wednesday update

SHORT TERM: interesting FOMC day, DOW -44

Overnight the Asian markets gained 1.0% – mostly Japan. Europe opened lower and lost 0.4%. US index futures were lower overnight. At 8:15 ADP was reported lower: 192K vs 215K, then at 8:30 Q4 GDP was reported negative: -0.1% vs +3.1%. The market opened one point below yesterday’s SPX 1508 close, bounced around in the opening minutes and made a new uptrend high at 1510. Then it started to pullback. Around 10:30 the SPX hit 1503. Then it rallied to SPX 1508 by 1:30 heading into the FOMC statement at 2:15: After that the market pulled back to SPX 1500 in the last few minutes of trading, before bouncing to close at 1502.

For the day the SPX/DOW were -0.35%, and the NDX/NAZ were -0.25%. Bonds gained 2 ticks, Crude added 45 cents, Gold rallied $13, and the USD was lower. Medium term support remains at the 1499 and 1440 pivots, with resistance at the 1523 and 1552 pivots. Tomorrow: weekly Jobless claims at 8:30, along with Personal income/spending, and PCE prices. Then at 9:45 the Chicago PMI.

The market opened slightly lower today, made a new uptrend high (SPX 1510), and then pulled back to SPX 1503. At that point we thought Nano wave 3 ended at SPX 1510, and Nano 4 at 1503, which is the top of Nano 1. Then we expected the market to rally, which it did, but it only reached SPX 1508 before weakening again after the FOMC statement.

Upon examining the short term charts, knowing SPX 1503 was now a key level for this Nano wave count. We noticed another potential count: a Minute iv ascending triangle starting at SPX 1495 and ending at 1498. With this potential count Minute v could have ended at SPX 1510, and Minor wave 3 as well. We then posted a “tentative” green Minor wave 3 label on the SPX hourly chart, with the obvious negative RSI divergence.

The real test for this second count is at SPX 1498, which would be the low of Minute iv. Should the SPX drop to/below this level, then Minor 3 probably ended at SPX 1510. If the SPX holds support above this level, then the market could still reach the OEW 1523 pivot as the rally from SPX 1498-1510 could be counted as a Micro wave 1, and this decline a Micro wave 2. Confusing right? Simply put, should the SPX reach 1498 again it could decline another 30 points, or so, for Minor 4. Should SPX 1500, or so hold support, the market can then reach 1523 pivot before the 40 point, or so, Minor 4 pullback gets underway. Markets get tricky when the become choppy.

Short term support is at the 1499 pivot and SPX 1471/75, with resistance at the 1523 and 1552 pivots. Short term mementum setup a negative divergence and declined to slightly oversold. The short term OEW charts remain positive with the swing level now around SPX 1496. Best to your trading!

MEDIUM TERM: new uptrend high at SPX 1510

LONG TERM: bull market


About tony caldaro

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133 Responses to wednesday update

  1. blubrd67 says:

    I just saw your objections regarding my joke about DeMark yesterday. Listen, relax, it was just a joke! 🙂 Really.
    I like this site among other things that most people don’t get offended easily, so let’s keep that spirit.

    If you want me to get serious on that, I highly respect Tom DeMark’s work, he has done some great stuff in the past. He is not a fluff, as he seems to be hard working at his theories, and has contributed meaningfully many times to the companies following him. I saw a short documentary oh his work. But I just couldn’t resist a joke, reading some of his thoughts where for months he was predicting that S&P will peak at 1492 and then expect 12-17% correction from that point. The exhaustion point was supposed to be 1-2 weeks ago, if I understood correctly when I read his remarks about a month ago. Even DeMark might be laughing at himself, as I’m doing when I made my mistakes.

    We occasionally have here “prophets” coming, and you recognize a false prophet pronouncing clenching firm opinions as to where the market was heading. Some politely, some rudely challenging Tony’s ideas. Even ridiculing his “followers” for blindly following his ideas, as in Erka’s case, and occasionally David. I don’t think there is anyone here following Tony cultishly, far from that… or making decisions blindly.

