tuesday update

SHORT TERM: Volcker Rule passed, DOW -52

Overnight the Asian markets lost 0.3%. Europe opened lower and lost 0.8%. US index futures were higher, then lower, overnight. The market opened four points below yesterday’s SPX 1808 close, bounced around until 10am, then tried to rally. At 10am Wholesale inventories were reported higher: +1.4% v +0.4%. At 10:30 the SPX hit 1809, the high for the day, and then began to pullback again. At 1:30 the FED released: http://www.federalreserve.gov/newsevents/press/bcreg/bcreg20131210b.htm, and http://www.federalreserve.gov/newsevents/press/bcreg/20131210a.htm. At 2pm the SPX hit 1802, bounced to 1806 by 3:30, then closed at 1803.

For the day the SPX/DOW were -0.30%, and the NDX/NAZ were -0.15%. Bonds gained 17 ticks, Crude rose $1.15, Gold rallied $20, and the USD as lower. Medium term support remains at the 1779 and 1699 pivots, with resistance at the 1828 and 1841 pivots. Tomorrow: the Budget deficit at 2pm.

Yesterday the market opened higher, hit SPX 1812 by 10am, traded down to 1807, and then went into an 1807-1811 trading range for the rest of the day. Today the market opened lower, bounced to SPX 1809 by 10:30, traded down to 1802, and then went into an 1802-1806 trading range for the rest of the day. Not much going on this week, so far. Nevertheless, we now have either completed three waves up from SPX 1779, or four waves, depending upon your preference: 1796-1783-1812-1802 so far. While this market has churned the past few days it has been working through potential counts, and setting up for its next big move.

Short term support is at the 1779 pivot and SPX 1746, with resistance at SPX 1810, SPX 1818 and the 1828 pivot. Short term momentum spent most of today under neutral. The short term OEW charts remain positive with the reversal level now SPX 1802. Best to your holiday trading!

MEDIUM TERM: uptrend

LONG TERM: bull market

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

About tony caldaro

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128 Responses to tuesday update

  1. pooch77 says:

    Close on the lows and gap down should finish this correction as the rut daily is getting close.Hopefully it does not slap me in the face with gap up!

  2. buddyglove says:

    What time is the Stick Save ?

  3. Let`s face it. Primary 4 is here.

  4. mcmasoniam says:

    Before I start packing for our little outting at the farm, I thought I’d post this article. Thought it was interesting. Have a great weekend Everyone! M


  5. radrian6 says:

    Hello all,
    RUT has decisively broken its rising wedge support and tested the 50-day MA. The leg down from 1122 to 1102 is definitive and could be wave C to end the correction. 1102 is the 27.2% Fib extension of wave A — some traders react to the 27.2%, 41.4%, and 61.8% Fib extensions so those levels are worth monitoring. Also, the C=A target for this correction is near 1100.50 which is very close to price right now.

    Take note that RUT has broken its cyclical trading pattern so even though it may bounce from 1102, there may be a larger corrective pattern in process. When RUT broke below 1111.63, it confirmed a lower high but if it can’t rally back through that level, watch for more downside.

    • radrian6 says:

      Also note the daily lower Bollinger Band is near 1097 and just below is channel support. The channel support trend line is near 1095 and rising at about 2 points per day. This trend line is important because it has held every correction since April — if RUT breaks this line, there will likely be trouble.

      • ewtoriginal says:

        Your work on RUT has been excellent. The last time I pointed out the trendline break was Nov 20.and the reversal was extremely sharp.I didnt expect it for numerous reasons,sentiment being one of the most glaring. But that was also in round 3 of the 8 round fight. Great read radrian6

      • radrian6 says:

        Thanks, EWT. There hasn’t been a threat to the RUT uptrend since the pullback in early October. The bears are stretching things a bit here and it’s a bit surprising considering the seasonal bullishness. It wouldn’t take a lot more downside to tip the scales. RUT has reached the C=A target so I would expect a bounce — if the bounce can’t work past 1108-1112, the uptrend may be done.

      • moo42 says:

        radrian – really appreciate your work. Would you short at a break below 1097?

      • radrian6 says:

        All we have so far is an a-b-c to the target area of 1100. If a larger correction is underway, we should see a retracement that rolls over at key resistance — possibly 1111.63, 1119, or the 50% Fib retracement of the a-b-c. I am seeing some +div on my 15-min charts so RUT may bounce from 1100. You can watch the way the retracement reacts as it reaches those resistance levels mentioned above. I can’t advise you on trading but the conventional wisdom would be to short the RUT as it rolls over from resistance and place a stop just above that resistance.

