Weekend update

REVIEW

The week started at SPX 2656. After gap up openings on Monday and Tuesday the SPX rallied to 2717 by Wednesday morning. Then over the next two days the SPX came within 5 points of giving it all back when hitting 2661 late Friday, before bouncing to end the week at 2670. For the week the SPX/DOW gained 0.45%, and the NDX/NAZ gained 0.60%. Economic reports for the week were quite positive. On the downtick: the NY FED and the NAHB. On the uptick: retail sales, business inventories, housing starts, building permits, industrial production, the Philly FED, leading indicators, plus weekly jobless claims declined. Next week’s reports will be highlighted by Q1 GDP and housing.

LONG TERM: uptrend

In the early stages of this bull market we suggested it could last 2 – 4 years and travel to SPX 3000+. It has been a bit more than 2 years now, and the high has been SPX 2873. Was that it? Not, according to the counts the have on the major US indices, some foreign indices, and some leading stocks. At minimum we should see another leg up to new highs. But where is it? All the market has produced, for nearly 3 months, is volatility and range bound corrective waves. It looks like it is waiting for a positive catalyst.

In the meantime the long term wave count continues to unfold as expected. A Major wave 1 bull market dividing in to five Intermediate waves. Intermediate waves i and ii completed in the spring of 2016. Intermediate iii then divided into five Minor waves. Minor waves 1 and 2 completed in the fall of 2016, and Minor waves 3 and 4 completed in the spring of 2017. Recently, in January 2018, Minor wave 5 completed, along with Intermediate wave iii, and an Intermediate wave iv correction began. After this weeks action, it appears it is still underway.

MEDIUM TERM: downtrend

Intermediate wave iv could have completed in February, after a 12% selloff ended with positive RSI divergences everywhere. The market rallied about 10% into March, did not make a new high and then failed. A retest of the low occurred right on the first trading day of April. Again with positive divergences. But the market has again failed to sustain an impulsive rally off those lows.

Some have speculated this correction could be a fourth wave triangle: A 2533, B 2802, C 2554, D 2717?, with E to follow. It could also be a double three: a-b-c zigzag to 2533, x wave to 2802, now another a-b-c (flat or zigzag) underway to retest the lows? Regardless of the final outcome we are still expecting at least one more uptrend, and series of new all-time highs. Medium term support remains at the 2656 and 2632 pivots, with resistance at the 2731 and 2780 pivots.

SHORT TERM

We were tracking the rally from SPX 2554 with a potential impulsive count. We had Minor waves 1 and 2 at SPX 2673 and 2586. Then a Minor 3 underway. Minor 3 divided into three Minutes waves: 2665, 2645, 2717. Then it blew up on Friday, when the market dropped below 2665. Now all we have is a lot of corrective activity from the high at SPX 2672 in early April. This potential uptrend no longer looks to have any chance of being impulsive.

Under the market we can see three potentials levels of medium term support: 2586, 2554, and 2533. Let’s see what the technicals looks like as these levels are hit. Short term support is at the 2656 and 2632 pivots, with resistance at the 2731 and 2780 pivots. Short term momentum ended the week oversold. Best to your trading this volatile market!

FOREIGN MARKETS

Asian markets were mostly higher and gained 0.3%.

European markets were all higher and gained 1.7%.

The DJ World index gained 0.4%, and the NYSE gained 0.5%.

COMMODITIES

Bonds are now in a downtrend and lost 0.8%.

Crude remains in an uptrend and gained 1.5%.

Gold is also in an uptrend but lost 0.7%.

The USD is in an uptrend and gained 0.6%.

NEXT WEEK

Monday: Chicago PMI and existing home sales. Tuesday: Case-Shiller, consumer confidence and new home sales. Thursday: weekly jobless claims, and durable goods. Friday: Q1 GDP (est. 2.1%) and consumer sentiment.

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

About tony caldaro

Investor
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374 Responses to Weekend update

  1. phil1247 says:

    gary 2646 target coming up

  2. phil1247 says:

    good place to exit TBT and PST

    bonds could catch a bid if stocks crap out

  3. tommyboys says:

    Surface red but under the hood NHNL about even while the real market – A/D – nicely green. RUT nicely green – risk on (?)

