Thursday update

SHORT TERM: flat opening then rally, DOW +60

Overnight the Asian markets lost 0.4%. Europe opened higher and gained 1.0%. US index futures were flat overnight. At 8:30 weekly jobless claims were reported lower: 254K v 258K, the CPI was reported higher: +0.2% v +0.4%, the Philly FED was reported at  2-year high: 21.5 v 7.6, and the NY FED was higher too: 9.0 v 1.5. The market opened 1 point above yesterday’s SPX 2253 close and began to rally. At 10am the NAHB was reported at an 11-year high: 70 v 63. Just past 10am the SPX hit 2268, pulled back to 2263 by 10:30, and then hit 2272 by 11:30. After that the market pulled back to SPX 2258 by 2pm before closing at 2262.

For the day the SPX/DOW gained 0.35%, and the NDX/NAZ gained 0.30%. Bonds lost 24 ticks, Crude ended flat, Gold dropped $13, and the USD hit 13-years highs. Medium term support remains at the 2212 and 2177 pivots, with resistance at the 2270 and 2286 pivots. Tomorrow is Options expiration Friday, and housing starts plus building permits will be reported at 8:30.

The market opened flat today, rallied to SPX 2272, pulled back to 2258, then ended at 2262 for the day. The OEW 2270 and 2286 pivots have offered some resistance, as expected. And yesterday we saw the largest pullback since the 31-point pullback in mid-November. The rally off yesterday’s SPX 2248 low had a good start, but faded in the afternoon. From yesterday’s low the market thus far looks a bit choppy: 2265-2250-2272-2258. Could be some 1-2’s or some abc’s. A drop below SPX 2250, or rise above SPX 2272, should give us the answer. Short term support is at SPX 2250 and SPX 2243, with resistance at the 2270 and 2286 pivots. Short term momentum rose to neutral today and then backed off. 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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99 Responses to Thursday update

  1. fotis2 says:

    Crude still has a gap unclosed my 2cents for the day nice to see everyone is making big bucks 🙂

  2. vivelaamo says:

    Market will do what it’s going to. News can always be found on any particular day to be blamed for the reason. Today is probably one of the last days of human trading before the holiday season. After such a rally and a sell off it was always going to be flat or down. This has nothing to do with China. But if we rally next week go ahead and use the positive news over the China news as being the reason for the move.

  3. GDX trying to fill the gap to 20.If gold gets past 1142,can go to 1155.Would fill the gap.China takes drone.Obama press conference upcoming.Fox hyping it pretty good as “act of war”.Not even waiting for Trump to get in for testing US response.

  4. captbara says:

    Now the HnS is very clear, target 2230. Too obvious?

  5. captbara says:

    Feels like it wants to roll over. Must mean bad news over the weekend.

  6. About time for the mid morning algorithm romp higher

  7. Seems unavoidable that if they push the DOW to 20,000,the SPX would exceed 2277 and post a sizable -div.Goes with what Cashin says.Later.

  8. vivelaamo says:

    Russel target now 1402 which I expect this year. Then I’m out.

  9. johnnymagicmoney says:

    ok so…………..

    retail sales disappointed yesterday
    wage pressures are mounting
    Dollar at a 14 year high
    Interest rates have gone parabolic
    Fed priced in 3 rate hikes instead of an expected 2
    Housing starts missed and just dropped considerably today (surprise surprise)
    China is devaluing its currency at a rapid pace and no one care
    GDP recently downgraded

    but with all of that earnings should increase like 15% next year!!!!! Stocks are a buy!!! Trump is going to do an infrastructure plan haven’t you heard??? This is the bubble phase and euphoric phase folks. How high and how long are the only two questions………………..period

  10. Pisani, of all people,had a cautionary segment today,showing 4 companies who are warning 2017 earnings being”way too optimistic”.Caterpillar,Honeywell,United Technology were 3 of them.Just flipped it on at the tail end.Caterpillar,for example had EPS of over $6 a share in 2013,dropped methodically in 2014,2015 and down to $3.30 a share this year.Next year?
    Trump rally aside–” The trend continues. $3.17 a share”.The companies are pleading with investors to notice this.Basically,come back to earth everyone.
    Later.

  11. alexhartley1 says:

    Morning Tony – what does the Feb 2017 denote on the JPY chart please? Are you expecting a cycle bottom then at your 135 target?

