tuesday update

SHORT TERM: higher open then pullback, DOW +5

Overnight the Asian markets gained 0.7%. Europe opened lower and lost 0.7%. US index futures were higher overnight. At 8:30 Retails sales were reported higher: +0.2% v +0.3%, Export (-0.3% v +0.1%)/Import (-0.1% v 0.0%) prices were reported lower, and the NY FED was reported higher: 25.6 v 19.3. The market opened three points above yesterday’s SPX 1977 close, hit 1983 in the first 15 minutes of trading, and then started to pullback. Just past 9:30 FED counsel Alvarez’s testimony was released: http://www.federalreserve.gov/newsevents/testimony/alvarez20140715a.htm. Then at 10am Business inventories were reported higher: +0.5% v +0.6%, and FED chair Yellen began her Senate testimony: http://www.federalreserve.gov/newsevents/testimony/yellen20140715a.htm. Just before 11am the SPX hit 1969, bounced to 1975 by 11:30, then dropped to 1965 by noon. After that the market started to rally. Around 2:30 the SPX hit 1976, then dipped to end the day at 1973.

For the day the SPX/DOW were mixed, and the NDX/NAZ were -0.45%. Bonds lost 3 ticks, Crude dropped $1.00, Gold slid $12, and the USD was higher. Medium term support remains at the 1973 and 1956 pivots, with resistance at the 2019 and 2070 pivots. Tomorrow: the PPI at 8:30, Industrial production at 9:15, the NAHB index at 10am, FED chair Yellen continues her testimony in the House, and the FED’s beige book at 2pm.

The market opened higher today, cleared the OEW 1973 pivot range by three points, then immediately began to pullback. The pullback dropped to SPX 1965, overlapping the first rally up from SPX 1953. We still count only three waves up from SPX 1953: 1970-1960-1983. This suggests the entire rally looks like a B wave, unless the alternate count is correct and Minor wave 5 is subdividing. A drop below SPX 1960 would favor the B wave scenario, and a rally above 1986 would favor the Minor 5 scenario. The market ended the day about in the middle.

Short term support is at the 1973 and 1956 pivots, with resistance at SPX 1986 and the 2019 pivot. Short term momentum dropped to oversold then bounced to neutral to end the day. The short term OEW charts flip-flopped again today, ending neutral with the reversal level at SPX 1973. Best to your trading!

MEDIUM TERM: downtrend still the most likely count

LONG TERM: bull market

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

About tony caldaro

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86 Responses to tuesday update

  1. magicianme says:

    Hi all, sorry I’ve been away for a while. Thanks for all the updates, Tony.

    It looks like I’m the only one hoping to take a few points on the long side today. 🙂

    According to my tick charts there was a range of about 2 points that created quite an area of congestion during the latter half of Tuesday (1967-69 on the 09 contract). On Wednesday when price moved away from that congestion it shot up, not down. This was pre-market. When the market opened yesterday price reversed but did so relatively slowly (on the tick charts), back to that area of congestion. It promptly bounced sharply up from that area again. Today, as we speak futures have followed European indices down and price is again in that area of congestion. But the drop into the congestion has been very weak – very little selling pressure compared with the same drop yesterday. It’s more a sympathetic move with the European indices.

    I’m looking for a long entry here – the smallest show of strength after a divergence on the 500 tick bar chart would do it for me. I will of course be keeping a close eye on the news at 1.30 PM and 3 PM BST.

    • magicianme says:

      This may have some more run to the upside, but I’d advise getting out of any longs now.

    • magicianme says:

      Sorry, wrong day. I should have posted this on the Wednesday entry rather than Tuesday’s as this was my call for Thursday’s trade. Apologies.

  2. pooch77 says:

    So we have turn down for rut,been turning down last 2 weeks

  3. Kevin M says:

    $trin numbers getting overbought http://stockcharts.com/h-sc/ui?s=$TRIN&p=D&yr=0&mn=6&dy=0&id=p43682206502 Now today could be the top. If not today then by Friday of this week we will have a top.

    I’m assuming the SPX makes a sneak a boo all time high this week(1987-89), That would fit nicely with the alternate count. Which means the downtrend will make an ABC correction that would last in the first part of August instead of this month.

    Who else thinks we are in the last gasps of minor 5 an d int 111?


    • drwarmington says:

      Does anyone know the history of the BRADLEY TURN ? Today is the day. I guess it has to be a high, as we are here. What is the normal window? 1,2, 3 days??