  4. E says:

    Things are heading south from many unexpected directions. Not looking good at all! Both GOOG CAT positive earnings has gone from an initial spike up to a selloff. I see big red flags everywhere.

  5. Jack kendo says:

    Tony, is it probable we are making one more new high into eom Apr, then have sell-in-May?
    even though here is int iv, and then was P4.

    cheers!

  6. Mini-crash (100+ points) is coming, as I predicted last week. See you around 2590 in a couple of days.

    • rabbittrader1 says:

      Probably have to get below 2532 to finish the C wave of this extended ABC intermediate 4th wave to finish this correction. The only thing I have made money on since Mid March is CBIS (Cannabis Science ) where I have made 45% on my investment. Tony ,all due respect) but you have led us to believe that we were in intermediate 5 for quite a while. Of course we dont pay for this service ,so no one can complain. However my credibility in your thoughts about this whole correction has been somewhat tarnished. I always thought that most second and fourth wave corrections ended with the C wave lower than the A wave. In fact I do not know of many (if any ) exceptions. Well, “you pays your money and you take your chances” ( Not to Tony, but to the Market.) Congratulations Bears ! Rabbit.

      • E says:

        This wave count is why I continue to say my (1st) bottom target is week of May 11th at around 2450. It will complete the A and C wave symmetry. I also purposefully inject “1st bottom” in my statement because my more speculative view is that we’re actually coming out of a 5th of a 5th wave and there will be many more bottoms to come this year and the following five years or so. I think most would disagree with me but that’s where I stand unless I see otherwise in the following weeks.

    • Jack kendo says:

      XiWu, you asked me to mark your posts.
      you were calling a crash the 2nd week of Apr, and your ALL-IN “262 puts (expire 4/16)” ended worthless.
      now you are calling crash again with another all-in puts. after losing all-in puts on 4/16, how much have you left? didn’t AAH warn you not to do options?

      • Haha, you misunderstood there.
        Based on my trading rule, the largest lot for my option trading is five grand. My ALL IN is in my investment trading account, which I traded SPXS or SPXL. Yeah, that 262 puts were largely gone, but that is part of the option trading business– you only use the money that you afford to lose. Today, my $4000 investment in 265 puts (expire 4/25) landed me $30,000+ profit [ I don’t know how to post pictures here, otherwise I will show you my trading record in the morning — I bought 80 lots of them at 0.26, 0.32, 0.34, 0.28, when SPX was at 2682].
        See you at 2590 tomorrow.
        Oh, almost forget: the first time I traded futures and options was in 1993, and we didn’t have the concept of “paper-trading” yet. Surprised you mentioned that, as that concept never got into my mind–I am too old-fashioned, I suppose.

  7. lunker1 says:

    Hi Tony, any chance everything from 2554 is a diagonal triangle and 2617 was C and we’re now forming D?

  8. E says:

    I continue holding the view that we will hit 1st bottom week of May 11th. The alternative is sideways until then, but I’m less convinced about that at this point.

  9. The 4th of 1 of 3 is still ongoing following his development. A squeeze should come quite soon, as the triangle of resistance created by a old ext short that never traded properly will be over. The timing should end by the end of day tomorrow. The 4th could go to 2644/2645, the old 2nd.
    Double click the chart.

  10. phil1247 says:

    3% traded

    but ZN was front run at target by one tick

  11. fotis2 says:

    Going down well done Bears

  12. phil1247 says:

    gold broke above ext short
    both gold and silver are good for counter trend rallies now

  13. phil1247 says:

    Lee

    what is your thinking on CL here ?

  14. phil1247 says:

    3% 10 yr

    should be hit today
    ZN target is only 5 ticks away
    looking to exit shorts at target if there is not a blast thru

  15. OBSERVATION ONLY…Yes, I am aware that /ES just tested to the tick the full 50% measured move SHORT…and defending this level (tested that level a few times, a few days ago but was front run by 4 ticks) just as /VX tested it’s 38.1% LONG…that is very important and key level to test and defend (BTW, /VX trading off 38.1% levels has been common and there has been a very correlation between /VX and /ES over the past few weeks. /NQ, looks very week compared to other index’s but financials look a bit stronger compared to the general market.

