Thursday update

SHORT TERM: higher early then decline, DOW -196

Overnight the Asian markets ended mixed. Europe opened higher and gained 0.3%. US index futures were lower overnight. At 8:30 Q2 GDP was reported higher: 1.4% v 1.1%, and weekly jobless claims rose: 254K v 252K. The market opened three points below yesterday’s SPX 2171 close, then rose to 2173 by 10am. At 10am pending home sales were reported lower: -2.4% v 1.3%, and FED governor Powell’s speech was released: Then the market declined to SPX 2163 just past 11am and rallied to 2170 by 12:30. Then some negative news broke on Deutsche Bank and the market sold off to SPX 2145 by 2pm. After that there was a rally to SPX 2161, then a decline to 2151 to end the day.

For the day the SPX/DOW lost 1.00%, and the NDX/NAZ lost 0.85%. Bonds added 3 ticks, Crude rose 60 cents, Gold slipped $2, and the USD was higher. Medium term support remains at the 2131 and 2116 pivots, with resistance at the 2177 and 2212 pivots. Tomorrow: personal income/spending and the PCE at 8:30, the Chicago PMI at 9:45, then consumer sentiment at 10am.

The market opened slightly lower today, then hit SPX 2173. After a pullback the market started to rally, and then the DB news broke. The stock sold off and the market sold off with it. For the first time, since the SPX 2120 low and seven rallies, the SPX fully retraced one: 2152-2173-2145. Now it is quite clear, the entire advance off the SPX 2120 low is corrective. This suggests SPX 2120 was an A, and SPX 2180 was a B, with a C wave underway now. Would have taken this viewpoint earlier if it wasn’t for the ongoing uptrend in the NDX/NAZ indices. Cyclicals fighting the Tech advance. Short term support is now at the 2131 and 2116 pivots, with resistance at the 2177 pivot and SPX 2194. Short term momentum was quite oversold at today’s lows then bounced. Trade what’s in front of you!

MEDIUM TERM: potential uptrend looks corrective

LONG TERM: uptrend


About tony caldaro

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136 Responses to Thursday update

  1. Foxnews says some DOJ announcement imminent.Market sees a 5.2 b fine as a plus.Probably wont hear anything until after 4pm EDT.What if its 8b?165 new highs 105 new lows–nasdaq.
    See how gold finishes…and how much volume.Down days in GDX with very low volume have been followed by big up moves.Later.

  2. Very difficult to get a good read on this for short term traders.

  3. abchart says:

    SPX: hourly toping process here. No drop before Tuesday.

  4. Techies sure don’t follow their own advice. the pattern is classic uptrend in a classic channel. Instead interpretations of head/shoulders, triangles, double triple tops, etc… Its like predetermining a football match and as the score is decidedly lopsided against you going into the 4th quarter you comment on all the reasons why it is wrong. The consumer is doing very well thank you and it shows. We are a service based nation and the consumer is the market. Look for reasons why the market did well over 7 years and find future breaks in that pattern instead of believing the past was a hoax. I saw this 6 years ago. The longer the zero rate policy holds the stronger the healing process. Housing prices are where today? Credit cost are where? Job growth? Wage exceeding inflation for how long now? All data from over one year back showed the continued healing process working. You had an extraordinary rare crash event that dropped to levels that screamed “BUYING OPPORTUNITY” had emotional bias been swept away. To suggest this long strong move is out of character begs the question from where did we start?

    October in third week should have a strong clue on quarterly earnings and future expectations. The fun could start then but unlikely before that time. 2250 seems a shoe in hit this year. BTW, I posted my Macro View over 6 years ago spelling out the long term consequence and suggested that while the consumer will be dealt the brunt of the pain corporate profits will do well and market was entering a very long bull run. I also spelled out the transitional phase where the reverse happens when the consumer gets the upper hand. This is not speculative thinking since most long term market cycles go thru these machinations.

