Weekend update

REVIEW.

The week started at SPX 2779. The market opened slightly higher Monday. Rallied to SPX 2790. Then bounced off of SPX 2789/91 for the next three days. On Friday’s option expiration, the market gapped down, hit SPX 2762, then rebounded to close unchanged for the week. For the week the SPX/DOW were mixed, and the NDX/NAZ gained 1.05%. Economic reports for the week were mostly positive. On the downtick: industrial production, plus the budget deficit expanded. On the uptick: the CPI, the PPI, the NY FED, retail  sales, import/export prices, business inventories, consumer sentiment, plus weekly jobless claims declined. Next week’s reports will be highlighted by the Philly FED, leading indicators, and housing.

LONG TERM: uptrend

We have been hearing some reports this week that the FED is behind the yield curve, and rates should be at least another 1.5% higher at this time. We disagree. In fact according to the indicator we track for future FED funds, the FED is exactly where the market wants it to be at this stage of the economic expansion. In early 2011 we published the following report on short term rates, and what we track to anticipate them: https://caldaro.wordpress.com/2011/01/18/interest-rates-the-economy-and-the-1yr-t-bill/. Using the 50 basis point rule the current 1YR chart suggests the FED is right where is should be: 1.75% to 2.00%.

The weekly chart displays the SPX price action since the great recession low in 2009. The market advanced for 6 years, to 2015, to complete Primary I of a Cycle wave bull market. Primary II ended in early 2016 at SPX 1810. Since then the market has been rising in a Major wave 1, of Primary III, bull market. When Major 1 concludes, and it looks like we’re already in Int. wave v, a Major wave 2 bear market should follow. Our mid-2016 projection for this bull market remains SPX 3000+ by the 2018+.

MEDIUM TERM: uptrend

From late-January to early-April the SPX corrected in an Intermediate wave iv flat. This flat alternates with the Q2-2016 Intermediate wave ii irregular zigzag. In fact, even the Minor waves 2 and 4, of Int. wave iii, display alternation. From that early-April low the uptrend has been unfolding in what appears to be a nesting of 1-2’s.

We have labeled SPX 2717 in mid-April Minor 1, and SPX 2595 in early-May Minor 2. Then SPX 2742 as Minute i, and SPX 2677 as Minute ii in mid-May. This count suggests Minute iii has been underway since then. Over the past three weeks the SPX has risen an unimpressive, for a third wave, 100+ points. The market is still looking for a catalyst.

SHORT TERM

A quiet week as the SPX could not make much upside progress after hitting the OEW 2798 pivot range. In fact, on options expiration Friday the market sold off to SPX 2762 before recovering in the afternoon. The gap down opening and rebound could set things up for the SPX to start impulsing again internally. A rally to SPX 2791 again would help in that regard.

Short term support is at the 2731 and 2656 pivots, with resistance at the 2780 and 2798 pivots. Short term momentum ended the week with a positive divergence. Best to your trading!

FOREIGN MARKET

Asian markets were mixed on the week and lost 0.7%.

European markets were mostly higher and gained 0.9%.

The DJ World index lost 0.5%, and the NYSE lost 0.8%.

COMMODITIES

Bonds continue to downtrend and ended unchanged for the week.

Crude remains in a downtrend and lost 1.0%.

Gold also remains in a downtrend and lost 1.9% on the week.

The USD has been in an uptrend and gained 1.0% on the week.

NEXT WEEK

Monday: NAHB at 10am. Tuesday: housing starts and building permits. Wednesday: existing home sales. Thursday: jobless claims, leading indicators and the Philly FED.

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

About tony caldaro

Investor
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519 Responses to Weekend update

  1. vivelaamo says:

    TRADING BASED ON THE POPE! 😂

    I’ve heard it all now.

    Apparently this guy had a subscription newsletter!

  2. torehund says:

    Biotech finally broke out clearing 5000 on the index, bull💰🔝

    • tommyboys says:

      May run for quite a while. A few of mine have done zip forever – big bases – finally moving 👍🏼

  3. interesting day tug a war at 2770 big battle. one more low, or blast thru

  4. emuntrader says:

    only 7-wave up from 2743. possible -wave. we may still be in correction mode.

