Thursday update

SHORT TERM: another gap down opening, DOW -205

Overnight the Asian markets lost 0.7%. Europe opened higher but lost 1.1%. US index futures were lower overnight, and at 8:30 jobless claims were higher plus the PPI was lower. The market gapped down to yesterday’s low at SPX 2462, and continued to fall. Just past 10am the SPX hit 2451. Then after a bounce to SPX 2458 by 10:30, then market headed even lower. At 12:30 the SPX hit 2445, bounced to 2455 by 2:30, then dropped to 2438 and closed there.

For the day the SPX/DOW lost 1.20%, and the NDX/NAZ lost 2.20%. Bonds gained 9 ticks, Crude lost $1.15, Gold rose $9, and the USD was lower. Medium term support drops to the 2428 and 2411 pivots, with resistance at the 2444 and 2456 pivots. Tomorrow: the CPI at 8:30.

The market gapped down at the open for the second day in a row, as the NK saber rattling continues. From Tuesday’s all-time high at SPX 2491 the market has dropped 53 points. This is a bit more than a 61.8% retracement of the entire SPX 2408-2491 rally. The last time the market ended a Micro 1 in mid-May, the market also sold off quite quickly. That event was triggered by Comey’s memo. Many EW counts floating around. It’s been that kind of market. Project, monitor and adjust. Maintaining our count until forced to change. Short term support is at the 2428 and 2411 pivots, with resistance at the 2444 and 2456 pivots. Short term momentum ended the day extremely oversold. Best to your trading!

MEDIUM TERM: uptrend

LONG TERM: uptrend


About tony caldaro

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125 Responses to Thursday update

  1. kaapiee says:

    Thank you Tony for sharing your knowledge and experience through your blog!

    I rarely post, but I am hoping for a puke into the close to buy IWM calls for next week. It is bearishly embedded, however the risk reward looks good ( the current doji outside the bb’s is a nice candle if they can pull off an island reversal for a bounce on Monday). If no news, should pop, if any bad news, should waterfall as it is ripe for a cascade type move as well (crashed happen from oversold levels)…

  2. Bear flag breakdowns are not supposed to rebound above the breakdown level(twice).Transports for example.I’m mystified as to how that could happen…lol.

  3. gary61b says:

    ES 2436 is level the bulls need to hold onto or more down coming.

    • gary61b says:

      If ES pops at the 2436 then spx would be a DB with a possible +div. it looks corrective off of low with one set of abc up and abc down and at 2436 a possible abc up or down a good place to halt the market at closing….

      • gary61b says:

        I am off on the spx value in relation to ES. cancel that correlation.. still looking for +div close to 2428 if gets there.

  4. mjtplayer says:

    Hour and a half to the close, let’s see if traders want to be long into the weekend

  5. captbara says:

    More huge VXX prints at 13.17 and 13.29. It worked damn well last time..

    Gundlach looking like a genius this week.

  6. torehund says:

    Happy weekend Tony and the crew.

  7. captbara says:

    Paused at a very interesting spot, according to my line in the sand going back to March.

  8. ohmtoom says:

    Hey Guys,

    Could you help me with my query :

    When a correction starts (in EW), it should be in the form of an a-b-c with a 5-3-5 structure.

    However, I have noticed on various occasions that the a,b,c all have 3-3-3 structure in a normal zig zag.

    When we trade these corrections, how do we know whether to play for 5 waves within the a wave or 3 waves within the a wave.

    Thanks in advance !

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