    However, my lay EW analysis shows that since the April 4 lows some stocks and ETF’s are testing a 38.1% wave 4 of 5…just saying. Have both analyses in my head…Favor the short for now but will change if /ES trades above 2696.50

  16. Holly Silver says:

    I do see today as important. Any rally sustained thru the day is positive for the market. if it falters or fails to generate at least a 10 point SPX move at end of day I will be adding Puts expecting SPY of 254 to be achieved this week. There are rare moment when fast sharp reversals are seen. These last 3 months have produced clusters of them against the prior full year of barely any. I have to take advantage when it presents itself. The double down approach in blackjack.

    Good luck folks.

    • Holly Silver says:

      BTW, a year long target for the 10 year note is 3.11% It started from 2.35. It should easily be achieved soon. Big question is will it break above. If not the top would seem to be there.

      • Holly Silver says:

        Added more PUTS on SPY for both this Friday and next. If the market holds up today without rising beyond 10 SPX points i will try again near close.

        Behaving as i expected. Q’s very weak and SPX tried multiple times to rally and so far got turned back. Way too early to declare any significates to it.

        • Holly Silver says:

          If pattern hold true we should NOT see a deep drop today and in fact might have a small gain. if this is a repeat of prior steep drops we should see the 1st bottom in 5 trading days.

          • Holly Silver says:

            Not sure if the 1/29 or 3/12 pattern is more in line with todays action. The first settled low will not be the bottom, there is almost always a sharp one day rebound followed by the deeper final bottom within days of that. Still see Low 250’s in SPY to form the 1st bottom.

  17. This was from two hours ago, but worth noting here that ES hit the HWB and so long as price stays lower than that 2688.50 overnight high up to the 2695ish .618, then it is fair to expect at least a test of yesterday’s low, and quite possibly a trip to the 2632 pivot over the next day or so. This isn’t about being a bear or not being a bull. This is acknowledging potentially significant levels and then piggybacking on the market’s reaction to those levels. If this plays out as I expect, VIX should have a good day, as today’s range will likely expand beyond yesterday’s.

  18. gary61b says:

    ES, 2685.5 and short holding for now 83/84 is a rejection level, 2680 and below back in volume cluster 2661 is lower end.

    • gary61b says:

      2680 is the level to achieve and maintain to go lower, otherwise up it is. CN not sure but it looks as though your picking up what phil is laying down…nice to have new tools in the toolbox.

      • I think most of us have always traded the halfway backs. I’m only making it more explicit so foks don’t think it is new or magical. I would say, however, that HD taught me to respect the 50% much more than I had before meeting up with him here. I tend to speak up more when a Big Up or Big Down is occurring in the absence of a significant fib level, or S/R level. But what Phil does is good when he is clear about it. I see he uses the 23.6/-23.6 as a profit target. Years ago I posted here at Tony’s that I use a box of 12.5 to 27.5/-12.5 to -27.5 for my own targets. That box developed out of my tracking stats of many trades over many years targeting the 23.6 that showed that 89% of my winners trade at least to 12.5% and stay below 27.5% before a pullback/reaction. All good stuff, when it comes to using actual technicals related to price levels rather than political opinions or lagging indicators.

  19. Bill Manscoe says:

    It’s interesting to me since I have been doing this since 1979 and worked in the Memphis Cotton Exchange for a guy that was 85-90 percent fundamental in outlook and has been extremely successful but was the futures broker for Mike Marcus of the old Commidity Corp who was all technical, WHY CANT THIS BLOG GET ALONG.

    Also everyone acts like there are only two directions in the market there are three up down & sideways. We are in a sideways market on a long term basis. We are not in a sideways market for people that trade in the short time frames of Phil,Gary, asa & others. This blog is infected with sidewaysitis until we get longer term confirmation. GLTA

    • vivelaamo says:

      Must be a sign of the times. Everyone is expecting big moves every day. Very impatient.

      I say slow and steady wins the race.

