wednesday update

SHORT TERM: new highs, DOW +108

Overnight the Asian markets gained 1.4%. European opened higher and gained 1.4%. US index futures were higher overnight as well. Last night, after the close the FED released:, and At 8:30 the PPI was reported higher: +0.4% v -0.1%, and the NY FED was higher: 12.5 v 1.0. The market opened three points above yesterday’s SPX 1839 close and continued to rally. At 11am the SPX hit a new all time high at 1851, then began to pullback. At 2pm the Beige book: The pullback hit SPX 1846 around 2pm. Then the market remained in a narrow trading range closing at SPX 1848.

For the day the SPX/DOW were +0.60%, and the NDX/NAZ were +0.80%. Bonds lost 7 ticks, Crude rallied $1.80, Gold slipped $3, and the USD was higher. Medium term support rises back to the 1841 and 1828 pivots, with resistance at the 1869 and 1884 pivots. Tomorrow: weekly Jobless claims and CPI at 8:30, then the Philly FED and NAHB index at 10am.

The market opened higher today, quickly cleared SPX 1843 and 1849, and then hit 1851. After the new high the market went into consolidation mode, a five point range, for the rest of the day. Minor wave 3 certainly appears to be underway. Since Minor 1 rose 81 points, it would not be too surprising to see Minor 3 do the same. That would project a rise to about SPX 1897, (1901 OEW pivot), before the next substantial pullback occurs. Thus far the market has rallied 35 points off the SPX 1816 Minor 2 low, without one meaningful pullback. This is the best surge since the 43 point rally off the SPX 1768 mid-December low.

Short term support rises to the 1841 and 1828 pivots, with resistance at SPX 1849 and the 1869 pivot. Short term momentum hit extremely overbought this morning, then backed off. The short term OEW charts remain positive with the reversal level now SPX 1839. Best to your trading!

MEDIUM TERM: uptrend

LONG TERM: bull market


About tony caldaro

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68 Responses to wednesday update

  1. pooch77 says:

    1835 bottom?couldnt break1831

  2. mcmasoniam says:

    Wow! R2K! BOC on SPX too? Looks like it. Bye.

  3. jobjas says:

    Topping – multiple Fib confluence in fractal waves.

  4. bobhopium says:

    Greetings All.
    Caution here imho…am seeing short term bearish structure down to 1834…GL to all.

    • gary61b says:

      That is quite possible Bob, 50% retrace is good but will the Bull sentiment allow for such a deep move. I like it though but the bulls seem to cut it off early every time one would think going long at a normal retrace.🙂

      • mcmasoniam says:

        gary, that’s exactly what’s been happening. A topping mkt getting extended almost every time due to the action you describe. So when ‘jobjas’ has “Topping…” on his blog, “Topping, until extending” is at least a 50%. 30 to 50 more spx points to go IMO. Tony’s pivot area is ripe for it.

  5. blackjak100 says:

    Boring day but I think we’re gearing up for OPEX tomorrow to the upside. However, I think this potential minute 3 wave is not going as high as everyone thinks tomorrow (1860ish) I’m still going with an 1865ish target for top before significant correction. I think this aligns with an OEW pivot anyway.

    Maybe I’m dead wrong and 1900 is around the corner.

    • mcmasoniam says:

      bj, I don’t know who said we’d be at 1901 pivot by OPEX, but I never heard of, or thought that. Perhaps by end of Earnings season.

      • Seems like many are focusing on a 50 point upwards possibility on SPX and forgetting about the several hundred points SPX can go in the other direction, At this point I am more concerned with the huge downward possibilities than a much smaller upward possibilitiy, especially after spx went up over 400 points in 2013. Market could use a nice healthy pull back, something many forget even exist.

      • mcmasoniam says:

        imawannabe, nobody’s forgotten a thing. Just staying with the trend until it ends. You seem to be fearful and overly-concerned almost every day you post; perhaps stocks and other riskier assets are not for you. Just a thought… GL!

