wednesday update

SHORT TERM: DOW weak – SPX stable, DOW -68

Overnight the Asian markets gained 1.1%. Europe opened lower and lost 0.2%. US index futures were lower overnight, and at 8:15 the ADP index was reported higher: 238k v 215k. The market opened three points below yesterday’s SPX 1838 close and continued lower. After about 15 minutes of trading the SPX hit 1831, and then started to rally. At 10:30 the SPX was back to yesterday’s 1840 high. But then again started to pullback. At 1:30 the SPX hit 1835, bounced to 1839 around the time the FOMC minutes were released:,  then started to pullback again. At 3pm Consumer credit was reported lower: $12.3bn v $18.2bn. Around 3:30 the SPX hit 1832, then bounced to close at 1837.

For the day the SPX/DOW were -0.20%, and the NDX/NAZ were +0.30%. Bonds lost 20 ticks, Crude dropped $1.10, Gold slid $7, and the USD was higher. Medium term support remains at the 1828 and 1779 pivots, with resistance at the 1841 and 1869 pivots. Tomorrow: weekly Jobless claims at 8:30.

The market opened lower today , dropped down to SPX 1831, then rallied back to 1840. At the high we noticed a short term negative divergence building, and noted it on the hourly chart. After that the market seemed to drift sideways awaiting the FOMC minutes. After they were released the market headed lower, then bounced into the close. We can count a three wave advance from Monday’s SPX 1824 low to today’s high: 1840-1831-1840. This could be all, or a large part, of Minute wave b. As a result we posted a tentative Minute b label on the hourly chart. If Minute b is done, the next objective, to continue the Minor wave 2 pullback, is for the market to drop below SPX 1824.

Short term support remains at the 1828 pivot and SPX 1814, with resistance at the 1841 pivot and SPX 1849. Short term momentum is displaying a negative divergence. The short term OEW charts have ended positive with the reversal level now SPX 1835. Best to your trading!

MEDIUM TERM: uptrend

LONG TERM: bull market


About tony caldaro

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159 Responses to wednesday update

  1. gtoptions says:

    Thanks Tony
    SPY ~ Still oscillating the WPP @ 183.35
    I SPY a bearish Gartley Pattern setting up on the 15 minute chart. Look for reversal to the downside near. 183.85.

    • 777daimon says:

      yes, wals like a duck, looks like a duck …. seems like an almost perfect bearish gartley … during the last 2 years saw this formation so few times…. in US capital markets I mean.

  2. When this correction begins it will be overnight and it will be huge, they have to trap the masses. Everyone’s finger is on the sell button, especially the big boys.. they love to gap the market and sell off into the volume and then continue to sell all day long but they also love to push the market up to give the appearance of more buying and no volatility. They pump futures and sell to the masses at the open, when market noticeably pulls back the masses start to sell or short, so they push the market up with higher bids and low volume to give the appearance of a continued uptrend. Once all their shares are sold they will gap this hard during futures and many will wake up in shock. The catalyst will be created out of any news they want to give you since the big boys control the media. There is no way this ends well folks. Too many I sound like a broken record, I know I will get some bs comments from buddy glove, valustr and maybe mcmason but so be it. Good Luck and God Bless.

  3. hucky2 says:

    I sell what I call very high probability options. Right now I have 96.5% probability of making 11% on the money at risk for the week.
    This is really great fun and very sound business for current market conditions in my opinion. I hear the frustration of the stock investors, but consider this, high probability options are much safer, less capital intensive & consistently pays me between 4% & around 10% per week.

    • uncle10 says:

      Hey Hucky, interesting! I am assuming you sold calls and or puts that are out of the money? So specifically what is your “trade”. Thanks

      • hucky2 says:

        When OEW gives high likelihood of sideways action I sell weekly condors with the shorts at 90% or less probability (or delta if your broker doesn’t supply probability).
        During fast up trending market I sell only the put credit spreads, but when the trend starts to calm down, I’m back to condors.
        Maintenance is simply watching the probability at end of each day if any probability approaches 22% I’m out on that side. or if the premium earned on one side was say 50c and becomes $1 loss then I close that side. But I haven’t had to close any side at a loss in the last 12 trades.

      • hucky2 says:

        That should read
        Maintenance is simply watching the probability at end of each day if any probability approaches 22% (of expiring in the money) I’m out on that side

    • gokalg says:

      Hi Hucky,

      Interesting strategy of selling premium during uncertain count and range bound market.
      I believe in this and have used this not weekly but monthly in the past. Will like to discuss more. I can be reached at Let me know your contact info so that we can share views on this strategy and its use in OEW. Thanks

    • perversionofthemean says:

      I’m an intermediate options guy, and *maybe* capable of spelling “condors” correctly, but probably not able to understand them adequately to trade/maintain them. Is there a simpler strategy?
      Somewhat related….I haven’t studied option prices during VIX extremes, but I’ve been wondering if at a crash low, do you think selling puts is more profitable than buying calls. They’re not opposites, I realize. I just don’t want to see my calls languish as premium is drained due to a falling VIX, and I would *want* premium to fall when short puts. My bullish alternative is to buy deep ITM calls, to avoid the drainage… Your thoughts?