    I will never change minds with my proclamations and really don’t care. As a system/application manager and programmer it’s in my DNA. Missed opportunities these last many years by the adamant bear. The bull should be equally shocked when the deep drops occur if you don’t stay nimble and let the data direct you without prejudice. Transitional phase should be upon us and as such higher volatility. My best guess is a decent breakdown in stocks for most of 2017 and a 20 plus drop from highs. not there yet since the earnings picture has not taken shape. If I am right 2017 will be dominated by the doom/gloomers. Oh what fun to once again declare all is not lost.

    • AMZN was the stock to watch as it lead the way higher. Hit critical price and slammed down yesterday. Came back with a vengeance hitting new highs. Suggests we are in for more upside from here. Just my 6 years of bias views that the market seems to appreciate if no one else does (lol). How anyone can interpret the channel we are in as terminal is stretching the limits of plausibility. Stepping aside till some event or change in pattern develops. Cumulative Earnings should be the next market reaction. Dollar firm, oil holing up, gold sideways, and consumer reports are not even a concern these days since its boring but steady.

  5. Peter Sliney says:

    Whether his direction and timing is right or wrong Newbie adds humor to an otherwise pretty dry atmosphere. Thanks Newbie and thanks Tony for sharing and hosting. Good weekend to all.

  6. Last one….new polls show Clinton bounce after debate.Gold (Trumpometer?)dropping as Trump drops.Just a theory.

  7. vivelaamo says:

    I’d like to say a big thanks to Newbie. Whenever he has posted a picture of a bear I have gone long and made a killing doing this all week.

    Thank you my friend and keep the bear pictures coming.

  8. sure looks like new highs. Big banks ne fear, they will be bailed out. bull no worries they to will be bailed out. Have a nice week end all look forward to the week end update

  9. alexhartley1 says:

    We seem to be rising into the 30th Sep – 3rd Oct CIT date. It’s a full moon (this one is known as the Dark Moon – ominous? 🙂 possibly!). I thought we’d be lower which we kind of were during pre-market futures until we weren’t when the market opened. Therefore we should be down from latest the 3rd to the 10th before a bounce and final drop into 20-26th Oct.

  10. Of note to me..Nasdaq at noon,has 135 new highs and 94 new lows.Not the usual numbers if this is it.But who knows nowadays,with CB intervention.

  11. fwiw AMZN finally hit the top of it’s weekly channel today 839.26…market top or broad breakout above in 4th qtr ?

  12. captbara says:

    Bulls 100% could not fail today or it would have triggered wave 3 down.

    Bears only hope is today is C of 2 and gap down on Monday.

    • NEWBIE says:

      The day just getting started, buckle up.

    • captbara says:

      If this is 3 of 1 of 3 of 3 of 3 then the we should get continuation for the rest of the day. Otherwise 🐻

      • torehund says:

        Like Tony mentioned we could maybe expect a C-wave down, but I guess he also sees the 2 + 2, whereas the last 2 retraced fully yesterday. Lets see what unfolds 🙂
        DB and the Euro; if DB goes bust Merkel has to print. If DB and markets goes wild to the upside, bonds go bust and she has to print (as no-one will lend her money for meager yields). Its not if she wants to print, its when…

  13. NEWBIE says:

    Tony, your thoughts on today’s action?

  14. Rumors of the fine being reduced on DB.Up 12% now.Is this all over already?

  15. magnus1234 says:

    DAX30: Is V.3.2 completed? I have been very hesitant to claim V.3.2 completed earlier and still not confident that now is the moment. So far it is just a 32% retracement of V.3.1. My earlier prediction of 10040 is still very likely. DAX30 will be closed on Monday and new a Quarter starting so I reduce over the weekend.

    DAX 1h:
    DAx Daily:

  16. Atl GDP cut to 2.4%.The beat goes on.

  17. NEWBIE says:

    It appears these wall street crooks are waiting for European markets to close before they drop this pig.

