tuesday update

SHORT TERM: Third gap up opening in a row, DOW +75

Overnight the Asian markets gained 0.5%. European markets opened higher and gained 0.7%. US index futures were higher overnight, and the market gapped up at the open to SPX 1879. The market had closed at SPX 1872 yesterday. The market continued to rally until just past 10am when it hit a new all time high at SPX 1885. At 10am Construction spending was reported higher: +0.1% v +0.1%, and ISM manufacturing was reported higher: 53.7 v 53.2. A pullback followed to SPX 1877 by noon, then the market tried to rally again. Heading into the close the SPX hit 1886 and closed there.

For the day the SPX/DOW were +0.60%, and the NDX/NAZ were +1.70%. Bonds lost 4 ticks, Crude dropped $2.15, Gold slipped $3, and the USD was flat. Medium term support remains at the 1869 and 1841 pivots, with resistance at the 1901 and 1962 pivots. Tomorrow: the ADP index at 8:15, then Factory orders at 10am.

The market gapped up at the open for the fifth time in the past six trading days. Looked back the past two years and did not see this occur even once. Nevertheless, the SPX cleared the 1834-1884 range, albeit it by just two points, to the upside. This suggests the Intermediate wave iii uptrend is extending. We updated the charts to reflect this potential, and even updated the DOW charts to a potentially more bullish scenario. We are also observing new highs in market breadth and the broader NYSE index. The NDX/NAZ have a lot of catching up to do. The next OEW pivot is at SPX 1901, then a large gap to the 1962 pivot.

Short term support is now at SPX 1884 and the 1869 pivot, with resistance at the 1901 and 1962 pivots. Short term momentum is reaching quite overbought. The short term charts remain positive with the reversal level now SPX 1870. Best to your trading!

MEDIUM TERM: uptrend

LONG TERM: bull market

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

About tony caldaro

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107 Responses to tuesday update

  1. buddyglove says:

    JK is getting sqeeeeeeezed.

  2. I’m guessing 20-30 Point gap down tomorrow if not the Big One.

    • Keep at it, you will get one of them right, eventually.

      • Surfingwavers please put on the record you are holding long overnight.

      • I ride small waves… when they show the direction, I hit them for a 1-2%% move, I went long ~1% ago, right now market is doing something interesting… if I smell a rat, no problem I will get out and wait to see what happens again… Last hour has been a bit strange, they will show their hands… but if I don’t see it, the I will stay long until 1914…

      • Never buy hedge with fear indicators, it is the bigger lie than HFTs…

    • iamnebietrader I am a bear but we have to face facts here buddy the market does not go down. It a ramp up everyday. I dont know what the problem with HFT the fed probably does it everyday at 3:30 pm

      • thetruthtrader, I’m not a believer that this craziness can continue much longer. And going short up here in anticipation of a market top or in anticipation of Primary 3 ending makes a lot of sense to me.

  3. gtoptions says:

    Thanks Tony
    SPY ~ Broken? Not really, Out of Sync with SPX since ex-div! Hate when that happens. 😉
    Daily PP @ 187.87
    Weekly R2 @ 189.02
    FYI the market is Rigged! LOL

  4. H D says:

    ~55 > pevious 4th. Just an observation.

  5. S&P500 Yearly Breakout 1921 & Break Down Levels 1765

  6. Nasdaq just entered 31 trading hour cycle, at 9:00 AM $Trinq short term trading index very bullish reading of 56 respectly. Elliott Wave Oscillator hourly is trending higher each hour, 34 trading hour cycle will start on Thursday at the open! If this bullish money flow continues each hour, I would expect powerful explosive opening on Thursday..I could be wrong.. But that’s my two cents! Good luck trading.. Tonys analysis, shouldn’t be ignored, facts are pointing his way!

  7. infantguru says:

    The summation index is finally in the clear. All the indicators suggest uptrend now.
    It remains to be seen if targets get to their goals now :).

    April 2nd:
    Below was my post on March 18th. Everything holds still.
    MACD had made a crossover today.
    The summation Index that has weakened since is the ONLY one to wait for now to cross over the 5,10 MA for the bullish case and in complete alignment with Tony.

    March 18th:
    “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….”

  8. I made huge mistake today, NFLX opening to $371.05 next 15 minute bar open at $369.13 I froze and waited too pull the trigger, I didn’t short it today.. I missed at great short trade.. NFLX at $360.23 currently.. Trust me, I’m going to experience full day of endophasia! Sympathetically only cure will be lunch at In and Out burger today with Chocalate shake!