    • fotis2 says:

      Sideways not downsloping channel yes with a trapped IHS at play tested neckline twice some are long 2780….2860
      https://invst.ly/7957s

    • I agree and started my career in commodities also (1968) mostly beans, grains and metals. Mostly old style technical analysis.. Made a lot in SBO on the massive breakout, but the base was long and tiring…actually traded Eggs in size with a large international trader until he was arrested (lol)…that market died and that guy was involved in the SBO Scandal (Mafia)…I found out latter and returned to the USA after the loss of that client/manipulator, btw, that person claimed at the time that his company had a low cholesterol egg (not true). Anyway, I think we go up in the $SPX pretty big short term.

    • kingfrogcash says:

      Bill, you only used the word “I” once. There is a house minimum of five. (that was a joke).

  20. fionamargaret says:

    Nothing in the mail…no RJ, Kimble etc….the only interest seems to be here….
    Thanks and love to Tony….and everyone xx

  21. Holly Silver says:

    Glad so many see the exactly opposite of what i do. Love being a contrarian. I am however on Ton’s side of the bet so to all those that questioned why I am here i have to ask the same of all the bulls. Clearly his report over weekend is the most bearish i have seen recently.

    Please reveal your EW count and where the next support/resistance level is. Chime in Bulls.

    Phil, want to CHIME IN HERE?

  22. Hi,
    29k is the target projecting as an expanding triangle
    expanding fib from 7,5k next target is ~28500
    https://invst.ly/791xt
    https://invst.ly/7928w
    thanks

  23. Jack kendo says:


    cheers!

    • Jack kendo says:

      A/D new ATH 04/18/2018:
      according to Tommyboy, probability of index to make new high is at least 70%, and it’s positive divergence.
      according to AAH, probability of index more down is 1 out all history, very very rare.

      very muted VIX indicates bullish market going forward.
      VIX down with a down market today.

      cheers!

  24. mcgcapital says:

    I’m out of SPX shorts here for 40 points. Not got a clue what it’s doing so better to sit out and wait. Don’t think I’ve ever been this confused around what the trend is as right now.. FTSE has broken up decisively, but is hugely overbought so difficult to trade that too. I can’t actually see there being a resolution anytime soon either.. just have to see what sets up

  25. I don’t know about you guys, but I am very bullish here, today sold me that we might just bust the 50 day ma and run towards 2800. Good luck, but I can’t yet yield to the bearish side right now.

    • CampFreddie says:

      Steve – agree strongly. Good long setup happening right now. 🙂

    • Holly Silver says:

      I see EXACT opposite. It should have rallied today and the point it did rally from, 2:50 PM, was extremely weak. I see no traction. The 10 year note will force the market down this whole week UNLESS it reverses big time.

      In fact I would exit my Puts if I see even a 10 point SPY close up in any of next 4 days. I see slip/sliding week folks. ENJOY! I had hoped for a more exciting drop but whether it does drop from here or rallies the moves seem to be very controlled.

      • Holly Silver says:

        HINT: When was the last time you saw a flat or slightly down move after minimum 2 day drop and it didn’t continue on down from there? I use pattern recognition and i don’t know of any time in recent past we had it rally. In fact most of the time it showed it was only the start of a more protracted drop. Depending on early tomorrow action i might yet again add more PUTS. Time frame consistent with it finishing by May 4th.

        If i am wrong I lose money and try hard to reevaluate my mistake so it happens less frequently. But the “TELL” for me is the big 3.0 percent.

        • Ashley says:

          I say it needs to go back to where it started from around 2575 before this meat grinder triangle algo shuts off and puts the heat on all the shorts and gets all the Bulls lathered up for the B wave up out of it…. We do have a nice looking 5 down from 3 up so far .)

          Bonds and Kudlows “King Dollar” are driving the short bus so far but they wont need to go down much to have a go at breaking out of here up… A good time to be on the sidelines watching but the time to get in that position isn’t right now, tough market!!

        • phil1247 says:

          3 per cent

          is a non event

          • Holly Silver says:

            Market waited over 4 years for 3 percent. No biggie. Just a number. Wonder what China is doing? I see another slow drawdown in equities tomorrow or the start of a drop but i do not see any move higher. if it is a slow draw I bet BIG, really BIG at close tomorrow for a Wednesday/Thursday swoon. Good luck to ya.

            I see you still got to put your THREE CENTS in. Don’t worry, no matter how well i do i will not be making the daily calls you do and will allow you your cheerleaders. you seem to need them desperately. Me, I don’t give a crap if everyone hates me as long as they stop goading me. Listen or ignore. I make or lose money the same. I ALWAYS post (somewhere) my thoughts and bets. Keeps me honest and forces me to reevaluate.

