Thursday update

SHORT TERM: gap down opening then rebound, DOW -24

Overnight the Asian markets gained 0.3%. Europe opened lower and lost 0.2%. US index futures were lower overnight. At 8:30 weekly jobless claims were reported lower: 236k v 238k, and the PPI was reported higher: 0.5% v  -0.1%. The market gapped down to SPX 2393 at the open, then declined to 2382 by 10:30. The SPX had closed at 2400 yesterday. At that 18-point decline the market started to rally. Around 2:30 the SPX hit 2396. Then backed off to close at SPX 2394.

For the day the SPX/DOW lost 0.15%, and the NDX/NAZ lost 0.15%. Bonds gained 6 ticks, Crude rose 45 cents, Gold added $5, and the USD was lower. Medium term support remains at the 2385 and 2336 pivots, with resistance at the 2411 and 2428 pivots. Tomorrow: the CPI and retail sales at 8:30, then consumer sentiment and business inventories at 10am.

The market gapped down at the open today for the first time since last Wednesday. That gap down took the market to SPX 2380 before the rally to 2404 this week. Today’s gap down opening took the market to SPX 2382 before reversing and rallying. With today’s decline into support, the low-2380’s, a third wave high at SPX 2404 was confirmed on both short term timeframes we are tracking. This suggests if this uptrend was a B wave, it probably ended at SPX 2404. If an impulse wave, a 5th wave to new highs should be underway shortly. The parameters remain: support low-2380’s, breakout 2404+, breakdown 2361-. Short term support is at the 2385 pivot and SPX 2361, with resistance at the 2411 and 2428 pivots. Short term momentum was quite oversold at today’s lows then rebounded to neutral. Best to your trading!

MEDIUM TERM: uptrend

LONG TERM: uptrend

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

About tony caldaro

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80 Responses to Thursday update

  1. Jimbo says:

    Do the low number of comments the past few days suggest anything…?

  2. tommyboys says:

    Global cyberattack – Europe & Asia…

  3. fenster6 says:

    Could we have had our minute 3 and four and even 5 already?

    If you look at the hourly chart it looks possible but I am usually worng

  4. torehund says:

    Euro a-x-c from dec -16, looks like Contagion is imminent. Good weekend Tony and all of the board, enjoy the rays of spring.

  5. vivelaamo says:

    Does the market action this year remind anybody of 2014?

    • June-Oct 2014.Said that two weeks ago.But I never pass up a chance to agree with myself again…lol.

      • bfquant says:

        I think QQQis putting in same daily rsi div

        • stcoleridge says:

          NDX is up 20% since that late November sell off based on the quaint notion that Trump was going to go after those offshore cash hoarding un-American large cap tech firms.

          • stcoleridge says:

            Apologies, that was the mid November sell-off, the late nov. one was Italian election related. Same idea though.

  6. ariez5 says:

    Phil, What makes you so sure this is a short squeeze in bonds? I see technical and fundamental reasons why this rally could go to 125 or higher in TLT. Not saying it will, but the evidence is about even to me.

    • phil1247 says:

      fundamental reasons ? … you are talking to the wrong person
      the rally could be over already.
      ..short has traded…. /zb 151.23
      willing to wait for monday before i rebuy tbt
      no rush to short
      bonds need to gyddyup cuz sep contract is about a point lower than june

  7. Apple seems to be holding the market up all by itself.

  8. radrian6 says:

    US indexes seem to be focused on the SP Futures recently … it’s a tedious mess but I do see a rising trendline in place from April 16 on my 60min chart (log scale). That line was tested yesterday and again today and it’s still holding — indexes won’t drop unless and until that trendline gives up. On the same chart, I use a 14,3 Stochastic and I’ve noticed the recent overbought/oversold cycle is rising during regular trading hours — tough for intraday shorts.

    RUT had a couple of decent EOD short setups but is fighting the upward cycle during the trading day — again, tough to maintain a short position. It appears to me that RUT completed a wave down from 1426 to 1380 and may now be caught up in a complex B-wave.

  9. looks like algos are teasing the bears. Im long with a stop at 2380.

    Have a nice weekend everyone

  10. Well,up from 20.88 to 22.70 so far on GDX.Should make a run at the upper BB (23.80).For a +div on the daily,that would be normal.If all the potential -divs on equities kicks in,probably would help boost GDX (I hope).
    I repeat,those weekly +divs in 2016 were much smaller than the huge -div we have now on weekly Nas and S&P.Keep an eye on DJT.
    Good luck all.

    • johnnymagicmoney says:

      Yeah the negative divergences on tech are nutty of course they don’t mean squat until they do.

      As far as gold take a look at KGC

      • Kinross has been a monster.I took a quick look.Hit the upper BB today,so a couple days rest seems likely,unless it decides to ride the upper BB.Trying to embed as well.See how Monday follows through with more upside or sideways action.Nice run though.

    • fionamargaret says:

      Silver has got itself a really nice chart….

  11. phil1247 says:

    /CL
    extension long nicked……..

    looking to exit UCO on further rally ..
    . and get SHORTY with SCO

    have a great weekend all !

  12. stcoleridge says:

    Vive, you’re the RUT expert, what are your thoughts here?