      • hucky2 says:

        To make money buying calls you have to be right in 3 areas, Trend, IV & time remaining to get there. It’s designed to be to difficult in my opinion.
        Selling puts naked is only a good idea if you have virtually unlimited capital.
        When the market is range bound selling very wide condors works well until the market breaks out. Then if the trend is up and the market is comfortably above say a 20 day ma
        selling put credit spreads is good. I personally sell puts with a delta of 10 or less and buy 5 or 10 points away to limit risk (credit spread). If the market turns back down and the delta becomes above 20 exit or move out of the way.
        They say to buy options when IV is low, but again you have to be right in the 3 areas.
        If you do decide to keep buying calls, only buy calls deep in the money with a delta at least 70, when the RSI on Tony’s hourly SPX chart is very oversold and turning back up.(or similar setup for your chosen underlying)
        You’ll generally find way out of the money credit spreads less of a worry.

  4. llerias7 says:

    I think this is a “Cash is King” moment!

  5. ewtoriginal says:

    Not sure if the reason for the IWM ramp at 12.15-12.30 was stops at 114.50 and again at 114.70 level or attributable to some guy on CNBC who predicts employment based on his firm’s service on background checks. Either way, there is not much weakness or fear around. And that guys forecasting ability: He was off by tens of thousands on his prediction last month.His figure was high by 40k jobs. CNBC should keep bringing him back as long as his figures are stupidly optimistic because thats all that matters..Happy smiles and pipe dreams.

    • tony caldaro says:

      Average job growth over the past couple of years has been about 190k/month.
      Estimates this month are from: 185k to 197k … original right?

      • ewtoriginal says:

        Tony, there rarely is much originality in market forecasts which makes those detractors on your site even more humorous.Who do they follow, the standard strategist “The market will be up between 8-12% this year (EVERY YEAR)” ?
        On a more fundamental and horribly sad note, the venerable store chain Loehman’s, a right of passage to young New York women for three plus generations including all the women up and down the ladder on both my side and that of my wife, announced a LIQUIDATION today. Not sure who is more depressed:my wife and daughter or me with higher bills for possibly lesser quality forthcoming.

  6. uncle10 says:

    Valunstr, Thomas, TBoys etc. you are in no matter what. Why not go enjoy life and not worry about it? Why do you come to this site? I have asked this question a number of times and never got any answer. If it is just to poo poo EW/OEW or technical analysis or the thought of someone actually making money short term/swing trading whats the point?? Makes no sense to me? You guys know there are many on this board who have been TRADING well over 10 years and have crushed the market by trading. It is very possible to TRADE the market and far out perform the market even in a run away bull market, and people here have. You guys understand this right?? Hopefully someone can shed some light on why if you are in for the long haul no matter what the technical, OEW, or anything else then why come to a site like this??????

    • Lee says:

      Hey Uncle

      I’m guessing they come here because they’ve been kicked off all the online dating sites?
      I know the only reason I come here is for the chicks😛

    • mcmasoniam says:

      LMAO! HAHAHAHAHA! If they’re here for the chicks, they are really, REALLY desperate! LOL! Too funny! Thanks for the good laugh.

    • tommyboys says:

      Over decades of study and investing I’ve found EW to be a real phenomenon yet never had seen it put into consistent accurate action- until Tony. His sight caught my eye during its infancy. I come for his analysis and have tried to post only what my experience has shown me as the crème-da la crème in market analysis hoping to help guide newbie traders in their own analysis – names I wish I was privy to decades ago. There aren’t many (I’ve found) but there are maybe a dozen or so very good and successful (key)analysts. A few of the names I’ve been recommended to read by successful pros have included Gayed, Tepper, Santoli, Berkowitz & Grantham among others. I’ve tried to post relevant and timely opinions by these and others – and will continue for anyone that may find them valuable. What has occurred typically has been snide remarks and attempted debunking of these analysts by just a few but predominantly just one. Funny thing these pros have been right along and right off the ’09 bottom. Love to measure the debunker’s records against! What I’ve learned over the years – and looking back at my youth – is that ideology, some cynicism and ego is where we start..uncertainty, the recognition of owning very little knowledge and humbleness is where we end up. The most important lesson I’ve learned is that holding to constant ideological beliefs and cynicism (read ignorance – lack of experience not stupidity) regarding our government and markets will make you poor in the markets. Learning the way the world works and applying many variables of a sort of soft science to the whole thing can make you rich. I was ideological in school and too many years after – and it cost me – but lessons learned. Did well in the 90s and bailed on everything in 2000 calling for a complete meltdown due to Fed incompetence. Unfortunately I stayed in cash right through the ’07 top and missed that whole rally. It did save me in ’08-’09 but catering to accurate analysis got me long in ’09 – and Tony had a part in that. I don’t see any bear beginning this year and likely not next. After this we’ll see. You asked…

      • uncle10 says:

        Thanks Tboys, I am one of those that sometimes remarks about your posts because mainly they are about the “news” or fundamentals, or the economy. But, like you, I am trying to help people understand and not make the mistake of trying to make investment decisions based on “news”/ econmic data, because it will lead to bad choices—unless you do the opposite of what most people do –and sell when the “news”/ economy is doing really good and buy when the “news” /economy is really bad. I hope you don’t take me disagreeing with some of your stuff , as being a snide remark? You have been right for sure and congrats! Your “free money” call has been very good! Go SILC😉. Thanks for the reply.