  5. stcoleridge says:

    Let’s see what this big bad “professional” money does in the last hour. It would be nice to see something creatively different like a rotation out of the R2K into the underperforming Dow, but instead I’m sure we’ll see more of the same buying of indices 50 basis points higher than where they could have bought them this morning. In the old days there used to be prop desks and hedge funds long to the gills waiting to give it to them.

    • Strongest 5 day correction. Late day rally once again. Higher close than open. Only kidding. Now that Trump had to reverse his separation policy you can bet your house he is angry. So angry he will take it out on the EU. Do I really know the man? We are about to find out!

      I will continue to play the man and not the chart. Silly as that sounds. next 5 days should be interesting.

      • tommyboys says:

        LOL – Trump has SMOKED your trading. He had you wrong at every turn. Holding long the past 19 months woulda had you WAY ahead HA!

  6. The quiet peaceful subdued market is about to be woken up. is this the longest losing streak in a long while? Tight range but reminiscent of a rolling top about to have the breaks let loose. All depends on todays close. This Berlioz piece should represent the current market well. From tenderness, ecstasy to despair, tantrums and murder.

    • tommyboys says:

      Man you’re king of the liberal drama agenda. How’s that been working out for you since the election 19 MONTHS ago 🤔🙄😜

      • Looks like the POPE even got involved again. The prior president and wife also. yes I would say we are hitting a PEAK when the outrage is from the LIBERAL POPE and CONSERVATIVE President. What just happened? Trumps evil mothers and drug dealing children with his tough zero policy now reversed? BUT all his supporters agreed with him? I suppose they still do. It’s called following whatever the dictator says and does. Please salute when you mention his name. He likes that.

        As for trade wars I find it rather funny that the BUSINESS NEWS from Forbes and Business insider consider this little spat troublesome. Expecting the market to resume higher with trade wars just getting going makes no sense. But ignore logic and stick your head in the charts. With the bias here they always see upside potential. To me it’s a screaming sell. Ludicrous to think trump reverses this policy. it has no visual pictures of screaming children and babies. No, he will get his trade war.

        I think the market at times like this, just like early 2016 is a great example of the individual having the upper hand. Markets are slow to respond to obvious concerns. The rolling drop has been suggested by me but I must admit I thought it would be much lower by now before the cascading event occurs. I can obviously be wrong here since its slide is so shallow with many indices showing strength. I say this is day FIVE of an assumed 10 day drop. Getting real close to a do-or-die pattern. have to see decided weakness form here on out. If I am wrong I lose a portion of the gains I made over last 2 drops. In fact this would be my third round of guessing in between the last one that might be wrong. no matter because i am sure how it eventually ends, with a test or breakdown of 254 area.

        https://www.forbes.com/sites/phillevy/2018/06/20/how-bad-would-a-trade-war-be/#71cfce1e68a9

        http://www.businessinsider.com/trump-china-tariff-fight-trade-war-hurts-economy-jobs-2018-6

        • tommyboys says:

          LOL the louder the biased media screams (for ratings) the more it benefits Trump! Immigration is another screwed up lib policy that Trump will now have enough outrage – thx to leftist media – to fix bagging yet another victory thanks to the hating media hysteria. FINALLY kicked Strzok outta FBI. Morevto come and fingers crossed a Clinton indictment! Trump 2020 a lock now 🤒

    • stcoleridge says:

      Losing streak in one index of 30 stocks while other indices rip to new highs day after day. Even a brief acquaintance with the truth might be helpful.

  7. phil1247 says:

    SQQQ is recommended almost every day

    WHY?

  8. jobjas says:

    SPX to 2810
    CL to 67.5

  9. Unless SPX has a massive afternoon rally of +20 points,it looks like the embedded reading is toast–which means you can’t count on an extended uptrend,but probably corrective action.Nas,HYG and IWM still there but for now,another chairleg that’s been holding up the market,is being removed.*
    *unless said meltup occurs.