            I ramble on here because i see a great setup fro a sharp drop again. If it doesn’t happen i am susceptible to a bout of depression. I never learnt to control a big setup that fails. My albatross.

        • aahmichael says:

          RE: “When was the last time you saw a flat or slightly down move after minimum 2 day drop and it didn’t continue on down from there?”

          You only have to go as far back as the 4 day decline from 2/16-2/22. That was a 57 point 4 day decline. This one has been a 60 point 4 day decline.

          • Holly Silver says:

            Yes the move was similar but the setup way different. in that case you were coming from a huge 10 day drop that had a very sharp 5 day rebound (50%). No such momentum exists today. BUT you are correct and I can’t believe I missed it. I will be exiting my position if we close tomorrow 10 or more SPX points higher in any case. I sure hope we don’t repeat that scenario.

    • vivelaamo says:

      Strongly agree too. Perfect backtest of the Dow trend line break.Text book for now…

  26. vivelaamo says:

    vivelaamo says:
    April 20, 2018 at 2:22 pm
    Me. Will buy more at dow 24295

    Close enough.

  27. phil1247 says:

    Lee

    lets see is 69.03 CL is a brick wall

  28. gary61b says:

    ES if we can break 59.75 I see 52.5 then 45

  29. phil1247 says:

    how about a spike in bond prices ………..ie short squeeze
    aggressive ext short already failed
    i want out of bond and note shorts on any weakness now

  30. Holly Silver says:

    US – EU Trade War starts May 1st. If EU can’t persuade trump to lift steel tariffs. Imagine going after EU and China at the same time. Insane. Many economists and stock analysts still think Trump will renegotiate and this is just a bargaining tactic. For China they stopped talks all together while EU is working now to negotiate deal. Mnuchin (may) go to China for Trade talks soon.

    Market movement is still within the shallow trend line but even if it breaks upward for one more rally it should be the end of it before this week is out. Today might decide it.

    Sorry for the interrupt against a boring day’s activity so far. Seems no one answered my previous questions so i guess that does answer my question. Beating a dead horse but this one Trump act will not only help decide how deep the drop is it will also cause many defections on the GOP side, and possible spike the treasury bond yields. A trifecta.

    • Holly Silver says:

      10 year at 2.98 trying to break above 3. Stock Market at a very precarious position on the monthly weekly and daily chart. I have a feeling the complacency and slow grind will be replaced once again with exciting spike moves. I suspect the last hour will divulge whether we are about to shoot up or down. It looks like a prelude for the rest of the week and possibly 2 weeks. Just a hunch based on current grinding day.

      • Holly Silver says:

        Now 2:15 and a minor break did occur. I will be looking for a possibility of a strong counter rally around 2:40 today. Anything before then is usually temporary. most reversals happen in 2:30 to 2:40 area.

        A fake break or reversal with more legs than one day? Stay tuned folks. We should know soon.

  31. Lee X says:

    Thx Tony

    Your hourly Spx 34 ema is flashing yellow again

  32. see if we rally from 2672 if not 2669
    2661-2683
    2683- 2672 a .50 retrace
    2672-2694 were C = A at 22 points

  33. floyd drummer says:

    phil or asa,

    do anchors have memories?
    can the same anchor return in importance later?

    thx

    • Sorry just back and saw this post…
      Great question. A a matter of fact they do. When we see the activity not technically responding to 23.6% profit targets, or 50%, 61.8% short/long. DH will go back to see if an algorithm is attaching themselves to an old but recent anchor. This commonly happens around market moving news events where “momentarily” this is a out of nowhere decline or rally. Sometimes it happens on FOMC days ads well.

  34. learnedmylesson25 says:

    For those keeping score on GDX,it broke under the 10d at 22.64,with the 20d at 22.44.Now at 22.53.It’s fighting a good fight but…there will be a TKO if 22.44 is broken.Later all.

