tuesday update

SHORT TERM: pullback continues, DOW -9

Overnight the Asian markets gained 0.6%. European market, however, opened lower and lost 0.7%. The US index futures were higher overnight, but lost ground heading into the open. At the open the SPX was four points below yesterday’s 1937 close. Then after a run up to SPX 1940 by 10am the market started to pullback. At 11am the SPX hit 1929, bounced to 1936 by 12:30, then hit 1928 by 2:30. At 2pm the Budget deficit was reported at -$94.6bn v -$97.6bn. A rally into the close stopped at SPX 1935, then the market closed at 1934.

For the day the SPX/DOW were -0.10%, and the NDX/NAZ were -0.20%. Bonds lost 5 ticks, Crude dropped 75 cents, Gold was flat, and the USD was higher. Medium term support remains at the 1929 and 1901 pivots, with resistance at the 1956 and 1973 pivots. Tomorrow: Retail sales at 8:30, then Business inventories at 10am.

Index futures looked like we would have a positive open this morning. But as Europe continued to move lower, futures weakened, and the market opened lower. After an early bounce the market then headed lower again. Stretching this pullback from Minute degree to Minor degree. As this unfolded we posted a Minor wave 1 label at Monday’s SPX 1945 high. Minor wave 2 appears to have been underway. The market then found support right at the OEW 1929 pivot and rallied some. If the SPX can get over 1940 we are probably in the early stages of Minor wave 3. If not, a 50% retracement is at 1925 and 61.8% at 1920.

Short term support is at the 1929 and 1901 pivots, with resistance at SPX 1945 and the 1956 pivot. Short term momentum hit oversold. The short term OEW charts swung negative at SPX 1934, but ended positive with a reversal level at 1933. Best to your trading!

MEDIUM TERM: uptrend probably underway

LONG TERM: bull market

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

About tony caldaro

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109 Responses to tuesday update

  1. gary61b says:

    Looks though the c wave of todays correction should continue through the night with the es,

  2. gtoptions says:

    AB=CD or Minimum Minor 3 SPX target @ 1970ish

  3. cmucha68 says:

    Everybody is talking now up up up and nobody cares about a possible shitty down move.

  4. Kevin M says:

    Inverse head and shoulders target of 1985 should be in play for next week.

    Surprised nobody is talking about this. It appears to be a valid set-up.


    • gtoptions says:

      H D says:
      August 12, 2014 at 2:13 pm
      cupnhandle, INHS, W2, 1929 pivot, what u got bears?

    • wildmick says:

      saw hd post yesterday and kept waiting. (im not bearish right now.)
      thanks kevin for putting a target number on it. have seen a few (very few) similar ones in same area. mostly reading all I never wanted to know about 1956.

      • H D says:

        hey mick, missed ur ? yesterday. Ext longs r at 1995. I’m only looking S 1948 right now and will give it 3 more minutes to prove me wrong. GL

      • wildmick says:

        haha! I know just how you feel hd. i was waiting for a bear response and never saw one. Watching the 1948,49 too. that would be es futures level right? cash level might be 1956. think all would be okay if we see push through by Friday close.

    • budfox9450 says:

      I am looking for 2010-2022
      by 1st Week is Sept, maybe

    • hrmny358 says:

      Can you send a chart? I have been looking at it and sort of assumed it was triggered, but ES is right at the neckline as is cash. At least as I am looking at it.

    • soulsurfer says:

      gap at 1970-1962 begging to get filled!?

    • hrmny358 says:

      Replied to the wrong comment…Can you send a chart? I have been looking at it and sort of assumed it was triggered, but ES is right at the neckline as is cash. At least as I am looking at it.

  5. Walter Crane says:

    Still all in short on TVIX. Like I said, will sell out at 2.67 breakeven, but he is a two times er, and I am margined on it. Have given some back, haven’t traded it. Just waiting for 10-35 bucks on it.

  6. lunker1 says:

    Its all on Tonys charts. SPX found support at Weekly 13EMA 1939 and resistance at Daily 34 EMA 1948. Other EMAs at 1940/41 so at this point a failure below 1939 would be surprising. Neg D on 60min but can this 3 power thru it? Or at least work off OB while staying in the 1940s

  7. gary61b says:

    I think we r correcting ( consolidating) before a new push into and through this low volume area above 1950 to 1964

  8. blackjak100 says:

    I don’t think 1948 is a top but I still favor minor B in progress. I believe we will see one more higher high after 8-10 pt pullback. It may not happen until late tomorrow/early Fri. This would correspond to minor C starting from 1956 pivot.

