wednesday update

SHORT TERM: market rebounds, DOW +49

Overnight the Asian markets lost 0.3%. Europe opened lower and lost 0.9%. US index futures were higher overnight. At 8:30 Q1 GDP was reported lower than expected: -2.9% v -1.0%, and Durable goods orders were reported lower: -1.0% v +0.6%. The market opened two points below yesterday’s SPX 1950 close, dipped to 1947, then began to rally. Near the open FED governor Tarullo’s speech was released: The rally continued throughout the day until the SPX hit 1961 around 3:30. Then a dip to SPX 1960 ended the day.

For the day the SPX/DOW were +0.40%, and the NDX/NAZ were +0.70%. Bonds gained 7 ticks, Crude added 55 cents, Gold was flat, and the USD was lower. Medium term support rises to the 1956 and 1929 pivots, with resistance at the 1973 and 2019 pivots. Tomorrow: weekly Jobless claims, PCE prices and Personal income/spending all at 8:30.

The market opened lower today, dipped to SPX 1947, then rallied, with two 4 point pullbacks, for the rest of the day. An odd response to a much worse than expected Q1 GDP report. The 21 point pullback from yesterday’s SPX 1968 high, is larger than any pullback, during a rally, during this uptrend. Which suggests Minor wave 3 ended at SPX 1968, and Minor 4 is underway. Minor wave 2 had declined 34 points (1885-1851), and took the form of a double zigzag. Would expect Minor 4 to be something like a simple a-b-c zigzag. Thus far we have had a decline to 1947, then a rally to 1961. Labeled today’s low Minute wave a, with Minute b underway.

Short term support is at the 1956 and 1929 pivots, with resistance back to the 1973 and 2019 pivots. Short term momentum rose from quite oversold to above neutral. The short term OEW charts flipped positive today with the reversal level SPX 1957. Best to your trading!

MEDIUM TERM: uptrend

LONG TERM: bull market


About tony caldaro

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69 Responses to wednesday update

  1. cmucha68 says:

    I am not really an Elliott wave counter (never learned it) but rather an intuitive trader. I don’t know what you guys think, but the market (S&P) smells as if it wants to test 1958-1960 area today by the close if there is not a sharp sell off again in the last hour. What comes tomorrow then only God and the wave counters may know. If we close around that levels mentioned above does anybody see a test of the old high or even 1973 tomorrow or is this then the last attempt and we are done with the upside and south we go next week from Monday on ? Have all great success !

  2. minor 4 turning into something more complex than a simple abc wave as minute b likely turning into a triangle that will result in minute c ultimately testing Tony’s 1929 pivot

  3. ariez5 says:

    C=1960-1944 (C=76.8 A)?
    Very pronounced hourly divergences in Dow and NYA at the low (not so much in SPX).
    I admit it is shallow, though. Not even a 23% retracement of Minor 3.

    • lunker1 says:

      maybe micro abc of minute a to 1945 and now in minute b
      1956.5 is 50%
      1959 is 62%

      FWIW the Dow had 5 waves down.

    • mjtplayer says:

      Minutte (orange) a-b of minute c? We could get a minor 4 low tomorrow around the 1,929 pivot on the new moon, then rally into next week on month/quarter-end window dressing and July 4th holiday weekend – another “holiday high” for minor 5 to end int 3 early the following week after the long weekend??

      Too much support from end of month/quarter/half-year window dressing for a large selloff, too many managers that want to hold-up the market.

  4. Intraday .618 broke S&P and upward 3 intraday 1.618 target

    • Kevin M says:

      Ted I gotta be honest with you. That link/website you want others to click on is NOT very user friendly. Lots of noise imho. Just something to think about.

  5. blackjak100 says:

    A minor wave does not last 3 days and retrace 23 pts. If we exceed 1968, then Tony’s count is suspect. This 10pt rebound could be an x wave or a higher degree b wave. A few pts higher and the downward channel is already broken out of.

  6. lunker1 says:

    so far today’s rebound is stopping right where it should at 1952.5. it’s the 14.6% of minor 3 (which also happens to be the 141.4 fib ext of 667 -> 1576). it’s also a backtest of last Thursday’s old support. Micro B of Minute C might be in.
    micro A = 16
    micro C=.62A=1942
    micro C=A=1936
    micro C=1.62A=1926
    micro C=2A=1920

    minute C = A = 1940
    minute C = 1.62A = 1927
    minute C = 2A = 1920

    The Q’s gave an .887 sell signal late afternoon yesterday to complete minute B and today retraced 50% of the intraday dip for micro B or minute C with B being another bearish rising wedge that already broke down.

    looks like things are trying to roll over here.

  7. fionamargaret says:

    …interesting the LSE wants to list the IWM – probably Rad knows this already….

  8. The measured move of the first down wave from the 6/24 high is 1926.88.
    The April-May uptrend line is currently about 1922 and rising.
    Maestro’s target area looks increasingly appealing.

  9. xela0 says:

    Am mostly a lurker, but lotsa kudos to having nailed this practically in real time.

