Thursday update

SHORT TERM: higher open and new highs, DOW +114

Overnight the Asian markets lost 0.1%. Europe opened lower but gained 0.3%. US index futures were slightly higher overnight. At 8:30 weekly jobless claims were reported lower, and the trade deficit was lower. The market opened three points above yesterday’s SPX 2538 high, and continued to rally. At 10am factory orders were reported higher. The rally continued until 3pm when the SPX hit 2553. Then a slight pullback ended the day at 2552.

For the day the SPX/DOW gained 0.55%, and the NDX/NAZ gained 0.90%. Bonds lost 6 ticks, Crude gained 75 cents, Gold slid $6, and the USD was higher. Medium term support remains at the 2525 and 2479 pivots, with resistance at the 2575 pivot. Tomorrow: monthly payrolls (est. 75K) at 8:30, wholesale inventories at 10am, then consumer credit at 3pm.

The market opened at its all-time high today, and then continued to move higher throughout the day. The advance from last Monday’s SPX 2488 low has now exceeded the largest advance since the mid-August SPX 2417 low. Quite a rally. The short term count from that SPX 2417 low continues to extend: 1. 2455, 2. 2428, 3. 2480-2447-2509-2488-2553. Still waiting for an end to this third wave, then a fourth and fifth wave to complete this lengthy Micro wave 3. Short term momentum has remained nearly extremely overbought all week. Daily momentum is also at extreme levels. Relentless advance. 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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157 Responses to Thursday update

  1. NEWBIE says:

    Banks closed Monday. Kim jong about to hit the button, vix at all time lows, bulls complacent. Perfect recipe for MONSTER down move.

  2. vivelaamo says:

    Added to my RUT positions. More than enough evidence bears cant take control. Will add all the way to 1630. Have a good weekend all.

  3. Page says:

    Newbie: the time is approaching for markets to change the color to ‘green’.

  4. scottycj1 says:

    Short nflx. 196.18

  5. tommyboys says:

    ECRI’s U.S. Weekly Leading Index (WLI) latest reading increased to 144.4 from 143.7 as WLI growth ticked up to 0.7 from -0.1%.
    That’s 4 for me & OUT! Great weekend all..

  6. JK1987 says:

    crude oil, target 20.8 with 261.8%
    it’s similar to GOLD broke down the wedge from early Sep
    GOLD was a bat, OIL is a Gartley
    oil Feb 2016 low was 26.05, 20.8 is lower the 2016 low.
    not coincidence, SPX 1810 low was on Feb 2016, meaning …
    time of oil, SPX downside target: the same, by 2017 year end (don’t mind if takes longer or sooner, it will get there)
    https://gyazo.com/0b9733ac4b48c1ab8a3cedba6e3f97c9

    BOND, FED is holding 2.4 trillion treasury. crash bond to hurt FED?
    bond market is much larger than equity market. if bond crashes, it would ripple through the entire financial market, bigger than the stock market melt down in 2008. possible? not probable at this time as bond is reflating a new bull “bubble” after the plunge in 2016. i mentioned bond pattern is like NDX rising from 2009 crash. i wrote a 13 pages TLT report (ditto to GOLD) before i invested in TLT/TMF, and be my largest holding. i am comfortable with the investment. of course, there are certain level should not be violated, but it’s unlikely for the need to visit the case.

    all my investments might be early in short term, but the big picture is there, that’s what i am counting on.

    job number disappointed. will GDP?
    all transit? FED’s transit sometimes meaning permanent, as they have no control over it.
    Japan gov kept on buying equity / bond for nearly 30 years, currently Nikkei still 47% off 1989/1990 Top. that’s because Japan gov has no control over it. Nikkei should soon start the decline toward new low, all in the pattern.

    see ya
    cheers!

    • tommyboys says:

      Oops – fifth and final post… If you believe Japan’s ‘Fed’ has “no control over it” and assert that the US FED is the same – lacking control – then you have to acknowledge that NEITHER domain’s Fed had anything to do with the past 8 years rise as well. Can’t have it one way and not the other. Either they ‘control’ or they don’t…

      • tony caldaro says:

        they manage the market
        they don’t control it

      • mcgcapital says:

        You can’t reason with someone who can’t spell transitory.. stopped reading when he compares a chart of a bond with fixed coupons and redemption payments with a stock which has variable (and unlimited) dividend and redemption proceeds.. doesn’t make sense

    • vivelaamo says:

      Give it a rest.