  10. E says:

    This is all about to come crashing down to Earth: dow, spy, ndx, rut, gold, oil…

  11. fionamargaret says:

    UVXY, VXX, SQQQ, SDOW, SPXS,
    Long the long bond…TLT or TMF…..and gold… GLD (going to 153) or UGLD
    Short oil ….DWT…to 59/60
    So far so good…do well…x

    • fionamargaret says:

      …and don’t listen to the pot advocates…it lessons your lung capacity….
      Now, I am an advocate for heavy breathing for all the right reasons….maybe the boys didn’t mention they were known as the Weak Willies….longevity is nice.

      • Page says:

        ha ha ha .. good one

      • fionamargaret says:

        ….”lessens your lung capacity”…if I hadn’t become so excited at mentioning heavy breathing, I might have spelled it correctly….
        The boys, not known for self congratulations, are really good at picking bottoms too…x

  12. stcoleridge says:

    YTD the awesome R2K has outperformed the Dow by over 10.5 %.

  13. phil1247 says:

    if long nq or tqqq
    7299 is a good place to take partial profits … hint hint

  14. lunker1 says:

    SPY strange daily candles.
    3 gaps down and then push it up to the prior open.
    the Green Waterfall

    Can you find any analogues to this and how did they resolve?

    • aahmichael says:

      Since 1970, it’s the first time that there were 3 consecutive days where the close was open.

      • aahmichael says:

        Disregard the post above, it didn’t post what I had written. It should have said:

        “Since 1970, it’s the first time that there were three consecutive days where the close was less than the previous day’s close, but greater than the open.”

  15. fotis2 says:

    https://t.co/DCJBeErnyi
    Get them brain dead and their hearts and minds will follow

    • dwr51 says:

      better to be though a fool than to put your ideas down in a blog and remove all doubt

    • scottycj1 says:

      The CB1 receptors in your brain were made for Cannabis. It is likely the most health giving plant on the planet. You haven’t studied it so you are IGNORANT of the Facts.

    • lunker1 says:

      Pot is much more mild than alcohol. Alcohol often triggers rage and violence in normally good people, causes severe motor and cognitive impairment, and alcoholism ruins millions of lives and destroys families.

      Pot makes you laugh and crave cheesesteaks and chocolate milk while listening to cool music

      • fotis2 says:

        Initially yes, after some time user realizes its actually a depressant and majority of users get to the stage where they become addicted/dependent I personally come from a place where it was very widely and cheaply available and know people who are still smoking on a daily basis 40 years down the line to say they are brain dead is putting it mildly.Now the propaganda spewing out about the various health giving benefits of weed is purely to misinform Joe Average so legislation can be passed without any hiccups the reason for the legalization is money money money,government can make more money by controlling the happy herb themselves thru taxation etc.

        • vivelaamo says:

          People will smoke pot regardless of whether it legal or not.

          I think it’s the better of 2 evils if compared with alcohol. Doesn’t make it acceptable but if more people are smoking instead of drinking at least it makes the world a safer place for the rest of us.

        • lunker1 says:

          People can be depressed with excessive alcohol, food, video games, TV even sleep and water. Most things are bad for you in excess

      • phil1247 says:

        lunker
        agree
        about 30% of my medical school class were potheads
        my circle of friends (about 15 guys out of the class of 100)
        had a rep of the ” sleep till noon club ”

        we were not buying bags of pot ….
        we were buying “bricks”
        we were not smoking joints….
        we were smoking spleefs

        we all graduated ………..

        ps
        do you know what they call the guy
        who graduates last in his medical school class ??

  16. emuntrader says:

    Short term view has not changed since yesterday. Longer term view the bulls need to get above 2857.85 on a closing basis before the next minor correction for an extension of the third wave.
    Even if you are a bear and believe that we are in a B-Wave the numbers are the same.
    Best of Luck.

  17. alexh110 says:

    It looks like we have a sequence of three cup and handle patterns on the daily MACD.
    I doubt there’ll be a fourth, as the market likes to do things in triplicate.
    Ought to resolve bullish.

  18. hugh jazole says:

    When will the downtrend in crude be over?

  19. See if we reverse and head down towards 2710-2720 hen rocket up to 2820 too end a ending diagonal. Target 2480. Over 2772: will look for 2820 again for an endiang diagonal to 2480. Either way looking for 2480; just which route we take.

