wednesday update

SHORT TERM: gap up opening, DOW +159

Overnight the Asian markets lost 0.2%. Europe opened lower but gained 0.4%. US index futures were higher overnight, and the market gapped up to SPX 1879 at the open. The SPX had closed at 1873 yesterday. The rally continued until 11am when the SPX hit Monday’s high at 1886. Then the market pulled back after FED chair Yellen’s speech: At noon the SPX hit 1880 then moved higher into the FOMC minutes release at 2pm: Right after the release the market hit SPX 1887, dipped to 1882, then rallied to 1889 by 3:30. A slip dip then ended the day at SPX 1888.

For the day the SPX/DOW were +0.90%, and the NDX/NAZ were +0.90%. Bonds lost 7 ticks, Crude rallied $1.50, Gold slipped $3, and the USD was flat. Medium term support remains at the 1869 and 1841 pivots, with resistance at the 1901 and 1929 pivots. Tomorrow: weekly Jobless claims at 8:30, then Existing home sales and Leading indicators at 10am.

The market gapped up at the open today for the second time this week. After hitting a low at SPX 1868 yesterday the market rallied to 1889 today. While yesterday’s low could have ended an important pullback. We would like to see SPX 1891 cleared before ruling out a retest of the 1860-ish area. This market has been quite choppy. On a positive note. Sentiment continues to improve in the growth indices, even though the DOW appeared to be leading today after yesterday’s positive divergence. Tomorrow should be the key to a continuedΒ move higher, or another sharp pullback.

Short term support is at the 1869 pivot and SPX 1860, with resistance at SPX 1891 and the 1901 pivot. Short term momentum ended the day slightly overbought. The short term OEW charts turned positive at the open with the reversal level now SPX 1881. Best to your trading!

MEDIUM TERM: uptrend

LONG TERM: bull market


About tony caldaro

This entry was posted in Updates and tagged , , , . Bookmark the permalink.

112 Responses to wednesday update

  1. Very tight trading range until the weekend.. I hope I am wrong, and we see a 1%+ move by tomorrow… but I know I am mostly always right.

  2. winslow80 says:

    A .764 retracement of the March-May decline in RUT is 1182.07, which would form a symmetrical right shoulder for a H/S top. That would represent a 5.9% advance from current levels. A corresponding rise in SPX would put it near 2000, the upper boundary of Tony’s objective for Primary 3. If Naz rose a similar percentage, it would make a marginal new high and create a double top.

    On 3/11/13, VIX hit the same level that it reached today. During the next 51 trading days, SPX rallied more than eight percent.

  3. Agree Elmer – Tony has done as good a job as anyone in correctly roadmapping this choppy market.

    To all: does anyone think we DON’T make new highs in the SPX here?

    • scf51 says:

      Yeah, Kevin. That know-it-all recently guaranteed no new high.

      It’s fine to disagree. But he showed up here bad-mouthing Tony and telling people
      they’re wrong.

      A new high should confirm his exit.

  4. elmer510 says:

    With SPX in the early stage of minor 3 of Intermediate 3 of major 5 of Primary III, we should have some real fine days ahead now in May/June. But SPX has to go higher than 1902 to be sure. That could happen any time soon.
    Probably I won’t join “the sell in May” promoters this year.

    I think Tony has done a remarkable job now analyzing this choppy market. At least it has been profitable for me, even though i trade an european stockmarket. But the main trends are the same.

    I think people commenting here should try to be as calm and polite as the “owner” of the blog.

  5. JK1987 says:

    Careful, slightly negative divergence on RSI 5 – same one as 1886.
    So far only 3 waves up from 1862.36$SPX&p=60&b=4&g=0&id=p17308303253&a=311732111&r=1375898285007&cmd=print

    • The proverbial calm before the storm? I’m expecting SPX to make a marginal new high then correct more substantially. It had a few chances to break down but failed, each time it bounces back to near 1900 increases the odds of breakout to the upside, I’m looking for 1910-20 and will start looking to go short.

  6. Market bounced from last week’s 1862 low as expected and commented but look at the relative weakness of BAC – Jedi, any updated thoughts on this, think it’s still headed back to $16 before the next leg down? TIA.

  7. Kevin M says:

    Not going to beat a dead horse here but the horse(bear) actually isn’t dead yet.

    The Japanese Yen is all I’m going to say. It’s about to change directions. Look what happened in JAN. It’s about to happen again. 1750 on the SPX by the end of June/early July will happen. Bubble phase thereafter. Buy bonds they are on sale again today. Do it!!!

  8. magicianme says:

    While the S&P is looking very bullish, I’ll urge some caution. It has gained just six points today before running into a brick wall, and it has done so on low volume. That’s like Monday’s ramp which was promptly sold on Tuesday. Such low volumes so close to the ATH are not a bullish sign!

