Thursday update

SHORT TERM: higher open then another choppy day, DOW -6

Overnight the Asian markets gained 0.4%. Europe opened higher and gained 0.9%. US index futures were higher overnight. At 8:30 weekly jobless claims were reported lower: 238k v 257k, and the trade deficit was slightly lower: -$43.7b v -$43.8b. The market opened 3 points above yesterday’s SPX 2388 close, then dipped to 2385 by 10am. At 10am factory orders were reported higher: 0.2% v 1.2%. The market then rallied back to SPX 2391 by 11:30, before dropping down to 2380 by 12:30. After that the market rallied into a SPX 2390 close.

For the day the SPX/DOW were mixed, and the NDX/NAZ gained 0.05%. Bonds dropped 11 ticks, Crude fell $2.45, Gold slid $11, and the USD was lower too. Medium term support remains at the 2385 and 2336 pivots, with resistance at the 2411 and 2428 pivots. Tomorrow: monthly payrolls (est. 190k) at 8:30, a speech from FED Fischer at 11:30, a speech from FED Yellen at 1:30, then consumer credit at 3pm.

The market opened higher today, after looking like it was going to breakout before the open, then pulled back and stayed within the OEW 2385 pivot range for the 6th consecutive day. No change today in the wave counts on either the small or larger short term timeframes. Still 7 waves up on the shorter and 3 waves up on the longer, with obviously a recent wave down from SPX 2398 to 2380. With a positive divergence setup on the hourly chart there’s a good opportunity to break out of the trading range. Short term support remains at the 2385 pivot and SPX 2369, with resistance at SPX 2401 and the 2411 pivot. Best to your trading!

MEDIUM TERM: uptrend

LONG TERM: uptrend

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

About tony caldaro

Investor
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107 Responses to Thursday update

  1. phil1247 says:

    i want 2394 target hit by 4 pm /es

  2. torehund says:

    Rates, rates, Putin soon to put on a grin….Good weekend to Tony and all on board😀

  3. Bud Fox says:

    New, SP500 high, above 2400. Should seal this price top
    that is now, evolving…..end

  4. It appears that the Atlanta Fed and NY Fed GDP trackers have decided to flip.

    While last quarter, it was the Atlanta Fed which started off optimistic, predicting just shy of 3% in Q1 GDP growth, only to slash it all they way down to 0.4%, the NY Fed kept its exuberance – in big part due to reliance on soft data – until the bitter 0.7% Q1 GDP announcement by the BEA last week.

    But, it’s now a new quarter, and everything resets, and while the Atlanta Fed has once again started off strong, expecting 4.3% initially although modestly trimming its exuberance to 4.2% in Q2 GDP yesterday – a number which we expect to decline materially once again – this time the NY Fed, perhaps wishing to avoid another quarter of mockery, is far more cautious, and in its latest just released Nowcasting report, the NY Fed now expected Q2 GDP to grow by only 1.8%, down from 2.3% due to “negative surprises from the ISM manufacturing survey as well as import and export data only partly offset by positive surprises from the employment report.”
    –ZH

  5. Mary773 says:

    Tony,

    1) Last night, there was a brutal stop-running capitulation in the Forex Crude between 10:15-10:25 p.m ET that is reminiscent of previous washout lows. XLE has again supported at 66. I searched for your oil count on Stockcharts, but if it is contained in your seventeen pages of analysis I missed it. What is your current count on Crude?

    2) In reviewing your charts, I was intrigued by the British Pound. Your notations are a C with a question mark and an uptrend designation. What are your thoughts about the pound potentially having completed the down move from 2007 and now initiated a long term rally?

    3) You interpret TWTR as having begun Wave 3. What is the minimum upside objective for 3 given that 1 measured 13.73 – 25.25?

    Thank you.

