Thursday update

SHORT TERM: higher open new highs, DOW +71

Overnight the Asian markets gained 0.9%. Europe opened lower and ended mixed. US index futures were higher overnight, and at 8:30 weekly jobless claims were reported higher: 234k v 233k. The market opened 6 points above yesterday’s SPX 2404 close and continued to rally. Just past 11am the SPX hit an all-time high at 2418, then pulled back to 2412 by noon. Heading into the close the SPX hit 2419, then closed at 2415.

For the day the SPX/DOW gained 0.40%, and the NDX/NAZ gained 0.75%. Bonds gained 3 ticks, Crude lost $2.70, Gold slipped $1, and the USD was lower. Medium term support rises to the 2411 and 2385 pivots, with resistance at the 2428 and 2444 pivots. Tomorrow: Q1 GDP (est. 0.9%) and durable goods at 8:30, then consumer sentiment at 10am.

The market opened higher today for the fifth day in a row. The SPX/NDX/NAZ all hit new all-time highs, but the DOW only managed to exceed its April high. The current rally continues to climb without a quantifiable pullback. Thus far it has risen 66 points from last week’s SPX 2353 low. This is the best uninterrupted rally of the entire uptrend, suggesting a third wave underway: 2406 wave 1, 2353 wave 2. While the SPX/NDX/NAZ all look impulsive, the DOW does not. It looks like it could be forming a diagonal triangle Minor wave 5, with wave C underway. Unless it strongly kicks in to the upside in the coming days/weeks this pattern would explain its lethargic action. Short term support is now at the 2411 and 2385 pivots, with resistance at the 2428 and 2444 pivots. Short term momentum ended the day overbought. Best to your trading!

MEDIUM TERM: uptrend

LONG TERM: uptrend

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

About tony caldaro

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134 Responses to Thursday update

  1. Dex T says:

    Tony,

    Your Opium growing article has presented me with a dilemma

    After this bubble finally pops I was planning on heading west to set up my own silicon valley “startup”

    Growing poppies in the north Carolina foothills may be even more lucrative!

    Thoughts?

    • Dex T says:

      But honestly that Chinese guy was nuts!! He was sitting on half a billion dollars and just invited the investigators in to take a peek and slap the cuffs on him.

      Quickest bankruptcy ever!!!

      (Note to all – drug dealing is wrong!)

    • tony caldaro says:

      Why go where all the other start ups are … are you selling burgers 😉
      Just start up in your own garage … worked for Jobs

      • Dex T says:

        I haven’t quite determined the product but it seems to me that it doesn’t really matter…

        Why? because the West coast U.S. seems to attract the dumbest/craziest/most gullible investors. who will fund just about anything. Why spend so much time analyzing charts when there is a whole group of people willing to give away their money for any idea.

        It would be cool to get an ocean desk view and be a paper billionaire for a few years before we crash and burn.

  2. Dex T says:

    After an early morning rally Bitcoin made fresh lows today.

    I wonder if yesterday was “the” top? it would coincide well with the chart and the turn of the moon

    • tony caldaro says:

      People on food stamps can no longer buy homes.
      This is not the Bush administration.

    • tommyboys says:

      Looks like an IHS at the far right bottom there…about to explode higher?

      • tommyboys says:

        Also lots of that is by choice. Youth today enlarge don’t want to “own” a home. They wanna be transient. Higher levels aren’t marrying and aren’t as interested in the “nuclear family” lifestyle. There are a million reasons outside of a failing economy why home ownership has fallen. Could cycle right back up just as easily. Statistics are limited in their value.

  3. NEWBIE says:

    Vix is super low with positive divergence, negative divergence on macd, nymo, rsi, gold about to break out, I smell a nasty down move coming

  4. micky says:

    I had the first sell signal at 2410 since the 3250,s .. I have it as a 3, with another 3 and 4 ..then the final 5th at the higher 20,s.. of a bigger 3 or whatever,, I still think the bigger pb will only come at the higher numbers…of course a 3 may also be a C wave, but my money is on a 3..end…

  5. kvilia says:

    BJ, Are you still giving Tue a chance?

