Thursday update

SHORT TERM: choppy Thursday Op-ex, DOW -40

Overnight the Asian markets gained 0.7%. Europe opened lower but gained 0.3%. US index futures were higher overnight, but then backed off when the ECB made no changes. At 8:30 weekly jobless claims rose: 260K v 243K, and the Philly FED was lower: 9.7 v 12.8. The market opened 5 points below yesterday’s SPX 2144 close, dipped to 2137, and then started to rally. At 10am leading indicators were reported higher: 0.2% v -0.2%, existing home sales were reported higher: 5.47M v 5.33M, the SPX hit 2147 and then started to decline. At 11am the SPX hit 2133. The market then rallied to SPX 2146, pulled back to 2139, then ended the day at 2141.

For the day the SPX/DOW were -0.20%, and the NDX/NAZ were -0.10%. Bonds lost 1 tick, Crude dropped $1.20, Gold slipped $4, and the USD was higher. Medium term support remains at the 2131 and 2116 pivots, with resistance at the 2177 and 2212 pivots. Tomorrow is option-expiration Friday.

The market opened lower today, on this volatile Thursday options-expiration. Traded down to SPX 2137, rallied to 2147, down to 2133, rallied to 2146, then ended at 2141. Down 3 points on the day. With today’s pullback we now observe five waves from the SPX 2115 low: 2149-2124-2148-2133-2146. If an uptrend underway now is the time for it to start rising in earnest. Short term support remains at the 2131 and 2116 pivots, with resistance in the mid-2140’s and lower-2150’s. Short term momentum declined from yesterday’s negative divergence to oversold, then bounced to neutral. Trade what’s in front of you!

MEDIUM TERM: downtrend may have bottomed

LONG TERM: uptrend

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

About tony caldaro

Investor
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113 Responses to Thursday update

  1. phil1247 says:

    DOLLAR

    while the dollar looks good longer term

    its time to ring the cash register now

    post triangle thrust has reached target

    we are within nickles of the ext long target

    its been an ” exciting ” 2 days in the dollar .

  2. johnnymagicmoney says:

    GE lowers guidance and paints a dim outlook

    explains why its almost flat today

    market is a joke

  3. NEWBIE says:

    The end is near, this is in no way bullish. 1987 coming!!!

    • alexhartley1 says:

      Personally Newbie I see your ‘BEAR’ time coming in 2017 (Apr-May17). I don’t see us getting much lower than 2094 – 2040 area before a strong rally into Dec and maybe beyond. That is unless Trump wins in which case ironically we’re likely to see the market drop. At the moment though (and whilst British and having witnessed the Brexit upset) I don’t see him beating Clinton who I dislike even more.

  4. pooch77 says:

    Wow bears dropped the ball everyday this week

  5. captbara says:

    Pretty clear TLs and channel on the advance from 2114. Bullish within, bearish out, keep it simple.

    • captbara says:

      Much cleaner on Nas, SPX is just a messy kids drawing, not reliable and full of fakeouts.

    • blackjak100 says:

      still very hard to be long $SPX here IMO. Not easy to be short either but I did cover my short this AM (not as close to low as I would’ve liked) and just reopened another at 2142…with stop at 2147.

  6. mjtplayer says:

    Boring market, 3 months and counting of a drifting sideways market. With the election in 2.5 weeks, I suspect the sideways market continues. After the election, the Fed’s Dec meeting will be 1 moth away, meaning we could continue drifting sideways for another 2 months.

    ZZZZzzzzzzzz………….

    • johnnymagicmoney says:

      market is a complete and utter joke

      central bankers should be ashamed with themselves

    • phil1247 says:

      plenty of excitement in dollar

      lots of money to be made quickly if you stay away from spx and oil

      unless you like to be chopped up in a trendless mess

      look to trade markets in extensions

  7. Not much of a bounce,Mr C.. on the hourly + div.

  8. mtu MTU says:

    [110pm] SPX update-
    Squiggles from this week’s high and near term tracking counts update. See charts.
    http://market-timing-update.blogspot.com/2016/10/market-timing-update-102116.html

  9. zvyezda says:

    Since the U.S. markets seem to want to maintain this range until the election, the only catalysts for even just breaking it to a slightly higher or lower range would be something they could not ignore and would have to reprice: 1. European market action, 2. geopolitical wag-the-dog 3. major election news that the media is for once forced to report.

