Wednesday update

SHORT TERM: early pullback then rebound, DOW +59

Overnight the Asian markets gained 0.1%. Europe opened higher but lost 0.3%. US index futures were lower overnight. At 8:30 durable goods were reported higher: +4.8% v -0.1%, weekly jobless claims were reported higher: 251K v 235K, and at 9am the FHFA index was reported higher: +0.6% v +0.7%. The market opened 7 points below yesterday’s SPX 2203 close, dipped to 2195 in the opening minutes, and then started to work its way higher. At 10am new home sales were reported lower: 563K v 593K, and consumer sentiment was reported higher: 93.8 v 91.6. At 2pm the FED released the FOMC minutes: https://www.federalreserve.gov/newsevents/press/monetary/20161123a.htm. Heading into the close the SPX hit the all time high at 2205, and closed there.

For the day the SPX/DOW gained 0.20%, and the NDX/NAZ lost 0.25%. Bonds lost 12 ticks, Crude slipped 5 cents. Gold dropped $23, and the USD was higher. Medium term support remains at the 2177 and 2131 pivots, with resistance at the 2212 and 2270 pivots. Tomorrow is the Thanksgiving holiday. Happy Thanksgiving!

The market opened lower today, hit SPX 2195, bounced, and then looked like it was headed even lower as the NDX was being sold. The DOW, however, remained unchanged to positive throughout the morning. Then it appeared the sellers gave up for the rest of the day. Complicated short term count for this first wave up of the uptrend. The hourly RSI has not hit oversold for 2.5 weeks. Amazing! Investors are so busy buying the dips, the market has not been oversold once since SPX 2085. US markets are closed tomorrow for the holiday, and will reopen on Friday for half a day. Many are taking an extended weekend. Happy Thanksgiving!

MEDIUM TERM: uptrend

LONG TERM: uptrend

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

About tony caldaro

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108 Responses to Wednesday update

  1. Broken record from weeks ago. 19,488 is the DOW target. Perhaps betting at that point, assuming it stalls there, would be a good fast play. Looks like a rounding style top so there could be a 10 day window down from that high mark and yet another 10 day recovery till it rolls over.

    Classic and normal leg higher. Domestic economy is finally catching up to its potential. Expect the weakest component will once again be brick and mortar retail this holiday. I do however expect them to beat expectations.

  2. Hi,
    Dow already reached first pennant target
    http://invst.ly/2u0ru

  3. captbara says:

    With the shallow W2, you would expect W3 < W1. In that case, it would probably end somewhere around here and 2226.

    Otoh, it might decide to keep subdividing for longer extensions. 2272 or 2310

  4. “As long as the market holds over our primary long term support regions, I still maintain the perspective that we are completing a corrective pullback in the complex. The ideal supports are the 16 region in silver, 111/112 in GLD and 19.80 in GDX. As I have noted before, we can certainly see a spike below those ideal support regions to scare investors, but if we see a relatively immediate reversal from those spikes, that is usually the sign we see when the market forms a bottom.

    At this point in time, I still have many signals that we “should” be bottoming. And, as long as we remain over support, I maintain that this is just a corrective pullback in a larger bull market mover off the December/January lows, with an estimated 70% probability. Should we see silver break down below 15.50 and GDX break below 16.50, it shifts the probabilities towards new lower lows seen in the complex.”
    Avi Gilburt today.
    He also had 70% probabilities on other predictions,from higher levels–that he was wrong on and apologized for.I hope he’s right this time,but we’ll see soon.He also maintains a rally on GDX over 25 will give an all clear.I agree(top of 3 black crows).If we get a +div bounce to 23,that would be normal.Then the fun starts.

  5. fotis2 says:

    CL trying to close last week’s gap check out the weekly candle not good for Bulls if it closes there.

    http://invst.ly/2u02q

  6. “The dollar’s gains were initially extended to almost JPY114 in Asia, but corrective forces quickly emerged, and the greenback fell to JPY112.50 by late in the session. Europe has seen some consolidation. A break of the low could see the dollar slipped toward JPY111.85-JPY112.00 and still not do much technical damage to the charts.”
    –Mark Chandler,currency guy
    The quick reversal,hopefully means something.Let’s hope it starts a correction of some kind.That’s how gold acted a few times at key peaks.
    Later.

  7. fbender7 says:

    Happy Holidays Tony and all.
    Tony, since the SPX has now exceeded 2209, we are back to your original short term count where minute wave i starts at 2084 instead of 2085. If I am understanding you correctly, this changes the internal count of minute wave i, which means that the 3rd wave of minute i is now counted as being 97 points in length (longer than the 1st wave of minute i), which means it is no longer the shortest wave. This means that wave 5 of minute i can go on being as long as it wants to be. I hope I’m getting this right.