  6. phil1247 says:

    /es
    shorts and longs breaking suggesting triangle forming .. wave 4?
    looking to sell all SSO into the next pop

    have a terrific holiday weekend Tony and everyone here…
    i am defrosting my hot dogs now

    we earned it !


  7. something has to give.

  8. learner3078 says:

    Hi Tony, what’s your view on the DXY, currently which wave is it in, is DXY still bullish, consolidating for a bigger move up? Thanks.

  9. Page says:

    OIL – short squeeze is imminent.

  10. Here are todays econ stats for APRIL–2ND QTR
    Core Durable Goods Orders (MoM) (Apr)

    Act: -0.4% Cons: 0.5% Prev.: -0.2

    Corporate Profits (QoQ) (Q1) 

    Act: -2.5% Cons: 2.3% Prev.: 2.3%

    08:30

    Durable Goods Orders (MoM) (Apr)

    Act: -0.7% Cons: -1.2% Prev.: 2.3% 

    Durables Excluding Defense (MoM) (Apr)

    Act: -0.8% Cons:  Prev.: 1.1% 

    GDP (QoQ) (Q1) 

    Act: 1.2% Cons: 0.9% Prev.: 0.7%
    Booming?

  11. NEWBIE says:

    North Korea or some othe b.s. is going to spark the wave c down over the weekend.

  12. phil1247 says:

    BITCOIN
    around 2400 now
    if it doesnt hold here ..
    .. downside blowout coming

  13. Also a question for Mr C.What do those diagonal red lines on the various RSIs for SPX and other markets mean?Anything at all?Lol.What it’s come down to is,these various asset classes are all buys I guess–bonds,dollar,gold,stocks.How is that possible?Not even mentioning BitCon.Later all.

  14. phil1247 says:

    /clm7
    above 49.35 ext shot breaks . short squeeze is next
    if support holds at 48.54…

    target is 53.90

    • Is that from Yellen’s private newsletter?I hear she charges $1500 a trade, for a heads up on PPT moves in advance.Nice.Btw,if the economy is booming,why don’t bonds sell off?Why is the 30 yr at 2.9%
      A)Its not really booming
      B)Bonds are being bought(by you know who)to artificially keep yields down.
      But then,who cares about details.

      • phil1247 says:

        i dont try to correlate ANYTHING
        keeps me UNBIASED

      • phil1247 says:

        also ..
        who ever said the economy has anything to do with stocks?
        i am sure it wasnt me
        because i dont try to correlate anything

        • I’ve seen that once or twice phil.It’s all good.

        • tommyboys says:

          Correct – there IS NO PPT and economy and markets are two SEPARATE/independent entities…Stop being paranoid.

          • Do you forget 2008 so quickly?No correlation?Hmmm.If that was true,stocks shouldn’t have sold off at all.What was all THAT about?

            • tommyboys says:

              Check out a history of PE ranges vs. economic activity and see if there is any LT correlations. Sentiment drives markets not economy.

          • phil1247 says:

            tommy ….

            if feds are so powerful
            why could they not stop spx from falling to 666?

          • phil1247 says:

            tommy
            he will never ……. learnhislesson25 26 27 or ever

          • stcoleridge says:

            So you are denying that Reagan formed a Working group on financial markets in 1988?

            • phil1247 says:

              dont care
              if they exist they failed miserably allowing 666

              • tony caldaro says:

                PWG is a standard operating policy of the FED

              • tommyboys says:

                PWGs mandate was to/is (if still active) improve market efficiencies – not prevent run ups and sell offs. It took/takes acts of legislation typically 60 days or longer in the making to implement actions. PWG morphed into the PPT solely on rhetoric nonsense. Just another lie perpetrated by crooked media selling fear to eager buyers. No substance just repeatedly uttered opinions becoming gospel.

