Friday update

SHORT TERM: gap down opening then rebound, DOW -17

Overnight the Asian markets lost 0.1%. Europe opened higher but finished mixed. US index futures were lower overnight, and the market gapped down to SPX 2133 at the open. The SPX had closed at 2141 yesterday. In the opening minutes the SPX hit 2130, set up a short term positive divergence, and began to rally. The rally lasted until just after 3pm when the SPX hit 2143. Then a dip into the close ended the week at SPX 2141.

For the day the SPX/DOW were -0.05%, and the NDX/NAZ were +0.35%. Bonds gained 2 ticks, Crude added 25 cents, Gold rose $1, and the USD was higher. Medium term support remains at the 2131 and 2116 pivots, with resistance at the 2177 and 2212 pivots.

The market gapped down at the open this option expiration Friday. Ticked down to SPX 2130 and then rallied to 2143, before settling close to unchanged. With today’s decline to SPX 2130 we now have four waves from last week’s 2115 low: 2149-2124-2148-2130. Some may count this pattern as correctional. Some may count it as a coiled spring of 1-2’s ready to breakout to the upside. With the tech sector in an uptrend I’m in the latter camp. Weekend update is tomorrow. Best to your weekend!

MEDIUM TERM: downtrend may have bottomed

LONG TERM: uptrend


About tony caldaro

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18 Responses to Friday update

  1. Ajay Singhi says:

    Hi Tony,

    IN your Thursday update, you had counted 5 waves up from 2115, i.e. 2149-2124-2148-2133-2146.

    None of the waves are extended. Doesn’t this break the basic EW rule that at least one of the 5 waves need to be extended in an impulse?




  2. torehund says:

    Good weekend, Tony and all on the blog.


  3. mtu MTU says:

    MTU weekly commentary – Three Potential Diagonal Triangles (10/21/16)
    Price actions since the August all-time high in SP500 now present three potential (leading or ending) diagonal triangles (DT) at three different degrees, which can partially account for the messy waves since then.


  4. Thanks Tony for your always helpful insights. Note the Fib band from 2074 to 2194 is playing a rather pivotal role in controlling price. Wednesday’s’ high and Thursday’s low were determined by key retracement levels. The white line is being widely discussed by Carter Worth, other analysts and many contributors to this site because its beginning is 1810 and with other variables seems to be playing a role in containing price. Obviously this much be breached and with a POSSIBLE improvement in my (Market Volume) buying selling oscillator, further declines in VIX, which closed at 13.43, and increased volume we may see this early next week. The red lines are a low conviction channel with everything to pointing to 2165 as a major hurdle.


  5. blackjak100 says:

    TC, bullish nest of 1-2’s???? that’s fine, but I’ve yet to see an impulse higher from any pivot low. I’ve learned through experience to never wait for a ‘third of a third’ because they never happen when you wait. if 2115 was a significant low, the market would’ve taken off by now.


  6. 123 abc says:

    Thank you Tony et al. Personally not seeing the coiled spring of nested 1-2-i-ii… since the wave from 2124 to 2148 appears to have internals overlapping. Suppose the weekend update may clarify, and that you’ll be proved right anyway! Great OEW daily updates this week, much appreciated.


  7. NEWBIE says:

    Officially every blog I follow is Bullish after seven years of a bull market while the United States economy is on life support. Everybody is a genius and gonna make millions from here or everyone is going to lose everything.


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