tuesday update

SHORT TERM: gap up and hold, DOW +87

Overnight the Asian markets gained 0.3%. Europe opened higher and gained 1.1%. US index futures were higher overnight, and at 9am Case-Shiller was reported lower: +12.9% v +13.2%. The market gapped up at the open to SPX 1875, then continued higher to 1880 by 10am. The SPX had closed at 1869 yesterday. At 10am Consumer confidence was reported unchanged at 82.3. The market pulled back to SPX 1871 by 10:30, then started to rally again. At 12:30 the SPX hit 1881, then went into a holding pattern for the rest of the day closing at 1878.

For the day the SPX/DOW were +0.50%, and the NDX/NAZ were +0.75%. Bonds lost 3 ticks, Crude added 15 cents, Gold slipped $1, and the USD was higher. Medium term support remains at the 1869 and 1841 pivots, with resistance at the 1901 and 1929 pivots. Tomorrow potentially a wild day: ADP at 8:15, Q1 GDP (est. -0.7% to +1.0%) at 8:30, Chicago PMI at 9:15, then the FOMC statement at 2pm.

The market gapped up for the second day in a row this week. But unlike yesterday it held the opening gap even after an early pullback, rallied to a higher high, then went on hold ahead of the FOMC statement and Q1 GDP report tomorrow. Today’s early rally to SPX 1880 cleared the OEW 1869 pivot range, which bodes well for the Minor wave 2 low at 1851 yesterday. Then retested the 1869 pivot when it dipped to 1871. If we are on track SPX 1880 may have been Minute one, and 1871 Minute two, of Minor wave 3. However, considering the two major market moving events tomorrow, which are often volatile, we will wait one more day before posting these counts. Also, there is a down sloping trend line from the bull market high at 1897 which was touched again today: 1897-1885-1884-1883-1881. The market probably needs to gap over that resistance to move higher.

Short term support is at the 1869 and 1841 pivots, with resistance at the 1901 and 1929 pivots. Short term momentum hit slightly overbought then dipped during the afternoon. The short term OEW charts remain positive with the reversal level now SPX 1871. Best to your trading tomorrow!

MEDIUM TERM: uptrend probable

LONG TERM: bull market

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

About tony caldaro

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106 Responses to tuesday update

  1. WOW GDP up .01 % and we are all time highs. Rick Santelli is right the fed is manipulating the market and nothing will change in the economy until the stock market starts to get hit. Enjoy the day the YELLEN way

    • No one manipulates markets.

      Assume for a time being, I have trillion dollars (Sometime in future will have, On record, I was trillionaire in Zimabwean dollar). With those trillions, I plan to buy facebook shares. Now, if FACEBOOK comes with bad results, people will sell, but since rest of the poor world does not have trillions (Remember, this is imaginary situation), they will fall flat against my buying FACEBOOK shares. so, even if FACEBOOK comes with bad results, due to my buying power, all those who shorted FACEBOOK will end up covering pushing prices further higher..

      There is no manipulation, everything is there in fine print.

  2. H D says:

    I got top ticked, I’ll be throwing myself into traffic. unreal! Later

  3. John Arella says:

    Heading to 1907 then correct to 1780-1800

  4. SPX can be counted real nice with minor 1, 2, minute i, ii and even micro 1, 2 IMHO

  5. rc1269 says:

    flyyy me tooooo the moooooooon

    hey, i guess even when it’s at mkt highs and not lows, and even when everybody on the planet sees it and is talking about it, an IHS can still work! sometimes it’s just that easy

    • tommyboys says:

      Its a short term pattern marking a month or so – can’t count a small pattern like this as the capper to a 5 year run.

      • rc1269 says:

        i can count whatever i darn well please! 🙂

        haha j/k TB. sorry in one of those moods today. sun is shining, it’s 78 degrees out and i’m stuck at my computer flipping bonds around. uggh. jealous of the squirrels.
        okay, i’m done for today. don’t get caught in the backdraft y’all

    • magicianme says:

      To consider those IHS patterns to have worked we should have reached 1930 for the small one or 1950 for the larger one. However, on a lower time frame (M5 or 1000 tick) the right shoulder of a small H&S seems to be forming as we speak.

    • First timer here…mates, just a TA FYI- the IHS your see are not valid since it does not meet the criteria. The reason IHS are propping up on indices (e.g. DJI and SPX) and individual stocks is that you are witnessing an 3-3-3-3-3 Ending Diagonal Formation. The ED wave 4 and 5 trick the bulls into believing that an IHS is forming to keep them buying the dips and to prevent them from focusing on the more dominant bearish ED pattern. Nevertheless, believe what you wish and gamble as you please. Just keep the peace going.

