Friday update

SHORT TERM: market surges, DOW +191

Overnight the Asian market gained 1.0%. Europe opened higher and gained 1.2%. US index futures were higher overnight. At 8:30 monthly Payrolls were reported higher than expected: 255K v 287K, and the Trade deficit increased: -$44.5B v -$41.1B. The market gapped up at the open to SPX 2172 and continued to rally. Before 10am the SPX made a new all time high, and then the surge quieted down for the rest of the day. At 3pm Consumer credit was reported lower: $12.3B v $18.6B. In the last hour of trading the SPX hit 2183 and closed there.

For the day the SPX/DOW gained 0.90%, and the NDX/NAZ gained 1.00%. Bonds lost 27 ticks, Crude slipped 5 cents, Gold dropped $23, and the USD was higher. Medium term support rises to the 2177 and 2131 pivots, with resistance at the 2212 and 2252 pivots.

The market gapped up at the open today for the first time in three weeks. On the surge the market cleared the all time high at SPX 2178 and continued higher. The SPX charts were updated to display that Int. wave iv ended at 2148, and Int. wave v is clearly underway. Some interesting observations for this uptrend will be detailed in the weekend update. Best to your weekend!


About tony caldaro

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64 Responses to Friday update

  1. piyushsharda says:

    hi tony,

    this was a discussion with u last week. saw your reply now.
    i am aware that the legend is in 1st page and charts in many pages.
    if that legend could be written as per different colours instead of black.
    this change alone will suffice

    eg supercycle written in shocking blue that is used in all charts ,
    cycle written in light blue, primary written in blue, and so on

    that page can be reference and opened in a tab and other charts can be seen

    i had meant this only.

    hi tony,

    if its not inconvenient for u can u please write the labelling legend in respective colours
    ie “super cycle in shocking blue”, can u write this in shocking blue which u use in the chart .same for other phrases too. it will be convenient for occasional visitors like me to look at the charts.
    tony caldaro says:
    July 30, 2016 at 7:22 am
    The legend is at the beginning of stock charts.
    Stock charts makes it very difficult to create a legend for each chart.
    And with over 200 charts that sort of task would be monumental

  2. vivelaamo says:

    Has there ever been such low volume on a NFP day? Volume continues low up we go.

  3. torehund says:


    ..Good weekend to our Captain Tony, and the gang.

  4. captbara says:

    Seems pretty straightforward

  5. locanbbs says:

    UPDATE: Ndx – ALL INDICATORS GIVE SELL SIGNALS (“Wave 4/c”; see vertical red line with white dots) –

  6. NY A/D line, is a pattern for the NY market.
    The RSI 5, is suggesting a top is forming,
    or will form. Not a time to get Bullish and
    Buy stocks, or ETF’s. IMO….end;

    • bud67 says:

      NY A/D line is currently in a Wave 3 advance, of W5.
      This is a long term chart, Suggesting the Bull Market
      is growing closer to a major Advance/Decline top pattern.
      Chart goes back to 2000 FYI – available on request.

  7. Just to confirm with anyone on Tony’s B count. Int 3 was 104 points, shorter then Int 1. Int 3 can’t be the shortes wave so Int 5 has to be 103 points or less. Right? Putting the max sp at 2250. 2148 plus 103 is 2151. Higher than that means higher, we don’t have to wait for 2345 to confirm we are going higher.

  8. Atlanta GDP is forecasting 3.7% for 3Q no one wants to be short if the economy is acclerating.

    • Earnings guidance for Q3 was 2:1 negative.

      • Among companies reporting Q2 earnings so far, according to Factset Research.

      • Most companies in particular the two biggest market cap. sectors tech and healthcare bet expectations for Q2. Q3 may be revised down but its still positive. I don’t think the market will worry about low earnings growth unless bond yields rise quickly. But yes there are risks to earnings from USD & wage growth strength, + fiscal contraction. Seems this bull market will end when wages inflation accelerates and crimps margins, Fed hikes and the government over taxes the economy running a budget surplus. Everyone is long bonds and gold scared of equities seems the high is at least 3-6 months away at least. US housing remains strong it is a key driving factor in 80% of post war II recessions.

  9. Bob Sagget says:

    Stanley Druckenmiller’s performance record is stellar. The 5-part article below was penned in May 2016 shortly after Stanley’s update at the Sohn conference. Read this then reply. Other than (Central Bank) CB-liquidity-driven higher-highs, has anything changed?

    If fundamentals have not changed for the better since May, can we all agree our recent ATHs are purely CB-liquidity-driven? If we agree to this then predicting future market direction is reduced to nothing more than liquidity discovery. I.e. When will liquidity stop.

