Thursday update

SHORT TERM: lower open then rebound, DOW -13

Overnight the Asian markets gained 0.3%. Europe opened lower and lost 0.3%. US index futures were lower overnight, and at 8:30 weekly jobless claims were reported lower: 249K v 254K. Also last night FED vice chair Fischer’s low interest rate speech was released: The market opened 3 points below yesterday’s SPX 2160 close, declined to 2150 just before 11am, and then started to rebound. By noon the market had recaptured the decline and turned positive at SPX 2163. Then went into a 4 point trading range for the rest of the day ending at SPX 2161.

For the day the SPX/DOW were mixed, and the NDX/NAZ lost 0.10%. Bonds lost 8 ticks, Crude rose 65 cents, Gold dropped $11, and the USD was higher. Medium term support remains at the 2131 and 2116 pivots, with resistance at the 2177 and 2212 pivots. Tomorrow: monthly Payrolls (est. +183K) at 8:30, wholesale inventories at 10am, then consumer credit at 3pm.

The market opened lower today, hit SPX 2150, then rebounded. The choppiness continues heading into tomorrow’s monthly payrolls report, with an eye on C-4 hurricane Matthew. Still believe the market needs to retest the 2116 pivot, or slightly lower, before it can start impulsing again. Short term support remains at SPX 2142 and the 2131 pivot, with resistance at SPX 2164 and the 2177 pivot. Short term momentum rose above neutral after hitting oversold this morning. Trade what’s in front of you!

MEDIUM TERM: choppiness continues

LONG TERM: uptrend


About tony caldaro

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128 Responses to Thursday update

  1. johnnymagicmoney says:

    this market is a joke but most unhealthy markets are

  2. Hourly GDX on the last 10 days–a monster +div.MACD crossing up from a low level.Daily has a slight + div.Later.

    • cyanus66 says:

      learned, such hourly +ve divs, al they have to do is touch the 34 or the 50Hma and reverse. That would be around the $24.50 area.
      The 4-hour chart is still massively -ve divergent, btw. Not looking too great for playing a GDX reversal here yet, imo.

  3. torehund says:

    Good vibe on the board these days.
    Happy weekend, Tony and the gang.

  4. The Astra says:

    18270 target met – the triangle is working like a charm ! Back to upper trendline resistance, Close above 18300 can see a fiery rally.

    Looks like the trading range is going to breakout pretty soon (1-2 days) – ~60% of the triangle has been completed

  5. mtu MTU says:

    [155pm] INDU update-
    Potential triangles as long as the index is stuck in the range. Moment of truth for the red B is coming up next. See chart.

  6. phil1247 says:


    next gold extension short target 1233

    again from last week

    ” GOLD is a bottomless pit until the extension short breaks ”


    have a great weekend …………..and thanks !!

  7. Peter Sliney says:

    This market reminds me of a star trek episode when a Klingon tradition makes the ascendee walk between two rows of warriors who subject him or her to painsticks.

  8. GOLDILOCKS in a theater near you! Wages running close to 4 times inflation rate. Strong steady job growth and the census report that came out a month ago showed 3.5 million people lifted from poverty levels. Looks like the zero rate policy helped the low and middle class a lot. The numbers however are going to be the norm not the exception. Under 200K going forward and somewhere between 100 and 150K.

    The equities market weakness is mild and we should see the end of it in another week or so. No mention of quarterly earnings surprises, which is surprising.

    People have to dig deep to keep coming up with reasons to expect a crash. Gold going nowhere, dollar still holding strong, and bond yields still holding up.

    How can the domestic economy crash given the huge rise in discretionary income? Inquiring minds want to know. It’s all about the ability for the consumer to sustain growth. Once business spending picks up it will be a big wind to their backs. For now businesses need to meet earnings expectations so I don’t expect that to happening just yet.

    Next deep drop in equities will be over stretched earnings and not over consumer angst. Imagine the new experiment started 7 years ago is showing the consumer in great shape relative to the last 20 years. Make no mistake, affluenza is still here and after 7 years of near total eradication it will be back. Once it does come back, watch out! That WILL spell the end of this bull run. For a long while the Goldilocks story for corporate America was told, and now it’s the consumers turn.

  9. bfquant says:

    What scares me is: where is the hedge for the large institutional investor? Treasuries, Gold, Utilities not there for investors when they need them of late. This has marked a turn from the status quo where a large institutional manager can load up on equities, bonds, etc and know that the treasuries would be there for him/her on large equity drawdowns. It seems now, when the market is down more than 50 basis points, treasuries, gold, and utilities are right there with it.