  6. mjtplayer says:

    Non=eventful Fed meeting, went exactly as expected, another $10b taper.

    Gold, silver, copper & oil all at the lows of the day – expected after Fed tapering. Bond yields just off the lows. Stocks unchanged, the market may be held-up through days’ end on end of month window dressing, we’ll see how the market trades over the next few days.

    The real surprise is the US Dollar, after being very weak prior to the Fed announcement has caught no bid after the taper announcement. Weak Dollar indeed, approaching the critcal 79 support area on the .DXY – yet again…

  7. Tony wrote “Also, there is a down sloping trend line from the bull market high at 1897 which was touched again today: 1897-1885-1884-1883-1881.” Well, today the market is really struggling right at it… with a possible bias that it’s currently above it. R turns S!?

  8. tommyboys says:

    Free money over at DWCH for the next 6 months…heard it here first.

    • uncle10 says:

      Tboys, Love your free money calls. lol. why the big drop? thx.

      • tommyboys says:

        Bad Q1 report, Secondary done in February, horrendous sentiment in micros and general market malaise. Company in the heart of data mgt analytics with a tight balance sheet, huge (64%) insider ownership and they just stepped up today. Q1 appears to be a one-off event. Buy and hold. SILC free money again as well.

      • uncle10 says:

        Thanks TB! Got my eye on both of them.
        Big moves up and down……. some things never change…….

  9. H D says:

    Range 1,872.69 – 1,881.35, sorry, what did NDX do? Staring at 1884 again, They know it. …
    It’s almost like SPX rallied right from 10AM- I think there is some news on deck :mrgreen:

  10. rc1269 says:

    this IHS in SPX has me a little leery – it’s almost too clean/perfect of a setup. gotta be that everyone is looking at that same thing

  11. 777daimon says:

    next … FOMC statement…. puts your lights on 🙂

  12. magnus1234 says:

    My 2 cents on FOMC is another cut in buying rate. They would still buy for 45Bn USD a month. One factor is absolutely the relative value of USD. ECB is getting closer and closer to QE or other means to boost inflation rate. Hence Yellen would not risk a stronger USD.

  13. gtoptions says:

    Thank Tony
    SPY ~ Nested 1/2’s? Possible Test of WWP @ 186.85 again? 😉
    NDX & RUT Continue to Hold Fib Fan & SP Support Levels.

  14. mjtplayer says:

    All indicies green now, open gaps from this a.m now filled; DOW & S&P now -div on the 60-min RSI. Also, absolutely zero volume, like yesterday’s rally on 35% lighter volume than Monday.

    Seem’s like stocks are hoping (praying) for a pause in tapering, the commodities markets and bond market are not buying it…

  15. 777daimon says:

    I see a lot of chat about GDP q1/2014 … have you observed the Chicago PMI for April?
    I repeat: FOR APRIL (q2/2014)
    You did? Ok. Than you have an answer why the market doesn’t crater right here.
    Next big thing: FOMC statement today.
    And even bigger: on Friday, the jobs report.

  16. JK1987 says:

    gap filled, action time anyone?

  17. I dont understand why GDP is a big topic. GDP tells about economy.since when is the stock market the economy. if the numbers mattered we would be down 300 points today.

  18. rc1269 says:

    GDP: must be that pesky weather. how those cold weather countries can ever grow is really beyond me. i mean, snow… in the winter?! inconceivable.


    • tommyboys says:

      Weather may or may not have affected GDP although my opinion is that it did – not that it matters. Regarding the weather however – and off topic – I have had a hundred foot long hedge along one fence line for 15 years and an Ivy vine planted on the other 13 years ago – which had taken over everything. To my shock they are both dead now here in spring. Nothing kills Ivy! That’s a testament to how frick’in cold it was here and for how long – just say’in. I’m over – out…

    • tony caldaro says:

      tapering pause today?

      • rc1269 says:

        tough call i think. looking at jobs alone one would have to say they should/would keep tapering on course. and if they do indeed believe that Q1 was mostly marred by weather, then that would call for keeping the pace as well.
        if i had to guess: i think they keep the pace + add in some slightly more cautious [dovish] commentary, and perhaps a gesture about potentially reviewing the pace of the taper in coming meetings. and maybe a little dose of pounding the table on how the fed funds rate *won’t* be going up 6 months after QE ends.

      • tony caldaro says:

        Just making a calculated guess, as Yellen as the chair is still an unknown.
        She appears more dovish than Bernanke.
        Think she stays the course, but a pause on tapering would not surprise.

      • mjtplayer says:

        Stocks at all-time highs = no pause in taper.