    • tony caldaro says:

      Hi Mary,
      1. pg. 9 http://tinyurl.com/leekvsv, and XLE on pg. 3.
      2. If it has the EUR has likely bottomed too. 2017-2018 was/is the timeframe for a low.
      3. TWTR has displayed signs of waking up, only to head south again. If it can keep going this time $25 is a good target.
      cheers!

  6. kvilia says:

    Sorry folks, uploaded old chart – phil, is it better now? Any comments?
    https://ibb.co/jmyTMQ

    • vivelaamo says:

      Looks like it’s heading to the red line.

      • kvilia says:

        Com’n vive, you can do better than that. Why would I draw the fib retrace levels? This is a weekly chart, if 1190 holds, it will break a green line of this symmetrical triangle. If 1190 does not hold, then eventually red line will be touched or broken. Fib levels are used for entry/exit purposes.

    • phil1247 says:

      well..is is up to date
      but you gold bugs had best hope it is not a B wave triangle forming
      after an initial A wave down
      the C wave collapse will probably not hold the 933 target

      • kvilia says:

        Hey phil, it does not matter to me. If current structure does not hold, I will switch to DUST to trade in trend. So far NUGT is the trend vehicle (I don’t mean intraday, talking swing trading here).
        Hey, hope I can help folks make money.
        Have a good weekend.

  7. mcgcapital says:

    Was always going to be easier to get downside next week. I literally can’t remember the last time NFP made the market go down, even if the number is bad they still buy. They also tend to like spiking it up on political events so was going to be easier to sell after Macron is confirmed on Sunday. Assuming he wins you would expect them to spike it up on Sunday night but that gap may be sold off.

  8. kvilia says:

    Guys, how can I make a chart show here, not a link? I can show you why gold is still bullish.

  9. If stocks don’t start moving on good news…what do you all tell me?It’s not the news,but how stocks react.This market should be up 150 dow and 15-20 S&P.But no dice,so far.Later all.

    • phil1247 says:

      you have to see the close to make a judgement

      prob up big at the close

      • Dex T says:

        It’s already priced in.

        If the market really cared about todays news then there would have been a lot more movement already.

        If it moves up in the next hour then it’s just because the algos

    • vivelaamo says:

      We keep telling you stocks don’t move on any news. You just don’t believe it.

    • vivelaamo says:

      You know something? Every month I never look at the NFP number and when I see the chart reaction I can never tell if the number was good or bad. I couldn’t care less either. Now apart from the fact I don’t know what I’m doing, what else does that tell you?

  10. captbara says:

    NYMO buy signal will trigger today. Back inside the BB right now at about -6.

  11. If GDX is going to go,today is the day…and then Monday as well.it can’t give back.what it has done this morning.Filled the gap at 21.51.Now what?It”s a start, but a lot to do.

    • 21.98 is the 10d EMA.Only more bullish above that.

      • kvilia says:

        Learned, I did not add yesterday but it looks like GDX will be already up 10% from the lows when gold breaks extension shorts. Target in this case will be 1348. There is so much negativity here regarding gold, its not helping anyone. Miners are actually a great swinging mechanism, and can make you a fortune if you can time them right vs. waiting for SPX to lift of. I actually think that there is a small probability of another drop to 1200-1210 area and up from there. I think the only concern should be expressed if gc breaks hbw/61% long from year lows below 1190 – then there will be a problem. At this point in time the first target for GDX is 22.70 – 22.80. Its also important to understand that miners lead gold both directions, not other way around.
        Have a good weekend.

        • phil1247 says:

          not true kvilia

          GOLD bottomed in 2015
          GDX made new lows in 2016

        • A lot of strange things happen to gold when the Nikkei closes for the week.You make all good points.I added 10% Wednesday,hoping the +div would kick in today.So far so good,but stochastics are embedded.So it hss to beat that negative.If it does and gets above some MAs–first stop 23.50.Very iffy.See how it closes today.Goldfingers crossed.

  12. mjtplayer says:

    Saudi’s succeeded in jawboning a reversal in oil overnight, will be interesting to see how far the bounce can go. But it’s just that, a bounce.

