Thursday update

SHORT TERM: gap down opening then lower, DOW -101

Overnight the Asian markets gained 0.2%. Europe opened lower and lost 1.1%. US index futures were lower overnight, and at 8:30 weekly jobless claims were reported higher. The market gapped down at the open to SPX 2580, dropped to 2577 in the opening minutes, then rebounded to 2586 just before 10am. The market had closed at SPX 2594 yesterday. At 10am wholesale inventories were reported higher. The market then dropped to SPX 2581 by 10:30, bounced to 2587 by 11am, then tumbled to 2566 by 12:30. After that the market started to rally. The rally continued into the last hour of trading when the SPX hit 2586. Then it dipped to close at SPX 2585.

For the day the SPX/DOW lost 0.40%, and the NDX/NAZ lost 0.55%. Bonds slipped 2 ticks, Crude rose 25 cents, Gold rallied $5, and the USD was lower. Medium term support remains at the 2575 and 2525 pivots, with resistance at the 2594 and 2632 pivots. Tomorrow: consumer sentiment at 10am.

The market gapped down at the open today for the first time since last Monday. Overnight volatility in Japan and Senate/House Tax plan leaks fueled the decline. By 12:30 the SPX had hit 2566, last week’s low, and then rebounded. Quite a drop from Tuesday’s SPX 2597 all-time high. While there was several potential counts floating around heading into today, it appears all but two have been eliminated. Either Micro wave 5 just set up an irregular wave 2: 2588-(2566-2597-2566)-xxxx, and will move higher shortly. Or, Minute iii ended at SPX 2588, and everything since then has been past of Minute iv. Including the potential head and shoulders pattern: 2588-2597-2586 on the daily charts. We’re going to use the parameters set up by the market to decide. A breakout above SPX 2597 and Micro 5 extends, a breakdown below SPX 2566 and Minute iv continues. Short term support is at the 2575 pivot and SPX 2566, with resistance at the 2594 and 2632 pivots. Short term momentum put in a very slight positive divergence at today’s lows. Best to your trading!

MEDIUM TERM: uptrend

LONG TERM: uptrend


About tony caldaro

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101 Responses to Thursday update

  1. Bud Fox says:

    Interestingly, m,y signals are not telling me. That the SP is going higher.
    Quite the contrary….

  2. vivelaamo says:

    I’m going long RUT on close. Massive gap up Sunday after a week of trapping bears and Newbies. Have a good weekend all.

    • stcoleridge says:

      I think Newbie’s comment about VIX is worth paying attention to.

      • vivelaamo says:

        Maybe but I don’t really understand the Vix. Last time we had any sort of significant spike in Sep (and the Newbies were making the same noises) the SPX dropped for a few days and then rallied 4% in a few weeks straight after.

        I’ll happily take that again.

        • NEWBIE says:

          Viv, be honest- how many years have you been trading?

          • vivelaamo says:

            Probably about 5 but nothing serious. I’m no expert but I can look at a chart and see which way a major is trend is going. Not rocket science.


              • vivelaamo says:

                So outa interest why have you been constantly posting on the blog about a market drop for several years when it keeps going up? Wind up right?

              • NEWBIE says:

                I have been wrong a lot over the last 5 years, I never thought in a million years the market would go this high. I vastly underestimated the capabilities of the federal reserve (this market did not go up legally or legitimately)but price is king. However, I know how this ends and it isn’t gonna be pretty.

              • vivelaamo says:

                Fair enough. You are a lot older than me so I’ll keep the images respectful. Good luck.

              • chrisk44342 says:

                Maybe a good way of summarizing the last 5 years would be to say- don’t fight the trend. If one just steps back and looks at a daily or weekly chart, the best move would have been to simply buy the dips on hourly charts. If OEW (or whatever cyclical system you prefer) tells you that we don’t have much upside left in the cycle, then you wait until the next short term wave down projects to support and your indy flashes a long buy signal. Then you go long. What you don’t do, is endlessly speculate on shorts that never come, or try timing the top over and over again. This is trading 101. So, now armed with this revolutionary approach to trading, wait for 2550 or whatever, look for the long, and go for it. Sorry Newbie- not directing this at you as much as I am every other top caller who comes here. Yes, we’re not far away from a more significant move down, but not yet. Sometimes you’re better not doing anything.

    • I fear that the bears dropped the ball this week..Transports down 5 pct off high rut 4 pct dax 400 pts ftse also hit. Nikkei had a 3 pct reversal thursday into friday and yet the sp closed down 3 points on the week? Maybe one more high and then we tank. Republicans are Hell bent on passing this and fast especially with Alabama in jeopardy now.The house definitely votes tax reform next week. After that it muddies with govt shutdown looming

  3. NEWBIE says:

    Distribution is an art- they have to sell to the bulls while squeezing the bears- that is exactly where we are at, I wouldn’t want to be long here- no way.

  4. NEWBIE says:

    Market is tired – no bears left and bulls are already all in.

  5. phil1247 says:

    bonds within 1 tick of support
    if it doesnt crash thru …short squeeze coming
    . taking some money off the table with TBT…

  6. NEWBIE says:

    Oh man bulls, how can you not see what is coming..

  7. learnedmylesson25 says:

    Dollar lost its bullish embedded reading.Dow also.
    Strange market trend of the day:TLT yield is rallying,with the tax bill in chaos (delayed a year?),which SHOULD mean less growth–lower yields.
    GDX not tipping its hand on which way it will break.Closing above the 20d–around 23,would be a tentative bullish confirmation OR as Ira said last night,a break of 22.66 is bearish.Good luck all.