  6. lunker1 says:

    Today a perfect backtest of the bull flag channel from 1849.

  7. llerias7 says:

    It seems the bull is geting tired now…What if? What if we have a failed 5th. wave? Considering it make me turn neutral and starting to look SH or SDS…(remembre these?)…this afternoon there is over 1.5 mil SH shares bought by the way…

    • torehund says:

      I think investors are getting tired, not the Bull itself. Usually the Bull gets extra energy when investors become tired.

    • mcmasoniam says:

      I was going to ask, “Tired, as compared to What?!” Spx just had over a 40 point run-up in 2 days! How spoiled we’ve gotten. LOL! Not aimed at you particularly, Il7, but traders in general. Now many want leaps and bounds every day, else they think something’s wrong. This is a nice pullback before pushing higher.

  8. elmer510 says:

    After going through the resistance and climbing to 1851 yesterday, SPX has been testing the support at 1843 from above today with positive result, before slowly moving upwards again. I think this is according to the books a pattern for further increase. Minor 3 will possibly rise close to 1900.
    Then we can harvest from our OEW-based investments.

  9. torehund says:

    Bought some Box-ships, looks mostly bottomed out working on a 2 down now I think. Sector is just bones and cartilage left.

    • perversionofthemean says:

      Which did you buy, if I might ask? If 2 down, how much of a retracement of 1 are you looking for? Thx!

  10. Cup with handle in SPX. The handle should retrace one third of prior advance. Almost done.

  11. gtoptions says:

    Thanks Tony
    SPY ~ Targeting Weekly R2 @ 185.62

  12. rc1269 says:

    nice little rising channel IHS forming. same as we’ve seen countless times this uptrend. sb good as long as we don’t break 1840. tho prob still safe above ~1823.70, but not quite as pretty

    • gary61b says:

      RC, do u have a pic or what time frame chart. thx.

      • rc1269 says:

        sorry my man i use bloomberg so haven’t really taken the time to master the online chart options for ya. but i’m looking at intraday 60min from 1/3 (left inverted shoulder) through now. can draw a nice upward channel from 1/3, 1/9 and 1/10 lows with today’s low. cheers

  13. mcmasoniam says:

    I thought this was a fairly interesting report this morning, but will likely be wrong. Who knows.

    The report that I’m really looking for is the one presented by Steve Liesman on Global Inflation. It was not a good report. Might as well have Deflation in bold print all over it.
    If anyone finds the link before I do, please post it. Much thanks! Done posting for now.

    • torehund says:

      Deflation has already done its job, look at the softs, like these downgrades they always come when the house is already burned down to just bricks standing. Rear mirror, what did I tell you approach, inflation ahead with commodities moving up.

      • mcmasoniam says:

        There’s more deflation coming tore. It’s not even done yet. Deflation and also inflation come in waves, just like market waves. Bernanke and others have tried, but IMO, couldn’t fill the hole left by Credit Crisis enough to do the trick. Close, but no cigar. Still, for the record, Bernanke gave everyone a chance to get their money back and RUN! We all should count our blessings for that.

      • torehund says:

        M-I am posting too much today and know it, just wanted to say that deflation isn’t following a straight line, and I think this is the time for deflation to pause for a while, giving gold, oil and all the commodities a lift. And for gold and oil my dream is a wave 2 up as the wave one down has been long and gruesome. I might be wrong, but I bet my money on a bear retracement, and it should right around the corner. Thats why I am bull on box ships, shipping and general, miners and coal producers.
        Hope this explains my view.

      • mcmasoniam says:

        tore, understand re: your view of deflation & agree. Hasn’t been a busy day & trading almost done. GL!

  14. llerias7 says:

    Que pasa?
    Is this a (ii) of iii…or the begining of something worse?

  15. berniebaruch says:

    I wish there were more pessimists of this advance.

