wednesday update

SHORT TERM: gap up opening, DOW +118

Last night FED governor Stein’s speech was released: Asian markets lost 1.6% overnight. Europe opened lower but gained 0.3%. US index futures were higher overnight and the market gapped up to SPX 1874 at the open. The market had closed at SPX 1868 yesterday. In the first few minutes the market hit SPX 1876, and then began to pullback. The pullback continued, led by the NDX/NAZ, even after FED chair Yellen’s testimony: Around 10:30 the SPX hit 1860, was quite oversold, and began to rally as the chairwoman spoke. At noon the SPX was back to the highs for the day at SPX 1876. Yet it pulled back again. At 2pm the SPX hit 1868 and began to rally. At 3pm Consumer credit was reported higher: $17.5bn v $16.5bn. Heading into the close the SPX hit 1879, then dipped to close at 1878.

For the day the SPX/DOW were +0.65%, and the NDX/NAZ were -0.30%. Bonds gained 7 ticks, Crude rallied $1.20, Gold dropped $17, and the USD was higher. Medium term support notches back up to the 1869 and 1841 pivots, with resistance at the 1901 and 1929 pivots. Tomorrow: weekly Jobless claims at 8:30, FED chair Yellen testifies before the Senate at 9:30, and FED governor Tarullo gives a speech at 9:30.

Odd week. Monday gap down then rally. Tuesday gap down then decline. Wednesday gap up then decline. Will Thursday be a gap up then rally? Today’s gap up was sold and completely retraced just past 10am. The decline dropped a bit more than expected, as the SPX fell two points under the OEW 1869 pivot range. But it spent only a minute or two under it, and quickly snapped right back. The decline from SPX 1891 certainly looks like a zigzag: 1867-1886-1860. With waves ‘a’ and ‘c’ within two points of being equal. Once this market clears SPX 1891 it should make a serious move to the upside. But it is going to require the assistance of the NDX/NAZ.

Short term support is at the 1869 and 1841 pivots, with resistance at the 1901 and 1929 pivots. Short term momentum hit quite oversold this morning, then turned higher. The short term OEW charts turned positive near the close, with the reversal level now SPX 1876. Best to your trading!

MEDIUM TERM: uptrend probable

LONG TERM: bull market


About tony caldaro

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167 Responses to wednesday update

  1. torehund says:

    Bulk update : Lets get all the bulkers onto the OTC list 🙂 GNKOQ up and the rest in the dumpster for now, but bottom should be Close if market respect 108 on the IWM. Gooo smallcaps !

  2. pbnj123 says:

    Blackjak100 – could this also be an ascending triangle – where we are completing shallower lows from 1814 and maintaining same highs and will complete in very near future – also looks like it could be a larger power of 3 and next touch above 1890 will take this to new highs.

    • blackjak100 says:

      Since the rise from 1814 to 1885 is clearly 5 waves, that has to be completion of wave A. It can’t be ascending for this reason since all subwaves of a triangle must be a 3 wave structure

  3. Have no fears Bulls 330 coming up. and VIX futures RED. a rally should be on the way

    • Kevin M says:

      Where is it truth?

    • tommyboys says:

      Dying for another fear spike huh truth? Keep pounding the table and eventually you’ll get your wish ..

      • Kevin Dow was down 20 points when i posted closed up 30. thats a ramp. as for you tommyboy I liked you until you went after my kids. That was not nice. They worked hard through school just tough to land a good job.

    • magicianme says:

      I’m sure there’ll be a talking head on CNBC or somewhere blaming it on Russia, but have a look at the timing of the news – it’s ancient history. That’s not what caused the reversal.

      I don’t think we’re done to the downside. Another momentum surge is due before EOD though I don’t know if it could do much further damage to price.

  4. pbnj123 says:

    Gap filled between 1870 and 1871 from yesterday about 2 o’clock.
    I know it’s not EW but it’s all I got

  5. magicianme says:

    Today’s target = yesterday’s low?

    I bet that this morning I could have got some great odds on the day ending as or close to an engulfing daily candle. You gotta love the market!

  6. buddyglove says:

    EveryBody !!!……please keep buying as much as you can…we cannot allow keVin M to be right !

