wednesday update

SHORT TERM: overnight selling drove the market down early, and it hardly recovered, DOW -211
Overnight the Asian markets were all lower, despite the positive close in the US yesterday. Europe was substantially lower, coming into the open down 2.5%. As a result stocks sold off rapidly, with a gap down, and by 11:00 hit SPX 1416. A new low for the correction. A choppy advance followed to 1435 by 3:00, but the market couldn’t make any more progress and headed to lows near the close. At the close the SPX/DOW were -1.60%, and the NDX/NAZ were -1.25%. Bonds were up over 1/4 point, Crude lost about 95 cents, Gold rallied nearly $12.00, and the Euro was higher. The selling this morning took the SPX down near the next lower pivot at 1410. This held today, so support remains at 1410 and then 1383, with resistance at 1438 and 1462. Short term momentum has been going sideways lately while the market has declined. This is usually not a good sign, as this kind of erosion without an extreme, can lead to continuing lower prices. It looks like the market will be revisiting the August lows, the 1364 pivot, before all is said and done. Tomorrow the US is closed for a holiday, and trading will resume for a shortened session on friday. Some matters came up this morning, missed the post. Enjoy the holiday!
MEDIUM TERM: correction continues
LONG TERM: it’s still a bull market.

About tony caldaro

Investor
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7 Responses to wednesday update

  1. tony says:

    Hi E>D>
     
    Not quite sure I follow you.
    Didn\’t notice any diagonal triangle on the way up to the October high.
     
    tony

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  2. tony says:

    Hi Bill,
     
    Wave 4 flat? Still not oversold enough to satisfy the wave 4 low, as mentioned to Kostas.
     
    tony

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  3. tony says:

    Hi Kostas,
     
    While all that you state is possible.
    I\’d prefer to see a washout the the SPX 1364 level again.
    THX

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  4. greg.kesselring says:

    More on the ED hypothesis:  Looks like we\’re in wave 5 of the ED.  And we\’re in the C wave of that wave 5.  And that C wave could be itself unfolding as an ED.  If this turns out to be correct, we would have the C wave of the ABC of wave 5 of the ED turn out to be an ED.  That would be a nice pattern, eh?If that\’s a correct count, then it looks like we\’re in wave 4 of that final ED.  Wave 5 would unfold today or Monday and would bottom slightly below the lower trendline, likely between 1400 and 1410.(Another way to count wave 5 of the larger ED is that it\’s a double or triple zigzag.  But I like the single zigzag with the C wave as an ED better.)

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  5. greg.kesselring says:

    What\’s your opinion about counting the drop from the October high as an Ending Diagonal (ED)?  If this count is correct, then the July high to August low would be wave A, August low to October high wave B, and the drop from the October high is wave C.  This ABC would be a flat.  It\’s rare for a C wave of a flat to be an ED, and it\’s also rare for an ED to be so steep.  However, it fits the ED pattern.  If this is a correct count, then the ED has either completed or is very close to completion (should know in a day or three).

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  6. Unknown says:

    Hi Tony,
     
    Is it possible to consider this a wave 4 flat if we would bottom around current prices?  I know the intraday low was down a good bit from here, but not too far on a closing basis.  I know this seems unlikely in the current environment, but trying to keep an open mind.
     
    Thanks,
    Bill 

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  7. kostas says:

    Hi Tony. The 38.2% fibo level of major 3 is at about 1410, where is also an important MA for this bull cycle, MA89, and an important EW pivot. Do u think that major 4 will end in this area? I think is a bit dangerous for the count to break this level. Also, with this count what is the target for the end of the bull cycle? Major 3 is 2.618 of major 1. Do u think a target of 1.618 of major 1, at about 1700 is correct? Also do u think that with the new data, the 8 year bull cycle target is rejected?
    Thanks, Kostas

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