Thursday update

SHORT TERM: new uptrend high, DOW +36

Overnight Asian markets lost 0.2%. Europe opened lower but gained 0.5%. US index futures were higher overnight. At 8am FED chair Yellen’s congressional testimony was released: https://www.federalreserve.gov/newsevents/testimony/yellen20161117a.htm. At 8:30 weekly jobless claims were reported lower: 235K v 254K, the CPI was reported higher: 0.4% v 0.3%, housing starts were reported higher: 1323K v 1047K, building permits were reported higher: 1229K v 1225K, and the Philly FED was reported lower: 7.6 v 9.7. The market opened unchanged at SPX 2177, then rallied to 2184 by 10am. After a pullback to SPX 2179 by 10:30 the market made a new uptrend high at 2188 by 12:30. Then the market went into a 5 point trading range and closed at 2187.

For the day the SPX/DOW gained 0.30%, and the NDX/NAZ gained 0.70%. Bonds lost 14 ticks, Crude slid 60 cents, Gold dropped $8, and the USD continued to rally. Medium term support remains at the 2177 and 2131 pivots, with resistance at the 2212 and 2270 pivots. Tomorrow is options expiration.

The market opened unchanged today, rallied to a new uptrend high, pulled back, then made a higher uptrend high. The short term wave pattern noted earlier this week has fit well over the past few days. We counted the first wave, Minute i, to have completed four waves up: 2147-2125-2182-2152, then the fifth wave has unfolded as follows: 2171-2156-2181-2172-2188 thus far. Project, monitor and adjust. This pattern suggests there is overhead resistance ahead at SPX 2194, SPX 2200 and SPX 2209. When this rally, Minute i, does end it should be followed by a fairly sharp pullback. Possibly back to the SPX 2150’s for Minute ii. Short term support is at the 2177 pivot and SPX 2152, with resistance noted above. Short term momentum is displaying a negative divergence on both the hourly and daily charts. Trade what is in front of you!

MEDIUM TERM: uptrend

LONG TERM: uptrend

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

About tony caldaro

Investor
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129 Responses to Thursday update

  1. pooch77 says:

    Should have a nice 5% pullback after next week

  2. Thanksgiving week and is where all money comes in to the Market taking positions for the upcoming season. I don’t expect any large correction for now, tiny pullback only. Just guessing what sectors could perform better next year…by the Trump picture for the future of US economy.

    The strong Dollar fit very well. More export than import.

  3. Dollar continues to inch to new 13 year records while the 10 year note is not even where it was 3 years ago at 3 percent. Looks like the yield id finally basing and about to breakout but we need to finally see a true long term trend change. That is an unknown right now. Market accepting the variables rather well for now.

    Equities continue to show steady and normal corrective moves off a strong rally. The momentum presented 2 weeks ago is still strong and it hasn’t yet reached its full potential of another 450-500 DOW points. We shall see if it hits that peak performance or stops short.

    Despite my emotional reservations the market seems to be in a seasonal mode. While it is possible we fall hard it seems to have a very short time span, that of days, not weeks. I suspect we actually have another big move higher soon after this consolidation phase.

    This does however fall into my long ago assumption that 2017 will see a market correction of steep proportions while the domestic economy hums along.

    • Zerohedge has been 100 percent wrong on every single doom and gloom report for the last 7 years. The yield isn’t even where it was in 2013? Was 2013 in better shape or worse on the domestic front? It hit 3 percent then. We are at 2.3? Sharp spike is relative. if the charts hit rock bottom for SPX to say 666 and it spikes immediately higher is that a sign we are about to fall into the abyss? We don’t even have a long term trend change based on any TA I know of. I am talking 30 years. I wish people would review the authors work before accepting it. It’s called trying to “normalize” from a long deflationary period.

      • kvilia says:

        So you think there will be no debt related impact due to the interest rates rising?

