tuesday update

SHORT TERM: new highs then decline, DOW -119

Overnight the Asian markets gained 0.6%. European markets opened higher but finished mixed. US index futures were lower overnight, and at 9am Case-Shiller was reported lower: +10.8% v +12.4%, and the FHFA index was reported flat: 0.0% v +0.7%. The market opened four points under yesterday’s SPX 1963 close, and then began to rally. At 10am New home sales were reported higher: 504k v 433k, and Consumer confidence was reported higher: 85.2 v 83.0. The rally continued until 11am when the SPX entered the 1973 pivot range at SPX 1968. Then it started to pullback. The market then declined, with only two point bounces, to SPX 1948 by 3:30. Then the market bounced to SPX 1952 and closed at 1950.

For the day the SPX/DOW were -0.65%, and the NDX/NAZ were -0.30%. Bonds gained 12 ticks, Crude slipped 15 cents, Gold added $1, and the USD was higher. Medium term support drops to the 1929 and 1901 pivots, with resistance at the 1956 and 1973 pivots. Tomorrow: Q1 GDP (est. -1.8%) and Durable goods orders at 8:30.

The market nearly gapped down this morning, but retested yesterday’s SPX 1959 low and rallied. It then cleared the all time high at SPX 1964 around 10:30, and entered the 1973 pivot range when hitting 1968 around 11am. Then it started to pullback. The pullback was clearly the largest since Minute wave iv (1956-1926), as the market dropped 20 points. So it does appear our count for Minute wave v was correct: 1941-1931-1960-1952-1968. At today’s high Minor 3 appears to have topped, and the market is now declining in Minor wave 4. Adding to this probability is the fact that the DOW failed to make a new high today. Minor wave 4 is expected to find support at the 1929 pivot range (1922-1936). Since the important pullbacks have ranged between 30 and 40 points during this uptrend. The 1929 pivot range fits nicely. Also there are two previous fourth waves at SPX 1925/1926: Minute iv of Minor 3, and Micro 4 of Minute iii.

Short term support is at the 1929 pivot and SPX 1916/1919, with resistance at the 1956 and 1973 pivots. Short term momentum created a negative divergence at today’s high, then hit quite oversold. The short term OEW charts turned negative with the reversal level now SPX 1960. Best to your Q1 GDP trading tomorrow!

MEDIUM TERM: uptrend

LONG TERM: bull market

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

About tony caldaro

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81 Responses to tuesday update

  1. gtoptions says:

    Thanks Tony
    SPX ~ .618 @ 1960 FYI

  2. He comes drop to 1920

  3. pooch77 says:

    This is it,no C wave down to 1929 pivot?? Tony how high can this go to negate a C wave down to 1929 pivot.

  4. cmucha68 says:

    Hey guys, when is the so much promoted 1929 level coming -:) ??

  5. Paulo Pereira says:

    Just to thank Tony for the outstanding job one year after starting to read the best blog on the net.

    Also to point that in the Durable Goods Report the May 2014 over May 2013 total growth is 3,6% and 4,2% on New Orders.

  6. lunker1 says:

    Hi Tony, you still have minor 3 as green. are you holding out for the possibility that minute v extends and this was a micro 1,2?

  7. JK1987 says:

    9 points reversal from EMA(89) support, wave b of Minor 4?

  8. lunker1 says:

    Check out the SPX EMAs on Tony’s 60 min and daily charts. Price nailed 3 of them today. Is the daily 34EMA next?

    • lunker1 says:

      To get a 25-35 point move down the 60 minute RSI5 probably needs to get back to 50-65 so maybe we’ll see consolidation here at the 1956 pivot

  9. GDXJ potentially has completed a nicely proportioned ABC on the hourly.

  10. [Free Chart] SPX 2 Day Chart – Truncation and reversal targets @ front page http://wavegenius.com

  11. manunidhi21 says:

    Namaste Tony !

    In time sense when you expect P3 to end(1973 or 2016) ?

  12. llerias7 says:

    In EW count we should be in a wave (b) of minor 4 (Int.III), right?

  13. Lee X says:

    It was the bad weather

    • torehund says:

      This is the wave 2 bottom counted from 2009, now even the FED agrees With me 🙂 bring on the large 3rd and some nubiles too, thanks 🙂

  14. that -2.9 gdp number should be bad enough to send the market to all time highs

  15. ariez5 says:

    TONY, THANK YOU for your unbelievable generosity.
    LUNKER, THANK YOU for this from yesterday:
    “60 minute RSI has worked off the overbought condition and price hasn’t moved that much so still expecting a micro 5 up to 1966 to 69 to set up -D”
    It helped me avoid doing something stupid.

  16. soulsurfer says:

    Thanks for the update tony!! Spot on calls. Impressive! Seems like the daily R2 (1966.70), weekly R1 (1969.99), upper daily BB (1966.70), together with the OEW pivots all provided the necessary overhead resistance as expected (see my comment from yesterday).

    Also, the daily AI gave a sell-signal today, which would coincide well with a minor 3 top: http://soulsurferusa.wordpress.com/2014/06/24/a-i-sell-signal-on-the-daily/
    In addition, the NDX’ ascending triangle (april-may) breakout target has been met:

    Last but not least, a 38.2% retrace of entire minor 3, which is typical retrace for a 4th wave of the same degree, would be ~45 points and would target 1923: well within the 1929 OEW pivot range, and thus make from an OEW and technical point of view a lot of sense.