  7. IMHO 3 down from 1891, and now 3 up from 1859. It’s all one big corrective mess. And back in the 1869 pivot… yahoooo…. NOT.

  8. magnus1234 says:

    Its been two months now with a balance between 1840-1890 (except for a two week fluctuation in mid of April). Now with VIX @ 13.5% I smell a high probabillity for a break-out any time soon. With a 50% retrace of todays/Y’days up I added more to my long position. ECB couldnt be more clearer on their agenda than what they said today. More to come in June.

  9. VIX futures still RED indicate to me the 330 algo ramp is on

  10. I am a bull myself, but I realize that this site can be most valuable if there is a diversity of opinion being posted. Nobody on this blog can make the market go down by being bearish anymore than we can make it go up by being bullish. What is most important is that we retain (or gain) the ability to think objectively, not wishfully. And that is easier said than done.

    • torehund says:

      agree and that implies that the bears act as warning flags, important in the mix.

    • jeffbalin says:

      It’s great to have the different views, it’s the trash talking and in particular, insulting the owner which is out of line. You can disagree or have a different view, that is fine. But make no mistake, the owner, is a quality individual and deserves the greatest respect.
      My first post today was truthful but meant to be funny as well. I just can’t get myself to use ‘lol’ or the smiley faces.

      • simpleiam says:

        Agree 100% jeffbalin. The posters to which you refer are not Bears with any useful info., or are even encouraging toward others.

  11. jeffbalin says:

    Actually I apologize Shrihas, you shouldn’t have been in that group. It’s a bunch of the trash talking bears and you are not one of them. I get confused they all sound the same, Sorry.

  12. blackjak100 says:

    No momentum also suggests triangle d wave completed at 1889. Looking for e wave to complete 1870ish probably tomorrow.

  13. CNBC reporting the link of Blackbox buying when Yellen speaks. Thanks for coming out guys.

  14. Great reading the road map provided here and wanted to thank Tony for his great work and info provided daily. I read a number of sites and have found that Carlos Santos at posts minute by minute coverage of EW counts and is able to nail the support and resistance levels for day trading. Just wanted to mention it since it’s helpful to my trading and keeps me out of being on the wrong side most of the time. He can also be followed on twitter at @CarlosGunX. Be well my friends…as the most interesting man in the world might say.

  15. blackjak100 says:

    The longer we stay below 1891, the more likely the d wave of triangle completed at 1887. Let’s see what happens!

  16. 16golfer says:

    Surfingwavers…..The FED saved our retirement accounts by covering for the politico’s….Democrat or Republican…doesn’t matter….they are all Self-serving SOB’s or STS as Tony would say. Just quoting Obama….what got your panties in a wad any way?

  17. jparkins10 says:

    Good call on the opening rally Tony 🙂

  18. gtoptions says:

    Thanks Tony
    Many two bar reversal long entries today.
    Enjoy the Bull. 😉

  19. Kevin M says:

    1890ish coming right on schedule. Dow will make all-time highs here and then lights out folks.

    Next week is the week it comes undone.

    • Kevin, why are you so focused on next week? Why not today? Other will say a big drop will not happen during an opex week? Your thoughts?

      • Kevin M says:

        Seasonals and exhaustion. Once all-time highs are achieved in dow there will be a lot of bullishness and thus that will complete this 4.5 month consolidation period. During the first 4 months of this year the market didn’t breakout above the highs. In no period in the past did the first 4 months of the year make the next 3 months thereafter a bullish one. It’s simple price action. Regardless of the bullish wave prediction here the writing is on the wall and it says down we go into the end of June, first part of July. It’s just not that easy. It’s as simple as that. To say wow I will buy now and we will breakout to the high 1970’s by july4th is misguided and down right wrong. The market NEVER gives you enough time(4 months) to decide to get in. It NEVER does.

        Next week will be the start…. NOT a crash. Remember it’s a time issue here. Once we get to the end of the quarter we might get a flash crash of some sorts but in no way do I expect a down move more than 10-15%. The bull is still very much alive and will most likely top next year, to which is seasonal. Some secondary markets that money flows into will actually go into 2016 before it all comes crashing down(50% decline).