  7. vivelaamo says:

    Crash callers will look for any conspiracy theory in a bull market.

    Saying that I do wonder if the fact Trump keeps referencing the performance of the market when he talks about his presidency means we keep going up?

    See I don’t care if it’s manipulated or a bubble or unsustainable. Why should a trader care? Obviously it could end badly for your average Joe. The whole point of stops is to protect a crash right? Long term holders who start buying right at a top due to euphoria will be affected. Are we anywhere near that phase and if we are would the people that are going to be affected the worst really know what EW is, let alone posts on an Elliot wave blog!

    That’s why I find the complacent talk on here amusing. It’s quite misplaced.

    • tommyboys says:

      LT buyers at the tops in 2000 & 2007 are just fine…

      • tommyboys says:

        Federal Tax structure has favored LT holders for decades…traders get creamed by “ordinary income” taxes – errrr… the few that squeak a profit..

        • tommyboys says:

          Those that bought monthly through a 401/403 for 20-25 years from 1990-2010/2015 or similar – right across two MAJOR tops – are doing REALLY well today!

      • aahmichael says:

        Those who bought SPX at the 2000 high suffered 2 drawdowns in excess of 50%, and didn’t get back to even until 13 years later. Those who bought the Nasdaq at the 2000 high suffered an 83% drawdown and didn’t get back to even for 16+ years. To make matters worse, if they were retired and needed to take monthly distributions from those investments for the last 17 years, then they have almost nothing left. I wouldn’t call that “just fine.”

      • vivelaamo says:

        If they held Tommy. A lot would have paniced and sold out. My point being I don’t get the constant crash calls on this blog as if the people that would post on here would really be the kind that would get wiped out going long.

        • NEWBIE says:

          Viv, how is your stop gonna save you when the market has a monster gap down or there is no bid?

          • vivelaamo says:

            We have something guaranteed stops in the UK. You dumb yank.

            • NEWBIE says:

              LOL, Guaranteed… only death, taxes, and your ___________ going down on _____.

              • mcgcapital says:

                To be fair if you have a guaranteed stop it’s the brokers responsibility to cover losses over and above the stop loss. The UK system is quite a bit more flexible than the US one.. we have no tax on winnings and are allowed way more leverage (up to 200 times deposits). Then client money has to be segregated. More dangerous if you don’t know what you’re doing but has some major advantages

          • lunker1 says:

            The same monster gap down you’ve been calling for for five years and still hasn’t arrived meanwhile the markets up 100% so even if the monster gap down limit 5 or 10% no big freaking deal chicken little.

  8. micky says:

    Seems like my VST lines were spot on again…just remember the trend is up, so the trick really is to get a good spot to add again..or not to add?

  9. kvilia says:

    Lee,
    If CL finds a support above $48.36, it maybe going to $54.58. That’s probably 20 or 30 trades for you 🙂 I’m long UWT and will follow up as you requested 😉

  10. Well I guess its time to dip my toe in the GDX water and see if there are any piranha lurking about.20% today added after the close.

  11. torehund says:

    Good weekend Tony and all. Peace price to nuclear banning effort supporters. Told you NATO was in a bear market and Kim/Trump gave the last Oomp to the movement. 2 peacemakers they are🚀🚀🚀

  12. Page says:

    The correction will be over before the close. Remember the close will be green.
    BUY BUY BUY.

  13. Lee X says:

    Jmho
    I think now you have at least a decent R/R if you’re looking to trade on the speculation of higher gold prices.

    If the easy part is thinking you’re right and the hard part is knowing you’re wrong, you’re toast

    • fotis2 says:

      CL patience required for next week look for a bounce off the lower TL go long tuck stop just under the TL go Big and GL amigo.

      https://invst.ly/5d6x5

      • Lee X says:

        Thx Fotis !

        I usually trade no smaller than 100 lots at any given time in CL , I’m kinda of a big deal and have been in the business for over 30 years 😜

    • vivelaamo says:

      How can you ever know you are right in trading?