      • ewtoriginal says:

        Santoli? Really? Is he a personal friend? He is a journalist

      • tommyboys says:

        Santoli is a Financial Jounalist/ market analyst – an analyst first. Check back his history for accuracy. He wouldn’t make my cut if he didn’t have an overwhelmingly accurate track record…

    • mcmasoniam says:

      Okay, I just snapped to the fact there’s more than a friendly joke going on here, so, Tboys, please accept my apology. I was just laughing and reacting to the chicks comment and nothing else. I like your blogs and info., even when we don’t agree; and you’ve been right on lots of calls that I’ve seen. Gotta go and hope you stay.

    • Thomas Crown says:

      You are completely missing the point Uncle.
      Who says we don’t enjoy life ? According to you, it wouldn’t be possible to enjoy life without embracing OEW ? Oh yes it is !
      According to you, we wouldn’t be serious traders because we don’t blindly trust and thus rely on a forecasting method that has proven time and time again how ineffective and random it is.
      What in my statement or Val’s would indicate to you that we ever disputed that one could outperform the market by trading “even in a runaway bull market” ?
      Why come to a site like this ? As far as I am concerned, obviously the entertainment value, the sheer amazement to see and read day after day the devotion of TC’s followers no matter how inaccurate and unusable his forecasts are for trading purposes. It’s a very interesting dive in the deepest corners of the human psyche that always remains fascinating. The need to believe, the need to look up to someone, the need to follow a leader, the need to seek constant reassurance, the need to be part of a crowd, the need to be heard, the need to believe one’s opinion actually matters, the need to help others. Reading this blog is a daily lesson in human psychology.

      • uncle10 says:

        ok. thanks…. i think? hehehehhe

      • tony caldaro says:

        Hi Emily Thorne/Erka1,
        I see you changed computers again =)
        Don’t you have anything better to do with your life?
        The regulars, and the majority, are here to help others.
        Your constant discouraging remarks only help your ego.
        Considering the names you have used: Erka, …Thorne, …Crown, it is not surprising.
        For your next post you will need another computer.
        So hop around at that Spanish Telephone company and trade with somebody.

      • 7dayyss says:

        Good one. I like when you get feisty Tony!

      • mmmiiikkkeee says:

        Tony, given the hour I guess you will not see this; are you sure that is Erka? As I remember it, Erka was not disparaging to EW in general as the post above is but to the concept of objectivity and confirmation. I certainly don’t remember any post of Erka’s, under that name, being insulting and stupid as the above is.
        In any case, I also like the feistiness

  7. gary61b says:

    The unemployment numbers r so not reality, they should have instead an employment participation statistic. This unemployment numbers reminds me of pouring water thru a slow drain colander, yep numbers r slowly going down but not true picture IMO. The truth usually gets in the way of a good story one is trying to portray

    • H D says:

      I don’t understand? Did they changed the formula recently or is it the same one they have always used to calculate intial claims? serious ?

    • H D says:

      Maybe it’s all an illusion, DOW 16,500, 45 months of private job growth, less wars, my house up 100K in value. Am I dreaming. Is Osama Bin laden still alive like Elvis?

    • mcmasoniam says:

      gary, I understand, and you’re right. It’s not good and this elevated level of prices and assets is temporary. There just aren’t enough good paying jobs to satisfy all the workers who’ve been chucked in the last few years, and JOBS ARE #1 for a Recovery, and we’re just not getting them in time, or at all. Even now, just simple math: 300K JC’s per week X 4 weeks per month – 1.2M jobs still lost per month. This is all a very bad scenario that will slow the economy to a crawl, once the absence of commerce, etc. are recognized, due to far less money being spent by the general populous. SIMPLIFIED: We’ve got another hard fall in the economy coming; not just US either, think it will be global and real nasty. Lots of people where I am retiring while they can, but they have good savings. Not so with long-term unemployed.

      • H D says:

        “promotions and discounts offered by U.S. retailers drove a 2.7 percent rise in holiday season sales despite six fewer days and a cold snap that kept shoppers from stores, retail industry tracker ShopperTrak said. Reflecting a recovering U.S. economy, retail sales between Thanksgiving and Christmas rose for the fourth consecutive year.”

        What was that about less money being spent?

