Thursday update

SHORT TERM: market pulls back after ECB meeting, DOW -46

Overnight the Asian markets gained 0.3%. Europe opened lower and lost 0.3%. US index futures were higher, then lower overnight, and at 8:30 weekly jobless claims were reported lower: 259K v 263K. The market opened 5 points below yesterday’s SPX 2186 close, and continued down to 2177 by 10:30. After that the market rallied to SPX 2185 just past 11am, nearly reaching unchanged, and then headed lower again. Just before 2pm the SPX hit 2178, then bounced to 2183 by 3pm when consumer credit was reported higher: $17.7B v $12.3B. After that the market settled at SPX 2181 at the close.

For the day the SPX/DOW lost 0.25%, and the NDX/NAZ lost 0.50%. Bonds lost 19 ticks, Crude rallied $1.90, Gold slid $7, and the USD was higher. Medium term support remains at the 2177 and 2131 pivots, with resistance at the 2212 and 2252 pivots. Tomorrow: wholesale inventories at 10am.

The market opened lower today, dropped to SPX 2177, rallied to 2185, then dropped again. After the ECB failed to make any changes to its EQE program European stocks fell and the SPX followed. During the decline we updated the hourly chart, which is still on a negative divergence, to display a possible 5th wave diagonal triangle pattern we recently uncovered. This pattern was observed in the DOW during 2014, and this pattern was confirmed in the SPX during the 2002-2007 bull market. While the conventional diagonal triangle is a contracting triangle that works its way towards an apex. This diagonal does just the opposite. It starts with the apex and expands outward. We’ll call it an inverted/expanding diagonal. The five waves of the diagonal would be: 2194-2169-2193-2157-2188 (thus far). If the E wave failed at SPX 2188, then a potential downtrend is underway now. If a rally back to resistance at SPX 2193/94 is required to complete the pattern, then a potential downtrend could unfold at that point. Short term support is at the 2177 pivot and SPX 2157, with resistance at SPX 2194 and the 2212 pivot. Short term momentum is still declining after yesterday’s negative divergence. Trade what’s in front of you!

MEDIUM TERM: uptrend topped/topping ?

LONG TERM: uptrend

CHARTS: https://stockcharts.com/public/1269446/tenpp

About tony caldaro

Investor
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202 Responses to Thursday update

  1. Fed blackout period starts Tuesday–it should be year round.Dollar starts moving down based on ISM and payrolls and they can’t let it play itself out.But no rate hike…then rinse and repeat.They should be arrested,as well as the Wells Fargo crooks(which I haven’t heard of one arrest).This is all winked at.No reality to any part of this.Houses are flipped,cars are leased-and reported as new sales,credit card accounts are invented,government stats are bogus,markets are propped up–others are suppressed.No more from me today.Adios.

  2. ariez5 says:

    OK, my count is invalidated. But Tony, I don’t understand your explanation. “2194-2169-2193-2157-2188” is 4 waves. The E wave would be down, and this is all supposed to be a 5th wave?

  3. johnnymagicmoney says:

    Oh my god the market can actually drop???? Oh my!!!!!!! Bulls are quiet

    Where’s Holly?

  4. purplember says:

    Tony, what’s the next support pivot below 2157 ?

  5. John Arella says:

    Expanding triangle on Nasdaq?

  6. Page says:

    This is the pullback we have been waiting for, Monday will be another down day the turnaround begins on Tuesday and will not look back again until 2250-2300.
    Gold/Miners looking attractive at this point.
    Oil going back down to 43-41.
    NatGas looks good to short here.
    🙂

  7. stmro says:

    Next FED governor (Tarullo), steps up to the plate.
    The crowd goes silent with expectation.
    He swings; he’s dovish!
    SPX rallies 5 points in short order.

  8. …and we’re off!Days like today could easily see a 90 point downday for the Nasdaq.Gold is disappointing–looked like if GDX were to retest 25.50,there would be a +div.Check it again later.Meanwhile support at 1330 possible.Good luck all.

