Thursday update

SHORT TERM: downtrend confirmed, DOW -139

Overnight the Asian markets lost 0.5%. Europe opened lower and lost 0.4%. US index futures were lower overnight. At 8:30 the PPI was reported lower: -0.1% v 0.3%, and weekly jobless claims were reported higher: 244K v 234K. The market opened 6 points below yesterday’s SPX 2345 close, dipped to 2338, and then started to rally. At 10am consumer sentiment was reported lower: 96.0 v 96.9, and the WLEI was reported lower: 57.1% v 57.5%. The rally continued until 11am when the SPX double topped at 2348. Then the market resumed its decline. For the rest of the day the market had two bounces, but closed at the SPX 2329 low of the day.

For the day the SPX/DOW lost 0.65%, and thee NDX/NAZ lost 0.50%. Bonds gained 18 ticks, Crude slipped 10 cents, Gold added $6, and the USD was lower. Medium term support drops to the 2321 and 2286 pivots, with resistance at the 2336 and 2385 pivots. Tomorrow is the good Friday holiday, but we have the following reports: the CPI and retail sales at 8:30, then business inventories and the Q1 GDP estimate at 10am.

Today’s selloff was sufficient to confirm a downtrend has been underway since the early-March SPX 2401 all-time high. The charts will be updated to confirm, as suspected, a Minor wave 4 is in progress. As noted earlier in the week, and over the weekend, support for this downtrend appears to be at SPX 2299, the 2270-2286pivots, and worse case SPX 2234. More on this in the weekend update. We will report a short post tomorrow on the overnight action and the economic reports, plus anything else that might appear interesting. Enjoy the three-day weekend, and happy holiday!

MEDIUM TERM: downtrend

LONG TERM: uptrend

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

About tony caldaro

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61 Responses to Thursday update

  1. Can anyone see the resemblance between the diagram and the chart?

    http://i0.wp.com/www.lifestyletrading101.com/wp-content/uploads/2016/06/b-wave-low.png?resize=350%2C350

    Diagram Matching

    pink a = April 5 high at 2373 ES

    (a) = April 7 @ 2338

    (b) = April 10 @ 2362

    pink b = April 13 @ 2323

  2. fenster6 says:

    Can anyone remember the level at which Tony said the whole Bull count was wrong. I want to use that as my stop.

    thanks

  3. Retail sales down .2 after down .3 previous month.Recession looming,BEFORE all the Korea drumbeating.June looking like no rate hike.Gold break above 1295 would slice through a multiyear downtrend line and officially end the bear market.China sounds extremely nervous about Korea.I remember Trump said,”We’ll have to do a few things to clean up the world,it may get a little messy for a while…”
    Which leaves us with,To Fourth Turn or not to Fourth Turn–that is the question.Is Trump bluffing–or not?

    • opader says:

      Thursday was extremely bearish. Breadth data was bad for NASDAQ and awful for NYSE. New highs dropped, new lows spiked and SGS ticked lower.

      All five major indices (DJI, DJT, NAZ, RUT and SPX) are now trading below their 50 D-SMA which signals more selling ahead.

  4. torehund says:

    A new one from Armstrong.

  5. vivelaamo says:

    This blog cracks me up. You now have people posting that the whole move from 2008 is corrective!

    We had the kiss of death from Ajay yesterday and no dancing bear to save it. May see more downside.

  6. Richard Glackin says:

    Let’s talk about wave 4’s. Wave 4’s are the most costly part of the market for the average trader. While I admit, I don’t always follow this advice, I’ve been told “never trade a wave 4” ! And, with good reason. You seldom know what a wave 4 is going to do. It’s the difference between trading and gambling. The sensible way to trade is to trade waves 3 & 5. Trade a wave 4 and you are gambling. The exception, of course, is day trading where most folks nip at nickels and dimes.