    PM’s not joining the bounce party, just drifting sideways. Silver should bounce, it’s extremely oversold, but gold isn’t a may not participate in the bounce.

    • Dex T says:

      Oil is still way overpriced.

      Despite what they say Saudis are slowly divesting themselves of their oil assets and have been investing into “clean” energy. They will take what they can from oil as long as it holds.

      They know that oil is in a long term bear

  13. phil1247 says:

    nice short entry on bond spike up…. added more TBT

  14. vivelaamo says:

    chop chop chop DROP! 😊

    • pooch77 says:

      We have bradley turn today and astro crd 6&7 go figure french elections Sunday.So low today and gap up again Monday?

      • stcoleridge says:

        Presumably at some point the market has to price in Le Pen not winning. She’s 20 points behind. Having said that, they do like a gap up Monday.

        • Dex T says:

          It’s been priced in for a while. The election is already on Sunday.

          If she pulls off an upset maybe the markets will tank? Other than that it’s old news

      • vivelaamo says:

        RUT led the way up and it’s starting to lead the way down. Gap has been filled though. If you look at the daily apart from last weeks new high the range since Dec still looks in play so I wouldn’t be suprised to 1340 again next week.

        • pooch77 says:

          megaphone pattern on rut targeting 1320 fwiw

          • pooch77 says:

            Is price factored in all ready for French election?

            • Dex T says:

              It’s been priced in for a while. The market hasn’t been anticipating a Le Pen win.

              If she pulls off an upset I could see major moves, but nothing else.

              If she doesn’t win then whatever the markets do on Monday will have no relation to the French elections.

            • alexhartley1 says:

              The market is not pricing in a Le Pen victory. Unlike with Brexit and Trump the spread by pollsters is simply too wide for her to overcome even if they may be biased towards the more liberal elite favoured candidate Macron. Her time will likely be in another 4 years when the French once again realise nothing has changed. No result shock this time.

              That said Pooch, cycle wise I see today as an up day and next week down so I favour a pump and dump or simply down and pretty much the same with the Eur/Usd after the Macron victory is announced. The Euro is rising into this election and is overbought. Macron will not help the Euro. It will be more of the same and the same hasn’t gotten the Euro anywhere in recent times.

            • stcoleridge says:

              Aggressive short covering in the DAX after the close.

  15. phil1247 says:

    long /cl 45.75

    • phil1247 says:

      doubled longs

      • purplember says:

        phil, i got out of DWT and bought some UWT. i’m not sure if this is counter trend bounce as CL very oversold or more than that. strong +div on weekly CL chart

        • phil1247 says:

          test of jan 2016 low of /clm7 at 36 has failed

          this is when you get a profit taking short squeeze
          could go to 52.5

  16. TLT yield DOWN from 2.36 to 2.34.Hmmm.Buffet also cut his IBM stake to drive that stock down 5 1/2 points.Another headline today.PMs,slight bounce so far.

  17. dan pulford says:

    SPX resumes uptrend. Go UPRO!

  18. Gangbuster number–211,000,though previous month revised to 79,000.You’d think algos take this and run with it.Outstanding report.

  19. jhjoyner says:

    If the C&H pattern on SPX develops, we could see about 2480 in the weeks ahead.

  20. vivelaamo says:

    Apart from those that own oil stocks. Isn’t a low oil price a good thing for economies? Saying that when oil was over $100 dollars we paid around £1.40 a litre. Now we pay around £1.15!!

    • fotis2 says:

      There was a time not long ago when every little spike in oil was blamed for the increase in price from shoes to overseas vacations and everything in between oil has fallen more than half and we don’t see a price decrease on Anything makes one wonder

      • vivelaamo says:

        It stinks! By the way do you use IG? The margin increases for this week is ridiculous.