        The day the greed dies will come but not until it gets out of hand to the upside. Dow 20k might be it.

        Take care…

    • 777daimon says:

      I’m afraid it won’t go over 1891 SPX.
      but, of course, I might be wrong.
      1814 is on deck soon, not today, but soon ;).
      after that … we’ll talk on that later :))

  20. These market movements are so OBVIOUS, wow, its truly remarkable. They are just giving away free money but then again they are fully aware of GREED and how to use it against the complacent. There is no way the majority will get out alive, does anyone think when the top is hit it will be a slow move down with plenty of time to jump ship?

    • Lee X says:


    • VIX smash S&P goosing. back to your centrally planned program

    • jeffbalin says:

      I’m bullish right now until the charts say otherwise. I’m anticipating minute 3 in process across the board, which means a long way to go before the first tanking of the market primary 4, and an even longer time before the big tanking, the end of cycle 2.
      You can’t predict the market but you can anticipate and have a roadmap which you adjust as necessary as new data and information comes in.
      What I want to know is are you going to still be here posting on this blog if what you are saying doesn’t happen?You, Kevin, Shrihas are predicting the markets exact bearish moves with confidence, cockiness and trash talking. What will likely happen to you guys, is you will mysteriously disappear from this blog and end up in a cave in the mountains living on plants and dead squirrels, hiding from everyone along with 3xs etf out of embarrassment when it turns out you are wrong.
      The only guy with the guts to keep coming on this blog being constantly wrong is the yen guy, god bless him.

  21. scorp100 says:

    Hi Tony, your call about TWTR going to 29 and change, was terrific. It can go lower, but you called it when it was around $38. Fantastic!!

  22. buddyglove says:

    Bears could be wearing white very soon.

  23. Popcorn popping ready for the ultimate move.

    • magicianme says:

      That was a good 10+ point bull run just now … possibly to set the stage nicely for a reversal. 😉

    • The best thing I ever learned was to distinguish what I wish to see, than what is actually happening in the market.

      In a mathematic based market, lines can be drawn in so many ways, it is unlimited.

      • tommyboys says:

        That said SP has broken out of IHS patterns on multiple timeframes this morning – most with the same neckline of resistance…doesn’t mean it can’t go back and test this area.

      • magicianme says:

        surfingwavers, well said! I’m amazed at how often people post their “100% guaranteed” predictions. And, yes, two people can look at a chart and see completely different things. Here’s what I’m seeing:

        So far today I’m seeing a medium volume, low momentum ramp up to an area of considerable resistance. That’s typical, in my limited experience, with some degree of reversal. I’m taking a small short with a close stop and a target of 4 points for half the position and 10 points for the rest.

      • Yep, that’s about what I am expecting too, I just wait for them to tell me which fork to take when we get there.

      • magicianme says:

        Both my bear targets above – 4 points and 10 points – have been hit so I’m now flat. Thank you Mr. M (or rather, whoever took the other side of those trades).

        No idea yet what tomorrow’s opportunity will be. It’s still a bull market so I’m highly likely to be on the long side but unlike some of you I’m not so sure till I see the PA, the volume, the momentum etc. Respect to those of you who take longer term positions. Today’s opportunity was, to me, clearly bear from the get go (even pre-market the heavy action large contract bars were down bars) and I was looking for the right opportunity to short which I finally did as per my previous post when the fake ramp ran out of steam.

        BTW, tommyboys, the H&S on the M5 chart today…. that’s a classic H&S. It came after a rise in price and had a clearly defined neckline with the price hitting it exactly four times (start and end of left and right shoulders). It was also supported by volume in the right places – something that many chartists ignore at their peril. As this is a proper H&S it is playing out nicely without mucking about around the neckline.Yesterday’s IHS, AFAIAC, is a failed IHS and not just because it crossed the neckline and then reversed back over it quite undecisively. Also, it was in the wrong place. The IHS is a reversing pattern so one looks for it at the end of bear runs and when price is weak, not the other way round..

  24. 777daimon says:

    No QE from ECB!

  25. blackjak100 says:

    Whether you like the ED or not, we have a line in the sand for the bulls at 1860. I’m under the assumption the ED is playing out until it’s not where wave ‘a’ completed at 1885.