      • mcmasoniam says:

        There is a cumulative effect, HD. I know it’s not showing itself strongly just now, but it will. Time is the factor. Bernanke held it off as long as he could, and Yellen will do the same. If I’m wrong, then, won’t be the first or last time, but I firmly believe we see another deflationary wave. It’s not just USA either. The trouble could start elsewhere, and cycle across the globe, which I think is likely. JMO. I’d love to see this Bull run on and on, trust me, I would. I can’t short my Roth 401k, or retirement fund. I NEED a Bull to make money.

      • H D says:

        Understand ur opinion, It’s a popular fear opinion. I just think it’s based on flawed data. We have net positive job growth monthly, not a 1.2M loss, and spending/ profits at all time highs.

        Bringing it all back to the market…. The market will discount a deflationary wave with price. When/ if we see that then we can look for real data to support a hypothesis for it. But it’s all speucaltion until then. :mrgreen: Peace all…

      • mcmasoniam says:

        HD, understand, I’m no a fear-mongerer, nor am I afraid. I’m prepared, either way. I’ve no doubt you have more expertise than I, so let me ask you this, and maybe I’ll have a better understanding and can put it to rest.

        What is the definition of a “First Time Jobless Claim”? Is this a claim being made by/for a worker as the first time he or she has lost a particular position? Or, are 1st Time Claims made repeatedly due to temporary assignments, etc? Unless it’s the 2nd choice here, then, to me, the number jobs lost per month is 1.2M. I don’t see a way around that.
        Simplify (Now you know why, uncle…)

      • H D says:

        Here is some data M.
        Again, you are only counting the loss, which is a very normal number historically 300K/Month, Net job growth last month was 238,000+. I’m not an expert on anything.

        Just say USA! it feels good

      • mcmasoniam says:

        HD, thanks, I’ll read it. But I’m not just counting the loss, I’m comparing the two to see if they keep pace with each other, and they don’t.

        Keep in mind, I hope you’re right, I really do. I don’t want to see any more people lose jobs, homes, retirement and go into ruin. it’s a terrible thing. Thanks again!

      • H D says:

        M, simplify. You r thinking we are losing 1.2 M jobs a month, 14.4M a year? for years? I will only refer you to Tony’s comment above.
        “Average job growth over the past couple of years has been about 190k/month.”

        I hope this is market related enough for some. I do think the numbers move the market. Over and out.

      • mcmasoniam says:

        HD, I agree w/Tony’s Jobs numbers. Say 200K per month? But what of the 300K FIRST TIME jobless claims per week? That was my question, without bias. How does the govt account for the 1M people who are still jobless for that month? It’s a question, and not meant to be a challenge, but I didn’t see the answer I was looking for on the link. Guess we’ll know soon enough. GL to us All.

    • mcmasoniam says:

      Hi gary. Out on the lawn w/my bucket BBQ cooking some ribs, steaks, then scallops & shrimp. (Shrimp direct from Gulf, fresh, not frozen.) Of course, with the ubiquitous very cold beer…

      You have some very good intuition on this one. Wish the ‘gold star’ could have been money, but I think earnings and JOBS are tied for #1 in importance from here on out. When the number from this morning is revised upward, even doubled it’s measly. Personally, I think we’re in big trouble. Deflation is alive and well, unfortunately. Have a great weekend!

  8. blackjak100 says:

    I’m here just not a lot to add. I went short at 1841 for a daytrade this AM. Looking for 1825ish today. I do think being long by the close will be the right trade assuming we hit 1825ish.

    Gold or apple has not been exciting lately

  9. Caldaro this looks liket he normal buy the dip as not many seem to think it will materialize. In you opinion is there a chance this market downturn materializes into something more than a 4 point dip on the S&P?

    • tony caldaro says:

      Been choppy, with a downward bias, since we hit 1849.

      • thanks for your reply. Based on options which are at lowest level in 12 years and VIX the market is telling me we are back to 1849 by friday. Job number friday will be perfect. its seems to always be to the market liking.

      • pooch77 says:

        last post cause iam 1 over.Here a possibility,new moon high was Dec31-Jan1,full moon low would be 15th,that would fit nice with 1800-10,moons work is dicey but would fit nice with low current in then possible a move up to 1870 in early Feb.

  10. mcmasoniam says:

    blackjack, you out there? Haven’t seen you today, so just checking. TTYL.

  11. Lee says:

    Thanks for the charts gary61b and good trading to ya !

  12. bobhopium says:

    Nasty market… full of traps. Kudos to Tony, Alexhartley1 and others who managed to navigate this safely. I’m virtually unscathed but put a lot of work in this week for nothing. GL to us all.

  13. jmoptions says:

    DJIA daily chart finally showing MACD negative crossover. It needs to close with this to confirm this down move to me.

  14. 777daimon says:

    McMason, did you like it?
    Wasn’t that fun? !?!?!?!!? :D?
    how about more?

    • mcmasoniam says:

      Didn’t I like what?