    My point is that if you look at where we are right now, no one can say whether we go up or down. It is impossible to know for sure. Take a look at the wave count. We had an abc down from 2401ES to 2318ES. Clearly that turned out to be the ‘A’ wave – not the entire ‘ABC’. That fooled a number of folks on this site. Then we had another ‘abc’ ‘b’ wave up to 2375ES. Or, is that just the ‘a’ wave of a large abc ‘b’ wave?…one that could bounce to the 2380 area before starting the ‘C’ wave down. If you don’t know the answer to that question – news flash – no one knows.

    It could go either way; we could drop straight from here to complete a ‘C’ wave and all of wave 4 or, we could bounce up for a more complex ‘B’ wave within wave 4. The moral of the story is very simply “keep your powder dry”…for now.

    I hope I save someone some money. Good luck to all.

    • micky says:

      I can understand that you are frustrated Richard, trading is not easy, especially for newbies. I am curious,how will you trade the fifth wave if you don’t know where wave four ended ? One of a EW traders biggest mistakes is to make assumptions without the wave action proving itself first. Therefore you have to know where you are wrong. Many over here know these things. BTW was it you, in one of your first posts that mentioned people over here could not count ?

      • Richard Glackin says:

        Micky, no frustration here…just relaying a perspective that, as I said, hopefully will save someone some losses. Wave 4′ are inherently dangerous to your portfolio. But you asked a VERY good question, “…how will you trade the fifth wave if you don’t know where wave four ended?”
        The answer is this; I always expect the worse case scenario for a wave 4, unless or until wave 5 proves itself. For example, how did I know that after the initial abc down that wave 4 was NOT finished? I waited to see if a viable 1-2 started in a wave 5. Since the abc up from there was not looking at all like a wave 1-2 of 5, it was clear that wave 4 continued. Yes, I said “looking”. Of course, there’s a little more to it than that. If you go back and look at the wave pattern there are several indications that we were not seeing the start of a wave 5. First, any possible five count had micro wave 4 violating the territory of wave 1 – both in the overall move but also in the sub waves as well and there was no diagonal. For that reason alone the end of wave 4 was unlikely. But I still wasn’t sure until I saw the magnitude…the size of that abc up was too large for the wave 1 of 5. Then, the ‘possible’ wave 2 retrace just did not have the typical structure of the wave 2 of an impulsive 5 wave up. But it was on that Friday before the weekend when I posted the warning that wave 4 was continuing when we saw an abc up – that’s when I was very confident that we were NOT getting a wave 5. It was going to be a more complex wave 4.
        Now, there are folks out there who have some rules about how to trade out of a wave 4 in order to catch the wave 5. If you like, I’d be happy to share those with you. However, personally I rely on wave structure. Besides, it is NOT all of wave 5 that I’m interested in. I look for the 3 of 5 for trading purposes.
        Finally, you referred to a comment that I made with respect to people who could not count. That was a tongue-in-cheek comment where I would hope that most would have realized I was not actually being critical. Most of the wave counters on this side do pretty well. I follow their counts – open to a wider perspective to find things that I may have missed. It’s very helpful.

        • micky says:

          Thanks Richard, that is a good and essential approach in any correction, let the waves prove themselves first ! Regarding trading corrections, you are correct in warning newbies of the danger of trading them-let them play out first. However once you understand the nature of them, there is good money to be made scalping them, not just nickels and dimes. In any case, make sure you have a good trading plan and system as one cannot rely solely on EW to trade as everyone should be aware of. Yes I considered the comment of inability to count was tongue-in-cheek. I just wanted to make sure lol. Thanks also for your contributions and GL.

    • chrisk44342 says:

      Agree with you…wave 4s are tough to identify and trade

      • I know very little about counting OEW on my own,but if I could do it,I would count say…the VIX or major individual stocks that effect the indexes most:Apple,IBM etc and extrapolate movement to the rest of the market that way.If Apple is in a bullish pattern,and news doesn’t change wave structure–no worries right?Thoughts on that?

