tuesday update

SHORT TERM: another gap up and go day, DOW +128

Overnight the Asian markets gained 2.1%. Europe opened higher and gained 1.6%. US index futures were sharply higher overnight, and the market gapped up at the open to SPX 1680. The rally continued until 11:00 when the SPX hit 1684. Then after a pullback to SPX 1678 by 11:30 the market worked its way higher again. Heading into the close the SPX hit 1684 again, and closed there.

For the day the SPX/DOW were +0.80%, and the NDX/NAZ were +0.55%. Bonds lost 17 ticks, Crude dropped $2.25, Gold slid $21, and the USD was flat. Medium term support rises to the 1680 and 1628 pivots, with resistance at the 1699 and 1762 pivots. Tomorrow: Wholesale inventories at 10:00.

The market gapped up again today for the fourth time in the past six trading days. Today’s gap up took the SPX right to the OEW 1680 pivot, and then into its upper range. This rally is now pushing the limits of an Intermediate wave B counter-trend advance. This type of B wave activity has occurred before in previous corrections during this bull market. And each time, it has forced a closer look at the wave patterns.

After reviewing the charts we are maintaining the current count. But are now considering, as an alternate, a potential irregular Int. B wave in the SPX or that Major wave 4 ended at the recent lows in the DOW. The market has now hit one of its many inflection points during this 4+ year run. Should the SPX clear the OEW 1680 pivot range (1673-1687) these alternate counts would gain in probability.

Short term support is at the 1680 pivot and SPX 1658-1667, with resistance at the 1699 pivot and SPX 1710. Short term momentum hit extremely overbought today, then ended the day with another potential negative divergence. The short term OEW charts remain positive with the reversal level now SPX 1661. Best to your trading!

MEDIUM TERM: downtrend

LONG TERM: bull market

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

About tony caldaro

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384 Responses to tuesday update

  1. budfox9450 says:

    IMO – the SP500 is now into a level of high risk. That is not
    to say the SP cannot go higher, just that the high range in
    price is in view – 1750-1640. The AGET long term oscillator
    is now displaying a negative divergence pattern in the daily
    time frame. Social media plays, like FB and YELP, etc…
    Are geting a lot of attention. This appears to be a growing
    fad market, not ready to pop yet. Give it 6-8 more months.

    I am in cash – comfortable there, for now…..Bud

  2. daking66 says:

    close above 169.07 SPY. SPX above 1687. still need follow thru.

    pay attention shorts. fat lady warming up in the back ground

    BIIB broke out today…nice fat base..volume low but came on strong on move above pivot…stock in leading group IBB…need to follow thru tomorrow
    BIDU broke out on of flat base…big volume
    FB closes at new all time high
    ARMH…setting up a nice big base — will def breakout sooner or later…they are in AAPL new product
    many more

    these USUALLY dont happen before a major mini crash to below 1600 SPX. But who knows.

  3. blackjak100 says:

    We got the close above 1687 and a 7th green day in a row, but did not get to 1692? What is with the last min ramp everyday now?

  4. Has anyone stopped to wonder if MAJOR 4 was 1560…. and we have been in MAJOR 5 ever since??? I HAVE>…..

  5. I’ll help some of you out with this I reckon

    Study this chart VERY VERY Carefully… it has all you need to know


  6. Erka11 says:

    This is amazingly relentless. Not even a few points pullback in the last few sessions. And the European indices, after hour, are still pushing higher past their highs of their respective main sessions ! This is madness given the current risk environment, both from the FED and geopolitically. As if risk had suddenly completely gotten out of fashion.

  7. A lot of folks here grasping at any small bearish tidbits they can find (no disrespect intended) but if we really look at this mkt objectively, then I think our shorts are dead in the water. Now looking forward to Tonys alt wave count and I am sure thereafter it will all make sense….GL to all.

  8. ariez5 says:

    Anybody else think TLT is a buy? Maybe rc1269?

  9. rc1269 says:

    for anybody curious, the 49bn VZ bond deal was a completely mispriced blowout. the long bonds are up 7% in price in secondary trading. the front end bonds (3yrs, 5yrs) are anywhere from -50 to -75bp tighter. that shouldn’t happen. i’ve got to imagine that VZ mgmt might be a little peeved with their bankers for paying about $200mm more in annual interest vs where the mkt is pricing debt in secondary.
    everybody was underweight or short the credit heading into the deal. issuer/bankers got scared they might not be able to place all the debt. now you have everybody scrambling for bonds in what will be by far the largest index component. oopsie. entertaining day. this deal just made my year. literally.

  10. Does anyone else find it interesting that the small and mid caps are down?

  11. gtoptions says:

    $DJI @ or near 61.8% retrace. Would think that would be a more logical Int. B, if that even matters now.🙂

  12. Tony,
    I have faith in you. C is coming.

  13. rc1269 says:

    i hate to be all debbie downer but when i look at the spx chart since the march 09 bull began this just does not look like an impulsive move/beginning of new wave higher to me.
    there hasn’t been one instance that i can see where we’ve had a meaningful low that didn’t come with a sharp selloff followed by a spike up rally.
    this ‘low’ lasted for 4, almost 5 days. the mkt does not usually give you that long/that many chances to buy a low. IMO.
    the only other instance that looks structurally similar to me is june 2011. feb 2010 is close, but the setup/structure/path looks too different to me

  14. House leaders are delaying the vote on the US spending until next week… A bit more time for the market to run wild?

    And they want to defund the healthcare, (without any political opinions here) this would signal a long battle ahead, but in a week or two.. this is how ‘they’ render September options worthless?

  15. H D says:

    no answers, just some potentials http://t.co/0hBvNKBQ2n

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