  9. gtoptions says:

    Thanks Tony
    Great call on that ED, just in time.
    SPY ~ WR1 to WS2 again. Can it expand below next week. I sure hope so!
    GL & Good Weekend all.

  10. gasman88 says:

    C, BAC and other banks up on a day like that? Do the financials tell us rate hike is coming?

    • fionamargaret says:

      ..in Europe earlier, they were discussing Brainard perhaps mentioning a rate hike in September ….she speaks on Monday….thus the bonds…

      • phil1247 says:

        the market has been raising rates for months
        this is just more of the same

        historic bond collapse is brewing

        TLT was an accident waiting to happen as i warned months ago

  11. allen1929 says:

    Trin .47 this am
    someone explain why so low during selloff of es

  12. John Arella says:

    Looks like a triangle pattern, lets see if it holds

  13. stmro says:

    Rosenberg, who is normally a dove is jawboning about a September rate hike. I dont believe they will actually raise, but this might finally catalyse a correction over the next 2 weeks.

  14. phil1247 says:

    ok everyone

    have a great weekend !!

    going on auto pilot soon

  15. phil1247 says:

    /gc

    still in extension shorts

    bearish below 1342

    THIS …..is how its supposed to work ….. 🙂
    not fooling with gold ..it just bounced off 18dsma

    mixed picture now

  16. phil1247 says:

    /cl

    extension long failed as i bailed yesterday
    looking for possible short entry

    we have two equal sized waves up from last thursday abc
    and about to overlap first wave

    • phil1247 says:

      consider /CL
      possible wave e 3 wave surge complete post inventory news

      e waves come on excitement

      possible end of wave 4 triangle from feb 2016

      now start of final collapse down to 14 dollars?
      bearish below 47.24

      no position

  17. phil1247 says:

    /esz6

    2157 target hit ( close enough)

    took profits on spxu at 23.46

    not reversing to long yet but may go long later

  18. Looks like 2152 is up next. Then new highs over the next few weeks.have a nice weekend all

  19. mtu MTU says:

    [745am] ES update-
    Potential for gap fill and testing of MA50 in the cash index. See charts.
    http://market-timing-update.blogspot.com/2016/09/market-timing-update-9916.html

  20. blackjak100 says:

    3 waves up to 2188 and now 3 waves down to complete this AM??? Yesterday’s action looked like a B wave triangle and now a C wave down to 2171 max (1.618*A). Any drawdown beyond 2171 or 2177 pivot would be concerning for the bull case IMO. Any reversal near 2171ish would be encouraging for the bull case and could indicate a breakout for next week. GL and cheers!

    • blackjak100 says:

      Now looking to open below 2177 pivot as futes deteoriate which would be bearish IMO unless it can miraculously recapture it before close.

  21. fotis2 says:

    Looks like 4th try on Resistance US10year
    http://invst.ly/2e2–

    • phil1247 says:

      fotis

      bonds still in extension shorts

      zb looks worse than zn but zb just hit daily short target

      barring total collapse in bonds
      we should be able to get a better short entry

  22. Late headline…fwiw.Add THIS to Wells,the CPI,gold manipulation,the PPT and FBI director Comey:
    “With the swipe of The Labor Department’s pen, 150,000 newly created jobs were ‘revised’ out of existence yesterday.
    As The New York Times reports, the U.S. economy likely created 150,000 fewer jobs in the 12 months through March than previously estimated,the Labor Department said on Wednesday.This revision – which shifts payrolls data lower in 9 of the last 14 months, is enough to knock 12k jobs off each month on average – likely kicking many of these prints to a ‘miss’… not that it matters anyway… ”
    If this was known at the time,bond rates would be lower,gold higher and stocks–well,who knows?
    Good thing I’m not a suspicious person.

  23. Nasdaq 225 new highs 105 new lows.Another verified Nasdaq H.O.McClellan Oscillator above 0,uptrend–the works.Shouldn’t be too long.

  24. jobjas says:

    Looks like uptrend from 1810 topping soon . If so next target is below 1800 for P4
    http://invst.ly/2e15e

  25. Jack Sparrow says:

    Christine -columbia- i am impressed

  26. chicotheman says:

    Thanks Tony, looking forward to the weekend update.