    As a note, ten days before the 1980 election, the Gallup poll had Reagan losing to Carter by 8 points. Instead Reagan won 44 out of 50 states in a landslide. In Michigan this year just a day or two before the primary, all the polls had Bernie losing to Hillary by double digits, one by 27 points. Instead Bernie won by 1.8%. GIGO

  10. NEWBIE says:

    What’s the consensus around here? Up to new highs or back to 2100?

  11. Peter Sliney says:

    I think we are going much lower but I think it will happen mostly over night and totally erratic during the day session. Much like today.

  12. torehund says:

    Btk looks to have turned. See to my latest Btk post for further explanation.

  13. NEWBIE says:

    They may have to flash crash this, wall street and fed boys backed into corner.

  14. GDX kind of in a short term range.This morning,tested 24.45 (20d sma)bounced up to 26.65 (presently).Big gap between 25.10 to 26.A move up over 25.10 would tell a gap fill in progress.So we wait.Meanwhile a slow move up on SPX with the hourly +div.Later.

  15. gtoptions says:

    Thanks Tony
    I have to negate some of the negative vibe.😉
    SPY ~ Bullish above YR1 @ 212
    GL & Good Weekend

    • fionamargaret says:

      …good man GTO….and gold and oil not collapsing against a higher dollar is just indicative of strength…hard assets are suggesting inflation…..or total carnage, whatever….but it is what the hedge guys are buying, along with diamonds, real estate (read WOOD) etc., GLD, USO or UWTI …..

  16. phil1247 says:

    / ES

    maybe i should just do a weekly update of /es

    STILL…..nothing has changed from last friday

    bearish below 2148
    target 2092…….

    see you all next week !!!

  17. Ajay Singhi says:

    Update on my several calls/forecasts since August:

    1. I had given a sell call at SPX 2193-95 for a minimum tgt of 2109 and a potential breach of 2100 but less than 2080. Low so far is 2114.

    2. I had anticipated this correction to take almost 2 months so, expected range of SPX for the rest of the year was 2080-2250.

    3. Since I expected SPX to bottom out by October 20th, I had anticipated a rally till elections and fall thereafter. My guess was a Trump victory would cause the much awaited downfall.

    4. 3 days ago, I had given a sell call on SPX at 2142 with a tgt of 2100.

    A closer inspection of the structure so far indicates that SPX is probably forming an ED in the last C wave from 2150, which means that this correction is likely to take the maximum possible time before the last wave up to and above 2200 commences.

    The maximum time allowed is another 12 sessions so my guess is that market will bottom out somewhere around November 5th or 7th with in the range of 2090-2100. Hillary will probably win the election and fed rate hike in December may be the cause of the C wave of Primary 4.

    Short term scenario remains unchanged, 2105-06 is still expected sometime next week and the last wave down after a rise from that area.

    Time to be extremely cautious with option play.I will post updates if I see any change in the structure.
    GL

    • Ajay Singhi says:

      SL for all shorts now is 2148.

      • Praveen Vishnu Shamain says:

        Ajay, Do you have any view or roadmap for $NIFTY? Thanks in advance.

        • Ajay Singhi says:

          Praveen,

          Like S&P, Nifty is also in a B wave but the difference is of the form. While, S&P is in an expanded flat, nifty is in a very complex triangle.

          Low of 6826 will break on nifty and nifty will break 6000 over next 2 years or so. For short term, low of 8506 will also break by November. I am not sure where the bottom will be. It may be between 8330 and 8450.

          Nifty is following S&P pattern to the dot. So. expect some rangebound movement between 8500 and 8700 before 8500 is broken next month.