  8. NINJA SHADE says:

    Happy thanksgiving! It’s Black Friday, and SPX short term count hanging by a thread here (2209/10)

  9. Overnight,USD/JPY got up to 113.90…gold was down to 1173.Currency reversed slowly around 2am–to this mornings low–112.78 (gold went green).S&P hardly moved in the futures with all the currency movement.That’s everything in a paragraph.Check everything out later GDX-wise later.

  10. hooloo1957 says:

    Happy Thanksgiving Tony, thanks for your work again. On the Amazon weekly chart the recent peak has a Roman numeral green 3. So that’s a primary 3? Or a major 3 incorrectly marked? If it’s a primary 3, where are primary one and two? Take care

    • Tony appears going into the US election most investors were neutral to slight short equities then the economic data kept getting strong without any Trump spending impact. If you step a side from Trump the US economy is accelerating most professional investors have now worked this out, and are trying chasing their tail to get neutral or slightly overweight.

    • tony caldaro says:

      That’s a tentative Primary III
      Primary’s I and II occurred in 2003 and 2006.
      happy holidays

  11. kvilia says:

    Phil,
    One of two conditions played out – GC dropped to 1172.1 to the tick. Did you act? I’m afraid to wake up tomorrow.

    • Like Tony wondering why all the chatter on gold its a negative real yield trade, US rates are heading to a positive real yield, there is a lot priced in here into gold short-term. But why would you own gold when GDP growth and interest rates are accelerating, gold is a fear trade..

      • NEWBIE says:

        You buy physical gold because the numbers the government is telling you are lies. There is no real recovery. The demand for physical gold is not reflective in the gold paper price, they cannot keep this fraud up much longer.

        • kvilia says:

          Yes, Newbie. All of a sudden Trump is going to save America. Can anybody look at what happened after Reagan was elected? You got it. There is also a difference – rates are at zero now, and they will not accelerate as Trump will be borowing for expansion. It was a brilliant equities trade who got in right after election, now it’s too late to chase it. Deflationary cycle continues.

          • vivelaamo says:

            What happened after Reegan? You really think the rally is done after a few weeks? Based on seasonality we could grind up a lot higher yet on low volume in to the New Year.

            I was one of those that got lucky on being long after the election but I was positioned based on a Clinton win. Even then took profits way to early and now want back in. Nothing makes sense but the charts. The noise is such a distraction and so hard to avoid. So many opinions, views, fundamentals to consider. I guess that’s why the best traders are the ones without emotion.

          • tommyboys says:

            Wrong. Powerful inflationary cycle at it’s infancy yet making itself blatantly obvious. Whole paradigm shift under way. Old relationships are all changing. Prepare for increasing rates at a more rapid clip than figured. FIG data telling…

            https://www.businesscycle.com/ecri-news-events/news-details/economic-cycle-research-ecri-all-of-a-sudden-inflation-fears-intensify

            • tommyboys says:

              New “First Turning” looking more and more likely…

            • kvilia says:

              Deflationary or inflationary – good for gold. I still think we are in deflationary cycle. Nothing changed yet, Fed is just trying to do what they offered all year long.

              • tommyboys says:

                Inflationary trend kicking off. Gold to $700+/-, THEN it may be good for a hold but could be a couple years off. Initial inflationary kick off a welcomed relief after a decade and a half of disinflation – with rates remaining historically VERY favorable for equities likely for at least a couple years. To each his own…

            • CampFreddie says:

              tommy – Totally agree as usual.

  12. torehund says:

    http://www.investing.com/currencies/usd-mxn
    The Peso still looks a bit better than the Turkish currency (TRY), loosing half since 2008. This hurts the population as a predominant share of income is used for food, compare to in Western societies. Whats good is that agriculture becomes a more prolific way of earning a living, supporting Mexican farmers. That said the squeezy development of the USD vs Peso is worrisome.

    • fionamargaret says:

      …now Tore you are beginning to go down the path for the case for gold….the real path….and that is also when you start having government intervention so you cannot own it….

      • fionamargaret says:

        ..an accountant friend phoned me up a few years back. What’s up, I asked, this is not tax time. He said he had done business for a company, who really couldn’t afford to pay him. What do they suggest I asked. They want to give me shares in their company. What kind of company I prodded. A gold mine……well, you know the rest……

        • fionamargaret says:

          ….miners and gold mines, penny stocks in a bear and seemingly worthless…surely a lesson of the market is to find the undesirables….