      • Lee X says:

        I was fortunate to have been born and raised in Chicago Il and my first real job was @ the CME where I started as a runner then worked the phones then got a job clerking in the D Mark futures and went over to the S&P 500 pit in 1987 and was an arb clerk for a few years then traded in the pit until 2006 and then traded on the screens since.
        I’d say the experience of being in the market on both sides in and out on a daily basis, it was my job.

  14. asaraniti says:

    Phil…good call…/ZB front run of it’s profit target …but “filled”. Expecting a counter trend rally in /ZB back up to the 152 area. Should be bearish for equities this morning. Watching /ES 2540.06. Break that by 1 tick and the 15 minute trend could get interesting….but that’s a long way away considering how this market has been performing. Refer to previous charts.

    • phil1247 says:

      thanks asa……….
      once again DH has been blindsided by bonds
      there was no front run on the extension short
      he has failed to realize the extension short and still does not as of today
      target of ext short was hit and blown thru ( oval)
      extension of extension now
      i dont expect counter rally
      i expect straight down for TLT and ZB
      ie …bond crash until proven otherwise

      • asaraniti says:

        No, not true DH had the 38.1% short leading into the profit target…look at last nights chart that I posted I didn’t see it at the time. My bad, in terms of probability, I thought the 50% support would offer a CTT, SHORT, leading into the profit target. DH was spot on.

        • phil1247 says:

          asa …. you are drinking the kool aid
          wasnt he talking about the ” protection trade ” for weeks
          about buying bonds to protect from stock collapse?
          i dont watch his videos much but thats the take away i had
          and he was mentioning bonds supporting these .50 pullbacks over and over
          maybe he changed his tune recently but he is already way late again
          i dont listen to him any more

          • asaraniti says:

            phil.last post today, over my quota. Again, look at my chart last night. the short analysis is right there for you. It was my call that was invalidated.

            • phil1247 says:

              ok asa……

              i dont want to argue with you…. we use a similar method that works for us
              the details dont matter to me as much as the results
              and the results are ….
              …….. as Tony ( the tiger ) says
              GRRRRRRRRRRRRRREAT !!!

    • phil1247 says:

      RE ES
      my rogue extension at 2543 held and i am already long again

      i dont use DH levels i have my own

  15. Lee X says:

    If you’re going to recommend trades you should follow up on them if they go against you

  16. mjtplayer says:

    All-time record low close for the VIX yesterday at 9.19

    Currently at all-time record high short interest in VIX futures at over 180k contracts! Short interest has blown-out over the past 2 months, almost doubling! Amazing, I’ve never seen anything like it in all m years of trading, the complacency is simply off the charts at this point.

    What could possibly go wrong?

    • fotis2 says:

      19 Oct 1987

      • JK1987 says:

        fotis 🙂
        one of the reasons i went back to my original plan is due to the average bull market cycle is 7.6 years, and i could not solve the mis-match of P2-major 1 of P3 to current numbers (one of the mis-match: 1982 major 1 only took 1 year to gain 73%, now 1.8 years only +41% from SPX 1810, and a few more mis-matches)
        current bull market has run 8.6 years, long in the tooth

        bull cycle statistics:
        1980 – 1987: 7.6 years
        1991 – 2000: 9.1 years
        2002 – 2007: 5 years
        2009 – 2017: 8.6 years
        average: 7.6 years

        1987 original VIX: 172.79
        1987 DJI: -41%

        original VIX: 172 = VIX 100+
        -41% from 2552.51: = SPX 1506

        SPX 10/5 high 2552.51 = +2.5% from 8/8 high 2490.87
        1987 took nearly 2 months from high to low
        now the potential high Oct 5, 2017
        give it 2 months: by year end, or sooner

        my original plan:
        As JK said, all 1987 correlated, sealed.
        JK1987 says:
        August 20, 2017 at 3:48 pm
        https://gyazo.com/dbf0e9dbb27bd804024099c6de92beaf

        let’s fill the gap from yesterday.

    • travis01 says:

      MJ I’m with ya here. Back in uvxy 18.50 with tight stops if wrong but think a scalp to mid 19s today is reasonable. Good luck

  17. phil1247 says:

    BONDS ZB TLT

    looks like the extension short was the way to go
    looking for spike down in bonds to short targets
    will take profits on TBT at targets and see if we go thru or bounce

    if we push thru targets below and create new extension shorts ………..
    BOND CRASH is on

    • phil1247 says:

      asa

      took more profits in TBT now
      if you are right i can buy back cheaper later 😉

      • phil1247 says:

        BOOM!
        ZBZ7 .. TARGET HIT!

        now … bounce or bond crash ?

