tuesday update

SHORT TERM: rally continues, DOW +89

Overnight the Asian markets gained 0.5%. Europe opened lower but gained 0.7%. US index futures were higher overnight. At 8:30 Housing starts (907k v 880k), Building permits (1018k v 937k) and the CPI (+0.1% v +0.1% ) were all reported higher. That’s seven for seven economic upticks so far this week. The market opened three points above yesterday’s SPX 1859 close and continued to rally. At 10:30 the SPX hit 1872, pulled back to 1867 by 11am, then moved higher. Around 3pm the SPX hit 1874, then dipped to close at 1872.

For the day the SPX/DOW were +0.65%, and the NDX/NAZ were +1.25%. Bonds gained 7 ticks, Crude rose $1.15, Gold dropped $10, and the USD was higher. Medium term support rises back to the 1869 and 1841 pivots, with resistance at the 1901 and 1962 pivots. Tomorrow: the Current account balance at 8:30, then the FED’s statement at 2pm, followed by a press conference at 2:30.

The market opened higher today resuming its rally from SPX 1840 last Friday. Thus far the rally is looking like a third wave – Minor wave 3. Should either the SPX (1884) or NAZ (4372) clear their recent highs, the probabilities of Minor 3 underway would rise dramatically. We have a failed flat “a-b-c” posted on the hourly charts: 1834-1884-1840. The DOW/NDX did make lower lows during the recent pullback.

Short term support is at the 1869 and 1841 pivots, with resistance at SPX 1884 and the 1901 pivot. Short term momentum is quite overbought. The short term OEW charts remain positive with the reversal level now SPX 1862. Best to your trading the often volatile FOMC day.

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

About tony caldaro

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98 Responses to tuesday update

  1. Ryan Parker says:

    Is anyone else having trouble with stockcharts.com or is it just me?

  2. magnus1234 says:

    1863 broken. I sold 50%. Looks abc-ish

  3. CygnetNoir says:

    Remember Dow 16174 – we are right back at it andit is the Mason/Dixon line between uptrend and down trend. Right now it has its own gravitational pull on price. Once either the sellers or the buyers reach enough critical mass, price will either pull away or fall away from that level quickly.

  4. scottycj1 says:


  5. buddyglove says:

    ……..”the market does sky rocket Everytime she talks. its like night is followed by day.”……..

  6. JK1987 says:

    Here is 1855, don’t feel like iii of 3 of 3.
    Need to change the labels?

  7. John Arella says:

    banks are the only ones that are benefiting from QE anyway so get rid of it🙂

  8. chrisk44342 says:

    initial fed reaction is always wrong

  9. rc1269 says:

    taper on
    “sufficient underlying strength in the economy”
    “sees rates going up in 2015”

  10. John Arella says:

    I’d say a little run up to 16420, then correct.

  11. blackjak100 says:

    Based on my count where B ended at 1884, I think the market finally sinks on Fed day. Maybe I’m wrong but that’s what I’m seeing now.

    • 2 p.m. SPX at 19 trading hour upswing, from 3-14-14 hourly low reading of 1939.57

      21 trading hour will be at close.

      I’m not observing any serious negative divergences, on the Elliott Wave Oscillator, so, my conclusion:

      Best to wait to on sidelines, until close.

      My opinion…

    • Very old wise trader, said You will soon discover the richness of living in the present by letting go of the past. We crucify ourselves between two thieves: regret for yesterday and fear of tomorrow. Traders mindset, 20 th trading hour, opened lower, 21 trading hour close is what’s matter most… Close of today?

  12. John Arella says:

    If it passes 16,365 before she speaks I’m bullish otherwise looks like the market can go either way and it probably will go up and down once she speaks.

  13. If VIX futures are not telling you the market is going up huge today I dont know what is.

  14. Do you guys realize that almost every time Yellin has talked or Fed notes are released market surges, do you think this will last forever? Do you realize how many longs expect a big push up just because of the Fed & Yellin comments?, Many overlook that we could be on the verge of a c wave down to 1800. Complacent Bulls may get smoked today.

    • the market does sky rocket everytime she talks. its like night is followed by day. why would it be different the fed wants higher stock prices. I would be shocked if the market was down big today

      • My point exactly… people are leveraged long on margin while market is up from 666 to 1870 in 5 years. Complacency & Euphoria everywhere up here in the nosebleeds. As you say, ” people will be shocked”… yes they will. Does primary 4 or a C wave down or a failing 5th wave evr get much warning; NO it just DROPS!

    • tommyboys says:

      Wow thanks for the heads up newbie. Never even considered there’s a chance the market might drop…whew! Please keep us “reality checked.”

    • I think it make sense Fed & Yellen try to be more agressive on taper raising $ 20 billion for coming months, Where bulls are? Get smoked?

    • Extremely good points! Sir, McDonald’s, low pre- market volume, closed my positioned at $97.40 in pre- market. Notice, regular trading session, McDonald’s and major four stocks, GM, IBM,GE and GM are lower too extremely weak. Caution should be used here due its fifth wave!

      I don’t have position, but might go short in the next couple of days.

