wednesday update

SHORT TERM: no taper market makes new highs, DOW +147

Overnight the Asian markets gained 0.6%. European markets opened higher and gained 0.2%. US index futures were higher overnight. At 8:30 Housing starts (891k v 896k), and Building permits (918k v 943k) were reported lower. The market opened one point above yesterday’s SPX 1705 close. The market pulled back to SPX 1700 by 12:30, and then started to drift higher ahead of the FOMC statement at 2:00: The market then spiked higher on news of no QE tapering. By 3:00 the SPX made new highs hitting 1729, dipped to 1724, then closed out the day at 1726.

For the day the SPX/DOW were +1.10%, and the NDX/NAZ were +1.15%. Bonds gained 47 ticks, Crude rose $2.50, Gold jumped $54, and the USD was lower. Medium term support remains at the 1699 and 1680 pivots, with resistance at the 1762 and 1779 pivots. Tomorrow: weekly Jobless claims at 8:30; then Exiting home sales, Leading indicators, and the Philly FED at 10:00.

The market opened quietly today, as it has since early Monday. Then at 2:00 the fireworks began as the much anticipated QE tapering was not announced. On the “stand pat” news the markets soared to new all time highs. Inflection point resolved. Our preferred count is that this uptrend is Major wave 5 of Primary III. This is the count that has been posted on the DOW charts. There is an alternate count, which is much talked about on the blog, that is even more bullish. Once we have had time to review the charts we will comment further.

Short term support is now at SPX 1710 and the 1699 pivot, with resistance at the 1762 and 1779 pivots. Short term momentum ended the day quite overbought. The short term OEW charts remain positive with the reversal level now SPX 1691. Best to your trading on post FOMC day!

MEDIUM TERM: uptrend

LONG TERM: bull market


About tony caldaro

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301 Responses to wednesday update

  1. joma11 says:

    To the vegaguy that said Tony is a fake.

    I have been following this blog since its inception andI have never written a comment. Morever I have no need to defend Tony, he can do it himself.
    But I think there are some things to point out from my side, its my personal opinion and belongs just only to myself (disclaimer). I have been working in markets since 1989 (in diferent assets). You can be agreed or not with tech analysis, EW, Lindsay cycles, Kondratiev……But what I realized, is the most difficult thing in my career was finding people with “No bias”, bull o bear. It is human to have a bias. Probably the FX traders are thee ones with less or not bias at all, their change their mind in seconds.
    And that is exactly what I like from Tony in his EW, he can be right or wrong but 99% of the time he inot having a bias. Second, in the different organizations I have been, average ratio of right against wrong position was 60% even the best traders I saw and Knew really good ones had more or less this ratio of accuracy. You know the secret to make money?, Management of p&l, the good trader made a lot of money even double up the winners with the rights, and when they were loosing with the wrongs the cut positions right away.
    I see EW as another tool, useful sometimes, but nothing is the wholy bible, flexibility is the name of the game. The way you use it is another story.
    with Respect I think you are confusing wheat with chaff.
    As I see (personal opinion) you´ve got bias, and you made money in bull markets good for you. And with all respect you didnt say anything about performance in bear ones. But again that is not the issue. The important matter is to use EW as a tool, managing P&L if you trade based on any method and on top of that, respect the markets and the rest of the people. Markets never ever are wrong or mistaken, we are the ones making the mistake.
    Tony the other day I understood you said tha bellweather for you in Europe is Footse, I disagree for me it is Eurostoxx 50 (the most liquid future), or Stoxx 600)
    Best regards.

  2. budfox9450 says:

    From Bud – Free 9/21 – Weekend, SP500 BoYu Charts.…..Thank you Tony.

  3. bcm52 says:

    Question, does anyone know how on the SPX daily chart, the 1762 swing level was calculated? Thanks in advance!

  4. jparkins10 says:

    Ghostine’s latest, worth a peek:

  5. Tony,
    Many thanks for the work, pivots are spot – on!
    And the 1680 inflection point was highly accurate.

  6. CN aka Big Up!
    Many thanks for the links to Wyckoff’s original trading course.
    And for the crash course in tape reading, I like it a lot.
    Keep rolling!