  9. alexhartley1 says:

    Morning Tony, What odds do you give to the USD Index having bottomed? I see the potential for a B Wave top on the EUR/USD on charts but remember you had an ideal target of just below 79. Thanks, Alex

  10. John Arella says:

    Upper limit at SPX 1920 on log weekly chart and Bollinger band is at limit at 1890, if it breaks 1920 its going to burst but if it doesn’t? Will Bollinger band hold?

  11. RDC says:

    Irrational Exuberance. Market is about to do its pullback/correction.

  12. sloop says:

    JK,that site…is a waste of time lol

  13. JK1987 says:

    daneric targets SPX 2000 with wave (iii) of 5.
    The SPX weekly chart is shown with the extended wave [v] of 5 in mind. That puts the SPX price at about 2000 at its peak.

  14. lunker1 says:

    Hi Tony, from 1842 I count nine waves up. How many do you see and where do you think we are in the Minute and micro world?

    • winslow80 says:

      So far/so good on your gold call yesterday. Bullish sentiment has fallen from 86% to 18% during this pullback, which indicates the potential for an ongoing wall of worry. I appreciate you sharing your work. I hadn’t used the Fibonacci 1.382 offset time cycle projection, but you motivated me to back test the technique on the Dow chart from 1907 forward and the results are encouraging. Good job.

  15. 777daimon says:

    I’ve red the comments but what else should I say?
    I’m a man more from the country-side… when there’s a time to sow and when there a time to reap …. you don’t sow in the autumn when everyone and their gradma reaps the products of their culture ….
    a picture that for sure worths more that 1000 words

    no more comments …

  16. Thanks Tony!
    Just want to add some fibolevels, according to Boroden. She often speaks about 3 important fiboextensions (1,272 1,618 2,618), calculated from the recent decline. With intermediate 2 being SPX 1850-1738, that would give us the following numbers for intermediate 3:

    Fibo 1,272 SPX 1884, now busted
    Fibo 1,618 SPX 1921
    Fibo 2,618 SPX 2031

    SPX 2031 would be a nice place to sell longs in may (and stay away).

    Best wishes Sverker

  17. Greg Polites says:

    Hi Tony; After the bullish NAZ and RUT comments yesterday- on the balance – the SP (and somewhat the DOW) is facing some significant hurdles: breaking out of the triple top formation, taking the STORMM indicators to all overbought levels and not generating a sell signal. And most significantly – the VIX and its relatives in buy signal territory not generating a new buy signal. Strong headwinds for equities….and to pile on – Bonds USD, and Gold at inflection points. Putting it all together the total picture looks tested for a wave 3……time will tell…..
    Cheers, Greg

  18. bouraq says:

    From far far away:

  19. bhupal777 says:

    Tony, You have been very objective rather than predicting the market as per your gut feeling. You have been spot on.Thank you.

    As some of you know I have been routing for option 1 that Tony laid out in his week end update. Also last Thursday and Friday I said bears are losing the advantage they have as every day passes by when SPX moves sideways. Also lot of stocks that I follow either turned up exactly at support line or at 200 day SMA. I have been waiting to go long on SPX when it clears 1880. Now it cleared I might look for small pullbacks to enter my UPRO positions. I am sure that bears might be thinking this is a suckers rally. Yes this could be very well can turn out to be a suckers rally. But in a bull market when downside stops at the support levels and takes out all time highs it is foolish to go short. Better go long with proper stops in place. Meanwhile to support what I said about some of my watch list stocks stopped going down once they hit support lines or at 200 day SMA, here I am posting couple of those charts. Good Luck all.


    • tuamotu says:

      GDX not declining with Gold, same happened at the Top. And now GDX putting a bottom … Are yo still long GDXJ ? Expecting a pullback or a big move for a 3 or a C wave ?

      • bhupal777 says:

        As I mentioned in my chart analysis, my stop is at 35.70. It almost hit yesterday. It is possible that wave 2 or B wants to go further down more than 61.8% of prior uptrend. In that case I get stopped out with a small loss and wait for another setup. There is a strong support at 34.50. That should hold. Further if it slides through 28.50 then the whole analysis is wrong and it is very well setup to continue its long bear market downside.

  20. fionamargaret says:


    Thanks Tony.
    Hope you are feeling better M.