    • RDC says:

      Who is Yellin?

    • Hi Imanewbie, I’m definitely not being snarky with this question. If the market has always surged on Yellin talking then why are you shorting when Yellin is about to talk? Just saying. I mean think about it, does that make sense? It’s the pattern until the pattern stops. What makes you think it will stop today and not some other time?

      • Twosidedtape, My chart shows we are going from present to1860 then pop to 1900+ OR from present to 1800 in quick order. I believe in the latter because c waves usually come off of good news, we have gotten 2 days of good news; mon & tues…. In addition I don’t believe the foundation of the market is strong (smoke and mirrors with fed pumping and weak volume) and I think we could have very well topped at 1889 for a while to come. Good Luck to All.

  15. simpleiam says:

    THANK U Tom Watson! Put the cell phones away and go outside to play!

  16. magnus1234 says:

    We are close tho thwe Globex O/N high and Y’day ES high which equals SPX 1874. If we break out (up) from here I will add further to my longs. Otherwise keep or sell 50%. Guess I will have the answer after 2pm today.

  17. pimacanyon says:


    Your 1874 looks like it’s acting as resistance. 1874.40 was the high of the March 13th bearish engulfing candle (daily).

  18. Stock market mass marketing, example, TC2000 platform, which I really love, has Notes & News link, you click on the link, and under all Notes & News, your hooked up world of traders and investors using their cell phones, iPads, computers, tweeter feed. Left side bar has ton of stocks, that people are talking about. Younger crowd, using stock options.

    Conclusion: Mass psychology of mania to trade stocks.

    Simply, amazing!

  19. MSFT insider selling, totals! Comparing MSFT chart pattern and Bill Gates and other insiders selling amounts, Tech sector might not be the place to invest. Huge warning sign!

    I shorted McDonald’s yesterday, but really sold to early, made few bucks. Currently, I’m long McDonald’s at $97.26 as of last hour of trading on Monday. I don’t care for the daily pattern but I like the hourly pattern on McDonald’s, $99.07 high on 3-12-14 to Monday close, its 34 trading hour cycle. For short term day trade only, expecting higher opening on Tuesday.


  20. John Arella says:

    Nasdaq Expanding Triangle In Third Wave and will end with new high then plummet

  21. blackjak100 says:

    I see a completed 3 waves up from 1839…1862-1853-1874…where a nearly equals c. However, I also see 3 waves down from 1884…1867-1882-1840. This leaves the bears only hope to an ending expanding diagonal for this C wave assuming B wave ended at 1884. The Fed would induce a third wave down tomorrow.

    Any thoughts on Apple from anyone? I went short from the triangle break down, but now it has climbed from $523. Nothing seems bullish to me about the stock but it’s a tough wave count.

    • Apple, page 8, Daily, Hourly and Monthly charts. http://stockcharts.com/public/520756/tenpp/8


    • Apple, Daily time frame, Bullish Homing Pigeon pattern, very low volume! Hourly time frame, 21 trading hour, bullish pattern, which is the Bullish Homing Pigeon on the daily, I wouldn’t be exactly short Apple at this moment, but monitor the bullish pigeon pattern, observe volume totals, TSV is above its 19 dma currently on the daily! my thinking! is within week, Apple will sell off to around $485


    • Look at Bollinger bands on the daily: getting really tight. Thus a Big move is coming to your screen (and wallet !?!😉 ) real soon. Given OEW count I’d say up.

      • 50 dma trending lower, low volume on the upside. Tight bands! Apple stock has changed over the years, Company don’t need it shareholders anymore, too much cash. Odds favor big move is $485

      • blackjak100 says:

        I do see a nice little bear flag on the hourly chart. Combine that with a triangle break down and it should be down. It would look best if the move down started sometime today.

      • tommyboys says:

        Company “not needing shareholders – too much cash”…all the more reason to own the stock – albeit not much ration to the premise.

    • uncle10 says:

      I agree with the idea that AAPL is very tight and ready to make a nice trend move. My guess is up but could be down. Of all the things to use capital for— shorting AAPL here would not be on my list. Gl.

  22. Anonymous says:

    tony spot on again! Kudos mate.

    All these people with their 1929 anaolgies, and they have not worked once since 2009 -> here is proof bit.ly/1eiJ8N7

    The market is now in an accelerated bull market, while tricky, I even had targets to like 2120 on SPX. Some might laugh, but there is no topping pattern here. No not all all….bull still showing their teeth. :-)))

  23. lunker1 says:

    Hi Tony,
    Have you had an add’l thoughts on expanding the +/- 7 range for the pivots now that we’re approaching the 2000’s? Did the 7 work better at smaller number and do you find it needs more wiggle room “up here”…..or not? Thx

  24. simpleiam says:

    Thanks Tony. These indices are quite a challenge.

  25. RDC says:

    Thanks, Tony!

  26. bhupal777 says:

    Tony, Nice follow through day. Odds have increased in favor of iii of 3. But b-wave is still a possibility. So I am still neutral on SPX chart. I will be long once 1883 is taken out. If it breaches 1850 I am going to be short. It is that simple. Just trying preserve mental capital as well. Thanks for the update.