  18. phil1247 says:

    /DX

    lots of chatter about the strong dollar now

    extension long target coming up at 98.98 as mentioned for days

    plus today is the exact day cycles targeted for dollar top.weeks ago

    looking to take 75% of profits on UUP today at target or on any sign of weakness

    • phil1247 says:

      also

      altho i dont use correllations…. 😉

      why arent gold and oil collapsing on this huge dollar surge?
      the dog that didnt bark?

      • torehund says:

        Proxy war US/Russia in Syria keeps Brent/gold afloat. Stagflation pressure exported.

      • frankrizzo31 says:

        Oil hanging on a tenuous deal

        • fionamargaret says:

          ..but perhaps Frank, the Saudis understand they cannot continue ad infinitum to not pay their workers, and their banks having no liquidity, without a goodly amount of social unease…so with the stakes so high, I think cuts are infinitely more acceptable…..though, taking the emotion out, social unease would probably lead to higher oil prices also….

  19. Not a flash crash scenario but more likely a 4 day drop that should bottom on Tuesday.
    Still think 1205 is the target on SPX. The dollar is key IMO. It is trying to breakout once again.

  20. mtu MTU says:

    [920am] ES update-
    Pre-market break of a potential HS pattern, which projects a test of the 2105-2110 area if it is not a fake breakdown. See chart.
    http://market-timing-update.blogspot.com/2016/10/market-timing-update-102116.html

  21. torehund says:

    http://www.investing.com/currencies/usd-try

    Turkish lira lost 66 percent of its value since 2008 vs Usd. It has then consolidated, until recently when the Dollar broke out. This is a perilous sign inspired by lack of confidence in Government and or war/ disaster ahead/collapsing economy; and gates are now open to overt hyperinflation. This society crumbles, and the asymptotic phase may very well be next.
    If you live here, consider voting with your feet.

  22. Been watching the SPX breadth (stocks about their 200 day SMA).
    Deteriorating quickly.
    Currently at 65.60%
    Not bullish.
    Like standing on quicksand.

    Thanks to Tony.
    GLTA

  23. My two british pounds(worth two cents maybe?).+div on SPX weekly…does it kick in?Or get buried by the dollar. $XJY would seem to indicate a decent rally for stocks AND gold.Tonights futes are down a bit for both.PPT better wake up,don’t want that +div to get undercut.But I shouldn’t doubt them after all this time.They’ll come through–won’t they?

  24. blackjak100 says:

    A breach of 2149 tomorrow would be a ‘huge sell’ IMO as long as 21 dma acts as resistance. Very possible tomorrow is an up day and does not affect my belief of a LL than 2115 in the near future.

  25. Richard Glackin says:

    There are few people that I take the position; I would NOT bet against their analysis. Tony is certainly one of them. Some of you may want to re-read his last paragraph on the Thursday analysis. After reading it, my take is that we have a classic 5 wave (ABCDE) contracting triangle each wave a three wave (33333) with the ‘E’ wave overshooting just a little (not unusual) followed by a series of 1-2’s to the upside. This type of triangle is typically a reversal pattern relative to the direction of entry into the triangle. Take a good look.

    Thanks Tony, again, excellent analysis.

    • fionamargaret says:

      This was supposed to be #24 on this playlist…..Van Morrison… I tried to post it as a single, but my computer is more giving, and decided to give you a playlist instead.xx

      • 123 abc says:

        Here is Van Morrison for you at the midnight hour…

        • fionamargaret says:

          ..really kind 123…..did you check out #24 on my playlist….These are the Days….beautiful lyrics, and the back-up totally blew me away…. thanks again x

  26. NEWBIE says:

    See you guys at 2080. Maybe super Mario Draghi will be the catalyst or excuse.

  27. bouraq says:

    Chart of the day is $GOLD at http://www.tradingchannels.uk

  28. stormchaser80llc says:

    The market is very quiet right now, which is concerning. My proprietary Volatility Model, which is not related to $VIX in any way (measures the market using various statistical schemes based on data from 1990-2016) is indicating that the market is only this quiet less than 5% of the time.

