wednesday update

SHORT TERM: consolidation Yellen day, DOW +20

Overnight the Asian markets rose 1.1%. Europe opened higher but finished mixed. US index futures were higher overnight, and at 8:15 the ADP was reported higher: 281k v 179k. The market opened unchanged at SPX 1973, then began to rise. At 10am Factory orders were reported lower: -0.5% v +0.7%. At 11am FED chair Yellen gave here speech:, and the SPX hit 1977. A pullback followed until 3pm when the SPX hit 1973 again. Then the market bounced into a SPX 1975 close.

For the day the SPX/DOW +0.10%, and the NDX/NAZ were mixed. Bonds lost 15 ticks, Crude slid $1.20, Gold ended flat, and the USD was higher. Medium term support remains at the 1973 and 1956 pivots, with resistance at the 2019 and 2070 pivots. Tomorrow: monthly Payrolls (est. +220k), weekly Jobless claims and the Trade deficit at 8:30. Then ISM services at 10am. Friday is the Independence day holiday!

The market opened flat today, bounced to SPX 1977, then went into a trading range between 1973 and 1977 for the rest of the day. During the entire rise from SPX 1945 to 1979 we had two six point pullbacks. And, we are currently sitting on another 6 point pullback: 1979-1973. Normally, these types of pullbacks are too small to be significant. Until we get a more significant pullback it is hard to count the internals of this advance. For now the minimum for a fifth wave is in place: the market has made new highs, Minor 5 is currently about half of Minor 1, the 1973 pivot range is offering resistance, and there are negative divergences on several timeframes.

Short term support is at the 1973 and 1956 pivots, with resistance at SPX 1989 and the 2019 pivot. Short term momentum dropped to neutral during this small pullback. The short term OEW charts remain positive with the reversal level now SPX 1972. Best to your Payrolls day trading!

MEDIUM TERM: uptrend

LONG TERM: bull market


About tony caldaro

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77 Responses to wednesday update

  1. torehund says:

    Happy 4th to all on Board.

  2. lbhkinqa says:

    Looks like Micro 5 of Minute 3 of Minor 5? Minute 5 of Minor 5 on Monday/Tuesday.

  3. Happy 4th Tony and all! Looks like a “little” more room to upside on NASI Summation Index … with $COMP price tagging top of trendline. Still long my favorites MU, SNDK and AMAT, BUT took some profits today. Sold my GDX today at the close. Good luck all!

    • valunvstr says:

      Sold your GDX? Hope it was just a short term trade because Point and Figure, IHS and Cup and Handle all say that the move higher can be significant from here.

    • Yes, I do expect to get back in — at a lower price. Price still holding solidly above the 10-week MA. Therefore, my sell was likely premature, Valunvstr.

      • valunvstr says:

        Like I said, I have GDXJ, not GDX so I don’t see one doing well without the other. Have 34 and 36 Nov call strikes when it was at 38.7 and 40.94 as average entry prices. The 38.7 is double the position size as I used the gap up and partial fill was my second entry. We will see. I am holding for an IHS completion and target in the 60’s however I will not hold out for those levels. If I am even close to right, I will closed those positions in the 50’s I HOPE!

  4. Short at 1984.3.God help me!!!! Panic, not sure if SPX will go to 2430 today itself!!!

    • soulsurfer says:

      same here, entered an SDS 1/2-sized position at 1980.

    • soulsurfer says:

      IMHO, it seems like the risk/reward is becoming decent for such type of position, compared to being long.
      Namely, my ideal target for minor 5 is low-mid 1990s, and my ideal target for intermediate iv is somewhere around the 1929-1901 pivot. Hence, the risk/reward ratio is 10/60 to 10/90, which translates into 1:6 and 1:9. So say 1:7.5 on average. Decent enough to me.

      we’ll have to re-assess If minor 5 extends to the 2019 pivot

  5. Caldaro if the market seemed frothy last week add another 1% to the froth. LOL everybody can get out at the same time so no worries

  6. manunidhi21 says:

    Namaste Tony!
    Any update on Dow. Is it still the alternate diagonal count valid ?

  7. mjtplayer says:

    The news of the day isn’t the stock market, it’s the break-down of the bond market. The yellow flags have been out there over the past couple trading sessions, today’s break-down in price on the TLT and break-higher in 10yr yields are both important. Higher rates on the way, next stop on the 10yr is 2.80%, then after an oversold bounce a move back up to the critical 3% area.

    Bonds, like gold, were both helped tremendously by quarter/half-year end window dressing and short covering. Both have reversed, bonds clearly breaking down with major red flags; gold/miner’s haven’t broken yet but the yellow flags are out.

  8. xela0 says:

    Those watching the DAX, do you think it’s in Int5 of major 5 or still in Int3?

  9. My assumed ongoing Minor 5 count is as follows:
    Minute i = 1957.51
    Minute ii = 1952.18
    Micro 1 of Min iii = 1964.24
    Micro 2 of Min iii = 1958.22
    Micro 3 of Min iii = 1978.58
    Micro 4 of MIn iii = 1972.58
    Micro 5 of Min iii = 1984.64??? underway
    Minute iv = 1973-68ish???
    Minute v = 2015ish???

    • mjtplayer says:

      I like the count, although I think 2015-ish is too aggressive for minute 5.

      This morning’s high at 1,981.98 = completed 5-waves up to minute 3?

    • blackjak100 says:

      I like the count and target for minor 5. He has it ending at 2019 pivot which I think is very possible.