    Premarket is indicating neither strength or weakness which could favor the ‘b wave’ triangle scenario – a move up to 1885ish (d wave) followed by a retrace towards 1870ish (e wave) before moving above 1900. If this happens, the c wave should be sharp and short lived (c =.618 * a = 1915ish) which seems to fit counts in other indices. A move above 1891 today would favor 3 of c.


    • simpleiam says:

      Thanks bj. If we see some decent follow through to yesterday’s rise, then I’m even more bullish… Until I’m not. GL and thanks for the info.

    • 16golfer says:

      Blackjak….if the bulls are gonna take this thing to 1900, I wish they would do it already. For God’s sake, why are they dragging their feet? Do they hear the bears grumbling or what?

    • simpleiam says:

      I’ll take this kind of consolidation ANYTIME, over that of a deep retracement that stays in retracement a long time.

  26. hkloon says:

    Tony, on the weekend update, you mentioned that NDX (if the uptrend continues) may exhibit the following:-
    Major 3 high July 4420
    Major 4 low August
    Major 5 high Sept 4470
    So, if I understand correctly, if this is the upturn for NDX, then May until July should see uptrend in NDX. Is it fair to say SPX may also see the following:-
    int III of major 5 high July
    int iv of major 5 low August
    int v of major 5 high Sept? thx…

  27. As I said on 2-3 occasions that SPX should touch 50dma. I also said “watch 50dma action”. Since, SPX as bounced back, next 5 trading days are crucial for SHORT TERM. There is no point in rejoicing for bulls as it is ONLY next 5-7 trading days good for BULLS,

    Then, first fall to 200dma, recover to 1840 and then SHARP fall to less than 1700.

    The horror movie should start ending next week and will run till end of June. ASA horror movie ends, we will see romantice movie starting from June end lasting for one month, that movie will be biggest grosser. However, BULLS will fail to watch romantic movie correctly As this romantic movie has TITANIC end…Raise the titanic!!!

    This is my last post for weeks to come, bye, GLTA

    • 777daimon says:

      ”Then, first fall to 200dma, recover to 1840 and then SHARP fall to less than 1700.”
      this is a very brave assessment.
      curious if it will be true.

  28. winslow80 says:

    Since 2010, SPX has been reversing every 242 trading days. Today was Day 242. The C leg nominally retraced .764 of A, which potentially completes the corrective wave. The Greed/Fear Ratio = 34 (Fear). The ISEE All Indices And ETF Volume registered almost twice as many puts traded as calls, indicating extreme short term pessimism. SPY/DIA/QQQ/IWM formed daily hammers, with IWM double bottoming at the 200 day ema.

    The technicals have aligned for a rally, using a decisive violation of today’s SPX low as the stop-out point. The upside objective remains SPX 1947 (which was a good year).

    • +1. Very nice info and summary bad cycle analyses!

    • bobhopium says:

      Winslow80…useful commentary from yourself… lately thanks for sharing.

    • simpleiam says:

      Thanks winslow! I also like the info…. Soul needs sleep, so I’ll tip-toe.

    • tommyboys says:

      Hi Winslow would you be able to elaborate a bit on the 242 trading day trend in recent years? I see the SP reversing trend approx every 25-40 trading days. What do you see at that 242 day mark that sets it apart from these other reversals. You are correct it did reverse down 242 trading days prior to yesterday but then 22 days after that it reversed again from the 1560 area and headed higher – and so on…?

  29. torehund says:

    THT; in Shanghai we trust, I say no more at this time 🙂

  30. lunker1 says:

    slight +D on RSI5 at 1860. +MACD cross too.
    the 1851 low didn’t have much +D either.$SPX&p=60&b=4&g=0&id=p17308303253&a=311732111&r=1375898285007&cmd=print

  31. blackjak100 says:

    With all the fantastic statistics provided by Fiona, the ED fits very nicely with the statistics. It’s extremely likely the S&P is in wave 3 of c of the final fifth wave of the ED. The wild card will be do we make a marginal new high just above 1897 or do we have an overthrow towards 1930? Watch the waves and QQQ for clues. I expect tomorrow to be a strong day overall!