    3.5 months from lows, we are up 200 points. Just churn before the big fall. Anything over 2825 I will be wrong.
    Good luck.

  20. phil1247 says:

    phil1247 says:
    June 19, 2018 at 4:55 pm
    scotty

    the boys use the same old tricks
    lets see if they park es at 2772 at 8 am tomorrow
    >>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
    ok ……….woke up late ……
    but at 8am es was at 2772

    da boyze really need to get some new tricks
    i love this game….

  21. schizo1688 says:

    VIX above 13 would hurt ….a nice head fake today

  22. Ahmichael:
    The McClellan Oscillator is derived from daily A-D numbers.

  23. vivelaamo says:

    Mcg you were right about the range. Even my own analysis had 2800 breaking before seeing new highs yet my bias led me to act too soon. I still expect it to break in the next few weeks. But unnecessarily took chances too early. One look at the chart suggested another pb was most likely first.

    Nobody said this was easy.

    • mcgcapital says:

      It’s a hard market to run trades in in a disciplined way that protects the downside. It’s literally switching between bullish and bearish intra day everyday so suits just taking small gains and cutting out immediately if it doesn’t go the right way. If it takes out 2800 will have to see how the price action looks because this isn’t that convincing so far

  24. torehund says:

    How to scare a bear😆

  25. Still bearish until 2773.91
    Lower lows lower highs. My 2 cents

  26. Ahmichael:
    If you are using the McClellan Oscillator, you are also using the A-D line because the McOs is derived from it.

    • aahmichael says:

      You’re incorrect, The McClellan Oscillator is derived from the daily A-D numbers. It’s not derived from the A-D line and has nothing to do with the A-D line.

  27. mjtplayer says:

    Very important juncture for the currency markets:

    DXY, at important resistance around 95: https://www.tradingview.com/x/3E796Vy9/

    Likewise, the Euro is at important support in the mid 115’s: https://www.tradingview.com/x/x2mqahA3/

    The CAD/USD also at important support: https://www.tradingview.com/x/mMcSRvPt/

    The AUD/USD has already broken important support: https://www.tradingview.com/x/01pilnQ3/

    Weekly AUD/USD breakdown: https://www.tradingview.com/x/IPqa7X3N/

  28. S&P the only index not embedded bullishly.Nas and IWM remains embedded,HYG is as well.So let’s see if Janet Powell sends a few million futures contracts through to get S&P back in sync.Gold is absolutely pathetic right now –with a trade war getting ramped up.Or is it all fake?Difficult to gauge,but the markets are not too worried at the moment.GL all.

  29. phil1247 says:

    NQ

    extension long traded (oval)

    shorts broken
    7395 target validated

    bull above 7192… ( long from low .618 support )

  30. gtoptions says:

    Thanks Tony
    ES ~Symmetry & Pivot Swing in Play? ~ https://www.tradingview.com/x/gwtfxbPK/

  31. Page says:

    Looks like tomorrow will be another down day.

  32. 123 abc says:

    DOW looking sloppy, taking out 24400 would signal corrective activity.
    Needs to stay above SPX 2700 for the following impulsive count to remain play.

    • pooch77 says:

      Trade talk losing effect can’t holding anything down.Rut almost green ,NAS down 125 futes than rally -20,bio big day..not a bearish market

  33. rd3777 says:

    I think tomorrow is the surprise day with a big down move. A series of 1,2’s in the SPX as the NDX and FANGS finish. Watch out below.

  34. Billy says:

    DAX and CAC both look like 5 down from their recent highs. This would be a C wave down completed … C of 2 to be precise. That would be the end of their corrections and wave 3 up would be on deck … 3 of 5 to be precise. Potentially very bullish. Neither however retraced a full 50% which has me pondering and cautious. Although it “looks like 5 down” it may also pass as 3 down with both currently in their 4th waves with the 5th wave down still too come. DOW also looks like it needs one more drop too. That index must be poisoned. DOW has retraced 17% whilst the SPX is comfortably over the HWB. NDX and RUT look as though they will never go down.