  13. phil1247 says:

    TLT /ZB

    as discussed
    short squeeze possible to 123 TLT
    holding off on rebuy of TBT
    until i see how strong the squeeze is

  14. mjtplayer says:

    From what I see, GDX is rallying in wave E of a potential bear wedge. Initial resistance is around $22.90 (midpoint of the wedge) and a rally to $24 and the top of the wedge is also possible. If/when this pattern completes and breaks to the downside, the target would be in the area of the Dec lows.

    https://www.tradingview.com/x/Hp2D5Oy1/

  15. phil1247 says:

    /GC

    GOLD…. interesting development……..shorts beware
    bullish above 1220

    target 1338………….as long as 1220 holds

  16. Richard Glackin says:

    I believe we made it to the decision point. If we continue dropping through 2379ES then, the bulls are done for now. On the other hand, the 61.8 of that last move up is 2384.5. Good luck all.

  17. stormchaser80llc says:

    Clearly either the retrace from May 7th is not yet over, or the trend has turned bearish. Did not see any negative divergences at the high so the former is more likely. Sunday night made a new all-hours All Time High at 2407.3, but then lower through this morning, dipping to the 2385 pivot before reversing higher. Both of my signals turned bearish today. However, risk is on, says HYG:IEF. We can see it in Oil’s performance, and market breadth indicators are gaining momentum.

    My proprietary Technicals Model was higher today (McClellan was lower), and is coming off a Technicals Thrust in late April which signaled a clear bullish trend. However now I am tracking 2 negative divergences. Even if SPX makes new All Time Highs, the model is suggesting lower prices (a change in trend) will be upon us sooner than the market cheerleaders think.

    VIX may be firming up, and its MACD gave a BUY signal Tuesday. It may be a head fake but no way to know, just need to closely watch VIX here.

    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!! Right now the 1, 5 and 10-minute models are back online and other time frames will be restored as enough data is collected one by one.

    • fionamargaret says:

      This is the first time I have listened to Fazil Say (Mozart) and I really would like you to do so too. He was born in Ankara, and started showing interest in music and rhythm at the age of two. “Not merely a pianist of genius but undoubtedly he will be one of the greatest artists of the twentieth-first century” suggests music critics.
      He reminds me of Glen Gould in the way he is completely wrapped up in the way the music is being formed in his head, and cannot wait for it to fall into the keys.
      As an encore to Mozart, this is what he played…..x

      • 123 abc says:

        gosh he’s certainly getting under the hood, never seen a piano played like that before! thank you for sharing Fiona.

  18. canadianloonie says:

    Hi Tony Did you change your bearish count on the Euro to 92 instead of 82?

  19. Thanks Tony. Remember the ES trading range between 2376 and 2394.75 before the market broke out? For convenience, I have moved 94.75 (SPX 2398) to the right; simple Fib extensions of this range seem to explain recent highs. And while there were “news” worries, I believe we would have seen a correction today in any event owing to the recent pattern of lower highs and lower lows. It usually hits on the third lower high and the unwillingness of overnight traders to move the market higher made today all but certain but the depth of the correction could have been influenced unfavorable news on many fronts. The execution, optics and poor messaging of Trump firing Comey are simply awful.
    https://invst.ly/3xwb2

  20. mjtplayer says:

    Does anyone here follow the cocao market?

    What happened to make it collapse 50% over the past year and a half and has it bottomed? Looks like it may have, per the chart, but I don’t know or follow this market.

    http://futures.tradingcharts.com/chart/CC/W?anticache=1494549216

  21. Hi Tony,
    On the weekly SPX chart, is that a negative divergence I see building?
    Next week is opex. Maybe the one push into opex for a B then your 5 pct? or do we need a little more time on the weekly to see the divergence build.

  22. bouraq says:

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

  23. torehund says:

    Concerning the Rut and applying to my latest chart here on Tonys blog, corrections abcd and wave e may bring it down to the MDA pretty fast at 130. This doesnt have to happen but it very well could, so now you are prewarned😇

  24. piotrekfx says:

    Hi Tony. If market breaks 2404 and tops around 2420 next week, what kind of the correction you would expect pls?

  25. 123 abc says:

    First chart is Minor-5 scenario, other two are B-wave scenario. Currently prefer the B-wave scenario…



    • Tarun Varma says:

      123abc – appreciate your daily charts too! Why do you prefer the B-wave scenario?

      • 123 abc says:

        Since the February 2016 lows…

        a. There have been two nested wave-1s and wave-2s and I’m guessing a third nested set could be underway.

        b. The wave-2s have taken 70 to 84 days to develop, average being 77 days.

        • Tarun Varma says:

          Great insight Steve, thank you for sharing your view. Maybe one more marginal push high before?

          • 123 abc says:

            A marginal move above 2404 would likely qualify Minor-5 and the B-wave scenario would be aborted. So going short at current levels with a stop-loss at 2404 poses a good risk/reward setup if the B-wave scenario pans out (not trading advice, just my current position!).

            • Tarun Varma says:

              Of course, understood! And, yes it is a good R/R position given your view. After reviewing your chart again, I see that your overall count is pretty bullish i.e. Minor 1 at the Feb 21.2K high vs Tony’s minor 3.

    • Richard Glackin says:

      Great work – Thank you.

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