    Thanks Ajay for the info earlier. You should continue to write here because it is the best forum of its type. Do you write or blog somewhere, how can I track your count?

    • ajaysinghi says:

      I checked the chart again after my last post to you. The top is already in. We seem to have had a failed 5th. A &B done and now C will form an ED, which will last almost a month. There will be more than one iteration between 2040(2060)- 2080.

      This mkt will require lot of patience though volatility will pick up from mid of next week.

  27. ariez5 says:

    I don’t post a lot, but I am going to repeat myself: The market does not usually hang around the highs this long. I see an ending diagonal possibly forming for the wave that started at SPX 1992. From the fourth wave low at 2147,
    A: 2147-2194
    B: 2194-2157
    C: 2157 –
    I think there’s a good chance we see the 2212 pivot before a larger selloff. A break of 2157 will obviously condemn this interpretation.

    • blackjak100 says:

      ariez5 with all due respect it looks nothing like an ED and I know you’re a smart dude. An ED should ALWAYS have an upward or downward bias and this movement has been sideways for almost 8 weeks. If anything, it looks like one large triangle.

  28. Jack Sparrow says:

    Fiona reference the earlier discussion so today it was all about oil report not the waves…next week it would be about the waves. it just happened that waves were pointing in both directions.

  29. dan pulford says:

    TNA started a textbook [small degree]Ending Diagonal, on 8/13/2016. It is still printing if the 5th wave has not failed. A fifth wave failure is rare, in this pattern. The VIXter The 5th wave of an ending diagonal often ends in a “throw-over,” of the trendline connecting the end points of wave i and iii. While volume tends to diminish as a diagonal of small degree progresses, the pattern always ends with a spike of relatively huge volume when a throw-over occurs. On rare occasions the fifth subwave falls short of its resistance trendline. By; Frost and Prechter, “The Elliott Wave Principle” Key To Market Behavior.

  30. dan pulford says:

    TNA started a textbook ending diagonal on 8/13/2016. It is still printing if the 5th wave has not failed. The VIXter

  31. Ajney says:

    Since last weeks energy date cluster crude is rising into the energy date tomorrow. Caution is warranted after the surge today. Bonds saw a real/fake technical breakdown today. Real/fake to be decided shortly. Details at https://astroanalytics.wordpress.com

  32. max torbreck says:

    Hi Tony,
    Just to summarise, you thinking the SPX has or is about to top soon, followed by a correction back to at least test 2130 level?
    This seems to make some sense with Sep not being a great month for equities.
    THX

  33. bfquant says:

    Another question Tony. The third leg of the ED appears to be the shortest. I thought that wasn’t allowed?

  34. bouraq says:

    Chart of the day is GOLD by https://www.tradingchannels.uk

  35. bfquant says:

    TC. Just trying to learn something about the method. So if the S&P confirms major A of Primary C, say, in the off chance, soon, the Dow and NYSE counts inevitably have to change right?

  36. Big scandal breaking on Wells Fargo for INVENTING thousands of credit card accounts,using customers personal info.Only 150 m dollar fine.Yellen give them an okay?Lots of this stuff is invented…lol.

    • If credit card accounts can be invented to enable bonuses to be given,what else is invented?Probably a lot more than we could imagine.Only 1% of this stuff gets caught.Throw in the gold manipulation that Deutschebank and others owned up to,government statistics that we KNOW are false (like CPI)…and it’s pretty damn disgusting.

      • vivelaamo says:

        This is shocking. In UK banks were misseling payment protection for years and have had to pay out billions!

        • Did you mean misselling? You forgot the second “l.”

          • Oh, and in the US, we put the quotes outside of the period (it’s the opposite in the UK), just in case you’re tempted to proofread my post.