    If the S&P doesn’t retreat tomorrow bear in mind that long weekends make for one extra day of possible bad news that could impact the markets. Good news tends not to cause major gaps up near the ATH but the slightest bad news can cause a big gap down. EU elections, Russia, China, it could come from anywhere.

    Take care and good luck to all.

    • magicianme says:

      That was such a classic move! Here’s what I saw: Three consecutive high churn bars on the M5 chart …which usually precede some coming action. Immediately there followed a standard blow out top and more than a third of today’s gain got erased in a few minutes (with more downside to come). I find that moves like this have their own beauty. Sorry to anyone on the wrong side of that trade.

      • magicianme says:

        We’ve now had a 50% retracement of the day’s gains. Might as well close shorts here, guys. Have a good one and I look forward to your new post in a few minutes, Tony.

  9. Smashing news, proving american oil independence theories?????

  10. lunker1 says:

    SPY pattern.
    the “dustpan”? the “putty knife”?
    or an IHS

    • JK1987 says:

      Free lunch fro IRA main account? πŸ™‚
      careful on the internet.

      • lunker1 says:

        thx but we covered this before…that’s only a chart name. there’s no acct name, number or password.

      • JK1987 says:

        rc said he gonna “hack” the account. πŸ™‚
        You are revealing personal information of you are trading with IRA account as main.
        I would block that information, and never reveal any personal information.
        You know, the internet is dangerous. Just a friendly reminder.

      • lunker1 says:

        Jackkendo1987 didn’t give hackers anything to chew on LOL πŸ˜‰

  11. gtoptions says:

    I just notices a bearish Gartley Pattern in the SPY. A break to new highs would eliminate. FYI

  12. JK1987 says:

    XLK new high, perfect weekend update on XLK and NQ.;

    Should wave iv on NDX be a completed label, not tentative?
    And maybe insert a 1-2 with 3 proceeding?
    RUT and NQ are leading.;

  13. JK1987 says:

    Tony Thanks for updating DOW with a completed wave b.
    Looking for wave c at new record high at the upper diagonal line for this alternate count?;

    my TY card is for you.
    oew tutoring is great, especially those enormous real time group real time work, a must join!

  14. winslow80 says:

    Greed/Fear Index = 29 (Fear).
    ISEE All Indices & ETF Only = 8,166 calls/16,160 puts.
    Traders hate this bull market.

    • tony caldaro says:

      we noticed
      thx Winslow

    • its hated because its the FED that has done it. Economy can not stand on its own. When National TV stations are saying if you own stocks you should send the FED a thank you card its obvious.

    • mjtplayer says:

      But, the VIX just made a new 52-week low this morning at 11.68 – that would indicate NO FEAR in this market. Prior 52-week low in the VIX: 12/26/13 – the day after Christmas and 3 trading days before the 12/31 high.

      Wouldn’t be surprised to see the market float higher into tomorrow and Tues with the holiday weekend, another holiday high (low in the VIX), before selling-off into mid-June.

      • winslow80 says:

        VIX was lower in March 2013. How did that work out? More people have lost money by emphasizing VIX than by using (misusing) any other indicator. Whoever devised VIX has “666” on his forehead. When the market crashes VIX will skyrocket, which won’t help all the homeless people who lived in mansions before they learned to follow VIX.

    • torehund says:

      Before there can be an implosion there has to be an explotion. Buy what you hate, and marry the wrong woman….it can only get better πŸ™‚

    • rc1269 says:

      i thought we already debunked the CNN Money fear/greed index as being broken
      my fear/greed indicator says we’re at 43.5. it’s mostly baseless and partly broken, like theirs, so should hold similar weight. and i can put it on a website too if it makes people feel better. πŸ™‚

  15. gtoptions says:

    Thanks Tony
    SPY ~ Weekly FOMC Pivot Fest should be just about done. πŸ˜‰
    Looking for a move towards the WR1 @ 190.75.

  16. If this 1892 breaks, then 1898 should be the max for this week. MO

  17. llerias7 says:

    It seems that they are pumping again and we will have ATH soon…does not make sense I know but it is what it is. “Too much bears on the boat!”…

  18. JK1987 says:

    Tony thanks for updating a completed ii at 1862.;

  19. lunker1 says:

    Tony on the monthly SPX chart why Aren’t there any light blue cycle notations for supercycle one?

  20. tommyboys says:

    Taking a high fly over It looks as though we’re nearing the end of a 14 year bear chopping pattern launching into 25-50% gains over the coming couple years. Looking back in 2020 the 2010s will look very similar to the 80s & 90s if not the 40s& 50s. We’re approaching a great time in the US – enjoy…

  21. blackjak100 says:

    It looks like a great risk/reward opportunity to go short gold today. It finally looks like the 6-7 week ‘b wave triangle’ is completing this AM as ‘c of e’ is ongoing as we speak. MACD has been near zero the entire time which is exactly what a triangle should be.