    David Banister was here last year, a few times strongly in-your-face arguing how Tony was terribly wrong, and market was about to be flushed down seriously. Again, David made some great comments in the past also, but all his most pointy, inflammatory remarks turned out to be wrong. So was TheYenGuy with: “Mark my words, today is the peak, now we are going down” statements. So unfortunately DeMarks expectations didn’t happen either, as we passed 1500. He also expected that only S&P will touch new highs, but NOT Dow or Nasdaq. Again wrong. I’m not putting DeMark down…, just couldn’t resist as it appeared comical to me at that point, without any evil intentions. I wouldn’t be offended if someone made a joke about me, if I were wrong. Which I just was…:) I expected that the market will start going down sometimes next week, not this week, but it looks like I’m wrong. Although the game is not over yet. 🙂 So lighten up, and smile.

  2. leelee64 says:

    Have a gooden everybody !

  3. mokiepon says:

    I’m not claiming any knowledge or intuition here, but January is the biggest hiring month of the year, so I’m thinking the Report should at least meet 166K. (That’s actually a pityful number, IMO.)

    • rc1269 says:

      is that before or after the seasonal adjustment that is 5x the size of the unadjusted number?

    • rc1269 says:

      if you look at non-seasonally adjusted payrolls (ie, that actual data), January is, in fact, the largest firing month of the year

    • mokiepon says:

      rc, your guess is as good as mine. 166K is the expectation. That’s what will move mkts. IMO.


      • torehund says:

        M-pessimism fuels market, when its unfounded. Unemployment is good for markets, as fixing the problem fuels stocks through low interest rates.

      • rc1269 says:

        i hear ya, and agree. the funny part is the reported number is about as close to garbage information as you can get. first, the standard deviation on that data is about 30k jobs. if we beat by 10k folks will whoop and holla. making it even more worthless, the seasonality adjustment – a purely statistical construct and in itself fraught with substantial margins of error – has averaged over 3x the reported number over the last 12 months. take december’s “155k” jobs number. non-farm payrolls actually declined by -243k in december. we get to the healdine number by applying a +398k seasonal adjustment – the adjustment alone is 2.5x the reported number! complete garbage. but the market moves. proving the ‘market’ is pretty much also garbage. which is why we look toward technicals rather than trying to make heads or tails of fundamentals.

  4. CB says:

    Tony, RU gonna change that ‘careful 3’ to 3 now?…I know, Iknow…I am being impatient

  5. torehund says:

    If sp 500 drops straight to 1496, we then have a double complex abc.

  6. leelee64 says:

    They just stopped all the shorts from 1494 ..again
    Blue light special into the close..1498 = 76.40 % thats as cheap as it gets till 99%
    Pick ur spots and ur noses

  7. leelee64 says:

    Pit range low/high ESH 1497 = .618 back

  8. Ryan Parker says:

    Has anyone seen the NAAIM released today? +104.25. As in people are all in and leveraged. Highest reading ever and this survey goes back to mid-2006. A bit scary from a sentiment perspective.

  9. torehund says:

    Largest MN Moose Mortality Study Underway
    Northland’s NewsCenter – 12 hours ago
    Expect more multi billion rand in listed property
    Financial Mail – 23 hours ago
    Lillie Burt
    Mesquite Citizen Journal – Jan 30, 2013
    Valley Voice: Late-term abortion should not be a choice
    The Desert Sun – Jan 30, 2013
    Heart of Louisiana: Bows and arrows
    FOX 8 News WVUE-TV – Jan 30, 2013
    Severe Storms and Wind Shear

    News section on google finance for my ARWR share, not much biotech.

  10. leelee64 says:

    Guys in ES just sold 1494’s again for the 2 nd time today.
    Haaa Thanks Tony

  11. torehund says:

    Market maker isnt acive, yesterday no trading for 2 hours, think a hike is in the cards there.