    I am concerned about my short position as the Technicals Model continues to get less negative. Also the McClellan Oscillator is showing a positive divergence from the early September low as are several of the Percent Above Moving Averages we follow.

    However, $VIX is coming through how I have hoped. We made a lower low with $VIX today, yet you can see the positive divergences on ADX -DI, RSI, and MACD histogram. Getting close to a $VIX BUY signal, as we cycle closer to the MACD positive cross on the hourly chart.

    In conclusion, we could be seeing some short term weakness in the market (which is shown on hourly SPX/$VIX) later materialize to a bullish period which would reconcile the Technicals Model, McClellan Oscillator and some of the Percent Above Moving Averages. This is a way to make all the clues work out in the end, but we’ll continue to monitor 1 day at a time.

    More discussion and charts here: http://navigatethemarketstorm.com

    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 to see daily posts. This takes 15 seconds. This is to protect myself, ensuring that everyone agrees to my legal documents.

    • pooch77 says:

      Your done ,bears are cooked

    • blackjak100 says:

      Has your model been right yet?

    • lunker1 says:

      I think I counted 4 differently referenced “we’s”. Do any of them know each other?

      My Mother talks in pronouns. Drives me crazy trying to follow her stories. She’s a lefty so that may explain it.

      The singular first person is I. What does it mean when an I calls themself a we? Is there a person that talks to the person? You know, like only they can hear them?

      We is more intimidating that I.
      Perhaps that’s it

      We’ll see…won’t we?

      • torehund says:

        LOL: Using “we” is an insurance policy, diverting responsibility towards others if something goes wrong, if you cant handle the possible downside all by yourself. And if things turn out all right, then “we” are as good as I🙂
        Popularity of use is spreading and widely used in health-care “There was nothing more we could do for ..”
        Its also exploited as an enforcer of credibility, “we” implies a lot of brains has been involved in the decision circuitry🙂

  29. Enjoying the ride tks Tony, Japanese equities (play on play on global trade) and Italian equities (play on oil and bank restructuring) outperforming US equities. Think the China property bubble will be a key threat in march 2017, mortgage debt up 100% last 12 months (household gearing is low), Chinese finance minister estimates LVR 45%, US had a crisis at 70% LVR, shadow banking system (finance companies ) now 40% of GDP more of the credit growth is shifting outside of the banking system reducing the government ability to react intervene to prevent a credit distress. Good luck everyone.

  30. captbara says:

    Dax confirmed daily bull flag breakout. Maybe look for a possible retest. Nikkei also looks to be starting its minor 3rd up. US market EW = hard mode. Foreign markets EW = easy mode.

    • blackjak100 says:

      Very difficult to be long $SPX here IMO and I’m not saying it’s easy to be short.

      • captbara says:

        It’s only difficult because it looks corrective. But that wouldn’t reconcile with what is happening in foreign markets at this point, so one of them is “lying”. That said, I’m only long some ADRs at the moment.

        • CB says:

          Who knows, maybe we can safely assume that markets never lie …Markets are people who invest their own money after all…..(excluding central banks, of course, who have very deep pockets😉
          To your point. Capt., since the Dax is FX sensitive, its recent strength must have been heavily influenced by the FX market’s anticipation of Mario’s next move. (which is now , thank goodness, behind us). And as you’ve already explained to us earlier: “Sell the rumor, buy the news ” happens all the time….. so some of today’s news may already be baked in…. I cannot tell without looking at the Euro chart…and I’m sure you watch the Euro closer than most of us, so you may have an opinion on that….the chart does look somewhat oversold, though…
          So, the controlling question, for me, would be : how much more Euro weakness can traders expect at this stage? (to figure out whether the Dax is going to continue rallying strongly)
          Also, the Dax and the US equities market could conceivably move in opposite directions (concurrently) as they’re both FX-driven to a large extent (depending on how strong/weak both currencies would be at any given point).