    • learnedmylesson25 says:

      Break of 22.60 is bearish.Later.

    • fotis2 says:

      Ok this one got me what just happened to Gold and it spiked down don’t follow the news much

    • JK1987 says:

      learned, looking at the charts. on the contrary, Dollar is finishing its 6th inning of the first embedded round, coming next should a “melt-up” round. that would create big headache for oil, gold, commodity.
      on the chart, TLT is finishing its second round at the test, next will the third round to power it up.
      it’s rather odd for SPX to have 2 gaps down in a row, not filled. i hate gap, there usually will be consequence needs to be paid. ditto UVXY.

  8. travis01 says:

    Newb I think you are correct but I made a mild bet on a turn up at 2575 this morning before a downturn confirmation next week. Let’s see. Yesterday was pretty sweet setup. Huge hit with uvxy.

  9. phil1247 says:

    i was kicking myself for selling TMF too soon
    glad i did tho …………its in free fall today
    did you add to your TBT?
    “I never buy at the bottom and I always sell too soon.” — Nathan Rothschild

    • torehund says:

      Phil, sitting is the worst you can do and maybe the most rewarding if you get it right. I use TBT only as a tool indicating the Rut and my small caps. When rates go Rut goes, dont sell any of my smal caps until they are firmly into hysteria. Or i go down with them.

      • torehund says:

        I go for the grand retracements of decade of decline, just need one home-run. Need tp be onhte right fractal, or toast. Good weekend to Tony and all of you in here.

  10. NEWBIE says:

    Bulls, wake up, it getting ugly and you don’t see even see it = complacent.

  11. NEWBIE says:

    Viv going down with the ship.

  12. Good morning traders. Just a quick post. With the late day rally, the charts are bullish both on the 15-minute chart and on the daily chart. From my post/chart last night, the overnight session went pretty much as I outlined. The /ES tested and defended the 61.8% LONG @ /ES 2571.25, by a tick, that’s bullish. Guys, IMHO, “major” programmed selling will not occur until /ES 2571.25 is breached. Looks like they want to fill today’s gap…will see the markets reaction to this level. That is my first target. Yesterday’s unfilled gap and the 2 profit targets noted on the chart are higher targets. Once again, /ES would have to trade below 2571.25 to invalidate this analysis. Not bullish/bearish here, just trading the tape I see at the present time (no open positions).

    The chart is in last night’s post. Sorry, have an appointment to look at tiles.

  13. Bud Fox says:

    Looked at the info here, and the SP500 charts of recent days, and then
    compared the latest SP chart to that of previous fall seasons. The conclusion.
    Is that, the fall price patterns in the SP are similar, and thus. I am in a negative
    investment mode for the SP500. That said, have a great weekend all. Thanks
    Tony for your enduring hard work over these many years. God Bless….

  14. NEWBIE says:

    Viv, tryingtomakeabuck, stcolerdige

  15. fionamargaret says:

    Thanks Chris Kimble
    Thanks Raymond James….I notice that Andrew wrote the update..??

    Thanks Tony….and everyone xx

  16. Last night I posted I thought we were in a B wave and headed for 2570 today. This morning I said we would rally to 2587 then fall to 2569. All in all pretty close. I actually thought I had a handle on things. Tonight, looking at things, I have no clue. I think something might surprise us all. I think I will watch the next day or so.
    Tony you are amazing being able to navigate these markets on a daily basis. I’m usually right once wrong 3. Awesome, simply awesome.

    Good night all and good luck

  17. 123 abc says:


  18. bouraq says:

    Chart of the day is #ES at

  19. asaraniti says:

    Good evening traders. Didn’t trade today, but this mornings post was somewhat accurate, if you placed a stop at the 61.8% LONG and and then moved the stop up to a profitable trade….you would have been stopped out at a profit.

    For tonight, a different story, as /ES is trading between 2 set-ups. I believe in the overnight session, /ES will test 2573.25….and that is as far as I am willing to go. To add color to Tony’s update, if /ES trades below 2571.27 I expect additional downside activity…minute wave iv?. If /ES trades to 2573.25 and that level is defended, I think /ES will continue to rally to the profit targets noted on the chart.

  20. mtu MTU says:

    [EOD] SPX/ES –
    Bear / Bull tracking, topped with truncation in cash and lack of trendline throwover in ES or small-degree wave 4 pullback. Time will tell. See charts. (a clean five-wave decline in ES today)

  21. fionamargaret says:


    My simple multiplier answer I suggested last night is 2609….close..

  22. stcoleridge says:

    Those are fair points mcg and I take your point on the weaker European indices. It just seems like there’s an invisible hand(algo) taking the market to Tony’s levels. We know some big boys read this blog, and not just for Newbie. But like he said 2566-2597 is the range until we know which count is the correct one. I like my odds as the micro 5 extending case is only 11 points away vs 20 for the minute iii.

  23. dan pulford says:

    Incidentally, Tony your irregular wave 2 (expanded flat) lines up with my analysis.

  24. vivelaamo says:

    Thanks Tony. Power of the pivot!!!

  25. dan pulford says:

    Thanks again Tony

  26. stcoleridge says:

    Thanks Tony, the severity of today’s bounce places my money on nano 3 of micro 5 underway.
    But what do i know?

    • mcgcapital says:

      Was just thinking the opposite lol… it’s exactly what they usually do before a big move down to throw everyone off. I’d say you have to give the benefit of the doubt to bears whilst below the prior high given the reversal signals we got off there. And it’s across the board.. nikkei, FTSE, Dax and the US indices all showing the same thing

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