      • phil, your analysis could be spot on. However, rarely does an asset class go straight down. It oscillates up/down but the trend is down. If my analysis is incorrect, you and I both know what will happen to /ZB if continues lower and hits but does not go through its profit target.

        • phil1247 says:

          asa …
          i would prefer a bounce in TLT / bonds so i can load up more shorts
          but you gotta take what Ms Market gives you
          still looking for TLT 101 longer term
          TMF 9 dollars +

  18. micky says:

    2556-60 area seems to be the next VST target, if we go higher today.

  19. In my opinion, this quote from Warren Buffet by Jeffrey Saut is very wrong. You better believe Mr. Market knows better than you.

    “Indeed, if you aren’t certain that you understand and can value your business far better than Mr. Market, you don’t belong in the game. As they say in poker, “If you’ve been in the game 30 minutes and you don’t know who the patsy is, you’re the patsy.”

  20. vivelaamo says:

    Will have to go back a while to see a NFP day that was red.

  21. Be Fall. says:

    Maestro,

    you called 2550 and its here :-),

    greetings from great wide frozen

    Piazzi

  22. JK1987 says:

    what’s wrong with Nikkei?
    after endless gov buying, nearly 3 decades later, Nikkei still -47% or 18000 points from the 1989/1990 Top.
    DIAG everywhere (did not realized until today, so all my equity short holdings were early)
    asset holding:
    1. TMF (converted TLT to TMF after fiona mentioned), largest holding, i really love it.
    2. ndx short, plan to add early tomorrow morning to become second largest holding.
    3. rut short (1511)
    4. spx short (2532)
    5. uvxy (down about 16% for now), smallest holding, insurance holding.

    Japan is a creditor, US is a debtor.
    Japan had the great deflation.
    Greece is having debt deflation.
    US is going to have debt deflation.

    US won’t be able to pay down debt until growth hits 4% again, says GOP policy chair
    https://gyazo.com/699040c87eaa167f093c4426fd211929

  23. fenster6 says:

    Made a killing shorting the CAD near the recent top.
    Lost just as much shorting the market.
    Why do i bother….

    • fionamargaret says:

      …well you were really helpful to me Fenster when you asked about the CAD, and I had to think about it. I bought some oil and gold stocks (XGD.TO and XEG.TO) from the TSX, and did quite well.
      Yes, I too suffer from premature 4….your ship will come in…x

      • fotis2 says:

        Crude printed a daily 3BR yesterday as long as 49.70 holds we should see another try to recent highs next few trading sessions.

  24. locanbbs says:

    UPDATE – Russell 2000: Although the previously often announced market cycle bottoms on the 3rd, 4th and 5th did occur on schedule (see black boxes on chart), the Rut, in contrast to most other main markets and despite new intraday highs, was not able to capitalize on this, failing on its extensions up to now in all three cases (black circles). It is still in a slight downtrend (see red parallel lines).
    Rut hourly futures –
    https://imgur.com/a/wkSFF

  25. Jack Sparrow says:

    Tony”s count seems more and more correct with every passing day. kudos for the right call last year

    • Jack Sparrow says:

      ie this being the third wave…..

      • Jack Sparrow says:

        sorry for typing piecemeal- the only difference is I don’t think this is 1 of 3….rather this all of the 3…and around 2850 it would equal the first wave from 2009 to 2016 ,.which is a reachable target – there are enough waves left in the structure to be completed that will allow it to hit 2850 over next year or sooner….
        Otherwise 10,000 in SP here we come….

  26. Having exited XNTK with another nominal profit, I bought 2000 shares of BBH, a biotech ETF, for 135.35/share.

  27. mtu MTU says:

    [EOD] SPX/INDU-
    Potential SPX cap by one longer term count – 2555.5 or 2579.27 – more on this in the weekend update if these levels hold. See short term tracking charts.
    https://market-timing-update.blogspot.com/2017/10/market-timing-update-10517.html

  28. Mary773 says:

    Thank you, Tony.