      • 777daimon says:

        ”oh 777, not funny. ME KEEPS THE MONEY!
        ”Still not funny 777, but think they might do it. Pump & Dump.
        … c’mon … it was fun what has happened today…you said it well …pump and dump!
        I liked it!🙂

      • mcmasoniam says:

        777, I’m an old lady. When you speak of “it”, “them”, “they” or anything else undefined, you need to remember that an actual identification of subject is needed.

        Did l ‘like’ it? I like that I sold my long holding yesterday! It was indeed, P&D! HD has 1827 level as the breakdown. Looks like a bounce now just above it. Going to encourage buying now and P&D again; maybe not today, but soon?

      • mcmasoniam says:

        1828 pivot taking the reins. Bye Ya’ll!

      • 777daimon says:

        Ok, Mc Mason
        Actually I thought you are 30-35 years old… sorry if I offended you in any way.
        bye all!

      • mcmasoniam says:

        30 Something? No offense taken, 777! LOL! Have a good day. You just made mine a better one, for sure!

  15. pooch77 says:

    trannies broke out of down channel,market to follow up??

  16. M1 says:

    SOX showing daily neg divergence.
    playing this today. Let’s see how it works

  17. alexhartley1 says:

    So far it seems the pop and drop could yet work out down into the close. Would like to see us lower now at end of the 1st hour and then down for the rest of the day.

    Slightly nervous but we’ll see!

    • Looks good so far! I want to see 1832-1824 taken out, seems to be a solid support.

      • 16golfer says:

        Lower high? Next stop 1800-1810 area?

      • alexhartley1 says:

        It does so far yes which is both rewarding and a relief after the market opened with the suggested Gap UP! I expect if it does work out then at a minimum we re-test the low and potentially get down to the high teens for a minute c and minor a low. Tomorrow would then favor the start of minor b.

        Cheers and good night from HK.

      • 16golfer says:

        Would really like to see 1775 this month or early next month. That would set up a nice H&S formation.

  18. 777daimon says:

    if there’s no “c” got 5000 shares of UPRO at 95.55 stop-to-buy ….hope it will be ok.

  19. H D says:

    Another good jobs number,,, USA! Another chance for the haters to repudiate good news.

    3 day sell of & +D, 2 gaps up in “””B””” working 3rd day. Ready for the hit?

  20. Is it possible market is saying job numbers are going to be “just right” some jobs created, but not enough, so grind up again!?

    Market is acting that way, for now! JMHO

  21. lunker1 says:

    Hi Tony on the daily chart the 1628 pivot line looks like it’s at about 1636

  22. lunker1 says:

    Looks like Neg D was wiped out or close to it

    • lunker1 says:

      Interesting how the opening RSI pop above 70 was absorbed.. Need to see where the print is at 10:30 AM

  23. M1 says:

    It is quite interesting how many of us are expecting a large pullback to come.
    I do expect a 27% pullback NDX cycle wave 4 (at this point, it looks like only a major negative could trigger this projection).
    I bet OEW expects abt 15-20% pullback for primary wave IV.
    Others expect the start of a new bear market.
    Permabears are just saying this was wave B from 2009 and now calling for a huge drop ahead.

    • M1 says:

      However, it is more interesting comparing the Old Dow to the NASDAQ
      Back in 1953 the old Dow hit the top of the wave B that it formed in 1930. After a 10% pullback it broke out in 1954 and it never again fell below that level.
      Now the NAZ is close to hit the top of the wave B it formed in 2000. I bet that a brakeout on the NASDAQ means more upside in the years ahead.
      Good luck

  24. gary61b says:

    This what I see on oil, as possible potentials, pics from old entries to today

  25. bobhopium says:

    Gday all.
    Still leaning bullish myself with this structure on SnP fut, but need to see gains hold during Us trading before cigar….Aimho & GL to us all
    Spoo’s 1hour.

    • mmmiiikkkeee says:

      High for the day on this chart is 1844.53; S&P futs at CME don’t trade in .01 increments and did not reach 1840 in this day’s session which, of course, started last evening.
      What is this the chart of then?

  26. rc1269 says:

    Morning Tony, et al

    Last night my most accurate market top predictor came to fruition. I got a call from my mother in law. She said she’s tired of hearing from all her friends about how they killed it in the stock market (again) this year and she can’t take it anymore; she asked me to sell all her preferred shares and high div yield stocks and put her into something “that’s going to go up more.”

    She’s only called me with this request twice before: January 2000 and January 2008. Now, January 2014.

    Take it or leave it, but three times is a trend for me. If you’re still sitting there thinking that the average retail investor is not involved, I’d check that thought. My experience tells me that it’s time to get worried when all of her 75 year old friends are making bank in stocks and bragging about it (and not her because I won’t let her touch her own money, for the very reason she falls prey to the emotional rapture of the average investor)

    cheers. -rc

    • 16golfer says:

      Think you are spot on RC. I’ve been waiting for front page news article talking about Stocks and how much they have gone up. FED has achieved what they set out to do….changed market sentiment….while their buddies quietly exit stage right.