        If the bulls want to trigger a pause in tapering, they’ll need to tank the stock market: 10% correction may spook the Fed into tapering pause.

      • rc1269 says:

        agree Tony. Yellen, while mostly still a mystery/untested, thus far does appear more dovish than Bernanke. much of it may just depend on how effective she is at exerting her influence over some pretty strong-willed and vocal FOMC members. time will tell! cheers

      • tony caldaro says:

        Just thinking:
        growth creates jobs
        Q1 no growth

  19. bhupal777 says:

    Thanks Tony. Your bullish count in markets still playing out.
    As per after hours action my EW count on Twitter is not going to play out as projected and will be taking losses tomorrow.

  20. ocaj2000 says:


  21. Kudos to Caldaro for doing an awesome job, I must say a lot of times we need to go by our gut and it just does not feel like this market is anywhere near correction or sell off mode. I cant even see a reason out there that has not already been taken into consideration,

    • Hmmm…my gut tells me this doesn’t feel like a wave 3. Think we’re still in minor 2 with 1820’s in our immediate future. Just my 2 cents and may not be worth that.

  22. Lee X says:

    Thanks Tony
    Hey guys it’s just an internet blog

  23. Nice daily, Tony! Thanks … have a nice evening.

  24. tommyboys says:

    That downtrend topsline you reference Tony is also the neckline of an inverted HS over the past few weeks. Right about SP 1880 now. Stymied us today but once it falls the downtrend should be exhausted 🙂

    • tony caldaro says:

      thx Tommy, didn’t know about the HS part

    • droc14 says:

      tommyboys – what does the IHS you refer measure to on the SPX? Thanks! I’m assuming something above 1900

    • magicianme says:

      tommyboys, the HS and IHS are considered “trend reversal” patterns. At an ATH we should be looking for a HS not an IHS. IHSs at the peaks aren’t really expected to play out. However, an HS at the peak has a high probability of working out and reversing the market. That’s what any good pattern recognition book/site will maintain.

      Another reason why this IHS has lower chances of fulfillment is because the volumes don’t fit in with what’s required of an IHS (it’s not just about the pattern of price bars – there needs to be the right type of volume confirmation). Typically a head is accompanied by lower volume than the first shoulder. Yet on the S&P the decline forming the head in this “IHS” was accompanied by huge volumes of selling – volumes substantially above the average of the last few days/weeks (it were the rises that were pathetic from the 17th to the 22nd – far, far below average. Compare it with the bull run from 6th to 22nd Feb and you’ll see how very weak it was).

      So, the S&P may get to the 1900+ target, but I have see very little reason to trust in this IHS to do it – the IHS has none of the main properties required of an IHS.

      • tommyboys says:

        My response…

        Agree HS works best at top and IHS works best at bottoms but I see THIS IHS – at a top – working as its in conjunction with many other variables I see moving markets higher from here. Bull markets climb the proverbial wall of worry and if you look at the chart off the ’09 bottom you’ll see these HS and HS set ups the whole way. This is how a bull unfolds – in fits and starts. Just when the whole world recognizes a very familiar pattern it fails and we’re on to new highs. I don’t see the IHS as working strictly because of its technical structure, I see it working because it’s confirming my many other variables pointing in that direction. That said it can still fail. I just don’t think it will – especially with all the nuts posting end of the dollar and end of the world.

      • tommyboys says:

        Also regarding volume. Volume has been relatively light the whole way up – especially when compared to the ’08-’09 debacle. This has been a bear staple premise. This however is how it ALWAYS works for a couple reasons. One is that after such a debacle most sane people are through and through spooked and want “nothing to do” with markets EVER again. The bigger the debacle the longer this condition persists – and we had a whopper. This condition is in my top five reasons for the bull running quite a bit further. Until volumes P/U considerably on the upside we’re no where near a euphoric top. This said volumes will likely still not eclipse those at the blowout bottom because – and the other reason – fear is a greater motivator than greed. GLTA!

      • magicianme says:

        It’s not about “working best” at top/bottom. It’s that I’ve never come across a single technical analysis expert or recognised author who considers an IHS as a valid tech pattern at the top. Am happy for you to point me to any authoritative material that DOESN’T go to great lengths to emphasise the location and volume of the pattern as crucial elements to its validity.

        That the PA at the ’09 bottom had IHS patterns that worked out and HS patterns that failed only proves my point. (Note: In smaller time frames it’s entirely possible. So on the M5 or 500 tick chart I’d trust an IHS today despite us being not far away from an ATH).