  10. cj32 says:

    Cr. to CBZ

    • micky says:

      Thanks, and gl with the SPX count, but I cannot see it pan out as we have seen hundreds of counts during this bull market, which were counted as impulsive and nested ones and twos down, they just faded and became corrections in the end. Also your last black w i down does seem like a three …Of course your count may be possible….just saying..

  11. gtoptions says:

    Thanks Tony
    SPY ~ Multiple MPP Failures
    Recursion pattern continues or not! (See Chart)
    GL & Good Weekend All

    • fionamargaret says:

      ..nice GTO…see if HD is ok…does he need this…x

      • micky says:

        Hi Fiona, excuse my budging in here, but I think you may have misunderstood HD the other day. I have it he actually made a statement rather than pose a question. He has a good grip on EW and also other stuff , so I think he is actually helping and not needing help.

        • fionamargaret says:

          Yes thanks Micky…you made me laugh..yes I know HD can run rings around us..he was asking for quotes in order to make a sell, and naturally would presume I could quote from my screen….but no I had been working on my other computer…and if I am in the market, am only tuned in to what formation the numbers are taking…progressions etc., the make-up of the pattern. I know GTO talks the same language as HD, thus my asking him to help with quotes if HD needs them…I thought perhaps HD was away from his set-up….and he probably thought I was demented….

  12. phil1247 says:


    monthly short has traded

    extension long has failed

    looking for short entry

  13. mtu MTU says:

    [1155am] INDU update-
    Potential triangles as long as the index is stuck in the range. Moment of truth for blue C coming up next. See Chart.

  14. locanbbs says:

    UPDATE: After a brief rally all asset classes except $$$ back in downtrend. Vix gives good buy signal –

  15. phil1247 says:


    1245 target hit !

  16. The Astra says:

    18170 target met : Now flirting with the lower trendline support : If it holds 18150 – 18160 levels, we should see a bounce till 18280 , if it breaks it its all the way till 17800

  17. captbara says:

    Bot some UVXY this morn as a hedge. Let’s see.

  18. As Mel Allen would say …”How about that?”GDX drops 4% from the high.DXY rallies.DAX dropping,..the main problem as I see it-is DB.

  19. phil1247 says:


    took tiny profits in UCO

    this 50.35 level is the short entry ……see chart from several days ago
    and until surpassed this stall could be da boyze loading up shorts
    staying away again

  20. phil1247 says:


    extension short traded 1267

    target 1245

    will 1050 hold ??? no guarantees ….and no typo

    • kvilia says:

      Sorry, Phil, but – nonsense. in this case you are projecting rate increases at each and every Fed meeting, 0.5 points each, meaning economy is blasting off. Plus there is record of commercial shorts. They are not going to last.
      Maybe you know more so you can share.

      • phil1247 says:

        just numbers kvilia..

        no rally in gold is possible until the extension short breaks

        and fed rate increases have no bearing

        anyway ..the bond market is not waiting for a silly old lady to raise rates

        didnt you notice the bond market has been doing that for months????

        ps….just raised stops on TBT

    • phil1247 says:


      no guarantee 12.35 will hold …..again… no typo

  21. vivelaamo says:

    Took afternoon off work and did some scalping today. Its a day traders dream at the moment. Very hard to trade medium long term positions in this climate.

  22. johnnymagicmoney says:

    question guys …………………post the Fall of 14 is that not a two year bearish megaphone? Are we not at the top of that pattern again? Seems similar to a year ago if you ask me (also at the top of the pattern and started to separate and roll over)

  23. NEWBIE says:

    Name your spx targets ladies and gents.

  24. kvilia says:

    Gold could still touch 2145, imo absolutely fantastic opportunity here. This is a pure speculation at this point, the largest short positions here. Look for a squeeze in the next couple of weeks.

  25. Also in the mix is $XJY,which bounced off 96.01…just above a 95.86 low a few months ago.Now over 97.Unfilled gap from a few days ago around 98.70-99.Very short term positive for gold.

  26. The Astra says:

    Again rejected at the upper trendline of the symmetrical triangle at 18,300. Lower trendline triangle support at 18,170. This triangle is a trader’s gift !

  27. 8:30 am Jobs number released to less than stellar reaction
    8:42 am Fed govs out.Meister says it “exceeds average job growth needed for expansion (80-120 thousand).Inflation,in the future will be 2%–so we should raise”
    Still trying to keep gold down,dollar up.

  28. vivelaamo says:

    unemployment increase. Does that mean no rate increase and good for stocks?