    One last thrust towards $1300-$1310 should do it assuming my count of this ‘c wave’ is correct. However, we must see a big ole topping tail and reversal as triangles usually offer fast and swift reversals. Target would be $1200ish.

    • mjtplayer says:

      Agree, shorting gold here at $1,300-ish with a tight 1% stop at about $1,310 – $1,315 is good risk/reward. I think we trade down to the low $1,200’s, not sure if we see $1,180 on this drop

      • blackjak100 says:

        So far looks perfect and I added to my short one last time at $1300 right after market open.

        $SPX count is not going my way but not invalidated yet.

  22. alexhartley1 says:

    I think we’ll hang up around here till the the US long weekend begins and then drop next week. I think we may well drop past 1860 if and when we do. I will look for a long opportunity end of month/early June for a last leg up into July.

  23. bobhopium says:

    Thanks Tony and others for their great input to this forum.
    Still no change of opinion from me, and I am still expecting a massive global summer rally.
    My reasoning ?…Well the short version (I Hate typing) is is that I simply do not see “Tops” in place, what i see is sideways/corrective strutures and i expect a continuation (eventually) of the prior trend.The market has fooled me before and will again, but i’m staying with this until mkts show me otherwise.
    My money is where my mouth is and I have highly leveraged positions in Nikkei,Dax, and US mkts and am looking to position long usd/jpy.
    Aimho and good health and good fortune to all

    • magicianme says:

      bobhopium, I’m with you in that strong trends, when they reach a period of consolidation, are more likely to continue in the direction of the trend than to reverse. That’s the accepted wisdom. However, that does not exclude the possibility of a sharp counter-trend move in the interim to shake out the weaker players.

      For those longer term traders here, those expecting choppiness to continue for a while, it makes sense to sell on the next high and wait for a correction before reloading. There’s a good chance that correction is coming whether you’re expecting OEW’s ED or whether you follow any other TA so get out early and don’t be greedy! A high volume day at the low of the current range followed by a testing of that low forming a +ve divergence on the daily would be a good time for them to go long again. And I believe that such price behaviour will materialise over the summer. The patient trader will be rewarded.

      Given price moves up slowly but moves down fast, ATR tends to shoot up when there’s a correction to a rally. At present I see low ATR. The actual range in the S&P is lower than what implied volatility would suggest it should be. That’s true of all the main US indices.

      I don’t like that bond yields are hitting new lows while the S&P hits new highs. That ain’t natural. Conceded that $ flow into bonds does not need to come from $ flow out of equities, but it stills takes balls of steel to go long in this scenario.

      May I offer my thoughts on your USDJPY? High churn days on the 9th and 16th both suggested a test of 103 and that didn’t happen. There was a lot of professional activity on the 2nd and 15th buying JPY and the lows of those bars are holding (on my Yen chart which is the inverse of the UY chart). I would be cautious about going long on UY at this stage especially as any correction in the S&P would hit this carry trade pair. If I traded UY I would use it as a hedge to the S&P rather than trading in the same direction on both… and I’d keep an eye on the correlation.

      bouraq, thanks for your FTSE chart from the other day. Tony, thanks for, well, everything.

  24. Planetrader says:

    blackjack100 – not suggesting you’re not right, but I am having trouble understanding how your ED ended at 1902 (from a wave counting perspective). I can only make that as a third wave of the ED at best. I still think the higher probability if it is an ED is that 1902 finished the third wave and this is now the 4th. Timing for a low yesterday a tad early for me so ideally we get a slightly lower price into the end of the week before the ramp.

    • blackjak100 says:

      these all are zigzags (a-b-c) per EW ED rules:

      wave i = 1646-1851
      wave ii = 1851-1738
      wave iii = 1738-1897
      wave iv = 1894-1814
      wave v = 1814-1902 (I have a ‘b wave’ triangle ending at 1867 which we overlapped 1902-1862…which looks impulsive)

      Hope this helps!

  25. the “total control” roadmap for thursday and the coming week with new stock picks and small cap folio beating benchmark by 3 times:

  26. bhupal777 says:

    Thanks Tony. So far so good and you are definitely in minority of the analysts who thinks the market will go up. When it looks low odds for upside move, that is the time market definitely surprises everyone and moves up. If it is not your superior analysis on NAZ market, I would have hard time in agreeing with your upside call. Since this is a 5th wave and in the last stages of the rise I am not really interested in trading this bumpy market on long side. Just buying the long dated PUTs and when this P3 ends, I will be richly rewarded.