      • gokalg says:

        Thanks for your update on RUT. From OEW which wave we are in labeling wise.

  6. IMO we are in wave 2 up, with wave 3 down to follow taking us to 1763-1758.. best of luck

  7. RDC says:

    Buy TNA as much you can right now!

  8. lunker1 says:

    anyone pondering that 1814 was Int III?

  9. mjtplayer says:

    R2K excellerating lower, weakest of all major indicies. Rising wedge broken, the low of 12/4 undercut and a “lower high” has been made – all bearish. Next stop is 1,075 and eventully R2K down to R1K

    • lunker1 says:

      no major alarms until two closes below the Nov 12 TL right?

      • mjtplayer says:

        First alarm was a lower high then breaking the Dec 4th low, which also breaks the uptrend line from the Oct low. Next alarm would be a drop below 1,096 – the mid-Nov low but more importantly the uptrend line from June. After minor levels give way, the real test is the 1,075 area, the early Nov low but more important it’s the uptrend line from the Nov 2012 low. This is the must-hold level!!

        I think 1,075 holds, for now. Once/if this uptrend line breaks though, it’s game over:


      • lunker1 says:

        That would be November 2012. The one year trendline

  10. pooch77 says:

    Watch the daily chart on iwm for bottom,still has more down,going to be nice spot to go long

  11. Sorry, a close under 1780, not 1700

  12. A close under 1700 this month is a warning that a correction is probably underway. See the possible triple top formation with a horizontal neckline around 1700.

  13. 777daimon says:

    why do I feel that in this market a bull can easily turn off the pc/laptop and go outside for a walk (having long positions) , but a bear in the same situation (market action today) will stay really “glued” to the charts?
    because it’s a bull market ?!? Oh , yeah..that’s the reason.
    I’ll be out for a walk🙂.
    Enjoy the show and close the shorts – you’ll avoid crying the next few days!

  14. pcskier says:

    I could be wrong about nflx. I would not short it until it makes a lower low on daily charts, stop loss, and would start small and add as direction is confirmed.

  15. pcskier says:

    Thanks, I’m looking for the Willshire 5000 to drop 500 points from now before the next bounce. The rich will taking profits before the fed meeting. Momo stocks will get hard in the next couple of days. MU started today, nflx should get hit really hard tomorrow, it hit resistance this morning and should fall tomorrow.

  16. mcmasoniam says:

    Tony, DJI seems to be holding onto more value than SPX during this drop. Perhaps trifurcation straightening itself out? M

  17. jmoptions says:

    RUT has significant down today. Broke the lower wedge trend line. Not good for bulls.

  18. Lee says:

    Good call Radian6 , gto and peskier
    #3 adios

    • bobhopium says:

      Yes Kudos indeed.

    • tony caldaro says:

      Amigo Lee posted:
      2013/12/10 at 10:08 am | In reply to tony caldaro.
      short into the teeth of 3 of 3 of 3 of 3 of 3 ?????
      It’s a cheap one!

      • 16golfer says:

        I was already short and enjoying the fruits of my trade this morning. Just closed it out and not gonna get greedy. Will reload later.

      • uncle10 says:

        Nice calls again! Lee, HD, and CN all get short the same day…. I would imagine when that happens the odds are very high it is a good trade ( at least short term). Thanks!

      • 16golfer says:

        Lee, HD, & Piker are men of few words…but when they talk, I listen. They have earned their stripes and don’t need to comment about every little nuance of the market. I appreciate that.

  19. pooch77 says:

    Radian6,i take your a left coaster as you post later in the day.Small caps going down as planned .Looking at 1100 as bottom.

  20. bobhopium says:

    The future looks flushed out imo, watching carefully here for a low. GL to us all.

  21. Lee says:

    60 min SPX EMA 89 1797.93
    Daily EMA 13 1797.47

    quiet as a mouse here

  22. mjtplayer says:

    S&P 1,750 here we come…

  23. mcmasoniam says:

    Want to post this link because I think it important to recognize that The Average Person is literally ‘scared’ of large sums of money. Not only do they not know how to handle it, or have a plan, they continue to repeat the same mistakes over and over. This time, is NOT different.


  24. 777daimon says:

    Kudos to McMason!
    In a post last week she noted correctly that this week will be a lower one and after that 1860 level will be the target for the year end period!
    Mega-Kudos to McMason!