            • vivelaamo says:

              My earlier post got deleted for some reason which is strange considering the abuse I got yesterday still seems to be present. For the record Christine my post regarding figure of speech etc was in regards to when I used the term ‘id argue’ and you used it to rudely abrupt a genuinely polity conversation I was having with you. I took offence to that as I was trying to be civil I just used an incorrect term it seems. English is not even my first language so I guess it’s likely I got misinterpreted. I would hardly be pointing out errors in posts when it’s not my first language Anyway I just wanted to make that clear.

              Market finally pulling back. It’s good to see. Have a nice weekend.

    • Wouldn’t these fake credit card accounts show up on a credit report? Or, do they not report them to the credit bureaus?

  37. ross368 says:

    Hi Tony,

    Read your post on China with interest.

    I write from Australia and interested get a comment from you regarding your post.

    Looks like our ASX is about to enter a large C wave down while China is about to rally.

    As Australia is a commodity based country and hangs off China’s economy wouldn’t we most likely follow them to some degree.

    By the way love your work.

    Ross

    • vivelaamo says:

      Why waste time searching using google when we have graduates of some of the top Universities in the world posting on this very blog. In fact take good care of your grammar or incorrect use of figures of speech. Your every word may be used against you.

      All the best 😊

      • You’re a joke Viv and clearly the fact that I’m an Ivy League grad bothers you. I’m a professional writer and media consultant clown, who owns my own business and makes 6 figures a year consulting for Madison and Park Avenue ad agencies and Fortune 100 pharmaceutical companies. I type out what I have to say and don’t proofread it. Why? Cause I write all day and this isn’t a professional forum for grammar. If what I wrote makes sense, then I’m happy. I’m not going to spend time making sure every comma is in place. You’re just a snarky punk. That’s all. And, by the way, Warren Buffet is not in academia.
        p.s. Seven letter word for you that starts with “a,” guess what it is?
        p.p.s. Sorry that my knowledge and intelligence threatens you. Just a few days you said you found talking to me “fascinating.” Maybe you try to be sincere instead of the little punk that you are.

      • Lee X says:

        If you two don’t hug it out soon I’ll start posting about baseball and weather again with a music video or two thrown in, you’ve been warned

        • I want nothing to do with him. I said he was a troll weeks ago and he proves me right constantly. I don’t find it hard to ignore him, but he goes out of his way to harass me. And, he contributes pretty much nothing to the blog but his lame opinion.

      • Oh, one last thing you joke. You’re not American. If you knew anything about the world, you’d know that English speakers don’t use phrases the same way. So, maybe it’s you that doesn’t speak correct English, since this is a blog hosted in the US? I’ve traveled all over the world and have close friends who are British, Australian, Kiwis, Canadian, etc. Phrases are different and so are the way some words are spelled. Again you prove you’re ignorant.

  38. You think you’re witty and clever, but you’re not. The links I posted are to articles, websites, blogs, and even a website for investment managers, not academic papers. Of course, because you have an ever present need to be snarky, you wouldn’t recognize that distinction. Oh, and by the way Viv, last week you literally prefaced your post with “I would argue” and then you said you weren’t arguing. Both of these reasons is why I have zero time for you. You’re constantly attention seeking with negative behavior.

  39. captbara says:

    DXY back to the TL again. Another do or die moment

  40. H D says:

    Thx Tony, are you staying with the DJI count 40% most likely? Ending diagonals and months of -D in beginning stages of Primary 3 up?

  41. gtoptions says:

    Thanks Tony
    I knew there was a Diagonal hiding somewhere in that chop. 🙂

  42. bfquant says:

    Tony. You are running out of shorter term outlook taglines !!!

  43. rd3777 says:

    Thanks Tony, I think when I first started posting back in January I said the market was in a 3 wave triangle….no matter…good chance the market has made top and in the first week of September,just like 1929….hmmm

  44. 123 abc says:

    Thank you Tony for pointing out the possible inverted diagonal triangle pattern. Would this pattern apply as an Intermediate-ii wave in the NYSE index? Or, like regular EW, are all types of triangles prohibited at wave-2 formations?


  45. kvilia says:

    Thank you Tony. Let the markets roll over so longs can buy and shorts can short again 😉

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