  10. Hi Tony,
    What are the chances minor 4 is in?

  11. It’s safe to say minute b complete and minute c underway

  12. gtoptions says:

    Thanks Tony
    Pricing in the -/GDP! 😉

  13. JK1987 says:

    b of Minor 4 at 1960.83?
    9 points reversal.;

  14. I think everyone rebuys around 1920-1930 spx waiting for wave 5 up,,, then instead of new highs, we drop into a wave 1 enroute to 1900, wave 2 back to 1930 then big wave 3 down to 1870 etc…

  15. Must break upside .618 and .786 levels for S&P after 5 waves down

  16. opader says:

    Tony: A friend of mine looked at the Major-3, Int-3, Minor-4. For that corrective wave, B/A was 0.59. For current Minor 4 wave, B/A is 0.63 which close to 61.8% of Fib retracement. Thoughts?

    • torehund says:

      Tommy, M and A will blossom further, as larger comps are cash laden and dont want their funds to vanish in taxes. whats even better is that smaller Fish dont want to sell themself unless the Premium compared to todays depressed market cap is reasonable. Many declijed offers last week and that will eventually rise valuations.

  17. lunker1 says:

    The Dow found resistance today at the 60 min EMAs on Tony’s chart. B wave over?

  18. student8888 says:

    Shorts beware! B-wave rallies have been known to make new highs in this market.

  19. makiori says:

    My short position is less than 2.5% underwater, I am not happy but not concerned either.
    What I can see is that my 3 conditions (gold,yen,flattening) have actually all materialised with different degrees of success, thus making my discomfort on the spx very acceptable.
    I shall continue to hold the shorts, as nothing has fundamentally changed since.
    Below are my post from the 29/05:

    I have no new chart to post, as every possible chart has already been posted.
    I have no way to predict the future, as I believe no one is gifted with such power (or curse…).
    A methodology (OEW for instance) can be helpful in projecting a plausible outcome, over less plausible ones, based on historical observation of behavioural patterns.
    However I have a survival instinct, that has served me very well to date.
    It kicks in very rarely, but I can clearly feel it as for today close.
    I don’t expect anyone to follow it or even take notice of it, but is the only thing I can share.
    My instinct tells me to get out from the “boat of excitement” where the captains (central banks) are continuously serving free rum , and drinking themselves like never before.
    Hubris kills.
    I am out and short as from tonight and not looking to change my medium term stance for several months.
    I will increase my exposure quite aggressively, if my instinct proves itself right.
    makiori says:
    May 29, 2014 at 4:45 pm
    signs of confirmation for my instinct: 1) a further marginal down push on gold, possibly followed by an intra day rejection. 2) another failed attempt to trade firmly above 102 on $/yen. 3) continue flattening of the yield curve (10yr-2yr) where I think that we have just entered wave C of a long A-B-C correction.

    • torehund says:

      Makiori, when the captain (Central banks) is drunk the passengers flee the ship and take the Money With them to elsewhere….that elsewhere could be the stockmarket. Maybe even the Captain Places his dough elsewhere, just to afford the booze 🙂

      • makiori says:

        Torehund, I respectfully disagree with your analogy: you are implying that the stockmarket has become a “safe heaven”. I somehow have a different view on risk.

  20. lunker1 says:

    today’s B wave bounce to the .618 looks like a bearish rising wedge to backtest the old rising support TL from May 20 thru the June lows….and also backtesting Monday’s old 1960 support area.
    C = A = 1940
    C = 1.62A = 1927
    C = 2A = 1920

  21. cmucha68 says:

    3 Lower highs in the Dow hourly could send the market lower again, perhaps enough for the S&P to test 1948-1950 area again.

  22. radrian6 says:

    The indexes were strong today and the RUT managed a 14-point gain off the 1169 low. With regard to retracement, RUT initially struggled with the 23.6% Fib retracement level but gained its bearing and punched through the 38% and 50% retracement levels and closed at or near its high. It’s possible that this is just a B wave and RUT is headed back down tomorrow and Friday — we’ll have to wait for the outcome. The 5-minute chart looks impulsive to me but I’m not a wave counter. If the RUT has resumed the uptrend, it will likely reach or exceed the 61.8% retracement level (1184) then pull back a few points to a higher low, then continue to new highs.

    So far, RUT has dropped 25 points from 1194 to 1169 — that’s about half of a typical minor correction. However, it is interesting to note that there have been three previous pullbacks in this uptrend and all of them were about 25 points. If RUT resumes the uptrend with no further correction then this pullback may be of a lesser degree and was correcting only the leg up from 1154.

    I also want to point out that RUT futures (/TF) touched its rising trend line with today’s low which suggests the correction is complete. I would welcome another leg down but it may not be in the cards.

    • pooch77 says:

      Rad doubt anymore downside,the charts are just not bearish on any timeframe, missed a huge entry at 116.25 today,my own fault,2 hour was buried and never pulled the trigger

      • radrian6 says:

        Pooch … not enough for a minor correction so it may have been a lower degree. The 25-point downside was a 61.8% correction of the leg up from 1154 so that may be it. This also means that there is a more serious correction waiting for the RUT. If it continues higher from here, I have Fib targets of 1200 and 1208. Eventually, the entire uptrend will have to be corrected and that will be more than the 25-point pullbacks we’ve had so far.

    • pooch77 says:

      I mean think of it,if GDP and durable goods don’t pull market down what will???

  23. fionamargaret says:

    Good stuff Tony – thank you. the waterslide to 1929 could still be on – we just are going country roads?

  24. pooch77 says:

    So Tony,B wave concludes at 1963 and see wave to ?

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