    • Thomas Crown says:

      You can already assess that her forecast for lower prices for the entire week is correct solely based on the first two days of the week ?
      You must be a psychic.

      • 777daimon says:

        Must be that, ain’t it so?!?🙂
        Or a very intelligent person.
        Next week is FED meeting and also (if I remember ok) OPEX week for december.
        So the script misght vbe this one: a sideways with some downside aroma for this week (like Mc Mason said) in order to obtain maximum bearish excitement and next week … BANG! no taper (just like Williams CONFIRMED! few days ago…) and some bears caught before OPEX ….. then Christmas rally….. and a Bradley turn on 1st January 2014 (+/- 2,3 days)….

        .. very hard to figure it out, isn’t it?

      • 16golfer says:

        Opinions are like a part of the human anatomy. Everyone has one.

      • tommyboys says:

        Golfer – bump!

    • buddyglove says:

      777, You think strategically like a Chess player…I like your style, good luck.

    • mcmasoniam says:

      777, I appreciate that you at least read my opinion, whether right or wrong. I’m HOPING to see a retest of 1779 pivot before FOMC, as that would really encourage Main St. to put their money into mut. funds (which is all they know to do) in a big way for a nice YE Rally. Don’t know if it will happen, but need a bit more pullback as enticement. Once YE Rally is done, AND, most of earnings are done (mid to last part Jan./1st part of Feb.), I think Big Boys pull the plug (P4), and The Average Joe will get caught investing at the top yet again.

      It would be nice if the markets actually performed as I expect. This rarely happens, 777, but, as the current joke goes: This time, it’s different. LOL!

      GL to All, and have fun! M

      • You seem to be on the right track McMason.Market looks primed for a C wave of some degree after the recent lower high, but after it completes the Grinch will have to grow his hearth three sizes that day and go long. I am looking for 1775 by early next week (maybe sooner) then a reversal higher. This would look like a pullback to the 13 week ema. The weekly is an interesting 3 week tight flatline. If that move back up and can’t put in a new high then the bears may really have something brewing, but let’s see it when we see it.

      • mcmasoniam says:

        2-sided, as you said, I’m HOPING for another test of 1779 pivot area, which I think will hold. Unless Fed announces tapering, spx could add as much as 100 pts from FOMC through 1st week in Jan. Not saying it will add that much, but it’s possible… However, lookout for the P4 drop that’s likely to follow after that run-up. GL All! M

      • ewtoriginal says:

        It appears that the diminished POMO in the next two weeks will impact light selling.100% of person expect one of the following:
        1. A Santa Claus rally starting the last 8 trading days
        2.A maximum downside of 1750.. but barely and only if 1779 gets tested
        3. A tiny amount or no taper at all feeding a rally into OPEX

        No one thinks that the long standing and tired bull who has hammered the bears with help from big brother can fall. No one thinks this is Round 7. I’m still not sure

    • mcmasoniam says:

      Opening the door for us ‘little people’ to come rushing in with our YE mut. fund money. Might be a Flush and Bounce shortly, if not already. I have to stay and watch. M

  25. $SPX $SPY $UVXY $NUGT $AAPL $TSLA $FB, market update and trades for wednesday: http://standardpoor.wordpress.com

  26. hucky2 says:

    The Asia/Pacific indexes are all red & Nikkei, SSE & HANG SENG down over 1%
    Looks like more weakness before the uptrend continues.

  27. torehund says:

    Only real cure against collective world depression, is depression, nuff said.

  28. torehund says:

    We are currently MAYBE all in a collective depression, compared to loans and debt; and to correct that deflation to approachable levels the indexes may just had to double fro m´here. Or we choose to deflate from here and nothing is ever possible, it s our choice-

    • mcmasoniam says:

      We are currently MAYBE all in a collective depression, compared to loans and debt; and to correct that deflation to approachable levels the indexes may just had to double fro m´here. Or we choose to deflate from here and nothing is ever possible, it s our choice-

      Very interesting assessment of the situation, tore. I give you snaps for using the “D” word. I don’t think it’s fixable via the markets, and I’m not sure we have too much choice in the matter, but very interesting angle nonetheless. M

  29. pooch77 says:

    So why are futes up?budget deal?

    • pooch77 says:

      SHORT VERSION…A cross-party Congressional budget committee convened after an October government shutdown has reached an agreement to fund federal services.