        • mcgcapital says:

          It’s outrageous.. especially if you’re holdings shorts. Think the odds of Le Pen winning when 20% behind in the polls are something similar to the NK situation escalating on any given weekend, so not sure why they need to hike it so much. But it’s been set at levels that are similar to what the FCA are proposing going forward so hopefully that doesn’t go through!

          • vivelaamo says:

            I think it will go through eventually because most other broker margin requirements are a lot higher than IG. I actually don’t understand how ‘spread betting’ is classed as betting for tax purporses etc yet doesn’t have to be governed by the same ‘responsible gambling policies’ that betting firms are. I.e. Opting out, setting limits etc.

            That’s a whole different story though.

        • fotis2 says:

          I used to for years but have had a few unresolved issues in the past and changed to other broker.The margin shenanigans being the main one just before any major event

    • tommyboys says:

      VIVE, Yes lower oil is bullish for economies. IT’s basically a huge tax break. Only one’s it’s bad for is oil/energy companies.

  21. That means short AUD and NZD and commodities long USD keep capacity to buy developed market equities if we get the 5th complete on the spx great time to add to cash.

  22. This market is the hardest to fathom for sometime I am reducing leverage to a long term position their are some pretty clear problems in NZ, Australia and Canadian housing from a halt in Chinese capital flows

  23. purplember says:

    CL still collapsing after hours. down another 2.5%

    • fionamargaret says:

      I sold mine Purple, after it didn’t bounce…
      I still have hope for gold bouncing here, but shall wait to see what Learned thinks…funny thing, silver bailed me out today..then I sold to help alleviate my oil loss, and put bids in again lower…..
      http://stockcharts.com/freecharts/pnf.php?c=%24WTIC,PWTADANRRO%5BP%5D%5BD%5D%5BF1!3!!!2!20%5D

      • fionamargaret says:

        I just looked at the chart, and I would think of buying at 44…maybe it will be lower than that in the morning. I hope you do well x

        • I can’t add to GDX until the PMs unembed.GDX is bearishly embedded itself.Silver has 7 days under the BB.Waiting to see if the slow stochastic
          overcomes the +div on daily gold.What a mess.Just thinking if money is coming out of gold and going into BITCOIN (!!!).Bitcoin is 1534 dollars–for an imaginary coin.I think Bitcoin in the problem right now.Just my theory right now.

          • The +div is on GdX,not gold.Something is even more bizarre than usual on this trip down,this week.Maybe it’s Bitcoin,like I said.At least I lightened up on a lot of GDX when the 10 and 20d caved in.Not totally,but no sweat.Still,it’s frustrating to see.Why gold went up to 1290 in the first place is the question.
            To wrap up,AG Thorson theorized gold would make a new intermediate low by late June and would go up from there.I can see that,the way this is playing out.

            • fionamargaret says:

              Thanks Learned. Take a look at this…I know it is not the P&F everyone else is using, but taking the price of 116, look at the totally great base going back to 2013….
              http://stockcharts.com/freecharts/pnf.php?c=GLD,PWTADANRRO%5BP%5D%5BD%5D%5BF1!3!!!2!20%5D%5BJ,Y%5D

              • If P&F charts have C&H’s we’re in business.While I’m here,Kathy Lien just posted her thoughts on ISM/NFP correlation.
                No charge…lol.
                “While jobless claims were very low and Challenger reported a steep decline in layoffs, the employment component of the manufacturing- and service-sector ISM reports continued to fall. Both reports accurately telegraphed the pullback last month and the fact that they did not improve is worrisome.”
                We shall see in 6 1/2 hrs,if my alarm goes off.

      • Lee X says:

        Ahhhh the internet

      • H D says:

        That’s quite a story Fiona, reminds me of the time I returned a blender to Costco to offset a loss in beaver futures that was funding my VIX options.