  18. abchart says:

    SPX: chart from yesterday.

    Today: bounce maximum 2172 then hard drop to 2120…etc.

  19. abchart says:

    DAX and FDAX will be closed next Monday (German National Unity day)

  20. Anyone have a guess why,with DB up 6%,the Dax is down?You’d think it would be up 200.

    • cosmos77 says:

      Nice post Red. Yesterday sure felt like a C wave down and took out my stop so quickly I decided to hang in there, and today it paid off – so far. If we make a higher high today, this looks to me like a fifth wave, but like Tony said it is still a larger corrective pattern. After yesterday I’ve been trying to figure out where to reset my stop because of today’s fairly strong advance. But, thanks to your analysis and it looks like a fifth wave, I am resetting it to 2167. Break that and I am out, . Maybe go long again at lower level or just stay out for awhile since I will be traveling. Thanks Red, Tony and all posters.

      • reddragonleo says:

        Sure thing Cos… I post updated charts throughout the day in the chatroom but don’t have time to repost them here. Plus I don’t want to clutter up Tony’s board.

        However, I did layout another possible scenario where we take out 2167 on the futures and stall out in the 2175 area as that should take out all the stops the bears put in over the 2167 high and the 2172.75 high on 9/22.

        I call that Scenario Three (S3) and could happen afterhours or over the weekend, which I would still view as bearish and should lead to a nice down move on Monday or Tuesday. It would change the wave count of course but not by much. Mainly it would just delay the drop.

        Based on having just a little more then an hour left in the day I’m currently bearish for Monday as suggested in my S1 play. I don’t see the S2 happening right now but won’t rule out some new all time high later.. like maybe the 3rd week of October, which is usually bullish. That could happen I think if we drop down to retest the 2100 prior low over the next 2 weeks and rally hard from it.

        • cosmos77 says:

          I had a target today of 2175 if it did rally, so when it went thru 2172 awhile ago, I said “close enough” and bailed. Now I’m a bystander, but still checking out your posts. Keep up the good work.

  21. gtoptions says:

    Thanks Tony
    I don’t see any winners (Bull/Bear) in this chart.
    GL & Good Weekend All.

  22. Cramer made a good point on DB…thinks Obama is going to make the Justice Dept drop the 17b fine and then (as I thought),someone like Buffet will rescue DB.Short squeeze coming–after it drops lower first.Gold likes the -.1 personal spending #s.That should cut GdP again.Good luck all.

    • Biff Hooper says:

      Some sources expect the fine to be reduced to a more reasonable 3-4 billion, which would bring it in line with the fines that have previously been levied against other big banks.

  23. stmro says:

    DAX again bouncing from the triple top base @10245. Gawd.

  24. vivelaamo says:

    This latest pb could finally get below 2100 for a great opportunity to go long. DB seems like it could be catylst for both a sharp move down and another v shape recovery. It’s time to be nimble. My biggest concern is I’m seeing pictures of bears all over this site and the majority of times that happens the market goes up. Fortunately non of them are dancing just yet.

  25. fotis2 says:

    CL today’s close on weekly should be telling going forward lets see still watching monthly 3BR down 49.30 cancels and forms 3BR up.

  26. stormchaser80 says:

    We hit the bottom line of the triangle I have been presenting, today. Still believe we should break in the Friday-Tuesday time-frame. On my site I gave my impression of tomorrow’s move. But the decisive move should come in the Friday-Tuesday time-frame (likely next week).

    More discussion and charts here:

    My site is 100% free. If you are visiting for the first time, be advised that I do ask new users register for a free login. This takes 15 seconds. This is to protect myself, ensuring that everyone agrees to my legal documents.

    • locanbbs says:

      Agree. Looks like a breakdown here is in the making: See “failed (5)” on my chart below. On the B% indicator most markets are back in the red after a (very) short soujourn in green. On the daily charts especially $NDX, $RUT, $DJU, $BSESN (Mumbai),GRMN,NTAP,WYNN,EA,ADSK,ADBE,MRK are breaking down. “Humpty Dumpty sat on a wall…And all the king’s men came tumbling down.”