        • tony caldaro says:

          Unfortunately it doesn’t always work that way.
          Strong stocks are first to get bought and last to get sold.
          Plus have their own long term patterns

          • Thank you.Would VIX be in a wave 1,after its long consolidation pattern and if so,any way to measure how high it could run up?Fibs I guess,right?Any estimates?

            • Just to follow up on Apple…weekly seems to have a -div.Daily RSI at 22.Went down to 10 previously I saw,but looks like a bounce should happen next week. (Especially if no war over the weekend).

  7. stormchaser80llc says:

    Today I present 2 EW counts that both eventually resolve for the bulls. However the market today was bleak, with strong losses on my proprietary Technicals Model. And my favorite signal is much deeper in BEARISH territory. The market looks like its feeling its way to a bottoming pattern, one which should end this 6 week consolidation period. Want the market to get above and stay above 2371 resistance line. VIX extended negative divergences, a huge VIX drop could be coming! Oil looks to remain in a sideways W4 for the short term.

    Much more FREE analysis at my site (http://navigatethemarketstorm.com). However be advised that I do ask folks to take a few seconds to register for a log-in, making sure you agree to my legal documents.

    On my site, be sure to check out the real-time Trading Platform (look for it on the top menu). I am taking feedback on pros and cons!!

  8. IRA Epstein says GDX should get to 26.10.Very bullish scenario.That would take it through the top black crow,which would be more bullish.You wonder what’s going to happen in North Korea over the weekend.Trump is talking extremely tough.He’s backed himself in a corner like Obama did in Syria.Big difference here though,I have no doubt he’ll do something.Read stories that China would invade NK to stop a nuke test OR we send conventional bombs in to destroy the test.South Korea needs to give approval first.So by Monday,we’ll either have war and gold up $100,or NK backs off and gold drops $30?Place your bets.

    • It was time to do something about to stop this idiot once and for all. It was time to stop Assad crimes too. It was time to stop ISIS.
      If we have to pay a price for it, so being for the sake of the future generations.

      • fotis2 says:

        The bombing has nothing to do with stopping ISIS or Assad they have known about the gas/ISIS for years why now?Its a chess game move between Trump and Putin next move Putin.

        • torehund says:

          Martin Armstrong detected a major turn in the expansive power between USA and Russia and the withrawal period in Nation building having started the 15 th of October 2015. It was the day of Russians entering Syria and coincided with a major turnpoint in the Economic confidence model. Trump move could therefore very well constitute the below off phase or death cramps of an era of Nation-building that has already in earnest come to its end. Lets see if Assad speaks the truth and media is to blame.

      • fenster6 says:

        Francesca – I think you are a bit naive if you follow the we need to fix all the bad in the world doctrine..

        ISIS came out of the chaos in Iraq. there was no ISIS ten years ago.

        And as to chemical weapons, Saddam used them a lot. Guess where he got them?

        http://www.dailymail.co.uk/news/article-153210/Rumsfeld-helped-Iraq-chemical-weapons.html

        • fionamargaret says:

          This article basically sums up my worries.
          I am used to total preparation in order to achieve an outcome, researched and presented in a professional manner, so someone please tell me how this helps his base, let alone the rest of us…
          http://www.nydailynews.com/news/politics/king-trump-twitter-fingers-spark-world-war-iii-article-1.3055197

          • “Yesterday in a Wall Street Journal interview Trump said he favored low interest rates and a weaker dollar, loved the Export-Import Bank (a hog trough for feeding globalists), might keep The Wicked Witch of the East Janet Yellen at the Fed, and likes NATO. By my count, it took the Elite about 5 months to ‘splain things to him. He’s got it now.