    • tony caldaro says:

      morning RC
      the mother-in-law indicator =)

    • budfox9450 says:

      I could use, a Mother In Law indicator….Bud

    • purplember says:

      RC I was at mcdonalds and group of old guys were talking stocks and what their buying…..

    • mcmasoniam says:

      OMG, that’s great, in it’s own way! LOL! Still, wish I’d held my long until this morning’s open. Awaiting minor 2 finish to add funds and ride 3. After that, I’m out for a while. I don’t have a Mother-In-Law anymore (passed away). I sure miss her. Know that sounds different than most people, but she was a Sweetie. “MIL Indicator”. That’s wonderful!

    • uncle10 says:

      RC, Oh go ahead buy her some “high growth” stocks. There’s nothing on the news front to worry about, the vix is low so no fear, valuations are just fine, and most importantly the FED has our backs……😉

  27. pooch77 says:

    looks like we challenge the high today before we end B,curveball here?

    • Not much of a C-wave in the cards now. Rather gap up.
      Perhaps SPX 1824 was the minor 2 low point.

      • pooch77 says:

        Perhaps,choppy market,hard to place a trade

      • alexhartley1 says:

        Maybe but maybe not. A higher opening this morning should lead into a lower close into
        9-10th minute c of minor a. Right now that’s looking very likely. We should then have a minor b wave rally into end of expiry week before a minor c and intermediate 2 low into around the 24th.

        If today doesn’t lead into a lower close I am most likely wrong. I am looking for the pump and dump move today.

        We have a short term negative divergence like Tony mentions in his report and currently we have 3 waves up so I definitely don’t agree that there isn’t much of an imminent downwards move for a minute c just around the corner.

        January is proving to be a volatile month just many predicted it would be before a likely higher high into March.

  28. ukmark62 says:

    Just came across this comment on the web concerning the S&P cap-weighted P/E being over 65!! Here is the text copied in its entirety. Comments??:-
    “I’m not sure I understand your question. I merely looked up the market cap and current P/E of every company that’s a member of the S&P 500 and did the math. It takes a few hours, so I understand why most people don’t bother doing it, but I wanted to get a baseline. But so you don’t have to spend hours doing it yourself, here’s a thought exercise that will show you the direction the math will take you.

    Let’s start with Starbucks. I bet most people don’t know what Starbucks’ current P/E is. Try 7839. (No, that’s not a typo.) Starbucks’ market cap is currently about $59 billion, so this is not a small company by any means. Let’s say, for the sake of argument, that there are 129 companies with the same market cap as Starbucks, but instead of their P/E’s being 7839, they’re 13. (Trying to be fair here, since there are 206 companies in the S&P 500 with P/E’s under 20.) So what does that give you? 13 x 129 = 1677 + 7839 = 9516 = the total P/E of those 13 companies. We don’t have to weight it in any way, since our initial assumption was the other 129 companies all had the same market cap as Starbucks. So you take 9516 and divide it by 130 (the other 129 companies + Starbucks), which equals an average P/E of those companies of 73.2. So what does that mean? Well, 130 companies x $59 billion per company = a total market cap of $7.67 trillion. The total market cap of the S&P 500 is about $16 trillion, so we already have 48% of the total market cap of the S&P 500 showing a P/E of 73.2. Following so far?

    Now let’s take Amazon, a much larger company than Starbucks (market cap = $180 billion). Know what its P/E is? How about 1424. Let’s say there are 24 other companies with market caps as large as Amazon’s. Instead of a P/E of 1424, let’s say, as in the Starbucks example, their P/E is a reasonable 13. So we get: 24 x 13 = 312 + 1424 = a total P/E of 1736. Divide that by 25 total companies for this example and you get an average P/E of 69.44. Then you multiply 25 companies x $180 billion to get a total market cap for the 25 companies of $4.5 trillion.

    So now what do you have? You have $12.17 trillion of the ~$16 trillion S&P 500 market cap (76%) showing an eye-watering P/E of 71.9. And how many companies in the S&P 500 do you think actually have a P/E of 13? This example presupposed there were 153, and that they had an average market cap of $77.98 billion. But I was being generous; that’s not the case.

    There are very few companies in the index with market caps that high and P/E’s that low. And there are plenty of other S&P 500 companies with very high P/E’s as well. (How about NFLX at 297 or HCN at 318?) And what about the 6% of S&P 500 companies that have no earnings (6% by number of companies, not by aggregate market cap)? I just left them out, and subtracted their combined market cap from the total S&P 500 market cap when I ran my calculations. But is that really fair? If their earnings are negative, wouldn’t it be more fair to subtract their losses from the earnings of the companies that ARE making a profit, which would show an even HIGHER P/E for the index? Probably so.

    I think you see my point. The S&P 500 is ridiculously overvalued today. Anyone who doesn’t think so should dig into the financials of the companies that make up the index and see for themselves.”

    • 777daimon says:

      ”The S&P 500 is ridiculously overvalued today.”
      and when Primary III will be 1.618* Primary I = 2251 points what will you say then?