  7. lunker1 says:

    if 1730 was w3 from 1641 then w4 targets
    23.6% 1709
    38.2% 1696 (previous 4?)

  8. Tony,
    Is there any chance V could have topped at 1729 and Peter out like minor 5 did? Thanks

  9. johnjo12 says:

    IMO the Dow/s&p are going to end in a series of quick 4th & 5th waves giving a rising wedge look so the market could top by the year end. The fed seems to have lost all credibility as QE has been running for 5 years and the only thing we have to show for it is a high stock market as Main Street continues to stagnate. Think rising yields on treasuries will be the straw that breaks the camels back.

  10. Leetired says:

    Well all righty then
    SPZ gave ya 10 so far
    Nice call H D and I’ll keep a look out for the next unicorn
    CL traded back to yesterdays Fed blast and I’m watching the grains and Ukrainian girls.
    Nobody likes to get called out for an opinion so try and play nice folks

  11. oneandonlyuniverse says:

    Gold feels like a bad short cover to me…Any thoughts??

    • tony caldaro says:

      looks like it too, but no thoughts at the moment

      • oneandonlyuniverse says:

        Thanks..great guidance at that 1200 and 1420 level…I am fading it here, do tell if you have a thought in the future. I think the $GDx get a $23 handle and spot trades $1234.

    • Yes, as does AAPL. AAPL even moreso. Classic 3 up days short cover. I would expect it to top out and fail at the 475 pivot area, but we’ll see. Gold has been going down with stimulus for a long time so even keeping the stimulus wouldn’t be enough to sustain these prices IMO.

  12. tony caldaro says:

    Can you get it through your mind this blog is not about you, or me, or others.
    It is about helping other people.
    Your constant posting about the past and momentum stocks is helping nobody but your ego.
    Please stop wasting our time with this noise.
    Either contribute or leave, thank you

  13. lunker1 says:

    66 this isn’t a chat board. please post your market and stocks view once and if something changes then post an update. no need to cheerlead and I told you so every day. you look silly with pom-poms.

  14. kloutt says:

    long term outlook …note the channel resistance ….this is the reason for the bearish short term outlook

  15. Tony,
    Just so we know, is it ok to post comments on the charts of other things you track on stockcharts besides the broad market as a whole, or would you rather we didn’t do that? You know, like AAPL, gold, etc. You do a lot of great chart analysis besides SPX and the DOW and it is helpful to discuss it, but if it’s a problem please let us know and I for one won’t post about them.

  16. wits2013 says:

    Guys,i havnt seen all posts,but is it possible or probable that the high in early June at 1680 ish could be int 3,then a expanded flat int 4 ending at 1627 end August,and busy with int 5 atm to end Major 3?

  17. tommyboys says:

    Concur…has been and will finish a strong 2013 equity market.

  18. tommyboys says:

    Looks like boring bullish consolidation so far…we’ll know in a day or so.

  19. The blog I mentioned yesterday has some great info today. I think everyone could benefit from reading the Fat Pitch. Tony not an OEW site, I hope it’s ok for me to mention it. I think Ukarlawitz is a former student of yours.

  20. kloutt says:

    TonyC et al here is a chart of the recent POP to new highs predicted by Peter Ghostine … FYI peter is now calling for profit taking at the 1721 level and his upside TGT is 1821-49

  21. rc1269 says:

    no follow through in credit today (or UST for that matter). seems like everyone is jumping up to hit the bid as fast and hard as possible.
    that, my friends, is not bullish.