      • Kevin M says:

        1-3 days. Sometimes it’s spot on. I’d say this year it will represent a top in July(not August) Remember though it’s just a turn date and just because it shows a top now and then a bottom later in Nov doesn’t mean we go straight down. November however does look like the low tony has been talking about for 4.


    • cmucha68 says:

      I think if we close below 1980 or even near the low of today we are done with the top and a wave down can begin. Let’s see the close. However if it closes at the high but cannot make a new high tomorrow same story for a down wave. This market is really boring at the moment. I pray for a new era of volatility. 30 points swings daily like some years ago would be nice. But the market is not a wish center.

    • If we are in Minor 5, then I think we just witness a truncated double top….this is not my prefer count but I am entertaining it. I’m preferred count is still per Tony’s preferred count. either way I am betting that downtrend will resume soon as I just added more ES shorts at 1974

  4. oneandonlyuniverse says:

    Time to get short size here with 1898 stop. Risk 16 to make 60 +. Would not touch the R2K here or $IBB . Expect a ton of vol next 3 weeks. They never sound the bell to let you in !


  6. rc1269 says:

    R2K looking ripe for a bounce. sitting on MAs, MACD just hit zero

  7. soulsurfer says:

    – div on hourly and daily on SPX, INDU, etc…

    • torehund says:

      looking at IMW the big decline from 1 july, it had a double abc, the last 5 days is looking like an X wave, hopefully W 2 on its way.

      • soulsurfer says:

        IWM looks weak indeed. Small caps not healthy… no risk in the market despite it grinding up…

        I counted it as 5 waves down for an intermediate a, then 3 up for b, and now in c!? That would make for a zigzag, but I agree that a double abc for int. med. a would count very nice as well, and I may change to that instead, since it is a correction.

  8. what happened to iamnewbie? miss the commentary.

  9. manunidhi21 says:

    Namaste Tony!

    Yellen is being screwed last two days. Seriously.Time laspse is the only relief for her.
    Is Yellen patriotic to accept Fed Chair or her package is good ?

    The best thing Fed can do is to charge interest to bank of this QE.
    QE will never end.

    • torehund says:

      Yellen is a reflector of the prevailing common opinion, and thats why Americans will embrace her even when markets eventually crash a bit.
      But one shouldnt rule out a bit of inflation altogether, a hyper light in commodities will put a confidence building floor and bring consumerism back; and if Norway is a leading dog then real estate could triple in the US.

      • manunidhi21 says:

        Hi Torehund,
        QE is liquidity to encourage manufacturing, trading and labour markets.

        But as a Banker I will put the easy money(QE) in Investments so that my bonus is up. why should I risk money in economy.Hell with economy. Let the Fed take care of it.

      • torehund says:

        As hard as the FED has driven you Americans, you have got to be strong and getting even stronger. Look foreward to prosperity. Also the emergers have been tortured With stagflation for 3- 4 years and if the commodities dont come up folks will Riot. Think that Merkel and Putin think enough is enough and tells FED/Obama to make some real inflation. They cant strech muman sentiment much further.

    • cmucha68 says:

      I just see her live on Bloomberg. This woman is so damn incompetent, it’s just outrageous to have her leading the Fed. She can’t give precise answers at all. Every economical student in the first year could answer better than her.

  10. scottycj1 says:

    CIT Change in trend day TODAY

  11. JK1987 says:

    Yellen coughs a couple of time when flipping her papers.
    Is that a buy or sell signal?

    • pimacanyon says:

      LOL… you need to learn to read the cough. I slight cough is a buy signal, especially if she looks alert and alive afterwards, or smiles a little. A more prolonged cough that degenerates into something that comes close to puking–that’s a sell signal.

  12. If we are in subdividing Minor 5, then I am on the look out for a possible double top (truncated or a minimum ATH)….we will see soon

  13. bhtrade says:

    3rd consecutive day of 5 year highs in NDX, DJI, sure doesn’t bode well for the preferred count

  14. lunker1 says:

    That might’ve been the run the stops pop I was watching for. Nice -D.