        • tommyboys says:

          No until 5,6 or 7% sometime several years from now. But even this is just speculation. What if they devalue currency substantially prior? What is Trump’s tax proposals actually work and begin paying down debts etc… Who knows but it’s been speculated on for decades.

          • mcgcapital says:

            If yields rise much more then the boost to growth better be there. This is a market that has been built on cheap money. Comparing to past cycles and yield levels that would become problematic isn’t accounting for the sheer size of global debt levels and the interconnectedness of it all. It’s not just US yields that are rising and that will have negative consequences for growth in Europe and Asia.

    • CB says:

      Interesting. Thanks kvilia..
      It’s how fast they’re rising. (rates) that matters. Too fast can be dangerous for market participants..
      So, as always, next month most likely, we’ll find out who is going belly up…it’s been very quiet recently but it’s hard to believe that every financial company in the world has made money on the recent “dislocation..” ..where are all the losers, right? Or as Buffet would say : let’s find out who’s been swimming without trunks?” …

  4. cyanus66 says:

    Crude turning up in earnest, with +ve divergences in hourly/daily timeframes.
    I’m liking how the daily MAs are starting their crossovers, & I do believe we’re seeing the run-up to the OPEC conference in Vienna, Nov 30th.

    I’m also guessing fiona is already in UWTI, so my view is quite redundant …

    • fionamargaret says:

      ..your views are never redundant Cy….I am waiting for Nomura’s 1950 or even a small crash with UVXY…
      When I checked this morning UWTI/DWTI in equilibrium….I shall check again….Thanks

  5. johnnymagicmoney says:

    Someone please blow up those computers so we can have a real market

    zzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzz

  6. phil1247 says:

    taking half my profits in EUO now

    dollar bulls stay alert !

  7. kvilia says:

    Learned, how long do you have +div on gold and GDX?

  8. bud67 says:

    I enjoy your comments, FIONA….thks

  9. phil1247 says:

    long spx

  10. johnnymagicmoney says:

    if yields go to 14% its a sign that the economy is healthy so definitely will be buying more as yields shoot higher and higher. So good for the global economy. lol

    • tommyboys says:

      14% too high obviously but 4, 5, 6% still historically very low and a rise to those areas would be bullish. You’re panicked.. “trend is your friend”

  11. johnnymagicmoney says:

    seriously how does anyone buy the Russell today? I mean I understand you may be enthusiastic about the strength of the index or small caps fundamentally but you seriously are ignorant if you put money to work on something that has gone up 11 days in a row.

  12. Mr C,could you reply to this: How long does a divergence on a weekly chart (like GDX) take to kick in-on average?Thanks.

  13. GDX and gold have nice +divs on the weekly charts.I saw one trader,who claims to have been short GDX since 31 (no verification),now say he’s going long until 25.
    Avi says we’re going to test 19.80 and that’s the whole ball of wax.If we still have a +div after today,I can see us bouncing to the top of the 3 black crow formation(25ish).Dollar is relentless.A pullback there is a must.Later.

    • fionamargaret says:

      Look at Bluebird…asks about NG…I say stick with it, even although P&F is much lower…up $2.40….he is definitely taking me out tonite….

  14. gtoptions says:

    Thanks Tony
    SPY ~ Pattern Complete +/-
    GL & Good Weekend All

    https://www.tradingview.com/x/XYUOAWof/

    • fionamargaret says:

      ..where do I make money today GTO….UWTI and DWTI are in equilibrium…

      • gtoptions says:

        It’s Friday, take a break study charts and wait for minute ii to complete.😉

        • fionamargaret says:

          Thanks GTO…..actually UVXY is working, so if Nomura wants the market down to 1950 before the end of November, to give us a great Santa rally…..now is the time…

          • NINJA SHADE says:

            Very long shot to have more than 200pts off in a week, but would fit in very nicely with big ED count if SPX can make its way down to sub 2000 and clear all those longs from Brexit low and Trump low out

  15. cj32 says:

    Cr. to CBZ

  16. stormchaser80llc says:

    Today I show negative divergences on SPX Daily, SPX Hourly, Breadth, HYG:IEF. Also shown were positive divergences on the $VIX. This all tells me a turn lower on the SPX is coming, risk off.