  15. NEWBIE says:

    What a recovery since 2008, LOL.

  16. phil1247 says:

    /cln7
    took profits on sco premarket at 39.67
    this wave down may have finished with a front run of 48.07 target
    which is also .50 support of long from lows.
    anyway dont want to be short in this area

  17. B Seagle says:

    NUGT 60 Update..
    Example of minute chart symmetry…
    https://eagleseagle.wordpress.com/2017/05/26/nugt-60-2/

  18. gary61b says:

    ES, https://gyazo.com/22500e09b4c5e710831687cea18d6458, Its channel trading with 2407 as support on lower channel with last candle, next candle support will have 2408.75 after the open..If channel holds that pullback was most likely w4 of this move from 2344, w5 up to possibly a measured move to 2439.

  19. Transport sector was strong today with the DJTA up 1.57%, but the DJIA was up only .34%.NYSE A-D line up +96 while the NASDAQ A_D line posted a +206. My mid cap growth mutual fund PEMGX, was up .65% today while MTK (MS tech etf) was up .95%. However, I suffered a paper loss of 2.83% on MTK about 2 weeks after I bought it, so I want it to move well above my purchase price of 72,80.

  20. cj32 says:

    cr. CBZ

  21. BitCon is having a slow day …up 7% for the day,in the middle of a 500 dollar range.Gold meanwhile has huffed up .92 cents.My heart can’t take all that excitement…lol.
    IRA says “Gold above 1264 and below 1248 will decide its short term direction.

    • phil1247 says:

      learned

      gold has been in extension longs in this sideways move
      and is now moving to 1274.50 target
      i said nothing earlier because the extension could have failed as bears hoped

      they were wrong
      still long from my ” cheap long ” a la Lee X .. at 1222

      • phil1247 says:

        question is .. is this a 5th wave up with post triangle wave 4 thrust now
        or was triangle wave b and this is C wave up?

  22. Bud Fox says:

    Tony – thank you very much, for your SP500 market comments.

  23. bouraq says:

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

  24. Key is 2430. Minute wave 1 was 76 points, if this is minute 3 , it should go thru 2430.
    2352 plus 76 to equal 1 is 2428. If it’s a 3 , you should know soon enough. Other problems, is sp stuck in a channel, which would need to break out of that, not sure how it does that. Dow is week, naz on blow off top. Would fit better if it were a B wave, either way we go to 2280 ish either in a B or Int 4. Max pain for minor 5 is 2379

  25. Thanks Tony. Obviously the market feasted upon the prospects of decent economic growth, increasing earnings and moderate inflation. And ES buying was as heavy as its been in a number of days. The Trump rally has possibly morphed into something new, likely less reliant upon the Trump policy mix. Yesterday we spoke of 53 points of essentially uninterrupted gains and today’s high was almost exactly a 1.236 extension of said increases. With tomorrow being Friday, I am reserved in my outlook but feel the next levels are likely to be in the low 20”s, then 2325 where I have a junior pivot and then 2428…..your senior pivot. Of course, it could go right to 2328 or even higher. Given current index levels, we could have a significant pullback (11 or more points) and remain in the 2400’s. Today’ spread between futures and cash was about 1 point and I took two successful longs in the ES 2410 area, validating the existence of 2411 as a critical pivot and level of support. Just to confirm counts, I have us in wave 3 of a five wave move that will complete wave 5, Int iii ?????? https://invst.ly/3-uqc With the passing of each day, I feel my understanding of counts grows and when there is apparent conflict I think it has more to do with syntax than counts.

  26. bfquant says:

    Also staying with B wave or worse. $VIX no new low, VXX actually up, divergences in smalls and cyclicals getting even worse. High yield bonds even down today. Not third wave activity of any important degree in my opinion.

  27. 123 abc says:

    Staying with the B-wave scenario until 2430 is exceeded; thank you Tony et al…



    • blackjak100 says:

      If it’s a B wave, aka failed breakout, it should reverse tomorrow or Tuesday at latest. I remain short from 2416.