        • fionamargaret says:

          Not really…if you have a loss, and out of the blue you get filled on a silver bid put in days previously which covers the loss, I think blessing…… and I did suggest 44 for a price to buy oil, (check how the traders reacted a couple of minutes (12.05) after my saying that…ditto for gold).
          Also note how my suggestion for the meeting with Kim was run by Bloomberg and taken to Trump for his reaction within a couple of hours….but it is easier to mock and discredit…

  24. Vu Hai says:

    Hi Tony,
    Would you please post your spx 500 historical elliott wave chart ?
    Best regards,

  25. Mr C,I know it was only one day,but what did you make of the dollar falling,euro and yen up,gold dumping,bond yields rising?

  26. stormchaser80llc says:

    The market continues to search for a bottom, often surpassing the 2385 pivot, only to quickly retrace higher close to the 2391 resistance line. My proprietary Technicals Model was only slightly lower today (and still positive), while the McClellan flipped back to positive. One of my signals turned weakly bearish yesterday, while the signal based on the Technicals Model remains bullish with the model still positive. Breadth remains bullish almost across the board, yet is weakening. SPX hourly still showing consolidation since April 25th, with a narrowing Bollinger Band. This is supportive of the start of a new leg higher this week. While the progress higher has been slow, believe it will start a new leg up as soon as SPX can sustain above 2091. My bullish stance is not only based on technicals and market breadth, but the strong positively diverging signal on my Technicals Model in late April as well as a Technicals Model Thrust. For wavers out there, believe this has been a W4 before another W5 to All Time Highs to come. Oil dumped today and made a new downtrend low as I have been expecting. Indicators suggest its more likely to trade sideways before making a final low before a potential reversal higher.

    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.

  27. bouraq says:

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

  28. bfquant says:

    TC. Thank you. I am going to stick my neck out and suggest strongly that we are about to begin C down (irregular ABC on SPY). My reasoning is as follows: Some of the smaller “juice” is getting absolutely obliterated: uranium, mining (not just precious metals), energy, etc. These aren’t just healthy pullbacks, but are well in excess of these securities’ own volatility-normed declines. High yield bonds had quite a weak day today with massive divergences on the daily(14) RSI. China has been under a lot pressure. Oil is cracking all forms of trendline support. Base metals are following the precious metals sharply lower. Also, Bonds are becoming unreliable again as a hedge on equity market swoons. Risk parity funds have to consider this when looking at their equity allocations. There is too much bearish action in the cyclical bearish space. Any giveback in the glamour space that coincides with deterioration in the cyclical space could actually provide the recipe for a crash (or perhaps something akin to August ’15).

    • vivelaamo says:

      I agree but I don’t think it will be as severe as 2015. I also think we could chop for longer yet. I’m short RUT and DOW from here.

      • mcgcapital says:

        Seems crazy that it won’t go down with oil off 5%. Think we aren’t going to get clarity until next week with a probable pop up on the French election result to come. I’m short but not holding over the weekend.

    • BF, agree with your vision, but where from the crash will begin? The short side also doesn’t want to start. Have to say it is peculiar and that a marginal higher high could very possibly come first, sort of a fake break out 20 or 30 points over the top. But since the start, this last correction looks like Mario Bros, it get killed and than suddenly a new Mario appears jumping erratically over and over again. So, all possibilities are still valid.

      • bfquant says:

        I think the irregular Abc on SPY and IWM are likely, even if another marginal high. Would remain short. This would imply a swift move to 2225-2285. Even if from 2420s. What is more, the deterioration is getting so bad in the small cap cyclical and commodity space that I wouldn’t rule out that we completed a major wave 3 of a massive ending diagonal that began last February. Oil and dollar are saying the Trump bump was a mirage.

        • bfquant says:

          …as Feb ’16

          • fionamargaret says:

            …and add to that, I normally trade about the same, but in the last week, there is difficulty putting through sell orders on index ETF’s….just be careful…

            • bfquant says:

              Seeing the same thing. Our custodian sources multiple liquidity providers, and the markdown below bid that they quote us on thinner etfs is getting larger for similarly sized sales.

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