tuesday update

SHORT TERM: gap up and new high, DOW +69

Over the holiday Asian markets rose 0.4%, and European markets rose 0.8%. Overnight the Asian markets lost 0.3%. Europe opened higher and gained 0.3%. US index futures were higher over the holiday, and remain higher overnight as well. At 8:30 Durable goods orders were reported higher: +0.8% v +2.6%, at 9am Case-Shiller was reported lower: +12.4% v +12.9%, but FHFA housing prices were reported higher: +0.7% v +0.6%. The market gapped up at the open to SPX 1908, a new all time high, and continued to rise. The market had closed at SPX 1901 last week. At 10am Consumer confidence was reported higher: 83.0 v 82.3. At 11am the SPX hit 1912, dipped to 1908 by 12:30, and then went into a two point trading range until the last hour of trading. Just past 3:30 the SPX hit 1912 again and closed there.

For the day the SPX/DOW were +0.50%, and the NDX/NAZ were +1.20%. Bonds gained 4 ticks, Crude slipped 20 cents, Gold dropped $26, and the USD was lower. Medium term support now rises to the 1901 and 1869 pivots, with resistance at the 1929 and 1956 pivots. Tomorrow: no economic reports scheduled.

The market gapped up at the open after a three day weekend, and made new all time highs. Thus far we have three waves up from SPX 1862: 1886-1868-1912. With short term momentum hitting an extremely overbought level this morning, and a rising trend line from late April: 1885-1902-1912, we may be due for a pullback. To continue this rally in an impulsive fashion any pullback needs to hold above SPX 1886, and then make higher highs. With the NDX less than 1% below its bull market high, and the NAZ more than 3%, this is likely to occur.

Short term support is now the OEW 1901 pivot and SPX 1891, with resistance at the 1929 and 1956 pivots. Short term momentum hit extremely overbought, with a potential negative divergence at the close. The short term OEW charts remain positive from SPX 1877 with the reversal level now 1905. 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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127 Responses to tuesday update

  1. magicianme says:

    There’s a nice little H&S formed.

    • magicianme says:

      That H&S played out nicely! 🙂

      The first short I posted about just after the open reached target pretty quickly and it was a long wait to get into this 2nd short … which took over two hours to get going (and did a bit of a scary retrace along the way). Some days it’s like treacle!

  2. llerias7 says:

    Tony, about GREK is there a possibility to be B wave of (II) still…probably above $23 will be the confirmation of 3 of III…

  3. This should be it for this wave, but if we gap up tomorrow, then protect your faces, people…

  4. torehund says:

    G-miners going for the double bottom or worse. At some stage it will be a prolific buy but the expected bottom churn may take months.

  5. Tony

    As you know there is always a bull market somewhere. Do you see any stocks/sectors or anything which might be close to start a wave 3 of 3 higher in the coming months ahead ?

    Thank you

  6. uncle10 says:

    Thanks Tony.
    Sorry. Not much help from my 3 today. Good day and gl all.

  7. H D says:

    GM Tony & all, Looks 55 points for the 3/C in EDT if B at 59.79, 1902 = overlap, it should keep impulse for 1921/2 to complete wave.

    What’s new?

    • H D says:

      Fishing has been super slow at my favorite lake and off the charts everywhere else. Go figure. Golf game is solid. I’m ready for the British Open with the winds we have had for the last 4 months. Club up and 3/4 swing keeps it low and straight. No grass to cut, I went synthetic.

      • uncle10 says:

        Funny HD. Fishing good down south. Playing 4 times a week for the last 2 months. Last week I had my worst round of golf in 5 years followed the next day by my best in 5 years. No joke.
        I cut grass all growing up. I built up a nice little business by the time I went off to college. I used to take pride in getting my lines just right.

      • H D says:

        4X a week! Nice, You must have a membership. Grass is tuff in the desert. I only had 500Sq feet of bermuda hybrid, and was starting to have problems. It’s just too dry and the native plants do a number on the soil. I can sweep perfect lines though.