    • blackjak100 says:

      No, it is not liquidity driven. In very simple terms, the market is rising because you have interest rates near 0 + low unemployment + higher wages = greater consumer consumption. I’ve talked about this here many times using the industry I work in day in and day out…new home construction.

      • Bob Sagget says:

        Thanks for the reply. I ask the following only to clarify & learn…(not to disagree)

        In your view, how does greater consumer consumption translate into higher S&P 500 index prices? More confident consumers/retail are buying the S&P? Or, market analysts recognize greater consumer consumption and are thereby recommending MFs, pensions, and institutions buy the S&P 500 and/or the underlying constituents that comprise the index.

        • blackjak100 says:

          I have no problem with you disagreeing as this is just my opinion. Supposedly 70% of the economy is dictated by consumer spending. I understand your question and not sure I have a great response. As long as the economy keeps adding jobs and the consumer keeps spending and consuming more, that translates into multiple expansion for the S&P. We all know earnings have been stagnant so the market rising has to be due to multiple expansion.

    • tony caldaro says:

      While I respect Stanley’s opinion he is only looking at reported earnings.
      SPX GAAP earnings dropped 20% over a 5 quarter period, and appears to have bottomed in Q1. Meanwhile the SPX over that period only corrected 15%.
      Why only 15%? Probably because of liquidity and future expectations.
      Future expectations? Q3 GDP is estimated to grow three times faster than the reported +1.2% for Q2. Right now the numbers appear to make sense.

  10. mjtplayer says:

    The VIX closed today below the lower BB, a rare event. From what I can see, it’s only happened once in the past 3 years (my BB data only goes back 3 years).

  11. Ajney says:

    We did get the energy waves but the market went for the alternate count we had and have eliminated the short term bearish preferred count. Gold, dived back into the channel it struggled to get back out of. We have lots of wave hits next week so would expect a commensurate expansion of the trading range as well.
    Charts at

  12. mike7x says:

    Thanks Tony. TGIF!

  13. bfquant says:

    Tony. I would be interested to know how a B wave advance in the S&P jives with your very bullish outlook on the Asian markets.

  14. stmro says:

    From Zero Edge. They’ve been wrong for 8 years, but they’re on to something here:

  15. The Bollinger Band width on the SPX has made consecutive new lows for the past 252 trading days. This event nearly always indicates a medium-term rally termination, prior to some sort of med-term pullback (within the context of a Bull Cycle as the SPX is in currently). The big question is whether this rally terminates in the front half of next week with a spike above the Upper Band and weak candlestick(s), or instead closes strongly above the Upper Band early next week and then goes on a termination Band Ride thrust for a week or more to the higher targets. In either case, this BB Width signal agrees with Tony’s 5th wave count on the intermediate degree.

  16. Lee X says:

    Thanks Tony
    Looks like a dry week coming your way in the Heartland, you might be mowing till November 😉

  17. Jim Miklos says:

    CRASH count confirmed today! Beware the 9th of August. Have a great weekend!

    • fotis2 says:

      CRASH has been just around the corner since the 1810 lows and after every 20 pips up for some now had I traded the other side……

    • vivelaamo says:

      If you look at the trendline from Feb low’s to earlier this weeks low’s you will see how strong this trend is. The Brexit drop is just an anomaly. Previous corrections of crashes have consolidated first before but falls. The signs have been there. This is nothing but a pure bullish move fall steam ahead. There is more chance of Trump being next president then a pb to this weeks low’s on the 9th let alone a crash.

      Anyway hope you stick around on and after Tuesday.

      • Extremely poor volume on this up move.

        • vivelaamo says:

          True todays volume was very low and that is probably the only bearish technical sign at ATH’s Can you see any others? Alternatively can you seen any bullish technical signals?

          • Yes, I do see other bearish indicators Daily, weekly, and monthly stochastics on the S & P 500 look like they’ve completed their up cycles, meaning that the next cycle is likely downward. The only indicator that is giving a contrary signal is the S & P monthly MACD which is trying to turn positive, but seems to be struggling. The directional indicator I use is indicating a sideways move, preceding a down move. And, there is a multiweek, and multimonth megaphone pattern which is bearish. The only bullish indicators I see are the mixed signal in the monthly MACD for the S & P 500 and the fact that the rising wedge in the S & P 500 that started in 2009 has not reached it’s apex, which it could do. The apex seems to be at 2250.

          • Sorry, Tony. I am trying to keep my replies as short as possible, the space taken away from the margin when one replies seems to makes them look extra long.

    • captbara says:

      No offense but I’d like to see less of these kinds of posts. No chart, no TA, nothing. Just your own personal confirmation that you don’t bother to explain. Looks extra foolish especially when your major top call on Tues got exceeded today.

Comments are closed.