tuesday update

SHORT TERM: gap down opening, DOW -243

Overnight the Asian markets lost 0.4%. European markets opened higher, but lost 1.9%. US index futures were sharply lower overnight. As the FED started its two day FOMC meeting the market gapped down at the open to SPX 1422 and continued to slide. Around 10:30 the SPX hit 1408, setting up a slight positive divergence, and then tried to rally. At 2:00 the SPX hit 1418 and then began to pullback again. After hitting SPX 1412 around 2:30, the market bounced to 1419 by 3:00, and then pulled back to end the day at 1413.

For the day the SPX/DOW were -1.65%, and the NDX/NAZ were -0.95%. Bonds gained 11 ticks, Crude slid $2.10, Gold dropped $22, and the USD was higher. Medium term support remains at the 1386 and 1372 pivots, with resistance at the 1440 and 1499 pivots. Tomorrow: New homes sales and the FHFA housing price index at 10:00, followed by the FED’s FOMC statement in the afternoon.

The market gapped down at the open today for the first time since monday October 8th. In the first few minutes the SPX broke below support at 1422/27. Then it broke support at SPX 1413/16, one half hour later, on its way to 1408. At that low it set up a slight positive divergence and tried to rally. Also at the low our Minor wave C (1464-1408) is now longer than Minor wave A (1471-1426). Suggesting wave C may target the 1.618 relationship at SPX 1391 next. Over the weekend we noted the Fibonacci/retracement levels at: SPX 1391/93, SPX 1369, and SPX 1345/46.

Also last weekend we updated the DOW charts with the most probable long term count. This suggests the recent uptrend high was the end of Intermediate wave i of Major wave 3, and not Major wave 3 in its entirety. We also posted a potential bearish count at the very end of the public stock charts list. Recently there has been some interest in a potential bull market top, at the recent uptrend high, in our OEW group. It’s October! After reviewing the entire bull market. The possibility of an upcoming end to a potential bearish pattern did arise. This pattern suggests there is at least one more uptrend high, after this correction concludes, before a potential diagonal triangle top could form. Right now, this is only a 20% probability.

Short term support is at SPX 1402/3 then SPX 1396/98, with resistance at SPX 1413/16 and SPX 1422/27. Short term momentum is displaying a slight positive divergence at today’s low. The short term OEW charts remain negatively biased, with the swing level around SPX 1437. Best to your trading!

MEDIUM TERM: uptrend in jeopardy

LONG TERM: bull market

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

About tony caldaro

Investor
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58 Responses to tuesday update

  1. torehund says:

    Comparing SPY and IWm small cap indices they track echother, normally the endof uptrends end in optimism with IWM outperforming SPY. So conclusion is that there is deep seated pessimism in the markets, which should fuel a rise and IMW/SPY divergence later on.

  2. rc1269 says:

    the Bernank has spoken, and… [drumroll]… nothing new. suprise. do we rally, selloff, who cares??! feels like the crop report moment during Trading Places. “sold, sold sold… waiiit… waiit…. okay, buy, BUY!”
    i wonder if Lee was in the background of the CME in that movie, whipping around corn or crude. i could see it

    • pbnj123 says:

      All I can see is Jamie Lee ;-0
      Oh did I say that out loud…

    • tony caldaro says:

      Copy and Paste … absolutely nothing new

      • pbnj123 says:

        Would a double bottom with a +div on the RSI be bullish – if we hold 1407.56?

      • CB says:

        kind of funny that Trading Places was made in ’83 and stocks bottomed around the same time – one could say that Wall Street hate tends to peak (as in popular culture) when the market bottoms – it definitely goes back to what you tell us about mass psychology markets Tony.
        ..and it def. took a lot of guts to go into what appeared to be “the most hated” job in the world at that time, Lee! It’s like hearing people say: hey, ur good enough, ur smart enough, and doggone it people kinda hate you……just kidding Lee.

      • CB says:

        mass psychology and markets, rather..

  3. currently benchmark $IWM is down 0.21% while the low risk folio is up 1.41%.
    $SEH in the folio is currently up 60% today on news that polycorp is to buy spytech for 246 million…

    still waiting for tna short term trade signal. careful as “PSTT” short term signal is still on short signal.

  4. Lee says:

    mm4398
    Nice ZW trade..well done !

    • mm4398 says:

      Thanks lee. I called the move correctly but unfortunately had just initiated my corn position, will add wheat on more upside. Such is trading.

  5. This SP 500 roadmap I published on Sept 26th… no need to overthink
    @1395-1400 we have fibonacci convergences of .236 of waves 1-3 and .382 of 1267-1474
    http://stocktwits.com/message/10171369
    Buy UPRO if 1400 ranges are hit for nice swing?

  6. doctorboom says:

    This is an important time for all of us. I enjoy reading Tony’s blog, so I would like to give something back in return, read my important message posted today:

    http://doctorboom.blogspot.com

  7. M1 says:

    http://scharts.co/RxXVFU
    SPX didn’t even retrace 38% (Fib Retr) from june’s lows and it looks many are getting scared.

  8. mjmateer says:

    Lee, re: your S1,2,3 prices for today – is there a link for these? tia.

  9. timing101 says:

    Thanks Tony.
    50% retracement today (12521.84 to 13661.87). Was that enough?

    • tony caldaro says:

      Timing,
      The uptrend was from 12,035-13,662

      • timing101 says:

        Thanks Tony. I nibbled at the close today. Stops are not far away, so it shouldn’t be too painful! :-)
        My thinking is, if we’re going back to 1576 SPX, we might not be correcting the entire upleg since June right now. Hence my retrace #’s.

  10. The Homeless Daytrader says:

    The alternate bear count has the entire 2009 bull market as a giant ABC? That is quite a bearish scenario, is it not?

  11. blubrd67 says:

    Thanks Tony, great navigation as always! Two questions:
    1) Did S&P confirm downtrend today?

    2) I’m not sure that I’m, or others, clear on this statement: “We also posted a potential bearish count at the very end of the public stock charts list.” If I understand this correctly, out of all previous variations, you are presenting two main possibilities:
    a) This is int. 2 on the way to 3, 4, 5, to complete major 3 – 80% chance
    b) significant downtrend (after another uptrend, are you suggesting beginning of Primary IV as 20% possibility?)

  12. M1 says:

    Thanks, Tony.
    Not much to say today. But it feels good.

  13. jaja2121 says:

    Am I reading this right – a possible end to the move from 2009.
    What levels would that target? And would that mean that we may stiil be in store for another 5 waves down? Below 2009 levels?

  14. CB says:

    thanks Tony. Like ur green pencil magic on 60 min. =) have a great afternoon everyone.

  15. ko68 says:

    Thanks Tony. Its quite a wide range between the retracement levels for the C; from 1345 in the low range to 1391/1393 in the high range. At this moment; what do you say is the most probable outcome her: the low range or the high range for the C target? Must admit that 1345 seems a bit scary…thanks again

  16. tna trades today. tomorrow might likely be green day.
    https://standardpoor.wordpress.com/

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