      • torehund says:

        Gold is ok outside of the US, but why dont just buy the USD. But if you live in Venezuela, it doesnt do you much good unless you have food already, or own it non-physical so that you can easily sell it for USD.
        I dont see a scenario in which gold will shine in the US near term.

  13. NEWBIE says:

    Now that scotty turned bull, the market will crash for sure.

    • pooch77 says:

      I would settle for a 3-5% pullback

    • scottycj1 says:

      Newbie on Nov 4 th at 10 am I posted this…….http://www.screencast.com/t/lBHIQ0IcVZJL
      do you know its meaning. ?…… place an up arrow on the daily chart on this date like its a
      buy signal…..can you see it ? From a guy who had a pay site for 20 bucks a month…..pay sites are an evil thing for every one here at ….The land of Entitlement traders….i’m sure you were all Hillary voters……I gave this signal for free….best of luck to you all….you will need it…Merry Christmas and good bye. I dont need to post here.

      I’m sure this is what Newbie wants….so long

  14. fionamargaret says:

  15. mcgcapital says:

    https://mobile.twitter.com/ukarlewitz/status/801828737264193536

    The widest bull bear spread since February 2015. If it plays out in a similar way it suggests volatility should pick up but that dips are for buying for now.

    • Jack Steiman,who I check out from time to time,says a 35% differential is the key to tops in equity sentiment.

        • Fiona, this guy goes over the places. He change every time, untrustworthy>

          • fionamargaret says:

            Thanks Francesca…Learned occasionally mentions his name, so thought maybe he would be interested…

            Gold is like the Bible…believers and detractors…but both believing they are right.
            One offers Eternal Life, the other unbelievable riches, but nothing quantifiably concrete.

            • Thanks Fiona.Francesca is correct.Avi was very bullish above 26…basically stayed bullish until very recently.Still thinks 19.80 holding- on GDX- keeps things bullish.But I ‘ll read this latest opinion with some pie.

      • torehund says:

        Its a bit too simplified to think of sentiment bias as an indicator of imminent reversal ahead, thats like saying oversold is bullish. We should follow a trend rather than try to ascertain the reversal point, let the market speak for itself.

        • vivelaamo says:

          Exactly. A simple trendline break is a better indicator then sentiment or momentum will ever be. May well be a break next week for a small pb. I’m looking at the Russel in particular.

          • torehund says:

            Yes, AND when you see these continuation patterns (or corrections that just churn higher) you know that strength is in place. Normally abc corrections gives a net price decline and when they dont, just look at the macd oscillators in different timeframe, emphazising the longer range like Monthly. Therein lies the explanation. Thats all you ever need to know about a hyper bullish setup.

            • vivelaamo says:

              I find 123 highs or lows are very reliable setups for tops and bottoms. The only problem is the stop need to be above the lower high and that can be quite far at times. This setup can take several days or weeks to form but the reliableness of them is worth the weight in my experience.

  16. http://www.marketwatch.com/story/the-charts-say-hot-air-is-pushing-these-markets-higher-and-little-else-2016-11-23?link=MW_TD
    Here’s an interesting article with lots of technicals,for those who like bear instead of turkey on Thanksgiving.Meanwhile,fwiw,P&F revising $XJY to 79 from 83 last week as patterns keep getting sliced through.
    Rhetorical question:Why do only equity markets have V bottoms and not gold?Partially answered in the link.See you all tomorrow.

  17. I have been killing some time and decided to play around with charts after seeing something that sparked interest. The upper black line connects 2135 and 2194 (using round numbers) and if we allow few bars it should greet the black line at 2207. https://www.tradingview.com/x/zGSi8FAS/

  18. captbara says:

    Hope everyone’s Trumpsgiving is going well so far.

    So who is short or waiting for a pullback to get in?

    • blackjak100 says:

      everyone should be because it’s highly probable the first pullback will be bought.

      • CB says:

        Agree with blackjack, capt…no sell signal yet. No shorting till then.
        I’m watching 114-114.20 for a possible reaction (FX level)
        In $SPX 2240, I think, would be the optimal level to reach if the market wants to stay crazy overbought at this juncture. But we can start correcting ant any point now, as we all know… =)
        T’day seasonality says that FRI & Mon after T’day tend to be down days (don’t have a link for that right now.. if I can find it, I’ll post it)
        RE: gold. Nice call the other day, capt!
        Most technicians tend to agree that 900-1K is the level to watch. Peter tweeted a nice HnS the other day that has that target as well if I remember correctly.