  27. locanbbs says:

    “Simple” EW (adapted from Trader Joe) using trendlines, (proprietary) cycles and (sorry, proprietary) indicators, over 40 years in the making and finally coming to fruition.
    Here: Spx hourly futures –

    • locanbbs says:

      Btw, where is Trader Joe these days?

    • locanbbs says:

      MORE THAN BTW !: On the chart above you can finally see your “missing FAILED 5th”! (See my comment to “Stormchaser” above!)!

      • micky says:

        Hi Locan, after many years of studying and applying EW, most get it wrong most of the time. It is very difficult to decipher at times, especially corrections. Therefore you have no chance if you have not studied the subject. .One can not just randomly put labels on waves. You have to respect the few laws of EW at least. I respectfully suggest you study the book of Robert Prechter on the subject. When it comes to labelling medium to longer term waves you can not beat OEW, which also adheres to the basic laws of EW. GL

        • locanbbs says:

          Thanks. Micky, don’t get me wrong, I am (obviously) not really using EW (long range), for which I depend on Tony and the rest of you guys. Nevertheless, this model has been very useful for the few months I’ve been using it, and only in connection with my indicators, channels etc.

  28. rd3777 says:

    7 tries and reversals. Being a triangle it just hard to tell when it finally capitulates…the downside target should be at least 2085. If indeed it is the end….much lower.

  29. Eric Wiseman says:

    Cheers to you 80% call. Another 10,000 into the furnace.

    • NEWBIE says:

      Thank you for the donation.

    • kvilia says:

      This site does not provide investment advices, and you are responsible for your actions – its internet. Now, market has been going up since 2009 until 2015 and then started puking. V shape recovery con-artists are jumping on every 1% dip, so there you go – you are one of them. If you are investor – you are in cash now. If you are trader – you should use stop orders. Simple – buy low, sell high.
      I think both Newbie and I got a chunk of that 10K today. Nevertheless, Tony has nothing to do with your loss.
      Anyway, good luck with you future investments/trades.

    • lunker1 says:

      Last I checked 2145 > 2120 wise man?

    • Biff Hooper says:

      Successful trading is less about knowing which way the market is heading next, and more about constructing your trades so as to define your risk, then managing your money. You might be well served to look into trading credit spreads on major stock indices instead of gambling your money away.

  30. A writer on currencies,Kathy Lien says,”this has the potential to cause European and US stock market crashes.Merkle will have to bail out DB.But it’s an election year in 2017,and a bailout is not popular in Germany.”
    She thinks XJY will test 100 again and then…it depends on Merkle.

  31. Volatile September lives up to its past. Domestic economy is starting to show signs of an actual breakout based on consumer data. Recent Consensus data also confirms my goldilocks scenario I presented over 6 years ago. the slower the buildup the bigger the reward. huge reduction in poverty class thanks to inflation being below wages. The longer we can maintain a boring but steady improvement the more likely we will first see a market drop relating to earnings misses even as the economy chugs along. 2250 seems likely in this run. Still view next year as a decidedly negative stock market period. 20 plus drop is not out of the question. I believe this bull has years to go after 2017 drop. Bears have been beaten up and I suspect 2017 will revive them into a frenzied roar. Sleep will overtake them again in 2018. Enjoy the show.

    • CB says:

      “the slower the buildup the bigger the reward.” lol….good one Gary.
      Did Holly say that?.. =)
      Have great evening everyone.

    • dan pulford says:

      Gary, you obviously know little truth of the size and struggle of the “poverty class”, in todays USA. Unaltered unemployment and poverty data prints 20% out of work and a 56% increase in the number of people on Food Stamps, since the current political administration has been running this country, almost 8 years now. You are not looking in the right places for the truth, my neighbor.