      • tommyboys says:

        Ha – I had the same biz right through college Unc! Was forced to take a pay cut once I graduated for a “real” job…Took that SAME pride in straight markings. Free money DWCH starting to squeeze…

      • uncle10 says:

        Nah. I am done with memberships. I play over at the city course. $16 walk 18 twilight. Awesome course. Bent greens in great shape- not slow not fast. #justright. #lucky

      • uncle10 says:

        Is that right Tboys!! Funny. I hear you on a pay cut!
        DWCH. Nice! like it. Thanks TB.

  8. mjtplayer says:

    Not to state the obvious, but gold is heading lower. Yesterday it finally broke out of the 1 month triangle consolidation, downside target is low $1,200’s; not sure if we tag the June/Dec lows at $1,180 on this trip down.

    Bigger picture, this should be a “D” wave low, with a small “E” wave bounce back up to $1,300 – $1,340 following to complete the massive wave 4 triangle that’s been forming for almost a year. Once complete, we get wave 5 down to THE bottom, which should be well below the recent $1,180 lows; perhaps $1,000 – $1,100. I’m still targeting GLD at around $100 – seems like a nice “round number” for options and future to migrate towards, this would be about $1,060 spot.

  9. budfox9450 says:

    Some day – as some study elliott wave. The study will be on time.
    Being able to project the next P3 high, in time. I find, an interesting

  10. winslow80 says:

    1050 a.m. ET
    ISEE All Indices & ETF Only
    Calls 14.374 Puts 93,392

  11. rc1269 says:

    can’t imagine there are tons of shorts left here, esp in ndx

    the bond rally lives on. smells like 2.20 10yr is a reasonable tgt

    • simpleiam says:

      Don’t know how much credit you give Rick Santelli, but during a broadcast last week, he said he sees 10yr. at ~1.6% in a couple of years because of deflation. He switched camps in a hurry from inflation, to deflation. Guess he perceives it as monitoring and adjusting.

      Have a good day, All! Simplify!

    • JK1987 says:

      FED is buying $45 billion bonds, so bond rally and yield dive?
      Key 10 yr support 2.73 broken.

    • mjtplayer says:

      Support at 2.40% first, then maybe 2.2%.

      Watch the 30yr, it leads the 10yr, key support at 3.25% is fast approaching. Those who have been long TLT and enjoyed the ride may want to start getting out and taking profits. Yields could certainly go lower, but you’re approaching importtant support. You’re also appraoching resistance on the TLT at $115 – $116; the downtrend off the highs.

    • Not yet. Was short last week and covered with profits just as soon as COMPQ jumped over its down trendline (posted the chart reversal to the blog when it happened). I am also not long, just in cash, but waiting to pull the trigger on short. Obviously, no signal for that yet. Good luck longs and shorts!

  12. JK1987 says:

    Tony, perfect trend line on SPX, what does that mean?

  13. Good time to wait for tomorrow’s GDP, and churn the Overbought condition…

    • torehund says:

      Excellent tune, let get rid of this intellectualized depression, NOW 🙂
      Lets be so daring as to demand some optimism…

      • simpleiam says:

        Careful tore, Doomsdayers might label you as “euphoric”… (But I don’t blame you for wanting to be optimistic!)

      • magicianme says:

        Expecting price to go up is not “optimistic” just as a downside price expectation is not “pessimistic”. There is no place for “optimism” and “pessimism” in trading, only realism.

        Traders would do well to trade the market based on what the market is telling them, not based on some mood, some blind faith in someone else’s analysis, or on their individual optimistic or pessimistic personality.

        I see today has a better chance of a retreat than an advance. It’s a probability. I’ve already made half my target for the day by going short as per the thoughts in my earlier post. Your indicators/analysis may contradict my reading and show a higher probability of an advance, which is fine. Differences of opinion make for a market. Denigrating other viewpoints as “pessimism” isn’t constructive.

        We’re not done to the upside, longer term, but I don’t assign the same probability to an individual day ending higher.

      • lunker1 says:

        Never make the mistake of telling a woman what she can or can’t be LOL

      • simpleiam says:

        simpleiam says:
        May 27, 2014 at 4:13 pm
        Thanks Tony! Yes, it might be time for a bit of a pullback.