  12. http://www.cnn.com/2016/12/15/opinions/its-the-oil-stupid-jacobs/index.html
    No charts
    But is this not outdated thinking? While may have been right a time ago, we have moved on. Opec does not control the USA oil flow, the market does. To do what is being suggested is complete waste of resources and can only exacerbate firstly a political time bomb that is building as well as create economic wastelands in many of the worlds areas; areas that the USA depends on for USA world co’s to operate in and generate income from. He is tunnel visioned as most one trick Condo salesman are. He will lay waste to years of political relationships and technological/employment gains based on new energy. HE IS AN OLD FOOL!!

    • Dex T says:

      The fight for geopolitical control of oil is becoming an increasingly outdated point of view thanks to U.S. energy developers and increasing advances in “green” technology. Oil is only going to drop in price.

      However,

      The U.S. does NOT depend on the rest of the world. They depend upon us. Trump is quite right to come down hard on Saudi Arabia (and other banana republics). They are ALREADY economic wastelands and Trump isn’t responsible for that.

      • yes but USA multinationals depend on these other banana republics as you call them to generate all that wealth held offshore in their foreign banks. What would Trump say when these BR’s say USA go home??

  13. vivelaamo says:

    Now I admit this chart may be biased but taking the pattern in isolation you can still see there was test of 20 day moving average, bottom of bear flag, bottom of channel, and backtest of breakout point. Apologies for format of pic.

  14. vivelaamo says:

    Seems to be a lot of top talk surfacing and understandably. But even if it was the top it’s all about timing now. It doesn’t mean the market will drop the same way it rose. Could consolidate for weeks before it falls.

  15. If 1867 was P4 you can count 5 waves up which would be enough to end this uptrend as a failed 5th at 2277. Or need 1 more low around 2237 then a move to 2300 that could be it. Or 2300 would need Int 4 down to 2200 than another high over 2300 to end it, or we simply go to Dow 50k I pick max high no matter what is 2368. Could fail anytime between now and then. If we go to sp 2500 I will be broke, cause I’m so lvereged now with a 1-/2 another half at 2300. Market is always been based on hope. Which has never materialized. Only central bankers support at every major downtrend. What happened at 1867, oh ya, Japan central bankers stepped in with QE at that exact moment. Now hope trump will be the savior. Anything he does will take longer than most expect, but will have little effect on economy. We will go from a 2’percent GDP to a 2.5 percent. With a raising dollar and interest rates. We shall see,

  16. stormchaser80llc says:

    Would not be too quick to jump on bearish trades just yet. SPX Weekly chart last Friday was bullish. On the daily no negative divergences were seen at the highs Tuesday. The negative divergences that formed late last week and early this week on the SPX hourly are playing out. Further weakness is expected with no positive divergences seen at today’s lows.

    All 999 ensemble members remain bullish with the legacy signals suggesting neutral positioning is best. My proprietary Technicals Model was slightly higher today, but still is lagging the SPX which may lead to further weakness ahead. Still believe need a lower low on VIX before bears should get excited.

    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. THE TOP IS IN … REMEMBER I CALLED A BULL MARKET IN FEBRUARY WHEN 90% OF YOU WERE BEARISH. GOOD LUCK TO ALL YOU BULLS

    • Time Stamped when everyone wanted to sell the rallies ..
      Sal Mazzurco (@Sal22Mazzo) says:
      February 26, 2016 at 9:19 am
      People – What ever pullback we get… ideally anything as far as 1900 … Buy it with both hands… 2016 will be a bull market

      • Sal (@Borgetto23) says:
        February 26, 2016 at 9:17 am
        2016 will be a Bull Market : Target 2160
        ABchart says:
        February 26, 2016 at 9:22 am
        Sal,
        I respect your view. But if you believe that, you must have an invalidation level to avoid suffering a big drop. Maybe stay cash next week to see where the market will move.
        Sal Mazzurco (@Sal22Mazzo) says:
        February 26, 2016 at 9:26 am
        Thanks AB .. MY Plan is to add to my current position a few more contracts around 1900.. Will know more the 1st week of March, where i actually buy could be 1880 or something above at 1900 … My invalidation would be a close below 1860
        ABchart says:
        February 26, 2016 at 9:38 am
        Sal,
        If you want my opinion, although we are here to share and not to give advices, do not do that. This is extremely risky. A crash is imminent…
        Sal Mazzurco (@Sal22Mazzo) says:
        February 26, 2016 at 9:52 am
        Thanks AB .. I’m keeping about 25-30pts as my downside risk .. maybe i’ll buy a Vix contract just in case

    • can you explain why you think markets have topped? tks

    • CampFreddie says:

      Thanks -SaL. Yes 90% were bearish in mid Feb when you made that call. I can also remember Buddygloves making bullish calls with conviction at the 1830/40 area, but the two of you were very lone voices.
      We are taking note GL.