        Cheers!

  19. NEWBIE says:

    Jim Sinclair, “An upward breakout the long Treasury bonds will not just violently impact markets but rather nuclear impact them in a instant to the wide cease trading limits of today. Every OTC derivative ever written has am implied if not direct connection to any significant change in rates.
    The implosion backwards on counter parties will be a super nova of money. The dollar will become the dwarf star that powers a black hole. 3.5% return now implies the death of the once global economy and that takes everything else with it.”

    • CampFreddie says:

      …violently impact,nuclear impact, implosion backwards,super nova of money,black hole,death …surely he could have got a few more emotive words in than that 😀

    • CB says:

      Pretty nice, newbie..lol.. And a bit similar to Jim Willie’s verbal escapades . ‘A notch above the rest’ for sure =) Some of those guys are kinda fun when they get excited about something.

  20. locanbbs says:

    UPDATE: Typical! Sneaky rally on a holiday!
    Rut hourly futures –

    • locanbbs says:

      Pardon me! “1” and “2” should probably be a little to the right. What do you experts say? I was thinking it would overlap. But it doesn’t actually (close prices).

    • pooch77 says:

      Oh that silly Jim was saying $5000 gold 10 years ago

  21. Happy Thanksgiving all…
    Tony you briefly mentioned and I am paraphrasing, a possible alternate wave count if SPX continues to rally beyond 2209(?). Your 60 minute chart and 123abc’s chart “looks” like the SPX is in minute iii. On 123abc’s chart, minute iii would be minute i and his micro 2 is actually minute ii, with minute iii subdividing.
    Is this your alternate count?…and does this violate any EW rules?

  22. tommyboys says:

    ECRIs WLI shot up HUGE this past week as did the FIG. Looks like a potential explosion in rates very likely going forward. Happy T-Day all!!

  23. tommyboys says:

    All the talk of RUT winnng streak breaking a record isn’t quite there. Record is 15 sessions. The SP conversely has just had a 9 session LOSING streak prior to election – the longest in 36 YEARS! So these streaks don’t mean much other than a statistic.

    https://www.google.com/amp/www.marketwatch.com/amp/story/guid/7D9E42D4-95E7-466C-8C73-E27BB6687AD1?client=safari

    http://www.cnbc.com/2016/11/04/us-markets.html

  24. blackjak100 says:

    Happy thanksgiving! I see futes hit another ATH. This author has charts to support his bearish stance. ‘

    http://www.marketwatch.com/story/the-charts-say-hot-air-is-pushing-these-markets-higher-and-little-else-2016-11-23?siteid=yhoof2

  25. vivelaamo says:

    Happy Thanksgiving all.

  26. fotis2 says:

    Not a trading post but like to share a tip with any fellow dog owners I have a German Boxer dog and while a pleasure to walk when a puppy now at 9 months old and tipping the scales at a shade over 80 pounds (she obviously did not read the specs for the breed) the daily walk has become a battle of who pulls more.Looked at various contraptions in the market mostly of the choke chain type of wich im not particularly fond I stumbled on the following.Slip the lead of a normal collar under the front leg.Wala! problem solved now even my 11year old can take her for a walk…

  27. fotis2 says:

    Triple Top in the making needs to validate S&P futures

    http://invst.ly/2tpy0

  28. stormchaser80llc says:

    Happy Thanksgiving!

    My proprietary Technicals Model continues to demonstrate success, even in the face of negative divergences which built up late last week, and have since been negated. Today we see negative divergences have come back in at the highs of the session. A pull-back or consolidation are possible here.

    The technicals model was a whisker lower than a couple days ago, so technically negative divergence, but its negligible. It remains firmly sided with the Bulls.

    Higher prices are ahead. But need to keep in mind that there are significant negative divergences on Breadth and %stocks above their major ma since summer. Also looming are the negative divergences on MACD of SPX, $HYG:IEF, and Oil.

    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.

  29. bouraq says:

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

  30. fionamargaret says:


    Thanks Chris Kimble
    https://raymondjames.bluematrix.com/sellside/EmailDocViewer?encrypt=2dbdad26-d3c4-4cb1-83e9-3d7b95e47344&mime=pdf&co=RaymondJames&id=Jeffrey.Saut@RaymondJames.com&source=mail
    Thanks Raymond James……Charts..mmmmm

    Thanks Tony, and wishing you a very Happy Thanksgiving xxx…….and everyone.x

    • locanbbs says:

      Thanks, Fiona, you’re always holding up the “finer arts” here! And for the great commentary by Andrew Adams (Raymond James)!