    But, I have a hard time discerning the minor 2 pattern. Was it a zigzag or (expanded) flat?

  17. Noticed that the Dow transports did not make a new high during the latest upthrust.
    We thus have an INDU/TRAN divergence here to keep in mind.

  18. mike7x says:

    Thanks Tony.

  19. “Minor wave 4 is expected to find support at the 1929 pivot range (1922-1936). Since the important pullbacks have ranged between 30 and 40 points during this uptrend. The 1929 pivot range fits nicely. Also there are two previous fourth waves at SPX 1925/1926: Minute iv of Minor 3, and Micro 4 of Minute iii.”

    To quote the legendary market timer Meg Ryan, “Yes. YES. YES!!!” The .382 retracement from the SPX 1868 C-leg low also lands in this support area, and the April-May uptrend line will do so presently.

  20. valunvstr says:

    Big outside day in GDX on huge volume. You hanging on?

  21. lunker1 says:

    on Tony’s chart seems like Micro 4 of Minute iii is 1919 not 1925

    .382 of minor 3 = 1923
    .447 = 1915.5

  22. torehund says:

    Thanks for the update Tony.
    I have never seen such “across the Board” manipulation of the Close. Not a single one of my 12 smallcaps had same closing price one hour later. Talk about boots living their own separate life.

  23. radrian6 says:

    Well, my lean toward bullishness was rejected by the market, particularly the RUT. Fortunately, I did manage to identify the breakpoint of the RUT intraday topping pattern and take an appropriate short-term position. I knew this correction was coming but I thought it might wait until after the July 4 holiday.

    Nevertheless, the minor correction appears underway so let’s look at probable targets. I have mentioned the 1160-54 area as a possible target once the 1180-78 neckline was broken. For Fib targets, I am using a low of 1082.53 and a high of 1193.60. The common retracement levels are 1167 (23%); 1151 (38%); 1138 (50%); and 1125 (62%). The numbers above assume the RUT is now correcting the entire 111-point structure (1083 to 1194). During the later part of 2013, the minor corrections were about 45-50 points and lasted six to eight days.

    The 13-day EMA is near 1171. Strong support starts with the confluence of the rising trend line, daily BB midline, and natural chart support — all near 1160. Further down is the 34-day EMA and the recent low near 1154. There’s more support from 1144-38 and the 50-day SMA at 1137.

    Looking at all the above, there is some pretty good confluence near 1154-51 and near 1138. As always, watch the reaction as RUT tackles each support area.

    • radrian6 says:

      Sorry … forgot to mention the daily lower BB near 1140 — that adds to the support confluence near 1138. Thank you and have a nice day.

      • pooch77 says:

        Rad you rock…thankyou

      • radrian6 says:

        Wow! sorry again … the daily lower BB near 1140 is not the typical 2-standard deviation BB but the 1-SD BB. I use 1, 2, and 3-SD BBs on a single chart to provide a context for market extremes and probable targets for reversion. It appears the indexes have reached their extreme positive levels and are now reacting (reverting) back toward the mean.

      • radrian6 says:

        You too, Pooch … thanks.

  24. cmucha68 says:

    Hi folks here: does anybody consider to go short S&P futures in the Globex session or better waiting for a small uptick (let’s say 5-6 points) or even waiting for the normal trading session tomorrow ? Dubai stock market was again crashing last night and perhaps Asia might lead the way down tonight. Thanks and good trading to all here !

    • lunker1 says:

      The short was today at the 1966 to 69 cash target. Now you’re in no mans land – midway between the high and the minor 4 target. today possibly could’ve been the end of the A wave and with a 50% or higher retrace for B to follow. I don’t short because I prefer to trade with the trend (less surprizes) and will be waiting for minor 4 to end.

      Nice numbers folks!

      • CygnetNoir says:

        “The short was today at the 1966 to 69 cash target. Now you’re in no mans land”
        Lunk, I like your style 🙂 For years I’ve taught my newlings that price spends most of its time in no man’s land and that one should trade only at pivots (Support/Resistance) because it is the only place where probability and risk can be measured with some degree of accuracy. I hope the newlings here are paying attention to your posts – you’ve been putting out some really good stuff.

  25. Anonymous says:

    are we looking for S&P to drop to 1929 to go long? if yes is the upside limited to 1973 maybe then what? thanks for your work as always.

    • tony caldaro says:

      Me personally? Possibly.
      Upside would then be limited to the 1973 or 2019 pivot.

      • Anonymous says:

        20 points drop = 1 percent when should we get the traditional 10% correction? this market have the backing of central banks (US fed QE/negative rate by ECB) and banks and bots doing all the trading.

    • Or, maybe with all the unrest in the world. Syria dropping bombs in Iraq, Ukraine has one of its helicopters shot down. We go directly to imt 4. Do not pass go and don’t collect 200. Meaning we skip minor 5 all together. Dow drops to 16,300 and sp 1890. Then up for int 5, whichif things in the world get worse may also get tructuated.good luck all, going to be an interesting next few days

  26. chrisk44342 says:

    Tony, what do you think the odds are that minor 5 might end in a failure?

  27. JK1987 says:

    Tony Thanks
    “So it does appear our count for Minute wave v was correct: 1941-1931-1960-1952-1968.”
    Not only appears to be correct, oew is perfect!
    I believe Minor 4 at 1929 pivot will once again perfect as usual.

    per thetruthtrader1, vxx is very bearish, the best short in town. 30 is a good short.

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