    • rc1269 says:

      when i see no follow through in UST move and guys hitting the bid in credit it tells me, “i don’t really care that we’re getting more QE the trend is changing and/or the economy is getting worse so i’m going to continue to move from one side of the boat closer to the middle. i was just wrong for a couple months and dang it hurt. not gonna happen again.” which of course means it might begin happening again very shortly

  22. rc1269 says:

    some good stuff on the blog today IMO. cheers everyone and thanks for the contributions. interesting times

  23. Got zero comment on this earlier, which in itself is bullish…looking to buy into weakness.
    Ttt from below :-This chart pattern,although not new has not been up for a while, and as we are so close to the top of it, I thought it deserved some merit. Of note is the 16000 big round number pulling traders like a magnet and the neg div. I hope this is useful to others and it would be interesting if this had any ewave significance…Good luck.
    Dow weekly with megaphone pattern :-

  24. tony caldaro says:

    Due to the enormous amount of comments.
    It is difficult for me to sort through the noise to reach the questions.
    Please refrain from posting the same thing, with a slightly different view, over and over again.
    Readers will just skip your post once they see your name.
    And also stop promoting your “book” by posting about individual stocks.

  25. daking, you are posing too much. PLEASR LIMIT YOUR POSTS.

    It is hard to follow the blog that way!

  26. pio27 says:

    MR C
    since wave counts have not worked and charts dont mean anythng. I asked my grandmother to give the market the Malocchio. maybe that works

    • LOL! I was just saying this very thing to my husband this morning — trendlines don’t work anymore, oscillators don’t work, wave counts don’t work. Market is now a casino … and I’m not a gambler, so I’ll sit on the sidelines for now.

      • daking66 says:

        jedi, there is only one method that works. its trend trading via breakouts of big bases in growth stocks. i am living proof.

        just follow some of the stocks i mention breaking out of big bases.

        spend time working on building a mental database on what is good action versus bad.

        dont give up.

      • daking66 says:

        as for EW, i have great respect for Tony … i just think it would be better if expectations were confirmed by group and stock action.

        but when you think about the latest miss. i never figured out why people were so amped to short the market. we were still in a bull mkt. corrections lead to better risk reward setups for individual stocks — just sit tight and watch for the right setups.

    • tony caldaro says:

      Expected the SPX to drop to 1540.
      It was my bad call. The market did something uncharacteristic.
      Waves are still unfolding in this bull market.

      • pio27 says:

        Mr C
        I try to make like of everything. I love your work and respect you. Market can always do something out of character. But since I am now short I figured I would try my grandmothers Maloccio. LOL maybe we see 1560 after all

      • Tony, don’t blame your self for the market doing something else than you thought it would. Isn’t that exactly how the market works!? If we knew all turns 2-3 steps ahead of time all the time, the market wouldn’t work. Many called for 1500s. Only the “told you so’s” said it wouldn’t AFTER the fact… hindsight is 20/20…

        Yes, you’ve had a serious winning streak of good calls, one bad call is totally OK, expected and acceptable. We just move on and see what this waves will do.

        Thank you for all your insights, work, patience, and respect! I need to catch up on my lessons!

      • manunidhi21 says:

        Namaste Tony !

        It wasnt your bad call at all. You wrote that if SPX crosses 1680 we need to see seriously..
        Things have changed a lot from 1642 pull back intra day, Summers withdrawal, Fed no taper.
        So let us move ahead..what may be the expected high and a following 10 % correction..

    • tommyboys says:

      Ridiculous comment. Charts work you’re just biased and looking at them upside down. Change your thinking and wah-la, they work. Wave counts also work – you just have to have the right one – there in lies the challenge.

  27. daking66 says:


    had the HIGHEST volume day EVER yesterday!!!!!

  28. blackjak100 says:

    BKX down 1.5% Today and did not make new high. Hmmm…led us up all the way and now has been laggard for last 2 months. Fits nicely with being close to the end of a move rather than the beginning

    • daking66 says:

      thats bec they trade banks like w view of the yield curve. curve flattens they sell banks curve steepens they buy. its stupid but alot of people on wall street are…we r just small ships in the ocean.

      longer term banks move with the economy…jobs.

  29. daking66 says:

    TSLA…last week i said it was setting up for swing trade up…held tight to 20dma…new high today

    FB…new high now past 45

    dont mess with big leaders on short side.when they are in strong uptrend. you get the horns and more!!!

  30. daking66 says:

    dont forget ULTA FIVE

    ULTA moving out hasnt given us a good pull back…stay on the stock

    FIVE…secondary provides oppty…

  31. daking66 says:

    GLD GDX SLV….looking to buy. hope it retraces to 50dma

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