  35. phil1247 says:

    now that the boys have gapped it down for a few days
    giving you the rope a dope

    do not be surprised by a gap up and go haymaker tomorrow

  36. emuntrader says:

    The Bulls have done there job. only chance for the bears is a triple – possible but rare.

  37. stcoleridge says:

    It really has been a game of two halves lately. Fill yer boots overnight and in the first 90 minutes of trading then wait for the machines to bid it to infinity into the close once the moratorium on selling has kicked in around 1.30. Nice.

    • mcgcapital says:

      Need to see a change in character to end the pattern. So either a sell into close, gap down and no fill or open flat tomorrow. When you keep getting repeated weakness like this it nearly always goes down.. would be surprised if the break of the range is up, but it’s quite simple to see if that’s happening as we just need to break the lower highs pattern which now is 2770s

      • stcoleridge says:

        Agree McG. I’m just amazed at this daily RUT pattern. Close it on the the highs and then bid up the Futures until 4.15. It’s happened the last four trading days.

        • vivelaamo says:

          Been happening for weeks. Big appetite for small caps which makes me wonder if this can really be a risk off environment. Unless it’s topped.

          Well done on your RUT trade today. I haven’t touched it for weeks. Been missing out on some serious action.

          • stcoleridge says:

            I grew up being told that the last hour was when the “professionals” trade. If that’s the case they’re “professionally” getting their clients in near the highs of the day. Add that up over time and it’s going to seriously elevate the cost basis of whatever ETF or benchmark they’re chasing.

            • scottycj1 says:

              brokers are not the professionals

              • tommyboys says:

                Correct. “Professionals” are institutional money managers – not retail brokers. They’re buying during the day as well and not buying just the highs. Its all programed – not concerned with intraday moves – averaging positions over time.

              • stcoleridge says:

                Yes I know that Scotty, thanks. However even institutions have end clients.

          • mcgcapital says:

            https://en.m.wikipedia.org/wiki/Russell_2000_Index

            The Rut is only 8% of the US market by market cap so nowhere near as important as SPX, particularly given at least half of all trading volume is passive.

            I’m not sure we can read much into what it does

          • tommyboys says:

            This is due to strong dollar. Rotation from Dow stocks to domestic small caps. Plus biotech and small banks benefiting which many are in the RUT.

      • tommyboys says:

        Ha! You just said not 6 hours ago today’s gap down WON’T fill! Geez you guys that analyze minute by minute and a dozen posts/day kill me. Step back and take a breath. We’re in a corrective period within a powerful bull. News highs WILL get here. Whether next week or next quarter who cares.

        A/D about 1.7/1.2 negative across the board today. Not bad at all when looking at the Dow…

        • mcgcapital says:

          I know I did Tommy, I flip flop if necessary though. I’m playing a game of points.. as soon as FTSE went back above 7600 I exited everything. Trading for me is basically a series of IF statements, I only get the view right probably about 60% of the time. I’m saying let’s wait for higher highs before thinking there’s another go at breaking the critical 2800. Got no view on whether this bull market continues or not over the next 6 months

        • searchme2017 says:

          Looking at the DOW……….if you count the move up from the 4/2 low (23344.52) as an ascending diagonal triangle (5/3/5/3 and another five ending 6/7) we have seen an expanded flat from there with a “B” wave high on 6/11 and the “C” wave ending today at 24567.75. This is exactly a 38.2% retracement for a wave “2” of some degree…..perhaps Minor #2 of Intermediate #5……..

          Ascending diagonals in the first wave are rare! Elliott, himself…. never noted this type of wave but it has occurred enough times in recent history to be somewhat valid in analysis.

          But as always…..search me.

  38. gary61b says:

    ES intra day 2750 has a 78.6 and a Low/High hwb….so maybe push to 2760 then down to 2750?

