Friday update

SHORT TERM: marginal new all time high, DOW -24

Overnight the Asian markets lost 0.3%. Europe opened higher and gained 0.3%. US index futures were lower overnight. At 8:30 Q2 GDP was reported lower than expected, but higher than Q1: +1.2% v +1.1%. The market opened two points below yesterday’s SPX 2170 close, then pulled back to 2163 by 10am. At 9:45 the Chicago PMI was reported lower: 55.8 v 56.8, then at 10am Consumer sentiment was reported lower: 90.0 v 93.5. Just after 10am the market started to rally. Just past noon the SPX hit a new high at 2177, then began to pullback. The pullback lasted the rest of the day as the SPX hit 2171 by 3pm, then bounced to 2174 to end the week.

For the day the SPX/DOW were mixed, and the NDX/NAZ gained 0.15%. Bonds gained 17 ticks, Crude rose 30 cents, Gold rallied $14, and the USD was lower. Medium term support remains at the 2131 and 2085 pivots, with resistance at the 2177 and 2212 pivots.

The market opened lower today, remaining in the 2156-2176 two week range. After hitting a low at SPX 2163 the market rallied and exceeded the range by just one point. After hitting the OEW pivot at 2177, the market pulled back for the rest of the day. With today’s slightly higher high Minor 4 appears to have concluded at SPX 2059. Minor 5 is currently underway. We calculated some Fibonacci targets for Minor 5, and will present them in the weekend update. Best to your weekend!

MEDIUM TERM: uptrend

LONG TERM: uptrend


About tony caldaro

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27 Responses to Friday update

  1. fotis2 says:

    Hume makes the statement ”Oil has fallen by more than 20% wich is the definition of a Bear market” You guys agree with this definition?


  2. joecthetruthteller says:

    This has been anecdotally a very very tight range in the S&P 500; now there is data to show this is a bit of history in the making.

    For the last 11 trading sessions, the large-cap index has traded in a range of 0.92%—the tightest range going back to at least 1970. Furthermore, the S&P 500 saw a streak of alternating higher and lower closes for 11 straight days—the third longest range of such movements on record. “Anything that hasn’t happened in over 40 years is rather eye-popping, even if the stats themselves are, in fact, boring,” said Frank Cappelleri, technical analyst at Instinetl. But according to Cappelleri, this isn’t just an interesting statistic but suggests that the stock market is poised for a new breakout to fresh highs.

    “After the historic Brexit-induced reversal and subsequent face-ripping rally, we’re now seeing an historical spate of nothingness,” Cappelleri. But this “nothingness” is in fact “the best case scenario after the breakout through 2,135” and a “bullish flag,” as it implies that the market is “constructively [digesting] the move.”

  3. Hi,thanks Tony
    looks like the Dow is developing a flag
    target of double bottom (20600) is very near of the double busted triangle(20400)
    it’s improbable that the benchmark return inside wave 3 channel
    so maybe it keep touching it’s lower trendline

  4. blackjak100 says:

    Not sure how much upside is left for $SPX Minor 5. I’m not short SPY, but extremely long gold. Gold looks extremely bullish from here. Possible 3rd wave up at multiple degrees in progress from $1330 just hit 16 hrs ago.

  5. rd3777 says:

    By my count we are in a 3 wave structure which is wave [Z] of the Fed’s supercycle 3 wave paradigm. 14 months of insider selling was not enough to top the market as the CB’s again bought the market @ the brexit low. I expect the market will attempt to top around 2260 in about 3 weeks…we might have another X wave down though extending the final top into September or October. I would guess the Central banks will own more than 80 percent of all stocks…much like the BOJ does now….Thanks TC….

    • rd3777 says:

      And I can’t count out a total blowoff up 2500+ considering if Trump is perceived to be the winner…
      I think since orthodox Elliott is dead as is any form of technical analysis we could have entered the stages of a “banana republic” especially if the CB’s start massive QE programs and accelerate the control of the criminal syndicate in this country as Trump will be no guarantee to be able to stop the thieves from screwing everybody.
      I changed the labeling of the 2nd X wave. Just looking @ the advance from the Brexit low…I think it needs a red bar and then a final advance…so that the pattern has 11 waves up…time will tell.