        I agree that volumes on the way up are lighter – to match prices going up the steps and down the elevator – but comparison with the volumes at the blowout bottom suggest you’re looking at volume a bit, er, differently. It isn’t about volume per se, it’s about relative volume at locations *within* the pattern.

        “I don’t see the IHS as working strictly because of its technical structure, I see it working because it’s confirming my many other variables”
        What variables? I have a lot to learn and am always looking for information that can educate me. I’m curious as to what other variables you use to analyse HS.

      • tommyboys says:

        I am not referring to anything regarding an HS pattern. I only use technical indicators to affirm many other fundamental variables I see – whether it’s cash, earnings, war, peace, Fed, valuations, sentiment etc…Patterns only affirm or disaffirm these other criteria for me. Learned long ago technical indicators in vacuum only work half the time. OK now I’m WAY over GL…

  25. Kevin M says:

    Closing high Tony…….You know…..I know….That’s what matters most…..Nice effort though….lol

    Ok That’s three posts for me and given the perma-bull sentiment on this site(an overall bearish sign) I’m guessing most will request me to stop posting(God forbid a different view) and respect the rule. And I will….See you tomorrow maybe…

    Take care….

  26. jamesbondman says:

    Hopefully, if enough people are as gloomy as Kevin, the market will continue to move up and us sheep will make a bit more money…….baaa

  27. Kevin M says:

    Look…I’m just suggesting we are entering W4 correction. I’m only looking for the SPX to go as low as 1600, odds are high it won’t even get that high low though(1680). the dip buyers will be in force. An ending diagonal now is as clear as ever on the SPX. How can people ignore this? After this W4 ends we’ll be at all time highs probably by year end. The trick is to buy this W4 for the easy money moon shot into late 2015. Anybody that follows Martin Armstrong and his economic cycles will notice it tops out in Oct 2015. His work is spot on. Ignore it at your own peril.

    Take care…

    • simpleiam says:

      Please go follow Martin and leave us alone. Since you and ‘newbie’ are likely the same person, guess I don’t have to tell you to take him with you. Bye!

    • tommyboys says:

      I followed Armstrong years ago during my gloom years. I think he was even in prison then. Once it became coincident – like almost all others – I stopped.

    • chrisk44342 says:

      Yes, Martin Armstrong is spot on, but we are sheep following Tony at our own peril. Who needs to wake up?

    • mjtplayer says:

      Armstrong or any other economic forecast should be taken with a grain of salt. Remember, Armstrong’s ECM peaked in 1998, but economic growth and the stock market topped in 2000 – 2 years later. His ECM got the bottom in 2002, the high in 2007, but then projected a low in 2011 – the low was clearly 2009, for countries outside southern Europe.

      Just b/c his ECM says top around 2015.75 and bottom around 2020 doesn’t mean anything, it could be accurate, it could be off by 2 years or anything in between. The stock market could top now, or later this year, or 2015 or even 2016 – nobody knows, you just have to constantly monitor the situation and only hindsight will tell you where to tops and bottoms are.

  28. Kevin M, Great Post!

  29. torehund says:

    Kevin, many Stocks are unnaturally depressed as the indexes stubbornly denies to pass their constraints. What about buying Box Ships at PE of 2 ? When the hysteria of high index values vanes we will see much higher prices. An extended bull makes for solid breath-numbers and we have not by far seen the end to this. Underpinning the valuations and much higher still is the merger Activity taking Place. Comps has a lot of cash and to omit paying tax its too tempting to buy up competitors that are undervalues.

  30. simpleiam says:

    Thanks Tony! A nice upward bias to the day today.

    • With Ebay down 3.28 percent and TWTR down 9.20 Percent after hours and tomorrows GDP 1st qtr number probably less then 1 percent going to be an ugly day tomorrow, although it is end of month and yellen says the same thing for the 100th time at 2PM who knows.

      • I think Yellen saying the same thing for the 100th time is all that matters. Caldaro I am assuming a break above 1897 will confirm an uptrend am I correct sir?

      • Kevin M says:

        Confirming an uptrend? Seriously? Does any really believe this thing gets much past 1910-20ish and then odds are high it craps out and tops there. Seasonally this year has been spot on. What makes this year any different?

        Think folks, and stop following blindly. The dow hasn’t made a new all time high since late dec 2013. Yes that’s right, during the very seasonally strong time of the year the dow could NOT make new all time highs. The writing is on the wall here.

        The sheep are about to get slaughtered. Also, remember the all powerful tony can just adjust his count to fit with a bearish forthcoming. Yep in a blink of an eye tony will do a change up.

        Wake up folks

      • simpleiam says:

        newbie? Is that you?! Sounds like you… LOL!

      • tony caldaro says:

        will not need that much
        but it certainly would

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