    The one saving grace is that my proprietary Technicals Model actually made a new high today. It usually gives advanced notice of turns, especially when something big is coming. So my conclusion is this, expect a turn lower, it may spook the market a bit. But I continue to hold a LONG position which is consistent with my Technicals Model and signals. I also want to point out that the cumulative Technicals Model is back (slightly) above its 200 dma, something we will continue to watch closely.

    I am also currently testing out a new method for signals using 999 ensemble members which takes my market Volatility Model into account. A side note, it also incorporates a Gaussian Distribution of randomness to create the ensemble. Well, today it gave a SELL signal with only 212 members currently bullish. I am not yet using it in practice, I want to monitor it for a few months first.

    Finally, as I was looking at my SPX hourly chart, I said to myself that if I were the market, no matter if a bull or bear run is ahead for us, that I would like the tag the bottom extension of the triangle we watched in September which broke down in early October. That line is the yellow line on the SPX hourly chart, which as of today sits at 2112.

    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.

  17. stormchaser80 says:

    Today I show negative divergences on SPX Daily, SPX Hourly, Breadth, HYG:IEF. Also shown were positive divergences on the $VIX. This all tells me a turn lower on the SPX is coming, risk off.

    The one saving grace is that my proprietary Technicals Model actually made a new high today. It usually gives advanced notice of turns, especially when something big is coming. So my conclusion is this, expect a turn lower, it may spook the market a bit. But I continue to hold a LONG position which is consistent with my Technicals Model and signals. I also want to point out that the cumulative Technicals Model is back (slightly) above its 200 dma, something we will continue to watch closely.

    I am also currently testing out a new method for signals using 999 ensemble members which takes my market Volatility Model into account. A side note, it also incorporates a Gaussian Distribution of randomness to create the ensemble. Well, today it gave a SELL signal with only 212 members currently bullish. I am not yet using it in practice, I want to monitor it for a few months first.

    Finally, as I was looking at my SPX hourly chart, I said to myself that if I were the market, no matter if a bull or bear run is ahead for us, that I would like the tag the bottom extension of the triangle we watched in September which broke down in early October. That line is the yellow line on the SPX hourly chart, which as of today sits at 2112.

    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.

  18. Recession and Elections
    I recently noted that since 1910, the US economy is either in recession or enters a recession within twelve months in every single instance at the end of a two-term presidency… effecting a 100% chance of recession for the new President.

    No recession without an election
    I then spent some time looking at US recessions in general, and found that every single one occurred during, or just after, an election, without exception.

    Not every single election sees a recession, only every two-term incumbent change. Some two-term Presidents saw recessions at their first-term re-elections too (Wilson and Eisenhower).
    –Raoul Pal(I guess he’s an expert on this stuff).

    • alexhartley1 says:

      He’s a smart guy. I listen to what he says. USD bull. Has been for sometime.

      • The dollar is rising because interest rates are rising.With that set up,either the dollar causes a recession OR the Fed puts the brakes on rate increases to stop a “dollar induced recession.”Agree?Or is there a third option?Or more?

        • alexhartley1 says:

          I think it’s likely that a rising USD is going to be the cause and will create difficulties as it rises further in value in the months ahead (Tony has mentioned this before). I don’t think the USD is rising because of the small rate rise that is likely to occur in Dec. I think it’s rising (in no particular order) because of the election of El Donald whose policies are seen as USD bullish (far more than HRC’s were), the upcoming events in Europe (Italian referendum and serious issues with specific Italian and German banks which haven’t gone away and had simply been put on ice) and Japan, Europe and China’s desire to all weaken their currencies to stimulate their economies. The small US rate rise is just the icing on the cake that the news media (CNBC) talks about.