  10. it sure does look and feel like a July 4th fireworks show…

  11. happy and a safe 4th of july of everybody. mission accomplished by the fed. down 17k

  12. rc1269 says:

    gameplan for payrolls day:
    Big miss: really long
    Miss: long
    Meet: long
    Beat: long
    Big beat: really long

  13. Lee X says:

    Happy 4 th to you Tony and the whole gang here.
    Trade well, trade for yourself and trade to make money.

    • rc1269 says:

      at least i know that somebody is always making money off my trades, even if it’s not me. so i got that going for me, which is nice
      happy 4th hombre!

    • Lee X says:

      And remember if you get bit by a squirrel you have no chance of contracting rabies as they do not carry the rabies virus…its a fact

  14. Tony

    So as I see it now it looks like NAZ is about to finnish Primary wave III but SPX is only about to end Int. III. Does this make any sense that NAZ is topping out before SPX?

    This means that NAZ might be in the making of a top of rest of this year 2014 at least , but SPX might have another run up before completing Primary wave III , with Int IV and Int V to complete first?

    • tony caldaro says:

      The NAZ is about to finish Major 3 of Primary III
      Still has Major 4 and 5 to go

      • Sorry I think im just confused about the “Minor, Major, Int, Primary what is the longest timeframes. Would be nice if you one the right side of your blog had a short description about the different timeframes and with colours. Just a suggestion to your great blog.

        Thank you Tony

      • tony caldaro says:

        There is a key at the beginning of the public charts

  15. Hi Tony

    Lets say that we topped out in the last days, how low do you believe Major 4 would take us ?

    Am I correct if we go down to the sub wave 4 of Major 3 which is 1929 pivot? Or what do you think ?

  16. Thanks Tony.
    Here is one idea that has some nice symmetry in it:
    Feb low to April high was 160 points
    April low to current high is 164 points (equal legs)
    If we can see a sharp decline (as we did at the end of January) of 6% from here that gets us to 1850s area. We also have a Bradley turn date on 16 July. That time (± a day or two) and price coincides with the following:
    1. Trendline through the key lows and originating 2 Jan 2013
    2. 50% fib of Major 5
    3. 200day ema
    4. December high at 1850 & resistance becomes support
    And if we got that for Int iv, then another 160 point rally from there for Int v would get us to the 2012-2026 pivot to perhaps complete PIII.
    Here’s a visual of the bull market as a pure stop hunting business model.

  17. bouraq says:

    Don’t worry god bugs:

  18. Federal reserve plans;

    Mon, Jul 7, 2014
    Outright Treasury Coupon Purchases $2.50 – $3.25 billion
    Tue, Jul 8, 2014 Outright Treasury Coupon Purchases $1.00 – $1.25 billion

  19. torehund says:

    Difficult to find a pastable chart, but looks like iron ore is bottoming, likewise coal, oil and I Guess the softs should follow.
    Good News for Brazilians*ore coal and agri, a population that may have reached their bottom in collective sentiment. If they win the World cup, then its maybe spot on…

  20. soulsurfer says:

    Maybe we’ll get a repeat from late December last year!? The market peaked for iii of 3 on 12/31, and then Major 3 only made a marginal new mid-Jan…?!?

  21. radrian6 says:

    RUT dropped about 6.5 points … during a holiday week? Wow! Well, it did make a momentary new high during yesterday’s mania so it’s entitled to a rest. During this uptrend, RUT has made four 25-point corrections and we may have started another one. If so, 25 points down would take the RUT to 1188.55 and it’s important to keep an eye on that area because if RUT moves below that level, then something more serious is going on.

    In this low-participation market, I don’t know what the RUT will do next but let’s cover the bases anyway. There is support near 1194 but it gets better at 1183 which coincides with the 23.6% Fib retracement of the entire impulse from 1083. There’s more support near 1168 and at the 38% Fib retracement level which is 1163.5. As I said above, if the RUT gets this far, we are probably in an intermediate correction that will take some time and some points.

    Another possibility, less likely, is that RUT is now forming the handle of a huge cup-with-handle pattern — this is a 130-point pattern so if it played out, it would take RUT to 1213+130 = 1343. I can’t imagine the RUT adding another 130 points without a very serious correction but I’m just throwing it out there as a possibility.

    Best case scenario for the bulls is the RUT is in a time-based correction and will wander sideways for a few days ahead of further gains. If the bears take control, keep an eye on the support levels mentioned above.

  22. mjtplayer says:

    It certainly looks like the end of quarter/half-year window dressing into bonds and gold is over. Both were 1st half winners, neither were loved by mangers; hedge funds/institutions were largely short. Lots of short covering and window dressing buying into both in the weeks headed into June 30th. That seems to have ended as bonds look like they may break down badly and gold/miners are stuck at resistance; $1,330/oz area in gold, $26.50 area in GDX per the downtrend line off the 2 priors highs and a potential int “E” wave to complete a major wave 4 triangle over the past year.

    • ariez5 says:

      MJT, it should worry you that at the moment I hate the GDX (and Silver) charts as well:) Not sure if rates have made an IHS or if they are in an ABC correction before continuing down.

  23. jamesbondman says:

    Sorry guys, the only reason the market hasn’t corrected yet is because I sold my long positions and got out. Maybe i should go long again and then the market will tank….

  24. cmucha68 says:

    Until all breaks down like hell…. and like always nobody saw it coming, especially not the permabulls.

  25. dragan ilic says:

    Woow..Fatlady out of control. Push up, then consolidation. Never loose gained ground and all gains are very controlled. That way the Bollingerbands keep raise all the time, this could keep going for looong time. Already 6 years.

    We all though that Primary 4 would start in 2013….2014 and bulls still unloadin wave after wave 🙂 Insane !!

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