  35. trying to break thru 2676 on up to 2691-2696 see what happens there. i suppose we should be looking for 3 waves up for the next area to short. breaks. over 2700 next stop 2725 area.
    good luck all

  36. learnedmylesson25 says:

    HYG doing what I expected.Did not try to re-embed so down it goes to test two levels:18d(85.84)has failed.Next is 85.64 (100d).We’re currently at 85.78.Equity market goes with it 98% of the time.That’s the whole ballgame in a paragraph.Must hold 85.64–and should,if the bullish crossover does what its supposed to.Kudlow is choking gold down personally–believe it or not–or at least trying.GL all.

    • mjtplayer says:

      No doubt, everyone is watching rates. 10yr at 2.98%, inching ever closer to the psychological 3%. Tagging 3% will be little more than a headline, the question is what happens next – back off again or accelerate through? If the 10yr starts rallying above 3% you can forget about high yield hanging on, it will tank, which will take stocks with it.

      Not a question of if, but when

  37. /Users/francescaca/Desktop/DbeP6ZFXcAAoxrN.jpg-large.jpg

    This is how the 1 of 3 is developing. Still bull doesn’t giving up.

  38. Gary Lewis says:

    Phil, where do you see TLT/ZB going? I’ve got 122 puts bought at 122 🙂 and 110 puts for the longer term. Was looking for the last low of 116.5 on TLT for the 122s and 95 for the 110s. Thoughts?

    • phil1247 says:

      bonds are headed way down ………..
      but a short squeeze may be brewing ……….
      a gift to pile on shorts at better levels

      TLT has a 110 target
      to 99 at the extreme -.618 target

      • Gary Lewis says:

        Thanks. I covered some short 121 calls on Friday, thinking more or less the same thing. My 122 puts are for June so I’ll hang in there and look for another opportunity to short calls.

  39. mcgcapital says:

    I always assume when we’re talking about the markets on here we’re coming at it from a trading perspective.

    From an investing perspective it’s actually pretty simple.. don’t use leverage (as you’re going to suffer 50% drawdowns every 10-20 years), always stay fully invested (as I can guarantee you’ll end up underperforming the market otherwise as it’s actually pretty difficult to forecast the long term), stay diversified by country/currency/sector and manage your risk by dripping in cash over time and reducing your allocation to stocks once goals are hit (e.g. on having enough to retire, buy a property etc).

    There’s no need to discuss investing day to day as any changes to strategy should be pretty infrequent. Whether the market is up or down on a particular day is completely irrelevant on your timeframe…

    Trading is completely different. To me it’s a game of points – look for set ups, take them, bank profits and cut losses. You can make points in either direction, in all different conditions if you’re adaptable, and I know a fair number of people who do this successfully. All you really need is the market to move.. that’s why last year sucked for trading

    • MCG, I disagree with your long term assessment – BUY and HOLD.
      If you do backtesting (30+ years), selling on any death cross on the weekly (and subsequent rebuy on the rebound) outperformed the buy/hold strategy.
      The only time I see that failing is with choppy long-term markets. Extended chop (30 year sideways market), you’ll lose money. Otherwise, it’s a gain. Have we ever seen a 30 year sideways move? It may happen sometime, but not in our lifetime. (Anything that can happen on the short term charts can happen on the long term charts. Fractals. But that just hasn’t occurred as there’s market manipulation and long term (+) sentiment.)

    • vivelaamo says:

      Yes but Mr hotshot professional trader claims trading is only in and out in minutes. Trades that last longer than a day is apparently investing.

      I have trades in keep open for several days or weeks. So I guess they must be investments.

      Each to their own I guess.

  40. phil1247 says:

    fotis

    gold swooshing down
    are you short ?

    • fotis2 says:

      Nope missed it gave a nice Bearflag break on 4hour Friday close Kudos to Bouraq

      • phil1247 says:

        dollar rally should continue into june
        so correlation police should look for gold headwinds
        not a place to be holding UGOLD for sure
        unless you enjoy losing your money three times as fast

  41. fionamargaret says:

  42. Can guarantee you if we were still before Jan 31, the futures would up lock limit up 30 pts now for S&P. Now, it can’t sustain a 8 pts gap-up.

  43. phil1247 says:

    now that 2673 ext short has been traded above
    full retracement to 2689 to 2696 is expected

    i have a magnet at 2691
    currently at 2677

    see you there in the am

Comments are closed.