            And if y’all voted against the Evil One for fear she would start a war with Russia, now Trump looks likely to start a war with North Korea, Russia, and somebody in the Middle East for good measure.”
            I read this on Franklin Sanders gold website.The last sentence of the first paragraph echoes my thoughts.Trump wilted when the pressure from the media and Congress got to him.I guess you need to replace more than the president to change where the country is headed.Learned another lesson.

            • fionamargaret says:

              Thanks Learned 26.
              I guess I would like to see him swotting up on Healthcare, Taxes, Infrastructure etc because people have faith in him…..
              This is tranquil…swans for Francesca….from Russia with love…(really)

  9. fionamargaret says:

    My sequences say if we go through 2343, we go to 2311….and that may be it……
    If we go through 2311, then 2261…
    Oil I have to spend more time on watching the numbers…it just seems there is no definitive algorithm, thus the thrashing. Once there is a pattern I shall tell you, At the moment bias is to the downside, but don’t waste your money until there is a pattern…..
    If indeed 2311 is it, I would imagine oil might rally with stocks,
    I have the usual charts, but thought perhaps to leave until the WU….
    Have a great Easter holiday, and keep safe.

    Thanks to Tony, and everyone.xx

    • Jack Sparrow says:

      hi fiona didnt we go thru 2343 already..

      • fionamargaret says:

        Yes Jack, breaking 2343 is only worth mentioning as being the criteria to getting to 2311…and to keep the wording the same as what I have previously mentioned.
        Actually 2343 is a very dominant number….so if you need 4 numbers……x

    • Fiona, I like your approach if price “sequencing” as I rely heavily upon it as I lack the background to generate and trade off of wave counts. And as of late, some of the best have been adjusting their counts to fit the market.

  10. Should go away and play golf more, shot under 100, for me that’s awesome. 2329 close, not 2320 as I was hoping for, but I will take it. Good start for the weekend. Looking forward to the weekend update.

  11. bouraq says:

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

  12. aahmichael says:

    Last month’s candlestick provided a 99% probability that 2322 would be taken out before 2401 is taken out. As I posted last Friday, I expected this week to begin the acceleration to the downside, and it didn’t disappoint. My count remains unchanged. I see the entire rally from 1810 as a WXY.
    W went from 1810-2111
    X was a running correction: 1992-2194-2084
    Y went from 2084 -2401.
    None of those waves were impulse waves.
    I’m counting everything down from 2401 as a 1-(running)2 to the high on 4/5 at 2378. From that point, it’s another i- (running)ii to 2350, which finished yesterday. Wave iii began at that point.
    Today’s close means that we now have a weekly 3BR, which should be the final nail in the cross. I do not expect to see a resurrection.

    • blackjak100 says:

      Aah…with all due respect we’ve heard this same story before from you from much lower levels. The earliest this bull ends is next year and above 2401. It’s going to require a lot of backing and filling possibly for up to 18 months to reverse this long strong bull. You know and I know it despite what you say.

      • blackjak100 says:

        My count hasn’t waivered as minor 4 for 3-4 weeks. I was on the triangle count until today, but mentioned an expanded flat minute B. Market will find support 2305-2310 and then rocket to 2400ish to complete minute B followed by minute C to 2299.

      • aahmichael says:

        I use very strict rules when I count impulse waves. If a wave doesn’t abide by those rules, then it isn’t an impulse wave, no matter how far or how fast that wave travels. The very first rule is that no part of a wave 3 will ever violate the 0-2 trendline. With that one very simple rule, it’s obvious that it’s impossible to count the move from 2084 to 2401 as an impulse wave. On the other hand, it counts perfectly as an ABC, where wave A went from 2084 to 2278, and wave C went exactly to the 1.618 extension of wave A at 2398. A more perfect setup you’ll very rarely see. Furthermore, wave W and wave Y are equal to each other. (with a very minor overthrow.) These types of relationships don’t occur in impulse waves. They only occur in corrective waves.