    • 16golfer says:

      The fact that the companies have bought back so much of their stock with cash and cheap money has helped their earnings. At what price will the insiders want to start dumping the stock which has risen so much based on something other than earings.? I would call all that “irrational” .

    • lunker1 says:

      Starbucks PE is 35. I’ll wager a guess that the rest of the math in the article is flawed too.

      • mmmiiikkkeee says: has SBUX with a PE of 100times its price, implying the company made 1cent per share. Price currently 77.32, PE currently 7732 in line with the post above.
        I have little interest in which is correct; pointing out that the author did not make up the SBUX PE. Rest of math looks fine to me btw.

  29. pas1968 says:

    Hi Tony,
    Any current thoughts on Shanghai?
    (suppose I’m glad I didn’t buy it in December when GS said its a 2014 buy)

    • tony caldaro says:

      SSEC has been effectively in a bear market since 2007.
      Has had opportunities to come out of it, but failed each time

    • budfox9450 says:

      I really do not see the value today in china,
      as it once was, prior to 2004. The peoples
      psych has changed from from friendly to.
      I ‘am number one. But, If I wanted to
      know, I;d ask my ICBC brother-in-law,
      he knows. And, he has not called me, yet.

      • mcmasoniam says:

        Last post:

        Bud, I’ve been seeing and hearing all sorts of reports on China of late, plus had friends go there on vacate, and a webinar hosted by a guy who just returned from China. The people in the more urban areas are becoming very ill. The coal-based fuel pollution is overwhelming. The man giving a webinar I was attending had a real raspy voice and turned out his throat was burned from just breathing the air on a trip to China; he had returned 2 days before the webinar. My friends who went there on vacation said that over half the tour group bcame ill from breathing the polluted air. Then, there’s Construction spending, which is 60% of their GDP; not working so well. Whole cities and towns sitting empty. Those Chinese who are/were able to buy a home or business location have already done so, and the rest are still in the fields. The financials are messy as well, as you know.

        Europe and China could be very large, quacking black ducks in the near future.


      • hucky2 says:

        MCM – interesting

      • torehund says:

        Its all in the EW pattern, 1300-1500 and Shanghai is free to fly. At one time I hoped it would manage to avoid it, but the weakness is now so discernible once more that it becomes ever more likely. We need China onboard to propel further with conviction.

  30. $SPX $SPY $TNA $NUGT $TWTR $GOGO market update and strategy /trades for thursday (within the remark’s sect.):

  31. mcmasoniam says:

    Hey tore. Off Topic as far as markets are concerned, but looks like you don’t have to travel far if you want to be suicidal (please don’t, just look) and ride some really big waves!

    • torehund says:

      ..little by little M, but to be a novice and improving is what brings back the smile I once had in my youth…and thats what its all about. Head high and maybe 30 inches more is all what I can take..and not the very hollow ones..Its more off season than I thought it would be here in Barra, but good for working..And just dogs barking all night and the next day they sleep in the road, roasters are surly active too at times when the noise is less wanted…no need for an alarm clock..This time around I will rent a new flat on the top of a hill with an ocean view and a shorter hike to wi-fi. But when the season starts in March its all surfing.

  32. valunvstr says:

    What causes stock market collapses? And what I mean by that is in excess of 30% and generally multi year. Financial Crisis, Untimely/Excessive Monetary Tightening, Valuation Bubbles and War. Which one is around the corner? The answer is NONE. 1929-1932 was the untimely tightening of Fed Funds from 3%-6% (after Douglas Strong’s death) while the economy was actually weakening. 1937 was again the untimely tightening while the economy was not yet cleared from the throws of the Great Depression. 1939-1942: WWII. 1962 lead up to the Cuban Missile Crisis. 1969-1970: Tech Wreck (no one talks about this one) 1973-74: Nifty Fifty Valuation Bubble 1977,1980-81: Opec Oil embargo, oil shocks, tightening monetary policy, 2000-2002: tightening monetary policy and internet valuation bubble, 2008: tightening monetary policy and financial crisis

    1987: computer driven crash but within bull market
    1997-1998: Russian default, Asian Crisis, Long Term Capital: all within a bull market

    Point and Case: A war can come out of the blue. Can’t run money based on that. Valuation BUBBLE do happen but there is not such bubble right now. No where near the levels of past valuation bubbles. And a financial crisis? Don’t get me wrong, I’m nervous about France of all countries and not many people are talking about it.

    But given history, at best the market has a severe correction. But a bear multi year bear market would need conditions not yet in sight to occur.

    • 30%, multi year? we are just trying to catch the next 5% move, that’s all… when the PV is done, will be time for that multi year drop… You seem to be a long-term investor. Most here are swing traders, or day traders, or option traders.. every percent (to the correct direction) is the only thing that matters.