  39. Anonymous says:

    xuwu992000 NAILED IT.
    xuwu992000 says:
    June 16, 2018 at 11:41 pm
    @ The decline from 2792 seems unfinished, and the best count I can come up with is a very rare leading expanding diagonal, with the last major zigzag leg to come on Monday and Tuesday. However, this pattern is VERY rare, and I would save this chart for reference if it does pan out.
    @ After the May 29 Major turning date, the next Major turning date on my calendar is June 19–very fitting for another turning around Tuesday. I suspect the 2731 pivot will be tested then.
    @ Xi was pissed, and Liu HE, the key negotiator in the trade talk & also Xi’s close buddy from early years, was in deep water now. The anger and frustration will be unleashed very soon, starting next week. Shorting AAPL & BA would be a very safe trade now.

    Reply

  40. schizo1688 says:

    now that all the traders came back from lunch, lets resume the decline

    • Anne Day says:

      Decline? I wish I bought more this morning 🙂
      No intention to sell yet. Plan to hold until Friday.

      • schizo1688 says:

        you should be in cash instead.. the market looks implosive to the downside..but i guess losing few fingers ain’t a big deal anyway…

    • Page says:

      will close green

      • fionamargaret says:

        If we are going down again, it is going to happen right now….
        Do take another look at Pretzel’s chart of yesterday….see what you think..

  41. Market and investors priced in a full blown trade war with China. A drop of less than 1 percent seems right. Now we have the EU committee meeting tomorrow and they will announce their retaliation tariffs. I am sure this all goes well and Mr. double down will react as he has with China.

    The market doesn’t need other countries for our future profits. Me, I will continue to do stupid things like add more and more Puts here. but hey, it’s only money. Since the market has absorbed the china debacle what’s another major trading partner thrown in the mix. the more the merrier.

    • Tomorrow is EU turn. They meet and will sure to retaliate. trump will hit them even harder than China. Market will ignore it of course.

      ** My my, seems my mentioning trade wars is now taboo here. I suggest you get the news agencies, other than FOX of course, to ban the mention of trade wars also. That will guarantee a great stock market future.

      • vivelaamo says:

        Nah just banning you would suffice.

      • Anne Day says:

        I am pretty sure that everyone here has already got your point.
        If you like, please tell us a few trades that you think are promising.
        Trade wars or not, we will be all dead at the end.

        • 10 year note will drop like a stone. The hiccup we recently saw will get magnified and last for weeks. 10 year should drop to 2.5 in the next 7 to 10 trading days.

          • Anne Day says:

            Thanks.

            What symbols should I look for if I would want to trade options/futures on 10 year note?

    • torehund says:

      Gary look at the macd oscillators in multiple timeframes, they tell the truth🤔

  42. stcoleridge says:

    At some point this relentless herding into the R2K has to reverse.

  43. looking to see if the 1:30 moving hour moves the market past 2763. if not im looking for 1 more down at a minimum.So i lean bullish until 2 if no giddie up i turn bearish

    good luck all

  44. scottycj1 says:

    Major Pos D on the SPX 240 min

    • stan911 says:

      Not giving you crap but you said that yesterday and we dropped another 24pts I’m looking for one more drop

      • scottycj1 says:

        It is what it is….pos D……..I really dont care what you do with it……If you trade in a 24 hr
        window….may not have a meaning to you…..to others it could be pivotal

      • mcgcapital says:

        He’s already decided it’s going to 2900-3000+ so will just look for things he can attribute long positions to. If it breaks 2800 then all fine and dandy.. if it doesn’t and it carries on down we’ll keep getting more of the same, and then once in drawdown he’ll stop posting. If someone doesn’t tell you where they’re wrong it’s useless as trading advice

        • scottycj1 says:

          And you will continue trying to top call and continue getting killed

          • mcgcapital says:

            I’m neutral on medium term until 2550-2800 breaks as it’s a trading range, I don’t try and guess what might happen in a few months. I’m short term bearish given proximity to the top of that range and the pattern of lower highs in place. But that doesn’t mean sit in shorts either.. I just close on breaks of resistance… got to stay flexible and that way you never get ‘killed’. That’s reserved for people who hold and hold when their opinion fails. If you just said what you’re looking for for the bull view to be invalidated it would be much more credible

  45. gary61b says:

    ES big play levels of concern 2735.5 for a hwb setup to target 2825 in play… 2721 if that does not hold then 2694 for a hwb setup… if 2669 does not hold then 2631, if that does not hold, then 2448 target.

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