Friday update

SHORT TERM: another gap up opening, DOW +63

Overnight the Asian markets lost 0.5%. Europe opened lower and lost 0.6%. US index futures ignored all that and were higher overnight. At 8:30 personal income/spending was reported higher, and the CPI was higher too. The market gapped up at the open to SPX 2430, ticked up to 2431 and then began to pullback. The SPX had closed at 2420 yesterday. At 9:45 the Chicago PMI was reported higher, and at 10am consumer sentiment was reported higher. By 10:30 the market had pulled back to SPX 2421, and then started to work its way higher. Heading into the close the SPX hit 2433, then pulled back to end the week at 2423.

For the day the SPX/DOW gained 0.20%, and the NDX/NAZ lost 0.10%. Bonds lost 10 ticks, Crude rallied $1.25, Gold slid $3, and the USD was higher. Medium term support remains at the 2411 and 2385 pivots, with resistance at the 2428 and 2444 pivots. Today the Q2 GDP estimate was lowered to 2.7%, and the WLEI was lower too.

The market gapped up at the open for the third day this week. Oddly enough, despite the higher opens the market actually lost ground for the week. Had to go back to January 2016, which was during a correction, to find a similar occurrence. The market has now rebounded 27 points after yesterday’s steep 37 point decline to SPX 2406. This is somewhat similar to Wednesday’s gap up rally of 24 points: 2419-2443. After many weeks of quiet markets, volatility is picking up. This also occurs during corrections. While waiting for this downtrend to get confirmed we have projected some downside targets in the weekend update. Best to your weekend!

MEDIUM TERM: uptrend topped?

LONG TERM: uptrend

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

About tony caldaro

Investor
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22 Responses to Friday update

  1. Bud Fox says:

    Tony…just to say. Thank you, for all your hard work at OEW.
    Got to to wish you the best, going forward in your future.

  2. lunker1 says:

    Int 1 1810->2111=301
    Int 2 2111->1992=119 39.5%
    Int 3 1992->2454=462

    Int 4 Targets
    23.6% Int 3 =109=2345
    P2336
    Prior 4th=2329
    P2321
    P2286
    38.2% Int 3 =176=2278
    P2270

    Int 5 Targets
    5=.618×301=186
    5=1=301
    5=1.618×301=487
    +(2278/2345)
    =2464 2531 2579 2646 2765 2832

    • I’ll only say about McClellan’s theory,that anything prior to 2009 was a different animal than now.Proof was the truncated bear market last year and various “market saves” after Brexit and Trumps election.It would not surprise me if this went on for years,but a miscalculation by the Fed or a black swan(like Korea etc),depending on the event,would probably crash the market temporarily.With governments propping up the markets since 2009,they can never really stop and that’s where McClellan’s observation may go awry.Let’s see what happens with these weekly – divergences first.Maybe then,we can gauge if the CBs are more of a force to be reckoned with than we even acknowledge or assume them to be.By coordinating with Deutsche Bank in Europe and the usual suspects here,it’s possible they have more control of the markets than we think.They certainly destroy gold whenever they feel like it.

      • fionamargaret says:

        Murphy was discussing narrowing spreads between Treasuries and foreign yields, in the context of it being bad for the dollar.
        Falling dollar portends better times for commodities (thus oil and copper and the shares connected with them as seen in the last week), but only to the extent of putting a floor under them.not enough to suggest much higher prices.
        Gold, he went on to say, benefits from a falling dollar, but it doesn’t do well when yields are jumping…

        I would like to see things when it isn’t end of quarter and everything is off kilter…all this wisdom that suddenly appears to decorate end of quarter summations sometimes disappears in the turning of the calendar page….

  3. Gold COT chart getting interesting…not quite to December’s very bullish chart,but better.Commercials pulling back and open interest nudged slightly higher.Monday is the start of my half year indicator for gold.Simply put,in January and July,gold makes a fairly immediate move which tends to last a few weeks(at least).It sets the tone.Could be a big selloff or a big rally.Gold COULD pull back quickly,make a bottom and rally after more constructive COT info.But I’ll make no predictions for Monday.Wait and see time.Good luck all.

  4. Tarun Varma says:

    Tony, regarding your comment “Had to go back to January 2016, which was during a correction, to find a similar occurrence.” Do you mean a similar example of 3 gap ups in a week where cash hours lost value and non-cash hours gained? Or just overall for the week (no 3 day similarity overlap)?

  5. Thanks Tony…….yes Tony the very modest man who simply “follows da waves” without mentioning the skill, practice, acumen and discerning judgement required in identifying and interpreting wave patterns. Just kidding about your modestly, which is an admirable quality. Blandishments aside, with five waves down (A) might we see three waves up (B) followed by another five down (C).???? Thinking of a simple zigzag. If we probe possible lengths of C vis a vis A (.618, 1.00 or 1.618) and make some informed guesses about B, then we might be able to start thinking about possible termination ranges and targets for C which, I know, you will be discussing tomorrow. All of this, though, presupposes a simple zigzag which may or may not be the case, making it a bit premature to ask. Mostly interested in your thinking based upon what has been seen thus far.

  6. bfquant says:

    Tony – Are grains, per $BCOMGR in stockcharts something to get more excited about now?

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