  31. I had 5% of bigger bios above 10D pre-open assuming straight 3% falls. That capitulation level led to 5-6% bounce off open.

  32. Gold weekly lost its +div.GDX still does on daily and weekly.Story supposedly is GDX leads.We’ll see how Friday rolls.Later.

  33. locanbbs says:

    Thanks, Tony, and happy holiday!

  34. Tony, happy thanks giving from little old New Zealand, after the US election our immigration website got hit with massive level of interest from liberal voters not sure they will have much fun here, the country behaves more like Nebraska without the guns, digging into your wisdom do you have a top 3 blogs or writers you follow?

    Also noting some resistance to further selloffs in the US 10Yr, 30YR, gold, USDJPY, US utilities, staples, telcos all these are fear and yield trades showing some seller exhaustion. Any thoughts on what that might mean? Do we get a pull back in the overbought sectors e.g. financials, small caps?

    • tony caldaro says:

      down under 2.0?
      I don’t follow any blogs =)

      • yip 1) Brexit then 2) Trump, prior trend was Chinese into Auckland to escape the regime and clean their capital, we have our own local Trump Winston Peters should win the next election in 2017 with the help of a major party Labour, we think populism wins here and anti immigration parties win the election same political trends as the UK & US same underlying problems wage growth vs. productivity, cheaper more motivated migrant labour, automation of jobs and outsourcing to China. Enjoy the Turkey.

        • tony caldaro says:

          worldwide movement
          France and Italy probably next in Europe

          • Ironic the people that want change the most are handing it over to those that believe all should stand on their own two feet. No government assistance. Those people are the ones receiving the most benefit from this current system. The poorest states are Republican controlled and give out the least state assistance to the poor. Disband federal funds and we have another India. It fits with MY Macro View on timing the end of this long and great bull run. Next cycle lows will be as bad as the last Great Depression, and as long. You can’t start a new bull cycle from here without resolving excess debt. if anything the shift will be more pronounced to the wealthy as debt accumulates to unheard of heights. It will make the Bush years look tame in comparison. If you doubt by argument please explain how the new bull market will emerge as we cut taxes and spend exponentially higher? Cutting social programs at the same time will undercut any possible growth prospect. Bush realized that and so will Trump. As sure as I was over the new surge in early 2016, basing it on pure analytical review, I am just as sure over the political consequences. Good luck all. I hope this time around my analysis is wrong.

            • Tony, need clarification on your statement the press slanted TRUMPS words or intent. Please explain since his words were pretty darn clear to me. I have a College degree and perhaps I have over analyzed and misinterpreted his agenda. HIs misogyny in doubt? 14 million deportations? Register Muslims? Criminal charges for crooked Hillary? Hiring a General in charge of our National Security that dismisses 2 billion Muslims as a non-religion? Used hate and fear thru his whole campaign? His history is as graphic as the Clintons yet he gets a pass? Non disclosure of tax returns AS President without any understanding of conflict of interest? Reversed almost all his pledges as if it didn’t matter to the voters?

              Yup it seems to be the big bad press that got it wrong. but FOX seems to get it right all the time. Imminent charges DURING last few days of voting but turned out to be FAKED? ONLY news organization that proclaimed TRUMP saved jobs from FORD plant and yet it was a lie. there was NEVER any closing or loss of jobs.

              I deal in facts and analysis of those facts. Please explain the press’s mistakes? Just a simple list would do. You make statements without meat to it.

  35. 123 abc says:

    Thank you Tony et al & OEW team, a great Thanksgiving to everybody.

    Trailer to a classic Thanksgiving movie, watch it every year with friends & family…


  36. Thanks Tony and happy holidays. Thanksgiving may be weighing upon the market but I found it interesting today’s trading range was identical to that of yesterday. Also interesting, is the market was unable to reach R1; in past days its been hitting all three levels on different days. Whether this is lack of powder or the holidays, we cant be sure. They have been important, though, as there are few guide posts at these levels. Interestingly, today’s R1 was 2207……close to 2209 the level at which Wave 3 equals Wave 5. The market closed floating in the channel after tagging 2194.50
    https://www.tradingview.com/x/NdlPBrKL/

  37. fotis2 says:

    Happy Thanksgiving Tony and to all the American posters.Inside day for CL also Friday we rock!

  38. llerias7 says:

    Hi. This minute (i) still alive? Still be considered a minute wave?
    Mr. TC what do you think about ^RUT…keeps going up non stop…a diferent EW count than major indices?

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