  29. asaraniti says:

    Let’s try this one more time. /ZB came back to retest the 50% support 152’02 for the fifth time. However, DH noted on his chart the 38.1% ( I mentioned in previous posts that for whatever reason, wave 3?, in equities, that the 38.1% long has been defended as opposed to the 50% = very bullish for equities) short traded (153’06) and was defended….didn’t pick that up on the first go around. Still sticking with analysis of /ZB having a counter trend rally to the 50% SHORT (153’18) which should be associated with a pullback in SPX…NANO wave 4?. If the 50% SHORT holds, the profit target for /ZB SHORT is 151.09

    Chart
    https://gyazo.com/e97483cb5cce89dd3af2e649190ce37c

  30. Lee X says:

    Thanks Tony

  31. Thanks Tony and this is a question with a preface. Nobody knows where 10 yr rates may peak, but they are above their 200 DMA and could return to the 2.4% to 2.6% level; maybe higher. But with inflation subdued (say 1.8% in the Treasury market) real rates would need to rise to about .75, the level in Dec, 2016, to get to the 2.5% area. Anyway, my thinking is rates may rise until the late October Fed meeting at which time they are likely to announce the first steps towards normalizing its balance sheet. At the beginning of the rate tightening cycle, rates often increased in advance of Fed meetings expected to conclude in a rate increase announcement. Rates would then fall. In June they did not do this but steps towards normalizing the bloated balance sheet is something new and of far greater consequence as we are starting to deal with the mothers milk of low treasury rates. https://invst.ly/5cxqp Your thoughts????

  32. 2554 is the 1.618 extinsion of micro 3 2587 is the 2x extension. Still thinking 2554 then 2503 then 2588 to end micro 3

    But what do I know, thought 2532 area would hold

    • Also this area of 1.618 of 1 is a great place to lock in profits after a nice run up and with North Korea expected to start holidays with possible missle launch, you never know what could. Happen

  33. pooch77 says:

    If rut can’t trade past 1525 Monday this will be a short.NFP number will be painted bullish what ever the number will be

  34. Mr C,do you think they’ll pass tax cuts this year…or next?Does it matter?

  35. Gold still embedded while GDX has escaped for two days.This does not compute.Gold needs to rally(and escape the bearish stochastic area) to get me to buy GDX.Has not done it yet.That’s the plan right now.Maybe I’ll throw some cash in after Friday to see what happens after Golden Week ends.Good luck all.

  36. Comments on this blog alwas seem to be about Ego. Everyone is fighting their ego in trading I sit at work with some very experienced investment analysts most them a terrible traders they are great at analysing detail but often blindsided at key market turning points because they are highly sensitive to criticism or a view which challenges all their detailed analysis and hard work.

  37. jwmcbride says:

    This is for Newbie and Phil. I posted an article I found on the internet inadvertently not mentioning where I got it. Honest mistake no criminal intent meant. got in hurry. people on this blog are constantly referring to PPT without fully understanding how it works. You can find tons of articles like it saying basically the same thing.

    Newbie you are without a the worst trader I have seen in my 25 years of trading. You should concentrate on developing trading skills instead of focusing on petty nonsense.

    Phil buying into Newbies nonsense Come on you are better than that

    • phil1247 says:

      dont attack others as an excuse for your plagiarism

    • You are probably right.it’s not PPT but the Buy Stocks team or BS team for short.PPT is only for catastophic selloffs.This is a steady purchase of stocks ,like other countries(Japan,China) and organizations((ECB)do around the world.This is all about a rising stock market,is in the nations best interest.A falling market is not.If you think we’re the only country not buying its own equity markets,then there’s this guy called Bernie Madoff that wants to talk to you.Pensions for one,need 10-20% a year to survive.Years from now it may all come out.Then again,maybe not.

  38. phil1247 says:

    phil1247 says:
    September 23, 2017 at 9:47 am

    SPX………….

    melt up more likely than melt down
    bottom two charts show … you are here ?

    ………………………>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>

    WEEKS ago i was calling for ” melt up”…
    all i heard was …….. ……… impossible … it has to crash
    WELL………….
    how you like me now ?

  39. iamnotviv says:

    Sterling getting crushed in the last week, would expect FTSE to reach 7540 pivot area tomorrow, especially with payrolls number coming tomorrow.

    Thanks for the update Tony!

  40. vivelaamo says:

    Thanks Tony. When the only thing bears have left is a full moon it means there is a lot more upside ahead.

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