Thursday update

SHORT TERM: yesterday’s pullback continues, DOW -23

Overnight the Asian markets lost 0.6%. Europe opened lower but gained 0.1%. US index futures were lower overnight. At 8:30 Q3 GDP was reported higher: 3.5% v 3.2%, weekly jobless claims were reported higher: 275K v 254K, and durable goods orders were reported lower: -4.6% v 4.8%. The market opened 3 points below yesterday’s SPX 2265 close, and continued to pullback. At 9am the FHFA housing index was reported higher: 0.4% v 0.6%. Then at 10am leading indicators were reported flat, personal income was reported flat, personal spending was reported higher: 0.2% v 0.3%, the PCE was reported flat. The pullback continued to around noon when the SPX hit 2256. After that the market worked its way higher in the afternoon to close at SPX 2261.

For the day the SPX/DOW lost 0.15%, and the NDX/NAZ lost 0.35%. Bonds slipped 2 ticks, Crude rose 10 cents, Gold lost $3, and the USD was higher. Medium term support remains at the 2212 and 2177 pivots, with resistance at the 2270 and 2286 pivots. Tomorrow: consumer sentiment and new home sales at 10am.

The market opened slightly lower again today and continued the pullback that started yesterday. A week ago Tuesday the SPX hit an all-time high at 2278. The following day the FED raised rates 25 bps for the first time in a year, and the market sold off to SPX 2248. Since then the SPX has remained in that 2248-2278 range, despite two events that would have normally generated a rally: Trump’s confirmation by the electoral college on Monday and today’s best GDP report (+3.5%) in two years. During this seven trading day trading range, the short term waves have been quite choppy. Nothing looks impulsive yet to resume the uptrend. Short term support remains at SPX 2254 and SPX 2248, with resistance at the 2270 and 2286 pivots. Short term momentum was quite oversold at today’s lows, then bounced. Trade what’s 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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68 Responses to Thursday update

  1. vivelaamo says:

    Merry Christmas all. What a year!

  2. fotis2 says:

    Merry Christmas Tony and to all the contributors may you have a fantastic one!

  3. stan502 says:

    Thank you Tony and all; still following, not commenting. Merry Christmas and New Year.

  4. Tony,

    Could the current action be micro 2 of minute 3?

    Thank you.

  5. captbara says:

    Interesting trendline starting from yesterday’s low. Enjoy the holidays everyone 🎅🇺🇸

  6. MACD crossing over signal line today for daily DJIA. (Left Hand crossover)
    (shown as the negative Histogram)
    Yesterday had same crossover for S&P 500.
    Market losing power quickly.

  7. Well you have China and the Arabs and Russia pro gold and the US and Euros against.

  8. scottycj1 says:

    Tidings of comfort and joy to all……Merry Christmas.

  9. Holiday sales (overall)down 4% this Christmas season–according to Foxbiz.GdX still trying to fill the gap.+div on daily.Avi thinks the low will be in by Jan 1st–based on sentiment.But a big break would negate that theory.A jump over the gap would confirm the low is in.That’s HIS theory.I have a difficult time believing Jan 2017 will repeat Jan 2016.But we’ll see.I read that a sharp selloff and a “V” bottom is what’s needed for PMs,but this slow descent augers further lower prices.Seems logical.As I said,I’m in up to 19.70-20.Then I’ll see how price is acting.Getting above the 20d is always important.Check it out later.

  10. phil1247 says:

    Tony

    hope you and your family enjoy a wonderful holiday

  11. micky says:

    es , I have a max retrace target of just below 2210,wth more likely targets of 2238 to 2222 area if it wants more downside than it already had…end

  12. I see Italy rescued its Monty Python–I mean Monte dei Paschi bank by reaching in its pocket for a quick 20b.THAT was a quick crisis.Just wonder how a ) that wasn’t done before and b)how do they decide when NOT to bail out a bank?
    Also,if stealing one of our drones (like China did),was called an act of war by some,what would you call an ambassador being assassinated,like Turkey did to Russia ?That used to start invasions in the past.Rhetorical questions all.

    • torehund says:

      Bullies have a different and skewed sense of insult sensitivty, its simply harassement.

    • wmorel says:

      I agree. Seems to be a disconnect. Nothing seems to make sense, it’s like we are watching a reality show but saying ” this is not real, it means nothing”

  13. stormchaser80llc says:

    The swing trading environment has become conflicted, which often occurs near tops. I have been thinking new highs are likely ahead due to the lack of negative divergences put in on SPX Daily at the highs, while HYG:IEF continues to make new 2016 highs.

    However based on recent performance of my long position in my 401K I have decided to become more conservative and consider selling and going to my interest baring account. Yesterday I noted $VIX looks set for a bullish trend with positive divergences on all indicators. Today, the McClellan Oscillator had its second negative day in a row after more than a month of positive ticks. There are also negative divergences on the McClellan Oscillator and New Highs, as the number of stocks above their 20/50 day moving average starts to really deteriorate.

    And today’s very negative reading on my proprietary Technicals Model has convinced me to go to cash, forming a huge negative divergence compared to the SPX since mid December. Additionally my legacy SHORT signal almost triggered today.

    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.

  14. Tarun Varma says:

    Tony, have you previously seen this sort of a choppy wave consolidation in wave iii of 3 before?

  15. A 1 percent gap down tomorrow would be a perfect ending to minute 4. With minute 5 next week ending at or around 2300. Then minor 4 down and minor 5 up to around 2350 and either that’s it or major 4 and 5 left. Either way after 2350 should get a 200 point down move. Re evaluate then

    • I also wonder if that forgotten B wave could be finishing near 2300 with a nasty C wave down. Would think that is still a possibility.

      • Thanks, Tony!
        I think the probability that we’re in that “forgotten B wave” is about the same as that for the recent crest at 2272 being the top of primary wave-5 to complete the current cycle wave. A fully formed 5-3-5-3-5 ending diagonal, the run-up from 1810 to 2272 might come to be called The Trump Blowoff Top of 2016.

  16. Whats interesting in the US AAII sentiment data is bullish but positioning in S&P 500 futures is short, effectively meaning any pullback will be brought until people are fully loaded. Seems we still have more fun ahead with any selloff to be brought. Thanks Tony for your hard work and all the best for Christmas from New Zealand.

  17. bouraq says:

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

  18. vivelaamo says:

    Surely a holiday period should be ignored for TA and waves in particular. There is no volume.

  19. llerias7 says:

    What a boring iii of 3 of 3 ?!?! Does not look like it…

  20. radrian6 says:

    Agree with Tony on lack of impulsive behavior — it’s also evident in the RUT / IWM. Nothing but corrective action since Dec 9. IWM may have completed A and B waves of a correction and, if true, support may come in around 133.65 to 134 but that’s just calculation. Keep an eye on the price action — IWM tends to “stair-step” higher when its in a strong uptrend.

    • 123 abc says:

      Currently guessing that the Trump rally from the 03-Nov low to 09-Dec high completes one wave; and now expecting either a 23.6% or 38.2% retracement.

  21. bfquant says:

    TC. Do you have any thoughts/counts on biotechs? BTK index or NBI?

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