. I am sure Fed and US Gov will have more debt to push to understanding parties seeking some return on their dollars.


    • Consumer purchases were up 4.2 percent. I would call that a good number. Businesses contracted their spending for the last 3 quarters. At some point they will have to revamp spending.


  6. How low can Crude go before it affects the SP500? 41 seems like a resistance area right here.
    While quarterly earnings are clearly upbeat and driving the negative percentage to around 2, the next quarter guidance is only a 3 percent swing upward. All the baked in earnings are thrown into 4th quarter with a big 9 percent expectation. If Oil doesn’t behave itself and breaks below 40 that number will be revised lower. So just how critical is Crude in the overall picture of the indices?


    • Revision: meant to say Q1 will have the 9 percent gain.


    • fionamargaret says:

      Gary would have to look at the performance of the S&P when oil was around 26…


      • Conditions are way different even if OIL was to drop again. Companies already went thru that process and would already be much leaner. The weaker leveraged companies already left or got consolidated. The first 4 to 5 years of the post housing debacle saw companies adjust to the new environment very well. The domestic consumer during the worse of the oil decline never went into a recession and in fact discretionary spending saw no difference. I am not talking about a recession but rather how it would affect the earnings picture across the board. I assume a weak OIL picture would reflect weaker demand against the now increased supply. Is that reflective of overseas contraction or just an over supply issue?


        • johnnymagicmoney says:

          yeah those GDP numbers were awwwwwwwesome lol


          • GDP range this whole recovery has been from 4.5 to 0. In that time we tripled in price. next quarter is pretty consistent between 2 and 2.5 percent. based on actual domestic spending and other activity it should hit around there. Anyone worried we go into a recession here? I look for correlations that work between earnings and economic data. In a zero rate environment you have to use historic parameters meeting that condition. At this stage I am only concerned about the ability to produce more profits, not fall into a recession. I suppose if we do get 4 percent GDP at year end people would find reasons to expect a crash there also. Deep drops or crash scenario over next 5 months seem remote.


        • how about states like Russia or SA that base their budgets on certain oil prices? Venezuela is a case pending right now…heavy crude not so much market for it as oil sands are pushed forward. And Canada is in that pot too.


  7. mtu MTU says:

    [1140am] SPX/INDU update-
    The notable divergence between SPX and INDU (Chart 1) appears to favor the green 4 or the blue [b] (Chart 2).


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