      • valunvstr says:

        If that is the case, Elliott Wave is a complete waste of time. I personally believe it is a waste of time for any investment approach because it “works” in hindsight as numbers and letters are changed on almost a daily basis on what the market did in the past. It is not a forecasting tool and anyone who says it is, is fooling themselves. With that said, if you are a short term trader, I would think momentum, relative strength, money flow and breadth indicators would be far more accurate.

        In regards to your other comment about the “multi year drop”? One should be careful about already having a conclusion as that will only lead to underperformance. Then all trading will be done based on a predetermined desired outcome that might never occur. The market RARELY drops multiple years in a row so to already have come to the conclusion that it will happen in the coming years is somewhat silly. 1929-1932, 1939-1942 (WWII for crying out loud), 1973-74 (Nifty Fifty Bubble), 2000-2002 Internet Bubble. So it’s happened 4 times in well over 90 years and it just happened 13 years ago. To add to that, the only time there wasn’t AT LEAST 27 years between multi year bear markets was 1932 end to 1939 beginning and that was because of a world war. So, maybe you will be right and we will have a huge multi year bear market again in the next 1,3,5 years. But to have already come to that conclusion does not come any historical basis.

        Good luck with your “swing trading” I hope it is in an IRA because you need to double the market to get market returns after taxes if you are trading the market actively.

      • valunvstr says:

        Actually, correction…it happened only 11 year, three months ago (2002-2014).

      • That is not correct, about the taxes… you just pay on your profit, so will a swing trader.

        But anyway, for the same argument, you are wasting your time, watching the market everyday, since you are a long term investor. thirty years from now, market will be MUCH higher. turn it off and go about life.

      • Thomas Crown says:

        A very dangerous opinion to voice in such a forum Valunvstr. But I couldn’t agree more. This is a very hard core bunch who think that they have found the key to deciphering the market. Their daily diatribes, their confused, ever changing and often contradictory opinions, a process which has been very cleverly relabeled “adjusting”, are just a constant proof of the uselessness of the method.

      • TC, wow, that was amazing… we watch the market and it is what we do, but you, you watch us?

        I bet you read an article online and your comment says “Gosh, it’s you’re not your”.

        Anyway too many posts, have a great day you all, nobody is playing with your money, not sure why being upset about a bunch of guys posting stuff online.

        Go enjoy the outdoors, we have an excuse.

    • “To add to that, the only time there wasn’t AT LEAST 27 years between multi year bear markets was 1932 end to 1939 beginning and that was because of a world war.”

      That is a patently incorrect statement. 1969-70, 1973-74, and 1980-82 occurred at short intervals from each other.

      As far as expecting OEW to be as predictive as physical science or math (for example), you should keep in mind the words of Carl Swenlin of Decision Point:
      “Technical analysis is a windsock, not a crystal ball”.

      Besides which, Tony often mentions other economic information and technical tools that he uses in addition to OEW. Behind the specific text of Tony’s Objective Elliott Wave Updates, there is also “confirmatory checking” with these other indicators. You should be appreciative for having access to that kind depth and breadth of analysis.

      • Oh yeah, I forgot to mention that the 2007-2009 bear market occurred within 5 years of the 2000-2002 bear market. That makes 5 instances since 1969 in which multi-year bear markets have occurred within 6 years or less of each other. OEW and most EW practitioners believe another such drop will occur within 6 years of the beginning of the 2009-2014? bull market. That would be totally consistent with has occurred in the last 45 years.

  33. Thanks Tony. Minute wave C should start at any time now. Market is behaving as per your analysis and projected counts. Great work Tony. If C wave starts tomorrow I am going to be golden as I shorted EEM for a quick trade. But I am still long on Citi and KRE on a weekly chart. Friday’s jobs number should give more impetus to financials. GL all.

  34. jobjas says:

    Final leg of the 5 wave up from 1640

    • mmmiiikkkeee says:

      what is your connection with that you post this useless column every day?

  35. alexhartley1 says:

    I was expecting a bigger fall into the 9 – 10th. It really has to happen tomorrow as I don’t think we’ll be going lower during expiry week unless the market is inverting to what it normally does during expiry week. A morning low should see a close higher and vica versa.

    Hopefully with the neg. div mentioned by Tony we see a low tomorrow for perhaps the end of minute a of minor C but not honestly sure yet.

    Thanks and good night.

    P.S. My concern is a pump and dump as someone already mentioned here.

    • torehund says:

      I think too many are “overworking” the small stuff, and then one easily gets lost in the big forest. Money in the market is always made from anticipating larger sustained moves; and thats what lies in front of us. This is the first Quarter with above 4 percent growth, and many companies have used the last couple of years to work off debt through numerous offerings, improvements and slimming of staff. At this point in time these efforts are starting to pay off. Enjoy the next couple of weeks and focus on Tonys long counts, the small stuff is just of academic academic interest.

  36. bouraq says:

    Bull flags still on:

  37. SimpleFinanz says:

    Hi Tony,
    If Dow is leading, looks like SPX should follow soon to the downside, isn’t it?
    You put a “b” on the SPX chart, is a “c” around the corner?

  38. bobhopium says:

    Thanks Tony.

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