      • vivelaamo says:

        Why is it a failed breakout? Smashed through previous highs and closed near the high. DOW could easily be up another hundred points tomorrow.

        It’s decent place to short but I see no evidence to suggest this B wave yet.

        • blackjak100 says:

          It’s not a failed breakout yet. If it’s a B wave, it will be a failed breakout. Needs to reverse tomorrow or tues. I’m ok with a marginal new ATH tomorrow AM, but needs to close below range tomorrow.

          • vivelaamo says:

            Thanks for clarifying. What would invalidate B wave scenario?

            • blackjak100 says:

              B waves never invalidate but Said it many times and mentioned it yesterday. 1.382*A=2430ish is the most generally accepted max. TC allows for 1.618 I believe.

            • 123 abc says:

              Irregular B-Wave limits are typically…
              @2430: b = a * 1.382
              @2450: b = a * 1.618

              • vivelaamo says:

                Thanks. Sounds far fatched but I believe we will see those numbers before we see 2300.

              • blackjak100 says:

                I can’t remember in the last 10 years where a B wave in an expanded flat exceeded 1.382*A. Most EW technicians consider the 1370 high a B wave which reached 1.618*A. However, that turned out to only be a running flat.

          • pooch77 says:

            Down day after Memorial Day isnt rhat normally very bullish

        • stcoleridge says:

          The less we talk about mythical b waves the better. Remember the b wave from Oct 2014, it kept going up and up and up, courtesy of the BOJ amongst other things and then suddenly it was no longer a b wave. Comment volume spiked horrendously and Tony had to lay down the law to those that look to blame others for their bad trading. Conclusion: b waves are extremely hazardous to your P&L.

    • Some say…a proper B-wave in a IV needs to reach a 90% retrace level from the A-wave low in order to validate itself as a B-wave. The Dow did that today for the first time by cresting 21,090, while the other two majors have exceeded their 100% retrace levels. It can turn at any time now, if all of this is indeed a B-wave.

    • 123, thanks for the interesting calendar analysis.

      • Tarun Varma says:

        SteveP (123), I’ll second Stephen’s comment. Curious: in your recollection have you seen this type of calendar symmetry in b-wave’s before?
        And secondly, besides the calendar symmetry and “obvious” no new ATHs on $DJI, is there an additional reason why you’re sticking with the b-wave scenario here? The 3rd wave type of action here is a pretty strong argument against it. I’m skeptical myself but staying invested to respect most imp criteria (price action)!

        • 123 abc says:

          Personally don’t really track moon phases or other calendar symmetry, just on rare occasion observe such phenomena as food for thought —so can’t comment on alignment with other B-waves. Current thinking suggests a B-wave because:
          a. No new all-time highs on the DOW; and,
          b. The internal activity of Micro-5 from 2381 to 2405 doesn’t appear motive —may need a closer examination.

  28. vivelaamo says:

    Thanks Tony. Feels like 3 of 3 of 3 of 3 😉 Bears never prosper.

    • kvilia says:

      How many trading session can SPX stay overbought? Just curious. Tomorrow will be #6. For the continuation of the mover higher it will need to blow through the PPs in the next 2 trading days.

      • vivelaamo says:

        Guys I’ve been posting on here for a while now and read views every day. I admit I probably don’t add just value and some even call me a troll but this is the honest truth. I’ve lost count of how many times B waves have been counted at a top just to get invalidated. Really I should start making a note to see if we ever actually get a B wave at a top! Time to keep a record. Good night all.

        • blackjak100 says:

          If it’s a B wave and we plunge 100+ pts in short order, an expanded flat 4th wave suggests a strong 5th wave to follow.

      • vivelaamo says:

        A lot more than 6 right?

        • torehund says:

          When whatever we see is Bs, we are provided 2s, thats the the psycology of a kicking and snorting Bull. Thats testosterone, and we can all smell it.

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