Friday update

SHORT TERM: gap up opening faded, DOW +73

Overnight the Asian markets gained 0.3%. Europe opened higher and rallied 2.0%. US index futures were relatively flat overnight until the monthly payrolls report. At 8:30 payrolls were reported lower: 151K v 255K, and the trade deficit narrowed: -$39.5B v -$44.5B. The market gapped up at the open to SPX 2182, then hit 2185 by 10am. The market had closed at SPX 2171 yesterday. At 10am factory orders were reported higher: 1.9% v -1.5%. Then the market started to pullback. The pullback lasted until 1:30 when the SPX hit 2174. Then a rally into the close end the week at SPX 2180.

For the day the SPX/DOW gained 0.40%, and the NDX/NAZ gained 0.35%. Bonds lost 7 ticks, Crude rose $1.05, Gold gained $12, and the USD was higher. Medium term support rises to the 2177 and 2131 pivots, with resistance at the 2212 and 2252 pivots. Today the Q3 GDP estimate was raised: 3.5% v 3.2%.

The market gapped up for the first time since last Friday. By 10am the market had rallied to SPX 2185, but then started to pullback. At 1:30 the SPX had nearly closed the opening gap when hitting 2174. Then it turned higher. While we have been expecting the market to enter a correction, all it has done for the past few weeks is to enter a choppy pattern with a downward bias. The 2% range has managed to work off the overbought condition created by a 200-point two month rally. In fact, the daily RSI on all the major indices put in a positive divergence yesterday. This often occurs at downtrend lows. More in the weekend update. Best to your three-day weekend!

MEDIUM TERM: pullbacks but no correction

LONG TERM: uptrend


About tony caldaro

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24 Responses to Friday update

  1. Thanks Tony
    Four hours chart,blue is wave 3 extension count
    If this is wave 4,wave 5 will be limited by 3,as Tony have mentioned

  2. fionamargaret says:

    …the latest from McClellan…….Thanks

    Thanks Tony and everyone……

  3. mtu MTU says:

    MTU weekly commentary – Monthly Outlook Update (9/2/16
    Stocks, Bonds, USD, Gold – key intermediate term scenarios to watch

  4. P&F has revised its gold price objective DOWN to 1241 from 1289.It still has $USD going to 84 (as it has for months).One of these is wrong,of course–unless there’s a tremendous deflationary crash.Hope not.
    My thinking is if gold can build on this,and GDX breaks above the 20sma at 29.60–that may have been the correction.Seasonals soon -or now,add to the possibillities.Added a bit more today.Good luck all.

  5. Equity markets love the US weak employment data no Fed hikes for 2016 no global increase in the cost of offshore USD borrowing. Happy days for risk assets

  6. 123 abc says:

    Thank you Tony et al. Great OEW daily updates despite a sideways week, much appreciated. Look forward to the OEWcc (coffee-club) update; a good weekend to everybody.

    Speculating that the NYSE count is Primary-v→Major-3→Intermediate-iii as follows…

    • blackjak100 says:

      I agree with the count as it’s the same on $SPX. How you got there with your random 123-abc is another story.

  7. Gold ready for next move up🙂 All the talks of Fed Raising Rates are fading away now🙂
    This time around, I am hoping for a strong push to 42 on GDX🙂

  8. fotis2 says:

    Tx Tony one more leg up?Don’t follow BBs looks ripe for a breakout.

    • vivelaamo says:

      Yep. Feels crazy to even think about going long here. Which is why it’s most likely the best position to take. Especially with the amount of stops positioned just above all time highs.

      What I find interesting is that RUT is top of bollinger band and looking like a pb where as s&p and Dow are still below the 1moving average and could
      go higher. What does this suggest? Risk on behaviour favouring small caps?

      The equivalent market in UK is rarely followed so any thoughts would be wwelcomed.

  9. rd3777 says:

    When will it end? Despite seasonal cycles the triangle continues to advance….it is clearly very long in the tooth here,and could end @ anytime.

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