    Simple, my apologies for last night. I think this board is most valuable when we all try to help each other in our trading whether it be day, swing, or investing. I will toot my own horn as I said the market will head to 1860 in a zig zag to complete 2 of c. When I told Tony it can’t be a flat per EW rules and had to be a zig zag, I got no response from anyone. That is OK!

    • a 5th wave can end at anytime, even well short of expectations.

      • blackjak100 says:

        yes, but a truncation is far less likely as they are not common. It’s all about probability. 1891 should be broken tomorrow if this is a third wave. If we hit 1885-1888 and reverse, the b wave looks like a triangle and could complete Fri/Mon around 1870ish. A break of 1860 and bulls are in trouble IMO.

    • Great call bj and gold too. I look for your comments everyday to learn from.

      • blackjak100 says:

        thanks but still need gold to break $1273 to confirm it’s not a second wave and confirm trip to $1200. So far so good though. I’ve been short but trade above $1300 could still mean an ongoing b wave and I would get out.

    • simpleiam says:

      bj, apology accepted. I didn’t mean to confuse you. Please keep in mind I had help from Tony on that position, else, I never would have tried it. Still, I will not be forthcoming with much info. anymore and think Tony’s right about not blogging actual trades. The reason that I trade the measly 10-15% of my cash is because IT’S FUN! I’m not trying to compete with anyone here, but won’t allow myself to be stomped on either. GL in all your trades.


    • RN Elliott wrote in 1938 that the E-wave of an ED “frequently” is truncated. He also said that it “occasionally” can be a throw-over of the upper channel.
      There is a risk/chance IMHO that the ED ended friday, at Dow 16.620 (ED start 4 october 2013). At that point there was an internal symmetry between A, C and E waves. In all three waves the relation between a and b waves were 0,4 and the a/c relation was 0,6.

      Best wishes Sverker

    • 777daimon says:

      Would you invest you money in the last points for an up move of an ending diagonale?
      I wouldn’t.
      I wouldn’t short it either (until it really starts to rollover to the downside).
      But getting long here… not too wise.

    • BJ, seldom do we get a pat on the shoulder, but often we get to hear what we did wrong… I am not sold on the ED yet. Seems IMHO there is way to much bearishness at less than a few % below ATH… ED should be bullish (as they quickly and dramatically reverse)

  32. simpleiam says:

    Thanks Tony! Wonderful info. on the blogs today. And something for Everyone, whether bullish or bearish; they both should have made money. This is the way to consolidate before moving higher, as far as I’m concerned. Core stocks doing well.

  33. Say hello to wave 3 down tomorrow targeting 1840, than small bounce 1855 than kaboomski 1810 or lower.

    • tommyboys says:


    • Did you not read CALDARO’S post? He works very hard to map out a game plan. The last line on the second paragraph which tells you flat out that Yellen speaks tomorrow is an automatic goosing of S&P and vix smash

      • truthtrader….. your name is in the dictionary next to the word complacent also next to the work euphoric and soon to be next the word bagholder& broke &miserable &naïve.. still enjoy yout though buddy , best of luck with your trading. ;-0

      • tommyboys says:

        You’re obviously too recent around here to understand ttrader’s sarcasm. He is as short as you and dying for a collapse being on the wrong side of the trade for months. He refuses to embrace a strengthening economy because his kids can’t seem to find employment. To relieve increasing angst he points to the Fed – ad nausea – as the sole reason for market gains. It got old six months ago. Now its just redundantly dumbing us down. Need a break from it. See you on the upside of 1900 next week.

      • Tommyboy lets not get personal about people’s kids. It’s not nice.

      • pooch77 says:

        IWBT,hope your right

    • RDC says:

      newb: you and Kevin are working very hard day and night for market to crash but it is not gonna happen until you give up your crash songs and turn bull. So secret is out now. As soon you will say market going higher, I will sell just like I use Dennis Gartman indicator.

    • pooch77 says:

      What is the catalyst?????

      • Kevin M says:

        Secret is out now? LMFAO!!! You gotta be joking right? So wallstreet looks up what Newbie and I say and then O NO…The JIG is UP and they reverse it on us.