  21. blackjak100 says:

    I know I’ve been wrong about the S&P of late (thank god oil and gold has saved me), but this sideways movement of late is not impulsive. What could this mean? I see a barrier triangle for a ‘b’ wave which completed at 1842 and now the ‘c’ wave to complete B from 1738. The 138.2% extension resides at 1894. If c=.382*a, then 1888 would be the target. Looking within the c wave, wave v = .618 * wave iii = 1890.

    Conclusion, there is a ton of confluence at 1888-1894 and the sideways movement of the last 3-4 weeks cannot be impulsive since it looks like a barrier triangle. I’ve said for over 6 months if we can close above 1892, I’d turn very bullish longer term. Let’s see what the market decides.

    • Study, April 2, 2010 Spx price action. Barrier triangle or ascending triangle, most often in bull market will produce the results of April 2,2010 outcome.

      Spx 1906 or higher most likely outcome. My that’s two cents! Tonys analysis, has the highest potential in my opinion. GL

      • blackjak100 says:

        Yes, B waves can go higher than the common length of 138.2 % extension. My analysis is based upon the max common length of 138.2%, but going higher than 1894 does not violate any EW rules. Either way, the triangle indicates a non-impulsive wave (since it cannot be wave 2) which will be followed by a large C wave down which should finish below 1738. From what level the C wave starts is the $64,000 question?

    • B-Wave conclusion? Based on so called Elliott Wave ( Barrier Triangle in confirmed Bull market, has very little evidence to stand on. Maximum common length theory, compelling and undeniable, if, we were dealing with Bear market, crucial facts, don’t support this bull market from 2009 lows, is even close to be over. Janet Yellen, Federal reserve, just stated, interest rates will remain low for extended period! First fundamental principle in investing, interest rates effect where money is place to work. Impulsive theory, yes, triangle or sideways consolidation period, prices tend to be less impulsive, less upward gains, but observe NYSE, Oex, Spx last three days, very impulsive. I wouldn’t place strong emphasis on bearish signs, just yet! Federal reserve main objective, is to turn the social mood positive! Higher stock market will help in their mandate. Rather you agree with their tactics or not.

      At best, two day pull back before the Bulls March higher, only compelling bearish case, something would have to unfold, that shocks the markets. Weather, War! Major attack maybe… Earthquake, Tornado might.. But still even those events, might just send the bull marching higher.

      I’m only shorting stocks, on few minute to maybe few hours, time frame currently.

      Bull gets tired, I’m looking to play the short side of the equation.

      Unless, we get powerful shocker event, then, I might go short for longer time frame.

      Good luck with the Wave B theory triangle…

      • blackjak100 says:

        Relax dude! I’m talking about a b (not B) wave triangle that lasted 3-4 weeks. It does not mean the bull market is over. It does mean a powerful C wave down past 1738 is coming. There are not many bearish signs so I’m not paying attention to them.

        I’ve had trouble with the SPX count since 1738, but I’ve nailed gold and oil. I kept pounding the table here that gold’s advance from $1182 was corrective because of it’s clear triangle on the daily chart. Yes it ran higher than I thought, but it sure turned down hard and I was prepared! The $SPX can run farther than I think into the 1900’s, but it too will turn down because of the triangle.

  22. gtoptions says:

    Thanks Tony
    DJI back to leading the pack.

  23. hucky2 says:

    After 3 up days 1 down would be normal – but that would mean closing back in the old range.
    SPX is already above the weekly R1 (1875)
    “Short term momentum is reaching quite overbought”
    Down day coming?

  24. esvxm says:

    Thanks Tony for the analysis and great calls with OEW 🙂
    It is interesting to see US making new highs in the equity indices and Europe majors lag.
    DAX: http://marketchartpattern.com/indices/german-dax-30-closes-key-level-technical-analysis-1-april-2014/
    S&P: http://marketchartpattern.com/indices/sp500-make-new-time-high-next-technical-analysis-1-april-2014/
    Russell racing higher after the price and time pattern formation: http://marketchartpattern.com/indices/russell-2000-us-small-cap-index-moves-higher-pattern-discussed-technical-analysis-1-april-2014/
    Crude had a smash down day after the bearish gartley formation discussed yesterday: http://marketchartpattern.com/commodities/crude-oil-wti-moves-lower-key-resistance-technical-analysis-1-april-2014/
    Finally dollar index, interesting week for the currencies with the NFP on Friday: http://marketchartpattern.com/forex/dollar-index-key-level-technical-analysis-1-april-2014/
    USDCAD key event on Friday. Is it just a retracement after 5 consecutive days of decline or a key turning point for the CAD?