      • lunker1 says:

        NKM you read into things too much. He was simply saying trade without emotion. Not necessarily you but just in general. Simplify LOL.

      • lunker1 says:


      • simpleiam says:

        Whatever… Thanks Dad. Like I don’t know that already. Were you a school teacher in a past life, lunker?

  14. Tony

    Does it not concern you that Nadsaq and COMPQ is a lot weaker – also Dow Jones it not making new highs with SPX ?

    If Dow Jones and COMPQ does not make new all time highs , what do you expect then ?

  15. bhupal777 says:

    Thanks Tony. Spot on with your analysis. Do you think India’s Nifty uptrend needs to take a breather before rally continues or is it end of impressive 9 months bear market rally and bear market to resume? Also your thoughts on China markets.

    • tony caldaro says:

      Both of those markets are quite messy using our analysis.
      China has done worse than expected, India better.
      But both look like commodities unfold in a series of a-b-c’ s.

      • bhupal777 says:

        Thanks Tony. I am labelling $EPI has done its bear market rally and downtrend has started. Owns $EPI July PUTs. Agree that $FXI is a mess but my labelling showing me one last gasp before going down. Owns June CALLs on $FXI.

      • tony caldaro says:

        EPI has not tracked the BSE very well since 2012.
        Probably more to do with the currency.

  16. magicianme says:

    On previous occasions when there’ve been low volume rallies I’ve posted about looking out for an opportunity to short … and it worked out great. We have another such situation here with several days of low volume rallying. However, as the low volume from last Friday to yesterday coincides with a long holiday weekend I don’t see it necessarily an indication of lack of professional support for the rally. It could be traders away from their desks. I’ll be looking for a short today, but would need more confidence than normal – multiple signals / multiple time frames – before I jump in. I see a bit of a pullback before we reach the 1929 OEW target.

    The futures often have a hidden story to tell. By my reckoning the main index has reached the trend line from the highs of Mar 7th and April 4th, but the futures (ES 06/14) is still well short. That’s despite the futures rising 190 points from the Feb 5th low while the main index has risen “only” circa 180 points.

  17. Hi Tony

    What is your view on Gold miners (a bit longer term – GDX ?)

    Do you think they made a short term bottom December 2013 and if so , is this then going to be wave ii low soon before wave iii , or what is your view on GDX ?

  18. blackjak100 says:

    wave iii of c = 2.618 * wave i = 1920ish or 1929 OEW. Looks like we are targeting this before any 10-20pt pullback.

  19. Tony another question to one of your charts.

    DRYS has completed at C move down in 2012 – and a wave 1 high in 2013. Do you expect this soon to be end of wave ii before wave iii upwards about to start ? If so , then shippers would be looking good in the future or am I wrong reading the chart ?

    • torehund says:

      Thats also my thinking and since wave on and two were pretty long in duration, wave 3 should last for a year or so. Drys must have approx 80 dry bulkers, 6 or so tankers, or maybe more and the drilling segment. Could be a rocketif bulk turns.

    • torehund says:

      Look also at tankers: from june 28-2013 Frontline has done 2 Waves up With the 2nd one soon to bottom, then I would expect a large wave 3 to start within a short time.

      • What is your favourite long setup Tore % wise with most potential gains in the industry ?

      • torehund says:

        FREE shipping is my favorite, however this is a risky Stock With lots of volatility. I also own GNKOQ and TEU as Box shipper. Nowadays in shipping there are some participants With Heavy debth still, like DRYS and in tank FRO.
        There has been lots of restructuring going on lately both Genco, Free, and recently NEWL have in a hurrry been through this process. The latter has hampered interest for EGLE and DRYS as they are still very much debth- laden. My thinking is that there is value to be fouund in the latter ones, when the BDI turns.
        The bond holders are now interested in entering the Stock instead of sitting in low yielding bonds, but if they get too attractive deals jumping in, then in some cases it will be bad News for the stockholders.
        Summary: When Things bottoms out in tank, I would think FRO is a good bet, and Drys is super when rates turn. Free is a crazy nanocap, but a grand slam lottery ticket if the BDI rises fast.