  16. mcmasoniam says:

    Happy to see small caps holding up well; but it is small cap time of year. Spx & others taking a little breather, maybe 9 to 11 pts down is good. Looking forward to Tony’s 1901 pivot area, whether it happens in wave 3 or 5, either is fine, but w3 preferred, of course. GL All!

  17. JK1987 says:

    DOW has yet to meet minor 1 high of 16588 for this minor 3 advance.
    Do you see DOW to get above 16588 since “DOW never truncates” with oew theory?

  18. llerias7 says:

    What it will be the time frame to reach “The Top”? Once again I think will be around the FOMC meeting Jan 29th…there will be find many excuses to start the “retreat of the troops”!

  19. market update for wednesday and thurs. strategy (within the remarks sect.) INCLUDES NEW PENNY STOCK WATCH (many new shorts and longs):

  20. RDC says:

    Thanks Tony. SPX crossed 1850, now 1910 is next.

  21. ariez5 says:

    My indicators, which have been very good at seeing short-term tops though not as good at seeing bottoms, tell me to go short if there is a break of today’s lows tomorrow. I agree with those who say there is top potential, but price has to be the determinant.

  22. hucky2 says:

    Wave count aside, is the apparent double top not going to spook investors?

    • I would love to see an open of 1855 tomorrow, then within the first 20 minutes drop to 1827, hang around that level until the close then drop to 1816. Gap up on Friday and sell off again to 1816. Let everyone sweet the weekend and go from there. No one is afraid of the double top. Could make things interesting. Or , everyone believes we are headed to 1900., so Why stop there, go straight to 2000 before a 20 percent correction. Interesting market to say the least

  23. torehund says:

    Folks are talking of a top all the time, however look at the commodities, they are scraping an important near term bottom. Sure it fits with the demise of the Shanghai index.
    Any market top seems to be a very immature call until the commodity plays have retraced a whole bit…and I think gold will follow. Bulk turned today its either a wave 2 bottom of a b in the making…but as commodities and the softs are so low I go for the wave 3 commencing in bulk shipping….Could even be the right time to enter the box ships.
    Thanks Tony for your relentless work.

  24. michael sim says:

    market keeps on extending…

  25. Tony,are you expecting dow above 20k for cycle wave I,thanks

  26. hi,16495 is 38,2% of the flag target,if breaked probally the next step is 16840(61,8%)
    full target is around 17400

  27. Tony

    Another view at this is that this is wave v and just ended at today’s high, just a sliver over the most recent top.
    This is evident in the hourly charts, where the bottom of iv (recent low) did not overlap with the previous high.
    If market breaks down, then this alternate view has legs.

    If market breaks out, then we all buy.

    Also, on the weekly MACD, this current top looks like a 5 of III (or C if one is a bear).

    Any thoughts?

  28. wisconsindoctor says:

    WOW. Tony, it looks to me that you’re on a roll, and have made great calls for the last 2-4 weeks. Congratulations and thank you.

  29. buddyglove says:

    Thanks for update Tony.

  30. Bubu Tralala says:

    Thanks for the update Tony…is the french CAC 40 in the same count as SPX, and where do you see a top in the french index ? thanks

  31. jmoptions says:

    You say ‘longest uptrend in the entire history of the US stock market has been 13 months.’
    So how long is the current uptrend?

  32. mcmasoniam says:

    Thanks Tony! 1901 pivot is a nice run-up. I’ll take it!

  33. M1 says:

    “Minor wave 3 certainly appears to be underway”. If not. What also could be, Tony ?
    Don’t see any other alt count on your charts.
    It is hard to me projecting + 2% increase in prices (NAZ above 4289) without a powerful pullback before that.

  34. pcskier says:

    $indu still has sell pressure from above, My brain does not work properly I am seeing a possible top at todays highs for $indu and SPX. I know I am a foolish bear! Buy the dip, buy the all time high, make money.

  35. thanks for the update Tony! Almost 2 weeks of selling erased in less than 2 days… shows who’s (still) driving the bus😉

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