  12. rc1269 says:

    so we bounced right off of 1498. now what…

  13. H D says:

    The highest all time monthly close in the DJIA was 13930 in October, of 2007

  14. mokiepon says:

    Good Morning. Nice green day! Just going to let longs run, awaiting Fri. Jobs or pivot; whichever comes first. Good trading/investing to Everyone. M

  15. Good morning all,
    For those interested, this is my update on US indeces macro proportions:
    Albeit circumspect, reaction at upper wedge-like trend-line on SPX and DJI + 61.8% large multi-week fib extension on SPX (to the tick!), while NDX did not break out, allows to keep last post’ stance (R2K break above 2007 top and trend-line is of concern).
    Updated charts:

  16. torehund says:

    Denis Slothower on the limelight, ses a 50 percent down projection. Is he runing a paysite too ? Doesnt have the academic flare of Precter, and is equally wrong on his projections, time after time.

  17. jaja2121 says:


  18. Tom Green says:


    Good Morning,
    Do you have an update of pit pivot and support-resistance levels for ES?


    • tony caldaro says:

      thx Stan, that works

      • thebbliss says:


        This count begins at Monday’s low of 1496. So I don’t see how it works anymore for your original Micro 3 due to the overlap of 1503 at the close, unless that count is now morphing into a diagonal. Am I missing something?

        Bill C

        • tony caldaro says:

          What count is that Bill?
          The Nano count broke down yesterday with the break through 1503.
          The Minor 3 high count at SPX 1510 is underway, should we break 1498 cash.

      • thebbliss says:

        Sorry about the confusion Tony. Before the open this morning, I was referring to Stan’s alt Nano count which I agree broke down at yesterday’s close.
        Bill C

    • ronini3 says:

      Why have a burger when you have steaks at home? hehe.

    • tony caldaro says:

      Must be cool in your house.
      You have the fan on again 😉

      • CB says:

        Tony, true 🙂 they’re always on, although sometimes there are heated discussions (aka fights) about them.
        I3, I am not sure I understand ur comment…why be cryptic when u can say it directly, huh?…anything wrong with that chart that hits you? thanks.

      • ronini3 says:

        CB, just kidding around..You have many good folks with good ideas here, and there is no need to go else where for them. 🙂

      • CB says:

        i3,I see. I think u were quite serious & thanks for giving me an honest answer. Sorry to hear that you’d take it that way. U guys are terrific and share with us very generously ur tremendous trading experience – and you guys know that we appreciate it very much. and I’ve certainly expressed it many, many times myself … The thing about the twitterverse is that it’s always on (like the ceiling fans), right? so we all scan it when we look for answers when we need them…and it’s also true that .people just aren’t always available to answer ur questions when U need it… It happens all the time…I can’t grab anyone here at midnight and ask them ” hey what are ur thoughts right now”, if I see sth. online that gets my attention I’ll take a look at it…I think everyone does… that’s why I posted it.

      • CB says:

        OK, question: what are our guys thinking about soybeans?..thanks

      • CB says:

        lol..OK, well it happens, like I’ve just’s that beautiful chart anyways if anyone is interested

      • ronini3 says:

        CB, No worries…I don’t take anything seriously. I throw posts out there just to keep up with Lee. As for the burger and steaks, I was just teasing you with that chart you got from elsewhere. In any case, there are some solid folks with good ideas here.

      • CB says:

        Agree, I3 – we love this place and our great guys. And just because I am not good at asking questions sometimes, it doesn’t mean I should stop asking them, right? : )
        as for: “I throw posts out there just to keep up with Lee.” -haha…now how are you gona do that, huh?…nobody can possibly keep up with Lee, and that’s a fact Jack 🙂

  19. ronini3 says:

    Trying to get on the good side of you fine folks, /CC looks like it is in play..Don’t like futures? Its ETN is NIB.

  20. ronini3 says:

    BTW, I see a few were making fun of DeMark’s call last week, and they are switching sides now..DeMark is one week ahead of you flippers..