  20. Tony

    If AAPL topped around 700$ per share in wave V , is this then start of bear market in AAPL and wave 2 about to end before wave 3 down ?

  21. Cliff Uzan says:

    Hi Tony,
    It has been said that 5th waves in this bull market have tended to truncate. However, this is also Primary 3, which tends to be the longest. Do we say that since this is Primary 3 a Major 5 wave will not truncate, because the influence of Primary 3 is more dominate. Or do we say no this is a 5th wave and even though its in Primary 3 we should anticipate a truncation.
    Thank you

  22. Hi Tony

    Are there any stocks you track which might have seen a major high and could be starting a wave 3 of 3 down in the coming months (with potential a market correction starting?)

    Any stocks you track which looks toppy for you in the coming months ?

    Thank you

  23. lunker1 says:

    Friday did the VIX close below its Daily BB?

  24. I thought trendline wont fall at 1912 but it looks falling.

    Wednesdays have been Bullish in this rally. Other days that have been bullish are Tuesday, Friday, Monday and Thursday.

    If market crosses 1914 then 1930 for sure…I may hold SHORTS

  25. blackjak100 says:

    Yes, this movement caught me by surprise and yes we are going higher. However after reanalyzing the V of the ED, it now looks like it will end where ED’s normally end…top or overshoot of the trendline @ 1930-1940ish or 1929 pivot for the OEW gang. With all the momentum of this obvious third wave closing above the BB, it must be iii of c of V of the ED which is either complete or will complete tomorrow. I’m changing the ‘b wave triangle’ completing at 1868 which actually has the right look, So in review for V of ED…

    a = 1814-1885 (clear impulse)
    b = 1885-1868 (nice triangle and a fast sharp thrust out of it which is very typical)
    c = 1868-1940ish or slightly higher with an overshoot (clear impulse)

    The reason I’m sticking with the ED is the series of 3 wave structures from 1646. It’s clearly not impulsive. Cheers!

  26. gtoptions says:

    Thanks Tony, Nice work!

  27. bouraq says:

    Today’s post: No comment
    #spx #djia #gold #audusd #oil

  28. ocaj2000 says:


  29. CygnetNoir says:

    Tony figured out the secret to delivering a stress-free day at the blog: Disable the “Reply” function during market hours lol 🙂 SPX at 1911 … and you read about here weeks before it happened, Thanks for sharing tomorrow’s newspaper today, Tony! Kudos!

  30. Lee X says:

    Thanks Tony

  31. LOL, all quiet on the western front 😉

    Today’s market action probably left many speechless, and IMHO it’s not even close to being done. Why? Last week I showed the very strong BB squeeze, which together with the preferred OEW count and other TIs already suggested a high probability for new ATHs, so for those who followed along today was not much of a surprise at all. In fact, price is now hugging the upper BB on the daily, and the BB-width is now expanding, MACD and signal line are pointing up, price just entered OB on the daily RSI(5), etc, all suggesting higher prices in the coming days. This setup looks similar to that of mid-December last year until the end of December. SPX then gained another 30 points. IF that works out similarly now, the 1929 OEW pivot is therefore and logically next.


    • pooch77 says:

      We can only hope

    • torehund says:

      The move that we have been waiting for is just at the beginning, funny how News get twisted to the upside when in NEED. Even Japan is now thinking economy is strong enough to stand on its own feet.
      Bulk: Think a BDI turn is just around the corner and from 25/10-11 until approximately today the index has made a long streched ABC Down. Hopefully a New wave one will emerge alternately a wave 3 form a Shorter pattern. Anyway I think the BDI is ripe to do something spectacular..If the lage ABC Plays out it will og utrafast into a wave 1, if its a wave 3 emerging price hike can take one year. Exciting times Ahead.
      NEWL went from 3 mill mcap to 450 mill mcap in less than 2 weeks, impressive 🙂

  32. simpleiam says:

    Thanks Tony! Yes, it might be time for a bit of a pullback.

  33. makiori says:

    no comments? wow is everyone speechless and breathless?
    even Toni had to post a test message in response to his analysis because it couldn’t believe it!

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