          • alexhartley1 says:

            Unless the US cuts rates aggressively (which they won’t yet) and sends them negative there’s likely only 1 direction for the USD. For nearly all economies it’s a race to the bottom in terms of their currencies.

    • Simon & Tara says:

      Very interesting. But this time it could be different. How many president-elects have promised massive infrastructure spending, tax cuts and jobs growth to such an extent? And how many have been complete political outsiders? The entire world is changing and the old laws may no longer apply.

  19. blubrd67 says:

    Anyone who can offer informed opinion on natural gas prices for the next few months other than “Trump effect” which might depress the prices? Lots of posts on gold, dollar, market, but not much on gas lately.

    “the policies of the new President-elect Donald Trump are likely to alter both the demand and the supply projections of natural gas.”

    http://oilprice.com/Energy/Natural-Gas/Trump-Could-Send-A-Shockwave-Through-Natural-Gas-Markets.html

  20. Along with the H&S charts from yesterday,the three black crows,the +div on the monthly dollar chart (on the chart I saw on Stockcharts),I’ll resubmit XJY, which I said last week–a break of 94-95 would send XJY down precipitously. P&F then gave a call of 89 as a PO.Tonight,it made it all the way to 89.30.Lot of fast moving currencies and commodities tonight.Two scenarios:
    Dollar reverses with XJY AND gold right here ,or the dam bursts tomorrow for a freefall.Phil…here’s the moment of truth.

    • bud67 says:

      Thought, you should know. I have left the OEW message board. Enjoyed
      the short time, we had time to chat. OEW suggest, I write to much. Thus,
      I have removed myself, to reading only….Best to you…Bud

  21. On the daily DXY (14)RSI,there was a – div from 99,all the way to 101 where–voila!there’s no more -div.Amazing.

  22. mcgcapital says:

    Another thing to note on the SPX is how often we double top and bottom:

    May 2015 2135, Jul 2015 2133
    Aug 2015 1867, Sept 2015 1872
    Nov 2015 2116, Dec 2015 2104
    Jan 2016 1812, Feb 2016 1810
    Aug 2016 2194, Nov 2016 2188?

    Not reading too much into the longer term, but it’s clear that we have difficulty breaking previous highs and lows. I’d be surprised if we broke 2194 on the first attempt when we’re this overbought and momentum has a negative divergence. Expecting a sizeable drop but will bail on my shorts if we sustain trade above 2194 (6820 FTSE, 10800 Dax).

  23. bfquant says:

    Anyone follow XLE? Would the interpretation of a terminal pattern be appropriate?

    • First time I heard “Susanne”,I played it over and over again for two weeks.A few years ago that was.It was one of those 60s best of albums,with the Chambers Brothers,the Byrds,Moby Grape etc.I bought the album for the other stuff and the song I never heard of–was what grabbed me.Great song.

      • torehund says:

        Lots of opportunities we knew were there but did not grab because our destiny were somewhere else. As goes love as go stock-trading, everything is hinged together.

    • fionamargaret says:

      This is what Cohen refers to as Bubble-Gum but I had this song on repeat…not as deep as Cohen, but angst just the same….

  24. Tony how do you see the Nikkei playing out in the short-term will it pullback with the US indices? or is going to push consistently higher playing out the 3rd wave?

  25. bouraq says:

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

  26. Hi,Tony,Dow’s count/correction is ahead in relation to S&P?thanks
    Looks like a flag/pennant
    http://invst.ly/2sg82

  27. jobjas says:

    CL long term – multi decade trend line and some classic fib ratios (for those who want to check out)

  28. 123 abc says:

    Tony, how are you counting five impulse Nano waves between 2125 to 2182 (i.e. What are the waves within Micro-3)?