    • tony caldaro says:

      mental capital is our most important asset

      • bhupal777 says:

        Thanks Tony. This is my 4th year into trading and still learning this business. Paid quite a bit as a tuition fee to this market. Also before entering this business, I am fully aware that 90% of the traders loose money and quit the trading for good in first couple of years. Staying in the game and learning from mistakes will make a trader successful. But one thing I definitely know is I don’t have to trade every move. some times it is good to be on sidelines and look for setups that I am comfortable with.

    • Agree bhupal! The daily SSTOs indicator did give a buy signal today (all 3 SSTOs -5,1; 13,1; 21,1- went up today). Though this can happen with b-waves for sure too, it is still a signal. Close above 1882 and also the weekly sell-signal from last week will be negated too.

    • simpleiam says:

      “Just trying preserve mental capital as well.”

      I know that’s right!

      • Mentally sound = trading sound = profits.

        Cash is a position too!

        One doesn’t have to trade (every squiggle).

        When in doubt, stay or get out.

        Few golden oldies that are golden for a reason, but are never old! Because there are only old traders and bold traders, there are no old and bold traders.


  27. Jennifer says:

    Thanks Tony!

    U.S. stocks traded high as Ukraine worries ease

  28. bouraq says:

    A new all time high is not far:

    • 16golfer says:

      Thanks bouraq. One day bullish…next day bearish. Wild roller coaster we are on.

    • RDC says:

      Thanks Bouraq.
      I am expecting knee jerk reaction for Gold after FOMC announcement, shake out weak hands then make very quick and fast rebound to the upside. This time move for Gold will be towards 1420-1430. Gold miners specially Junior miners will be huge winners on this next upside move. (Same may apply for SPX).

    • simpleiam says:

      Excellent charts as always. Thanks bouraq.

  29. John Arella says:

    Ops wrong chart, here is the right one🙂

  30. infantguru says:

    Dow: A saucer is in formation on both Weekly and daily. Breach of 16.505 on the upside sets the target to between 17.5 and 17.7 (Fib 1.61). RSI 21 on both weekly and daily, is above 55 which suggests a strong possibility. MACD, (3,10) moving avg needs cross over for confirmation. Both are pretty closely poised at this time. Bollinger band tightening up as well.

    SPX: The Saucer is a bit more elongated than the Dow. A breach of 188.3 on the upside has the a target of 2020+ (approx). Again RSI on both daily and weekly is above 55 Summation-Index, MACD and (3,10) moving avg needs cross over for confirmation here as well. All three are pretty closely poised at this time like in Dow. Bollinger band tightening up as well.

    Wow. Do I see bullishness here! Interesting times….

  31. John Arella says:

    Gap Up then Consolidate till 2PM Chart

  32. Hi Tony

    I see a 3-wave structure since last Friday’s low, which can be either:
    – 1-2-3, part of a larger upwards move that will lead to all time highs, or
    – a-b-c (can end now any time) of B, with downwards follow-through in the near future.

    Nevertheless, the short term play for today was to buy at the open and sell at the close and allow tomorrow to show us the way (up or down).

    For some reason I am biased to the down-side

    • gary61b says:

      STT, I could see another retrace from this level to complete minor 2. The retrace as of now is a little light 38-50% would be more in the norm range and that would reset alot of the indicators. Or market continues higher without the concern of the indicators.

  33. radrian6 says:

    Based on conventional indicators, RUT is overbought on the intraday charts — more important is that RUT is once again pushing on it’s weekly upper Bollinger Band. The RUT closed the day at 1205 with the weekly upper BB near 1208. Closes above the weekly upper BB are rare and are generally followed by price flattening and/or pullbacks. RUT can ride the band higher but the weekly BB can advance only 10-15 points per week. For RUT-based products, gains will likely be limited until we see some consolidation or correction.

    • Hi Radrian. From what I see the RUT is going to blow through the top weekly band. Daily is just picking up steam. Not that it can stay outside the band forever or anything, but the daily just looks too strong to stop right now and the market is small cap crazy. Maybe price flattening next week sometime? For some reason this reminds me of March 2010 .

      • radrian6 says:

        RUT closed above the weekly upper BB during the first week of March and that resulted in a 3.4% pullback. Weekly indicators are questionable — MACD negative since the beginning of the year.

        I don’t know what the RUT will do in the short term but given the technical conditions, I don’t think it’s a good time to chase. I would rather buy when the RUT is near the weekly lower BB than test my luck at the upper BB.

      • I hear ya. Short term I’m expecting minute ii to show up by the end of the week as a triple witching gut check (probably a single day down). My hourly shows generally micro threes now. Probably a micro 4 consolidation tomorrow then a micro 5 tomorrow into Thursday, then gut check? Going by RUT when I say that. I have today as the iii of 3 day of minute i in RUT. Gut check will suck in a lot of shorts and shake out weak longs.

    • John Arella says:

      I’d say one more gap up in the morning, then consolidation until 2PM, then at 2pm another run up to new highs?

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