  15. gtoptions says:

    Thanks Tony
    Tony has updated his SPX ‘b’ wave. Look like the Flat completed.
    SPY ~ warning -/div 60 min RSI & MACD

  16. CygnetNoir says:

    $NEWL = lol as the reverse splits just keep on coming. Eventually this thing will reverse split back down to 1 share and they still won’t find a real buyer 🙂

  17. Pingback: Red Flag Warning for US Stocks ? | GoldEdge

  18. cmucha68 says:

    Isn’t today great Bradley Turn date, July 16 ? Some mentioned it yesterday.

  19. cmucha68 says:

    I just can’t wait for the 1929 to come. This market is overloved, overbought, overvalued, just over everything.

  20. Pre-Market volume, Apple Inc. Trading higher $97.99 was the high. Which suggest the re should be some swings today with Apple Inc. Good luck, trading.

  21. rc1269 says:

    looks like ES really likes that PPI data
    all good in the hood. nothing to see here, move along

  22. Elliott Wave Focus 7.16.14 – Zigzags and breakout W3 moves $ES_F $NQ_F $DAX $AAPL $CMG $UPRO [Wavegenius] http://stks.co/a0lEx

  23. Apple Inc. Closed in regular session down, $95.23 area, in after hours it closed higher $96.38 area.

    Interesting action!

  24. Thanks, Tony, for another daily commentary!

  25. pcskier says:

    All eyes on china tonight after yellin sell small cap, biotech and momo and hold comments on large cap stocks.

  26. Top 5 Internet Elliott Wave Update 7.16.14 W3’s setting up after deep zigzags[Wavegenius] $BIDU $YHOO $YELP $FB $QIHU http://stks.co/g0pF

    Top 5 Food Elliott Wave Forecast 7.16.14 Threat to test full C wave levels [Wavegenius] $GMCR $SBUX $PNRA $BWLD $CMG http://stks.co/s0XAm

  27. Good afternoon Tony,
    Thank you for all you do. Do you mind expanding on your time frames short, medium, and long? Again. thank you.

  28. attitude928 says:

    Thanks for providing an excellent framework for day trading Tony. TNA fingerprinting suggests more down tomorrow for the $RUT.

  29. valunvstr says:

    Jedi, looks like GLD and GDX are on the verge of breaking down. VERY high volume on the down days. I might have to exit GDXJ with very little gain after two days of getting smashed. The only hope is that GDXJ has a big Cup and Handle formation but volume on the handle should not be high as it is. Thoughts?

    • GDX couldn’t get past resistance — stuck in this range (see below). It is still holding the 10 week EMA. If it holds here, than great, but I did post yesterday that I sold. I bought it with expectations of going up — not down. Even when it was making gains, it just didn’t trade the way it should. It would go way up and then start giving it away. Never take losses “hoping” for something better. Better to wait for confirmation (a break out of this darn range) and buy at a higher price than to take a loss, of course.


    • On 7/10, GDXJ On Balance Volume hit a 52 week high, exceeding the 8/27/13 high despite GDXJ being $8.06 lower. The right side of the weekly IHS has all time high volume, which is a textbook bullish configuration. Who has been selling aggressively at multi-year lows – the Big Money or the public? After rallying 43.4% in 30 trading days, GDXJ is experiencing a normal pullback within the context of a classic bottoming pattern. It might be a violent pullback, but disciplined traders who wait for their indicators to reset as the market reaches support will get a low risk/high reward buying opportunity in a market that is exhibiting multiple signs of an impending weekly trend reversal.

  30. Hi Tony

    I see a target around 1920 – does that fit well into your analysis for a potential low ?

    Thank you

  31. bouraq says:

    Cautiously bullish:

  32. It seems to me that the last uptrend can be counted as 5 waves up from 1945.75 to 1976.50 in ESU4. Possibly it is a truncated V, which is even more probable in my opinion, since INDU and NDX made new highs today. Just a possibility to keep an eye on.

    USD breakout is also looming in the background, which could be bearish.

  33. blackjak100 says:

    traditional EW would call this a flat correction with a target just beyond 1952. If it hits 1946 or 23.6% retrace it’s still very shallow for a 4th wave but acceptable

  34. soulsurfer says:

    Thanks Tony!

    INDU’s technicals look particularly weak and bleak with heavy – div across the board and price hitting the upper trendline of the rising wedge (ED)… SPX same regarding the – div on TIs.


    Note how the bollinger bands are contracting: strong directional moving coming soon. Preferred count suggests down.

  35. Jordi Güell says:

    Tony, referring to Dow, once Int C have been completed, what is your target for int. D? thank you very much for your updates

  36. Thanks for the update Tony…..

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