    I only see seven waves between 2125 to 2182: 2145-2130-2163-2151-2170-2161-2182

    • tony caldaro says:

      you missed 2141-2127

      • 123 abc says:

        Ah I see. My word, that Trump spike is so unfair and tricky!

        Was erroneously thinking that the low at 2127 was part of truncated Micro-2; this is exceedingly difficult counting and it appears one must examine 1-minute charts too.

        Thank you Tony et OEW team, your counting is intricate, meticulous and unparalleled !

  29. vivelaamo says:

    This slow move up after such a large rally is very bullish IMO. I think we’ll see 2200 before we see 1950. I’m no longer long and will sit patiently and wait for a pb but I do regret closing my positions to soon.

  30. kvilia says:

    Thanks, Tony.
    I shared my thoughts on dollar/gold with eminiaddict and there was an interesting answer. dx is just an indicator and may actually represent dollar strength vs other currencies and not necessarily gold. There is a clear divergence between the price of dx and gold where gold is only hwb from 2016 highs as dx is at the highs. I did not think of it this way. In any case, hwb weekly long on gold was defended today creating a double bottom for now.
    And I also have a message for bud and others. A post saying “expect this and that” without a logical explanation and reference to what caused this expectation is not a service by any means, rather a distraction. Just my 2c.
    Cheers all and peace – lets make this place filled with perfume of wisdom.

  31. Thanks Tony for your always useful insight. It will be interesting to see now far we go. A question if you will: on the larger count of minute 1, wave 4 was an ABC. 83 to 52; 52 to 77; 77 to 52. Right? And is it axiomatic that little wave 5 has concluded and minute 1 is in place should we take out 2172? If you are too busy, I understand.

  32. mtu MTU says:

    [EOD] Stocks –
    While the case for a breakout is building in SPX (Chart 1) (especially with record highs in other indexes), a near term downswing looks probable give a completing post-election thrust in SPX (3s or 5s, Chart 2 and Chart 3) and ES(5s, Chart 4).
    http://market-timing-update.blogspot.com/2016/11/market-timing-update-111716.html

  33. lu1977jp says:

    Hi Tony,

    Can you give an update on the dollar and other currencies when you can?

    All the best

    Luca

  34. The vertical move of dollar looks like it could be going sideways or slightly down from here. If it does hold I still expect the DOW to surge another 450 to 500 points before we see a decent retrace.
    As I mentioned 2 weeks ago we have big momentum behind this move. If I was a true TA investor I would have ignored the wild ride of election and jump in dollar. Sometimes my intuitive betting combining fundamental, technical and past chart pattern recognition gets me in trouble. Still long.

    Tony, thanks for your pure analytics.

    • FYI, Trump offers National Security post to General Flynn. Fired by Obama in 2014 as head of Defense intelligence Agency. He believes problem in Middle East is the Islamic faith and declares it is nothing more than a “political ideology”. He also believes fear of Muslims here is rational.

      Maybe the buildup of his administration alone could set off a decent drop in market. Wishful thinking but it sets the stage for his platform on day one of his inauguration. His first speech might just shake everyone up. We shall see in 2 months time.

      If conditions are right I just might make a big bet on that day on the off chance he declares America Muslim free. You never know. The times they are a changing.

      I will now be adding Trumps actions to possible market direction changes. He is a loose canon that the Republican party will not be able to control. I am serious when I say I will be focused on Trump’s decisions for short term betting positions.

  35. bud67 says:

    ref SP500 – expecting a decline to 2149, approx.
    Near term decline, expected….Bud

    • tony caldaro says:

      Bud,
      While you were gone there was someone who posted numerous emails daily.
      After a while we all got tired of that person, and they were asked to leave.
      I counted 18 posts, excluding the duplicates that were deleted, since this morning.
      We had a three post limit, but it is loosely enforced.
      But 18? Keep in mind I have to read every post that is written. Spare me!

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