        BTW I say it’s going higher iinto the 1890ish region before it tops. Catalyst? there will be one but they won’t let you know until it happens. Haven’t we learned this from the past? You think they give heads up to little traders like us? lol

        It most likely will be a flash mini crash type even that will be over with by the end of June.

        Take care..

  34. Great update Caldaro. Most important line is Janet Yellen speaks again on Thursday. Market up Vix Smash. Same prediction as today

  35. gtoptions says:

    Thanks Tony
    RUT Chart Update ~ Nice Reversal, will it hold? 😉

  36. radrian6 says:

    For the RUT, a stab into the 1095-1083 support zone produced an afternoon bounce. The bulls will have to work hard to stay in control — the first resistance zone is 1114-1126 and if RUT clears that area, there’s more resistance starting at 1133-35. Also, the 13-day EMA and daily BB mid-line have been cutting off rally attempts and they are at 1125 and 1129 respectively; the 34-day EMA is at 1140. RUT is in a position to stage a rally but I would expect a grind on the way up.

  37. ocaj2000 says:


  38. thanks for the update tony!!! let’s hope we get that pivot cleared soon indeed, as well as less bashfull but more technical matter of fact comments and market insights from certain individuals. it’s tiring enough already with a range bound market… 😉

    1) bought some GMCR y’day at open (first time I bought anything in 2 months… can you believe it… due to this total sideways slop… yup cash is a position too) and today’s earnings were good with good AH action. Major 4 maybe in!?
    2) bought some SCTY today and AH looks good too
    3) bought some TSLA today, but AH not so good… .
    2 out a 3; not bad. can’t win ’em all.
    4) JCP looking good. Maybe major 2 in at low 7s?
    5) TWTR getting very close to your $29.14 target. Maybe I’ll nibble at it again 😉

  39. RDC says:

    Thanks Tony. 1900+ coming.

    • 1900+ coming, you know what, Make it 2200 +. Sure why not, everything is Great here in America.

    • Kevin M says:

      1900 should have come by now. It hasn’t. The market never gives you this much time to get in. More like high 1600’s coming by mid summer.

      However short term…..1890ish is coming by Next Monday. Then over she goes…..

      • gtoptions says:

        You can also say it never gives you this much time to get out. GL 😉

      • lunker1 says:

        Why 1890?
        Why by next Monday?
        And why rollover?

        Post the answers once and then leave it be until Tuesday if you’re able to.

        The daily repetitive cheerleading by a number of you guys is just ridiculous.

      • Kevin M says:

        gtoptions…lol I guess 4 months is not a very long time to think about getting in lol

      • Kevin M says:

        Lunker-Seasonals and exhaustion is the answer.
        If you don’t like my comments look away goood sir…..Look away…..Ya know like the song….lol

      • lunker1 says:

        Kevin M,
        I didn’t know seasonals were precise down to the day and to a certain 1890 top, So it seems you’ve thrown in some gut feeling into your call unless you have some technical analysis to share? Anyone with darts can pick a day and a number but unless you share the why then it’s just a useless call.

      • magicianme says:

        Kevin, I too am waiting for (expecting) a correction … as I have posted in the past. It may even start today … but the signs aren’t good. Despite bonds going up the S&P has been going up as well. That correlation as well as other correlations between risk-on / risk-off have broken. The correlation between UY and the market has broken. The relationship between market and earnings – and earnings relative to forecasts – has broken. Other correlations have broken as well to keep the S&P at a level that is, IMO, unnaturally high. Even COT stats aren’t signalling an immediate reversal.

        Whether the market is where it is because of the Fed’s dovish talk, POMO, or some other factor or a combination of factors, I don’t know.

        What I do know is that yesterday’s volume & “momentum” (for me it’s # of contracts exchanged at bid vs those done at ask) signals a much higher probability of us seeing a new ATH before a correction. I’ve got no long term position, but if I had to put money on it I’d bet we come out of this congestion to the upside i.e. in the direction of the long term trend rather than the downside.

        The party will end at some point but it seems to have momentum for now… albeit of a very dangerous kind – bulls would be wise to keep their stops near and keep them trailing.

  40. bouraq says:

    Get used to volatility:

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