  27. mjtplayer says:

    Bias is higher tomorrow and Friday, usually the case heading into a 3-day/holiday weekend. If no new highs by Tuesday, then the high could already be in at 1,902 and completed ED on the DOW, need a break and close below Tuesday’s low to potentially confirm a downside break of the ED.

    BTW: I still favor you original ED count

  28. blackjak100 says:

    Sticking with the ED ending at 1902 and 1902-1862 as wave i until I’m proven wrong, it looks like a zigzag (5-3-5) for wave ii could have completed today at 1889. Initially I thought the rise from 1862-1886 was a 3, but it does have the right look as 5. Clearly 1886-1868 is a 3 and then today’s rise for ‘c’ counts nicely as an ED which terminated at 1889. Tomorrow must head straight south to confirm this count however.

    • China data came in better then expected, a good jobs number tomorrow could create a gap and go to 1960. Or not.

      • blackjak100 says:

        Yep seeing the mini futures ramp now. Always endless possibilities – just trying to come up with most probable count. Wave ii can still be a WXY where c of Y = .618*a =1891. Will need to see how futures react rest of night.

      • You know that direct tv commercial were is kid and wife have wires and the commercial is based on hiding the wires for the tv. That’s how I feel we are being played. This market has nothing to do about fundamentals, just technical. Which means even with chinas better then expected numbers and a better jobs number we still could tank when we all think it should be going higher. I can’t tell you how many times companies had really bad earrings and I thought the market would tank. Yet it went up. The opposite has also applied. We are all puppets in A computer driven market.. Spin the wheel were it stops nobody knows

    • blackjak100 says:

      There’s been no volume of late meaning institutions aren’t selling, but retail isn’t buying. A sideways market frustrates the most participants including myself IMO.

  29. M1 says:

    Bumpy ?

  30. simpleiam says:

    Thanks Tony. Would be good to see spx move impulsively up through 1891 tomorrow and close up there. We shall see. Simplify!
    (Last post for now.)

  31. ocaj2000 says:


  32. bouraq says:

    Wild bulls raging

  33. COMPQ right at resistance, but price has moved outside of the down channel. Turnaround Wednesday?$COMPQ&p=60&yr=0&mn=6&dy=0&id=p31684324037&a=347539933&listNum=7

  34. ariez5 says:

    Tony, could you extend the last bearish divergence you drew on the SPX hourly chart to the readings from today – or does the slightly oversold reading from yesterday negate such an interpretation?

  35. alexhartley1 says:

    Hmmm….. we’re rising into the 22nd! I was hoping for a pullback into this date. I am leaning more towards another leg down towards end of month.

    • Yes, exactly one year ago tomorrow since the May 22 fake out and flop. If it pulls the same trick out of the gate, especially this close to 1900, it could be the fake out of the year. The market had a great opportunity to follow through with a lower low today to set the market up with the ideal conditions for a sustainable upside breakout, but it didn’t and the foundations look flimsy and that waves a red flag to me. EU elections tomorrow, Ukraine on Sunday.

  36. pbnj123 says:

    I asked the same question a day or two ago – shouldn’t the red circle be in 2012 and not 2011similar to $COMPQ?

    • tony caldaro says:

      Sorry get the two mixed up.
      The NAZ circles illustrate a previous choppy period, like this one.
      The NDX circles illustrate the choppy pattern heading into PRI I, and now near PRI III’s end.

  37. Thanks for the update Tony – while I tasted a crow’s leg yesterday, today pretty much confirmed what I was looking for on Monday. The daily AI on the SPX and DOW gave today a buy signal. NDX’S setup, as I discussed on monday, followed through today.

    ps: I noticed the red circles on your weekly NDX bars, are you thinking -keeping on open-mind- that this iv-th wave may be progressing as the major 4 of primary I on the NDX?

    • tony caldaro says:

      No, those circles just compare a similar consolidation period before a stronger move in the past.
      NFLX leading the way?

      • Ah Ok! Good to know. NFLX looking very good (i am almost $50/share in the green πŸ™‚ JCP… not so good… but we can’t win ’em all.

    • torehund says:

      Thanks for the update Tony, like Charlie Chaplin walking this market chooses the longest path possible to where we think its headed.
      Sould: Market loves to wrongfoot all players, and I am chopped up in my mind on my long term positions. Daytraders have mostly left…..

    • simpleiam says:

      Crow…Tastes like chikin! We’ve all eaten our share, soul. Not a first time and surely not the last for any of us. GL trading! Simplify!

    • John Arella says:

      If JCP goes over $11, I’m in for the rise to $24 otherwise iam waiting to see what happens πŸ™‚

Comments are closed.