  25. mccarthyti says:

    if you backed out all the stock buybacks in S&P 500 companies over the last 5 years… what would the Earnings have looked like? without the buybacks 2014 and 2015 est would be much lower than 119.50 and 132.50.

  26. CygnetNoir says:

    Next stop, Dow 17645 by May opex. See y’all there!

  27. Thanks tony! All systems go! Fantastic! Yesterday, the SSTOs-indicator already led the way by giving a by signal on the daily and weekly. Fantastic! The bull-flag pattern I eluded to last week is pretty much validated now, which suggests a run to 1940s. Fantastic! That -1940s- would be a good minor 3 of intermediate iii target, IMHO, given that this pattern is based on minor waves. Then minor 4 and 5 to complete intermediate iii, which would then be the 1962 pivot!? Sounds rather logical IMHO.

    I don’t dare to predict intermediate iv and v of Major 5 of III yet, but my longstanding target range of 2044-2207 for Primary III on the SPX remains still in effect (i.e. nothing has invalidated it yet).

    For now; 1901 first, then 1940, then 1962. With tech crawling back from heavily OS conditions, I don’t see a problem for the SPX to get there. Glad I bought techies into this down trend. Now I’ll let those positions ripen and will pick the juicy sweet fruits later. Fantastic!

    • All systems were a go in 1999-2000 and in 2007-2008, oh yeah and in 1987 and 1929 BUT that would never happen to any bulls here. Nobody buys at the top and gets slaughtered right? Well let me guess everyone has stops protecting their profits, stops don’t help when a catastrophic incident occurs and the market gaps down HUGE. But let me guess many of you have been long for years so a big pullback or crash wont be that big of a deal right? Let me guess since you have been long so long you have never reinvested that extra money you made over the years and your not on margin either? When the time comes all traders are humbled and I believe anyone holding LONG overnight in this climate at or near the end of a Bull Market is playing Russian Roulette. There are so many things that can go wrong but most are just moving with the herd, Good Luck and God Bless!

      • You know what happens to the little ones who fall behind the herd?

      • 777daimon says:

        @ surfingwavers:

        they get stomped when the herd is running crazy scared to the exit …. a somewhat very small exit to all the bulls leveraged on margin ??? :)?

      • tommyboys says:

        Thanks for the heads up Yen Guy. Where were you in ’99?

      • 777… This could go on for months.. why is it a big deal right now?

        Newbie has been signing this song for months…

        They keep talking about what a disaster CANN has been… I made a nice 280% profit on half and lost 20% on the other half… I know I got lucky there though…

        The point is some people scream at their kids when a big sound comes from the backyard, even though they are inside the house… you don’t have to play, but if you don’t play when the new highs breaks out, then when?!

        Anyway, chicken little never crossed the road…

      • tony caldaro says:

        years past it was called short against the box
        nowadays it is just called being hedged

      • Thanks for your opinion. No offense, but I’ve heard this story in 2010, 2011, 2012, 2013 and now in 2014. It’s not very profitable… Opinion is one thing, OEW, TA, and cold hard price-action facts are a whole other.

        Btw, I always use stops, I’ve recently pulled out a big chunk a chance for a down payment towards a house I bought, and stops don’t help either when the market gaps up HUGE. I guess I must be doing something right… Just my 2c… 😉

      • I know I said I was taking the week off but I had to respond. Iamanewbie the market is not coming down. Janet Hellen speaks and we break highs.

    • llerias7 says:

      I was thinking 1960´s would be end of P III…and 2100´s the end of P V (by 2015)…
      Am I wrong?

      • Good of guess as any. Current schiller pe ratio is 25.99 all time high is 44.20 so we have lots of room to go higher. 1st quarter growth rates were supposed to be 4.4 percent, those have since been reduced to 0 percent. Which Allows for earnings season to beat lower projected estimates, YEA. A beat is a beat right? Yellen, still has our back, there is no were else to put your money. So, all in all your probably a little low on your estimate.

        1960 may end int 3 P5 probably ends near 2200-2250

      • IMHO, you are as much right and as much wrong as we are; as these are all merely (educated) guesses. 😉 As long as we identify when such important tops are about to occur or have just happened we’re doing mighty fine IMHO. OEW helps us tremendously for that matter. Combine it with solid TA and it’s hard to go (Very) wrong.

  28. mike7x says:

    Thanks Tony. Thank you Janet. Don’t fight the Fed.

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