  21. ronini3 says:

    Hmm, I wonder where Bloomberg TV got the idea from..I still prefer Bloomberg over CNBC and Cramer’s shrill…

    • CB says:

      I3, you were first, right?..ur post is from 11:47 am and their video shows a time stamp of 4 hrs ago – so , yes, we understand ur slight irritation… it was a really funny idea I3! Hey, get ready… next time they’ll poach ur TLs..Yup, nothing is every really fair in life..ppl poach stuff all the time…life, huh ?

      • ronini3 says:

        I am not irritated. I thought it was funny..we are way ahead of everyone else! 🙂

      • CB says:

        yeah, that’s a good way to look at it…they could have given you credit, though.. 🙂
        wel,l if you were working in the media /ad/or film industry, you’d have to protect your ideas really well all the time because good ideas can make you $$$ (lots of it).

    • CB says:

      ooops, typo,…nothing is ever really fair in life

  22. thebbliss says:

    Thanks for the excellent analysis Tony! I like the Minute iv triangle way better than the pattern of irregular flats noted this morning.

  23. wednesday’s short term indicators/systems:
    eliott PSTT: remains on buy signal.
    qqq indicator: +6, down from +8, remains on buy signal.
    smart money indicator: remains on -9, remains on sell signal.
    2faced longs 0.52% loss today.
    2faced shorts: 1.67%% profit today.
    spy + 0.39%
    from 2013/01/11 2faced system of both longs and shorts is +5.27% vs. spy +2.84%.

    heaven and hell long term crash indicator: remains at +6 , no crash in sight.

    shorting the following stocks at wednesday’, osis,rimm,meip and scss in the high risk folio for a 5% allocation in total.

  24. radrian6 says:

    For what it’s worth, the RUT looks like it has already committed to the Minor 4 correction. Tony pointed to 1498 as critical support for SPX — the comparable level on the RUT is about 902.60 and that was easily taken out today.

    The September high for the RUT was 868.50. A 38.2% Fib retracement from Monday’s peak of 907.91 would be 877.28; a 50% retracement would be 867.82. There are open gaps near 882 and 875. There seems to be a confluence of potential support around 870-75 and assuming we are in Minor 4, that’s a likely target for the RUT.

  25. rc1269 says:

    good stuff maestro – appreciate it!

  26. hi Tony, looking at future after hour. we may be hittiing 1498 tommorow if we do ,then 30 points drop from 1498 or from 1510 ?

  27. torehund says:

    Looking at the macd from 2000 this lost decade plus 3 years is one big ABC, where the C is a little bent. Japan broke out of their large ABC decline in Nov, now its US turn to break out. Brand new wave one should be a monster.

    • laralda says:

      Japan has endured years of deflationary pressures and in November 2012 fired up their printing presses – really had no choice as 50% of their outstanding debt was set to expire in the next 3 years. They are in the very early stages of their own QE program – the US markets have nearly exhausted their options.

  28. ronini3 says:

    Hey Bloomberg Business TV is following this site….

    RE: China’s air pollution and that Spaceballs Perri-Air Clip??

  29. mokiepon says:

    Great Update, Tony! Thank you very much!

  30. leelee64 says:

    Thanks Tony
    FB down 10% now up a little… U guys and that easy button.
    There’s no whining in trading !?!
    It’s all urs folks until I get the BATCO.

    • rc1269 says:

      posted to Tuesday, in case you don’t skip back a day to relive old memories…
      it’s too high! what do you mean it’s too high?! so far… yep, she’s pulling an AMZN. only -1.8% now.
      somebody on the desk just said – “what to do with your FB winnings?” mighty chuckles.

    • CB says:

      ‘until I get the BATCO’ -good 1 Lee….he who laughs last….

  31. ronini3 says:

    This is not a top spotter..So pick your spot and mark your ticket “NOT HELD”.


  32. CB says:

    thanks Tony. this market needs a litle bit of this.

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