  18. mcgcapital says:

    Thinking the markets will pullback here into mid next week then another rally into January. Resistance areas on the Dow at 20000, Dax at 10400 and FTSE at 7000. Hugely overbought conditions and indecision candlesticks at these levels. There’s a lack of catalysts now until Jan so it could drift down post OpEx then rally over Xmas and New Year. Either way not expecting much of a move in either direction.

  19. torehund says:

    https://www.armstrongeconomics.com/world-news/corruption/merkel-want-full-censorship-claiming-putin-wants-her-defeated/

    Other than that not to much to comment except that Euro is in a perilous state and P-III is ongoing 🙂

  20. Thanks Tony. Because it was an inside day, not much as revealed beyond the body of today’s candle largely traded close to the bottom half of yesterday’s

    I had a chance to compare notes with friends who work in the financial industry and who are most helpful in developing likely longer term scenarios.

    One is that Yellen may have announced three rates hikes for 2017 to simply remove froth from the market but this will likely be dismissed as the shift in the dot plot was small and not all board members agree on the proposed path of hikes. She may have to walk back some of these hikes as the inflation is not there.

    Alternatively, Trump will deliver on his fiscal stimulus promise, the economy will expand sharply, inflation will rise and the Fed will need to hike rates as, or more than, currently forecast by the Fed but not by enough to lead to a serious stock market sell-off.

    The problem for us is that we are working in uncharted waters with few rate markers. In the past the market easily tolerated 3% FFR’s but that era has since passed; we are entering a new financial ethos.

    What I can say is that when the FFR exceeds the ten year, the economy suffers; with the FFR trading between .50 to .75 and the ten year at 2.6%, we should have more than ample room for rate hikes without putting the economy at risk.

    I’m having problems with FRED but in the only observation available the market suffers as well as it preceded a recession.

    I would love your thinking on this Tony.

    Interesting read: https://www.seeitmarket.com/history-says-bull-market-room-run-higher-stocks-16372/

  21. Not a lot posts today everyone on holiday?

  22. “On CNBC’s Options Action, Pete Najarian spoke about unusually high options volume in Market Vectors Gold Miners ETF (NYSE: GDX). He said that the stock is trading sharply lower, but traders are buying the January 19 calls.

    They bought around 25,000 contracts of the January 19 calls in Market Vectors Gold Miners ETF and Najarian thinks the high volume might be a sign of a bottom in gold. He owns call options in the name.”
    There you have it…the bell rang at the bottom.Anyone else hear that?
    Hmmm,maybe I’m developing early stage tinnitus…lol.Soon find out.
    Later.

  23. bouraq says:

    Chart of the day is $RUT at https://www.tradingchannels.uk

  24. hooloo1957 says:

    Hey Tony, seasons greetings, thanks for your work. You sure have been right lately. The only problem I have with being in a third wave of whatever degree is that we’re going so vertical. I think it’s unsustainable. BAC, SMH, iwm, and others are trading higher above their 200-day moving average then at any time in the last 10 years or even longer. This can’t last so how is it going to work out? Who knows? Maybe next week we’ll be laughing about what I wrote here😆😆

    • 123 abc says:

      Agree, it is starting to look quite vertical, and yet Primary-iii is just believed to be starting!
      Assuming the OEW call of Primary-iii is correct, and assuming the channel from the 2009 low continues; then the DOW could be at 27,250 by Aug 2021 where wave3 = wave1, or more typically at 34,600 by Dec 2026 where wave3 = wave1 * 1.618 —certainly thought-provoking!

    • They don’t make music like that anymore.If you can call what
      they did music…lol.
      Lyrics of a song,I know of theirs:(1966)
      “I ain’t a-ever gonna go to a-Vietnam
      I prefer to stay right here and a-s***w your mom.”
      Before my time,but I have 3 of their albums.

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