  29. Lee X says:

    RE GBP
    Makes perfect sense to me , took profits on my pre Brexit shorts near last evening lows, I guess some people here are disappointed or confused by the move but the trend is your friend

  30. vivelaamo says:

    GBP flash crash last night. Dirty business.

  31. fotis2 says:

    EUR/USD nice little short setup brewing

    • kvilia says:

      Hmmm, thinking another lower low is coming. But it would be smart accumulating juniors here – potentially two fold trade by year end.

  32. locanbbs says:

    Yes, Tony, you were right. No carry-through on buy signals. Instead they are still breaking down. It indeed looks like a deeper bottom is needed (November-January). Good to have stops in place! Market expecting bad news?

  33. fionamargaret says:

    Thanks Tony.

  34. Dollar breaks out of channel.SPX not amused.Fed better hope employment report is benign or the stampede will be on.Coffee will be on at 8:20 to watch this one.Later.

  35. torehund says:

    The immense power of a predetermined trend path is astounding. It reinforces the thinking free will doesnt exist. We are all trend animals, tied to cycles.

  36. Bollinger bands contracting and trading into an unbiased wedge, I think we are coiling for a hard move, likely down. The 38% retracement of the Fib dawn between 1992 and 2194 is 2117.

  37. Mentioned over 2 months ago that we have entered a boring hard to play market with upside bias.
    Nearing the last decent dip followed by a big rally from 3rd week of October thru early January. if the market is setting up for such a move that suggests the earnings picture will improve significantly in the short term. I have had my doubts but considering we are starting to visualize this quarters numbers and the lead in for future profits we might be witnessing soon the last mini-euphoric stage before a deep and long lasting correction happens.

    Been pretty consistent in my analysis and see no need to change it. Lets see how the numbers come out this quarter and the market reaction. So far it is in line with expectations. After all said and done a 2 plus percentage gain in SP500 is likely this quarter. The big stretch for me is the assumption of 9 percent next quarter. CEO’s are a conservative bunch when projecting forward. Lets see if that 9 percent gets taken down and by how much.

    How the market reacts in next 2 weeks is critical, especially if we get a deep one to two day drop.
    The move off any lows has to be decisive. is anyone following the quarterly earnings trend?

  38. somebody remind me how to post a chart/picture I have a really good one to post?

    • 123 abc says:

      Upload your image to and then paste the generated sharing link here —looking forward to seeing your chart !

    • chart link

      Hi I created a chart looking at US asset performance in inflation adjusted terms, real GDP, real US 10yr treasury bonds. real US 90 day gov. bills and the real S&P 500 capital appreciation (excludes div’s. so understates returns) from 1930’s-80’s. The reason I started in the 1930’s was this was when total debt to GDP was as high as it is today. This chart suggests the best asset class long-term will be equities vs. bonds, cash and property as the FED will need to maintain low interest rates for a very long time i.e.. below 2% for some time, basically peg the yield curve down this mean negative real returns for bond and cash holders. Note I do think the data overstates the returns for US equities as their was a baby boom and the US economy benefitted greatly from supply the World with arms during WWII, but returns will be better than bonds and cash. Stock picking may be the way to make excess return

      • torehund says:

        Thanks for the correlation info. Bonds have had a sour taste to themselves for a very long time but finding the right turn and not just a bear market “hiccup” is always difficult. That said, this could be it 🙂 Market abhors collapses and when Merkel demanded DB to go it alone she turned bonds downwards, which may hike rates and BK the Euro-zone.
        Thats what they call a “slam dunk”, and Putin is grinning…

        • torehund says:

          ..if they somehow manages to freeze rates it will “spill over” to the USD, and Trump or whoever enters the White house will have to build enormous tax barriers for imported goods.

  39. 123 abc says:

    Thank you Tony et OEW team; “sell Rosh Hashanah, buy Yom Kippur” —if so then looking for a bottom around Oct 12 perhaps…?

  40. Thanks for the advice.You may be right.I’m giving GDX another 10% on the downside before I cash in my remaining investment.Already took out 70% of my average amount at 28.This is play money….for now.

  41. torehund says:

    Weekly Spx still putting on negative bars on the macd-histogram. They are shallow but do their harm. Just have to wait 🙂
    And thanks Tony for your efforts.

  42. Anyone following GDX has to think the last 3 days being outside the BBs should bring a nice bounce.About 80,000 jobs # would contribute mucho to that as well…lol.Lots of stats concerning GdX and 3 BB closes as they have.In 2008…in 10 days there was a 28% gain.Average about 12% gain.Some losses as well.Good luck all.

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