          • captbara says:

            Nice post CB. I think Mario easing more in Dec is being expected? Actually I’m not incredibly focused on the ins and outs of European market, only their wave counts. I am very aware of a potential trap being set on the foreign side though, where US markets are actually leading and Dax & Nikkei are making their final tops before both are synchronized to a big down move.

            Nov 1 will be BoJ’s next meeting which could be a catalyst. But this time Kuroda is doing the opposite of what he’s yammered on about all year, and actually not threatening to ease. So maybe there’s a bit of reverse psychology going on..

            • CB says:

              Thanks for the heads-up, Capt. Very interesting comments. Lots of moving parts for us to consider going forward. Yes, the god ole Holmes has the central bankers’ number .. =) (I hope I’m reading your avatar correctly; a nice image and very original too ).
              Kuroda is actually a fun guy as it turns out (or is it Mrs. Kuroda doing all the reverse psychology thinking behind the scenes…..hehe…we will never find out, I’m afraid😉
              I see that the Euro wants to cooperate with your Dax strategy. Congrats, Sherlock.- great attention to detail and amazing powers of deduction =) German exporters are going to love it for sure.. Smart Mario has figured out what the Brits are doing and is ready to fight back.. Will be watching the Dax to see if it can overcome its horizontal resistance soon. Are your trading EWG or something else as a proxy?
              I like your TL in SPX. And, if the ‘boring’ routine continues in the SPX in the coming days, I’m not going to complain… And if/when we break 2119 in ES, we’ll prolly see some funny bears dancing in the streets again…but let’s enjoy the weekend for now =) Cheers!

      • pooch77 says:

        ???You kidding me

  31. Sorry Gary, Looks like Lucy pulled the football again

    • pooch77 says:

      No Gary tonight

      • I am still waiting for the pattern to resolve. The sharp drop today happened but the manipulative SOB’s prevented us from seeing it! The mask will be withdrawn when Donald exposes the rigged setup.

        Yup I got fooled badly. Still holding onto the Oct 28th PUTs. Nothing to add except that the move today did nothing to prove or disprove a flash crash scenario. The catalyst for such a drop should be the dollar. Keeps pushing towards 100. I need to see some real breakdowns in pattern tomorrow or I exit and lick my wounds.

        • I will try another short at 2170. TJ has that as a potential, also last high was 2175 before that 2180. Also the honk if it wasn’t s going to drop its going to be 70 points in sh, so 2170 is as good as any, especially if it happens tomorrow.
          Good luck all

  32. 123 abc says:

    Thank you Tony et OEW team, appreciate the detail in regards to pinpointing the waves.

    Q1: In regards to the five waves observed from the 2115 low: 2149-2124-2148-2133-2146 —these waves appear corrective since the third wave didn’t exceed the first, and the fourth wave overlapped the first. Is OEW considering this five wave structure as a Leading Diagonal pattern?

    Q2: If the 2115 low is taken out, will the first five wave structure from 2115 to 2149 be re-evaluated to a three wave structure?


  33. pooch77 says:

    Microsoft beat handly the Bears are in big trouble and I don’t mean the Chicago Bears

    • CB says:

      lol.. Da Bears =) Pooch, a lot of patience may be required from both bulls & bears at this juncture. as we have a lot of supply from the recent range break… So a series of 1-2s that Tony has just mentioned seems to be the perfect panacea to deal with that .
      Tony, thanks very much for explaining your count in detail – it helps a lot.. Appreciate it .

    • NEWBIE says:

      Last time I checked Microsoft is only one company and does not represent the market as a whole.🙂

      • pooch77 says:

        Ahh no if microsoft is up so are there Naz suppliers,bodes well for naz…

      • pooch77 says:

        Just so you know Microsoft is a bell whether for the NAZ,as Microsoft goes so does the NAZ,put that in your trading notes

        • 95% of the largest cap US companies have bet eps and revenue expectations investors are holding back from investing due to election concerns but it looks like Clinton will get it as Trump is doing a Cosby.

        • NEWBIE says:

          I hope your putting the red open in your trading notes. Microsoft isn’t helping at all.

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