        • Jack Sparrow says:

          have you taken a position AAHM

          • aahmichael says:

            Jack, I almost always have a position in at least one market or another, but I don’t post them on this blog anymore because the comments section is made up almost exclusively with daytraders/scalpers, amateur nickel and dimers, or just plain clueless idiots. My time is better spent elsewhere. Nevertheless, it shouldn’t be too hard to figure out my positions and when I entered them based on the contents of the few posts that I do make.

            • vivelaamo says:

              Haha when a bear is wrong time after time he resorts to insults!

            • Jack Sparrow says:

              yes though it was good to know when you posted when you opened the position…

              i dont understand why people are harsh to each other…there could be good calls and bad calls..no one has a perfect record…i think its the internet (the veil) which allows us to act obnoxious to each other therwise in actual life we wouldnt go on putting down we meet if they had one or two bad calls…lately i have noticed on this blog whenever there is a difference of opnion there is always a addon of how bad the previous call was therefore the person with different view must be an idiot….quite childish i think

        • STEPHEN BARTLETT says:

          I don’t count the whole move from 2008 as impulsive. I don’t contribute much but have said before, to me, it’s a corrective diametric rally. Wave g to complete finished at 2402. a=g in price length and time length-14 months each. The rally from 2008 is part of a corrective structure from 1999. Possibly an x wave or a wave d. Either way we are going to 1700.

          • aahmichael says:

            Stephen, I thought we had done waves 1-2-3 from 2009-2015, but the market action since then has forced me to question that count, especially the last 14 months. As I posted above, it’s impossible that the last 14 months are part of an impulse wave. I certainly don’t look at wave counts in a vacuum, and given everything else that I factor in, I agree that 1700 is the minimum expectation, and if that doesn’t hold, then 1550 and 1200 would be the next potential destinations. Also, while I’m counting 1810-2401 as a WXY, it could also be abcde of a diametric, with wave f currently in progress, and wave g still to go after wave f completes. If that turns out to be the case, then I would expect wave g to be a truncation. You’re right about price and time coming together at 2401, so I would be surprised if that is exceeded.

            • STEPHEN BARTLETT says:

              Aah. FYI. I have the 2009 low to the end of March 2010 as wave a. It was 14 months. Wave b a expanded flat to end Aug 2011. Then a zig zag to end July 2012 for wave c. From there a running correction to end of May 2013 for d. Then a complicated correction to the start of 2015 for e. Flat to the low at the start of 2016 for e. Rally since a zig zag to complete wave g also at 14 months. Wave a=g in price as well as time at 2400. The most powerful point of the chart was the running flat. If you split they in two to the lows and mirror higher you get 2400.

        • Jim B. says:

          aah, wondering if you might see the count you have now back in 1929? I couldn’t find a great chart but it looks like the same count might have occurred. I do really think the working group did the old stick save in feb 2016 at the 181. Dimon comes out beats his horn that he’s buying and I think I do remember people saying that it was clean that Japan intervened in our equities market.

          Now Dimon is selling his JPM like a mad man and I really think these drums of war might be being used to cover up that the emperor has no clothes.

          1929 equity market had crazy leverage and this last bull had crazy fed money.

          SPX 2430 and 2080. BIG numbers that should tell the story of P3 bull or double zig zag bear.

  13. It sure is.Like I said,it’s almost been a stealth rally.Not getting any attention.Selling off at the EOD was pretty frustrating to see.Not sure what it means for Monday,but maybe others are trying to figure out when VIX starts dropping from the upper BB(bearish gold?)–and took some profits.My best guess.As long as it stays above 10 and 20d,I’m not worried.Good luck.

  14. kvilia says:

    Thanks, Tony.
    Learned, don’t you think GDX is clearly under performing gc? I smell trouble there, JNUG 10% down today – juniors show the way?

    • torehund says:

      Think the commodity complex is sensing the impending dollar strength. Euro too is out of juice, just some final “cramping” lef in it. Should have succumbed a long time ago, but bullishness has to be washed out thoroughly.

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