    • Central banks owns mostly gov. bond markets not stocks. You can see it on their balance sheets. So they own a big chunk of the gov. bond market. The idea behind QE is to buy the bond off you or a fund manager this gives you cash and then you inject that into the stock market to create the wealth effect on GDP because the return in bonds and cash is to low compared to equities.

      • rd3777 says:

        A technicality,as it was announced today that the Fed partner SNB(swiss) had bought billions in stocks since Brexit. The Fed does swaps with the SNB as the Fed has literally purchased trillions of dollars of stocks through their surrogates. Also the ECB injected 600 billion alone since Brexit.
        It is a criminal syndicate operation as billions of dollars stock options are executed by boards of directors and then sheltered in off shore accounts mainly in Swiss banks…that’s the Swiss connection. Also the world’s largest covert intelligence operation is in Switzerland operated by the CIA and others.

      • We must always be mindful that in The USA, “central bank” means The Federal Reserve System which includes the primary dealers which are required to bid at The Treasury auctions. True, it’s mainly US government debt which is bought low and sold high by these dealers. However, any gains can be used any which way the dealers choose, to include proprietary trading operations involving equity instruments. The results of these proprietary dealings by the primary dealers will not be seen on The Fed balance sheet.

        • My understanding is the primary dealers are JPM and Citigroup etc all the investment banks and they will have large derivative positions which are now closer to matched then they use to be due to tough bank regulation. I doubt the Federal reserve system of sub banks will have a lot of equity positions. Best way to check is to look at the large cap stocks ownership in the annual reports this will demonstrate no large scale central bank or federal system ownership.

  6. Tony like your primary B count for the US, like Japan and Europe you need to have recession and bear market of -30% to trigger fiscal QE in the US. Thinking further USD appreciation for large cap tech and healthcare stocks which dominate the S&P 500 & Nasdaq will hurt earnings. Can you remind me what the maximum projected level of Primary Wave B is for the US tks . I think the JCB yesterday did everything right not cutting rates more negative (fosters more savings), its really now up to the Japanese government to expand fiscal policy in combination with the central banks buying of the new bonds, that’s how you will get inflation and spending, it should be very positive for equities. Not so good for bonds and property. I kind of think the US is still in late cycle 1937, needs one more recession before it undertakes fiscal QE, the low in US 10yr gov. interest rates was 1942 during the massive WWII fiscal expansion. In 1930’s Germany and Japan undertook a massive fiscal expansion (30% deficits), which got those economies back to full capacity the only problem was the military took control of the budget and keep going with the expansion creating too much inflation, rather than steeping back and letting the private sector take the next leg of the recovery.

    • tony caldaro says:

      Max upside is SPX 2335 for P B.
      Unexpected weak GDP number today. No rate rise under these conditions.
      Like your Fiscal QE Japan observation. They did not mention any tax cuts though.
      FED still has lots of ammunition despite what the pundits say.

      • Japanese gov. only confirmed the size 24t yen of the stimulas should confirm details soon. A key positive was no further cut into negative cash rate territory the long end of the curve rallied hard so good for Japanese banks as they need a net interest spread to make money. Looks good for Japanese equities. Best trade I can see.

  7. 123 abc says:

    Thank you Tony et al, the daily guidance is much appreciated. See everybody at the OEWcc (coffee-club).

  8. torehund says:

    Good weekend Tony and all.

  9. purplember says:

    GDP growth of .8% isn’t good but some keep pounding the table consumer is great. if consumer spending was up 4.5% and consumer is 70% of GDP then business spending (30% of gdp) is horrifically bad to get gross of .8% growth.

  10. fotis2 says:

    Bulls carefull of monthly 3BR on CL 34.75 potential target longer term

  11. fotis2 says:

    Tx Tony nice weekend to all..

  12. bud67 says:

    Tony, thank you for your work.
    No one, does market analysis better
    than you…take care.

  13. vivelaamo says:

    Thanks Tony. if we continue consolidating for the next few weeks then I can see a sharp move down. But I expect another breakout early next week. As Newbie mentioned dumb money is bullish and he is probably right in a longer time frame. But for now if it means being on the side of CB’s and governments I’ll happy be dumb money. Have a good weekend all.

  14. Still a decent -div on daily S&P?

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