      The proposed deal finances the government for two years and reduces the federal deficit by $23b (£14b).

      It also avoids another government shutdown on 15 January when government funding is scheduled to run out.

      The new deal “cuts spending in a smarter way,” Republican Congressman Paul Ryan said on Tuesday.

      Continue reading the main story

      Start Quote
      This agreement doesn’t include everything I’d like – and I know many Republicans feel the same way”
      End Quote
      Barack Obama

      US President

      The budget deal also offsets $63b in previously enacted automatic military and domestic spending cuts triggered in January when Democrats and Republicans failed to reach a budget compromise.

      Mr Ryan and Democratic Senator Patty Murray, the respective chairs of the House and Senate budget committees, were called on to reach a cross-party budget deal in the wake of October’s partial government shutdown over federal spending.

  30. torehund says:

    sorry about all my postings, but when I get emotional I am usually right (and to our common benefit). So all the fuzz may be doing some good to all on board. Angry bull, lol.

  31. Thanks Tony.
    Rest all……BIDU got a great follow through day today after it broke out yesterday. If my EW counts posted yesterday are playing out then this should go to 200 in 4 to 5 weeks. GL with your trading.

  32. Jennifer says:

    Thanks Tony🙂

    U.S. stocks drop on Fed tapering expectations

  33. some observations on my EW counts. Dax is bearish could get hit very hard. Swedish market also looks like its heading to down fast. That’s my over seas view. As for US markets I don’t know anybody who can make a count fit or work its straight up no matter what

  34. bouraq says:

    Russell2k trapped:

    • mharrison60 says:

      I appreciate the FTSE update.

      In your study of elipses how important / powerful is a move outside relative to similar move outside of channel? I understand resistance with channels but elipses are new to me.


      • bouraq says:

        Ellipses are new to me too. I noticed them last month and made several posts on them. As far as I can recognise they are not always topping patterns, however when they are the drop is very severe. I found a large ellipse at 2007 top which took 9 months to form and also a massive one on DOW which you can find in my past posts. The FTSE ellipse is exemplary, a perfect pattern and I think it will deliver.

    • torehund says:

      Ftse leaning on 2 pos divs on price, think we are at a bottom here even if it looks like a top. WELL MARKET PROVE ME VRONG.

    • torehund says:

      ..and on gold it looks like the C down is not fulfilled. After that its a lot more serious, think the latest move in gold is just squeeze.

    • RDC says:

      Thanks Bouraq.

    • mcmasoniam says:

      Oops, one more post for bouraq… Great rut chart and info! Much thanks, M

  35. attitude928 says:

    Thanks radrian6. I got confirmation of a downleg for TNA today. http://instigator928.blogspot.com/

  36. radrian6 says:

    Hello all,
    RUT has broken below rising wedge support but not decisively. If RUT is leading the way into a serious correction, it must now work its way below 1111.63 to confirm a lower high. There are pullback targets all over the place from 1105 down to 1090 and a resumption of the uptrend could start from just about anywhere.

    I don’t have a “feeling” one way or the other with regard to this being a correction or just another routine pullback. However, RUT has broken the cyclical trading pattern established early in the year and repeated many times throughout the year — with the pattern broken, you can throw expectations out the window. All that remains is to watch the price reaction as RUT encounters each support level. Start with 1111.63, then 1109. Fibonacci-related pullback targets are at 1102, 1097, and 1090. The 34-day EMA is near 1113, the 50-day SMA is near 1105 and the daily lower Bollinger Band is near 1096. All the corrections this year at least tagged the lower BB so the real test may be there.

    • torehund says:

      RAD: lot of diminishing abcs all the way from wave major 2 bottom; what if 3 of 3 hasn’t started yet, and it will take rut immensely higher, what if the wave major wave 3 we have been following was just an upwards sloping correction. What if growth is back for good and will be with us until the FED THINKS TAXATION COULD BE BIG ENOUGH TO DENT THE HUGHE DEFICIT. Lets see.

      • radrian6 says:

        What if you try some decaf? Tore, the RUT has gone up 400 points in 13 months without a correction. The bull market is 56 months old. A number of long-term cycles are topping. You don’t buy an index after a 50% run up, you take profit. If you’re so anxious to buy, why not wait for a legitimate correction?

      • buddyglove says:

        rad said :-
        What if you try some decaf? lol.

    • RDC says:

      Thanks Radrian. Nice work. I will buy RUT when it gets in 1105-1090 range..

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