      • You obviously use your own matrix to determine current conditions verses last 10 years. If you use the same government stats, whether flawed or not, the trend of that data is key. To dismiss the common sense conclusions that a steady job growth, extremely low inflation, and wages above that inflation has no positive affect is ludicrous. All the other daily, weekly, and monthly data on consumer health is in line with each others assumption. Being an application/system analysts I am bound to use concrete real world foundations to support my work. Dismiss the record string of good jobs, low unemployment and consumer spending and optimism (which just reached a 7 year high). Me, I am old schooled, I connect the dots without prejudice. To think that today we are worse off than 2 years ago suggests an all powerful massive conspiracy that aligned all the fake data. Just read the consensus report for yourself before dismissing its value. My arguments have been 6 years running and in all that time not one person opposing my view has changed their position. Rigid inflexible thinking will never work in the programming world. The application either works or fails and no stubborn insistence will change that.

        My Macro view has explained and matched the last 6 years of results. By no means does that prove I am right. It does however disprove a good number of crash bound assumptions over the years.

  32. locanbbs says:

    UPDATE: Spx/Ndx – shortterm (“new moon/month’s end”) dip in midterm sideways/upward trend:
    Spx (hourly futures) –

    Ndx (hourly futures) –

    • locanbbs says:

      Mickey (yesterday) asked “Whose EW are you practising?” – My answer: “My own (borrowed a lot from Trader Joe, though)! Fits perfectly with what I’m doing!”
      In ÉW terms: We’re now in a/b of a shortterm correction. Will show chart later.

    • locanbbs says:

      The “buy-signal” from yesterday (unfortunately) just defined the trend-channel top in sideways trend. US-indices now “too heavy” for big jumps! Should be sideways now for a couple of years. Get out your easy-chairs!

    • locanbbs says:


  33. HW says:

    Thanks Mr TC! One question about EW triangle – could w4 of an LD/ED be a triangle? TIA!

  34. mike7x says:

    Thanks Toni. “Correction” here. Thanks Tony!

  35. bouraq says:

    Chart of the day is $ES by

  36. H&S on the 30 minute at 2150.Broke it…Yellen said no,not yet.Target,if valid,should be 2120.Minimum 3% off of 2180 on the H.O. would be 2116.Could be more though.Good luck all.

  37. captbara says:

    Something tells me the 3 wave up from 2141 is a bear fake. Anyways we’ll have our answer on Fri or Mon.

  38. blackjak100 says:

    Thx TC! Glad you are onboard with the correction. While a new low below 2119 is possible, still have to keep an eye out for the major 5 of P5 ED where wave 2 should bottom 2131-2140 using .66-.81 retrace guideline of wave 1. I still think a wave 4 of some degree ended at 2119/2120.

  39. kvilia says:

    Thank you Tony. What is your target for the end of C?

    • tony caldaro says:

      As long as the NDX remains in an uptrend
      a retest of the 2116 pivot would work

      • kvilia says:

        Absolutely agree, Sir. IMO either that’s the end of correction or we will be putting the bear hats on – no need to wait for 1991 if 2116 does not hold.
        I had a fantastic trading day today. Sharing the secret – once UVXY is on the real move, trail it 15-20 c, it will take you to the moon and leave you happy. There is always another entry into the beautifully awful trading instrument.

        • tony caldaro says:

          bears are currently all over the media
          talking their book

          • kvilia says:

            It is Trump’s time 😉 mass psychology, hard to imagine all time highs without a correlation.

            • Bookies have Hillary winning with odds close to 70 percent. the bookies took a beating on the UK exit but I would not bet against them here. The stock market will ONLY factor in this race (IF) those margins get squeezed. Don’t count on it since the electoral vote is what counts and Trump has an almost impossible task ahead of him. Pay attention to the consumer going forward. You will be surprised at the strength thru this years close. (I do believe I foretold the 2016 strength before the data was in based on cumulative data points). Same holds true today.

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