    • I agree 1948 is an odd place for the rally to end. But it’s only 1 point from the bottom of the 1956 pivot. Suppose it could push all the way up to the 1960’s, but I’m betting on the IHS failure.

      • blackjak100 says:

        1956 is massive resistance with 20 & 50 SMA residing there not to forget 50% retrace of 1991-1911. Thinking we need a final kiss before MInor C. If it gets there fri, minor B would last 8 fib days and be nicely in proportion to Minor A which lasted 9 days. It has the right look. A close above 1956 pivot negates bear case.

    • wildmick says:

      blackjack, how do you feel about 1956 given that many people are looking at that same area as a top of a B wave? you might not see the posts on this blog but im seeing them all over the place. usually when everyone is watching something at an absolute level, it doesn’t happen.

  9. mjtplayer says:

    Silver and copper breaking down, looks like these 2 markets are on their way to lower prices and possibly new lows. When will gold follow?

  10. CAUTION: I have unloaded longs and am already heavily short this market. I would strenuously caution anyone who is heavily long on the basis Minor 3 is in play. I always believed Monday’s high counted best as only 3 waves but the real tell for me was wave 4 which went precisely where it should of on the SPX late in yesterday’s session. Ditto DOW and ditto DAX. This is more than enough conviction for me to say Minor 1 is in its death throes if not already dead and the only 3 we are likely to see dominate proceedings today is 3 of Minor 2 down. I would be very disconsolate if I was wrong, which is always very possible, and prompted you out of a winning position on the long side. On the other hand I believe a greater crime would be to say nothing. So please proceed with caution. I hope you choose wisely. If my assessment changes I will happily re-post.

  11. 5th wave can fail at anytime and many complacent BULLS could be bag holders. I think we are about to drop into a C wave slashing and smashing through 1900 like a hot knife through butter. Best of Luck!

  12. magicianme says:

    So far today the S&P has been reluctantly going up each time the Nas rallies. The rises have been what I call sympathy rises. The S&P is very sluggish and it’s rising only a fraction of the Nas each time the Nas goes up, and it’s doing so on low volume. That suggests ES wants desperately to take a trip south today. That’s where the big money seems to be positioned and I’m looking for signals of it entering the market and taking control of price.

    • There is no resistance till 1968 SPX. The PIVOT of 1956 is not there. Because,world thinks PIVOT is at 1956, it may give small reaction at 1956 SPX to trap SHORT Sellers. SPX will not go below 1940 in next seven trading days, IMO

      • Shrihas – I think you are onto something here. Base on the ES subdividing wave structure, it appears that the 1956 pivot will only serve to assisting minute 3 of minor 3 in subdividing into it’s micro waves. current seeing mirco 1 of minute 3 at 1950 ES pivot (1956 SPX)

      • wildmick says:

        you might be right about 1956. everyone and his dog is watching it. will probably push through with barely a nod. hope this isn’t just wishful thinking on my part!

    • uncle10 says:

      The vix futures are not suggesting weakness today…. hahaha 🙂

    • magicianme says:

      Shrihas and uncle, I hear what you’re saying. I’m still going to keep an eye out for a suitable entry for a 10-15 point drop.

    • magicianme says:

      I’ve just entered my short based on my signals showing that a buying exhaustion has happened at ES 1944 which has now been tested on low volume. I would liked to have seen one or two high volume selling bars, but I’ll make an exception in this case.

      • MagicianMe, This SHORT Should get you 2 nights stay at three star hotel nearby!!!

      • magicianme says:

        I got in at ES 1945, the exact top, and have set it to B/E. Am expecting a bit of support when we hit ES 1941 (which was the pre-open high) and then a further trip down to a quite modest target. But I shouldn’t be here – I don’t normally post when I’ve got a trade open! Bye.

      • Hope you managed two nights stay at three star. I have managed five star, lucky me!!! Market will hang around SPX 1944-45 few hours and then grind higher

  13. gtoptions says:

    Thanks Tony
    FYI ~ Weekly Pivots give a clue as to range (Tight for this Week)
    SPY ~ WPP @ 192.68 ~ WR1 @ 194.12 ~ WR2 ~ 195

  14. (PSA) whipsaw Wednesday

  15. perversionofthemean says:

    Having gotten stopped out of my “cheap long” at the low yesterday, I had a nightmare that they’d gap it overnight to take out recent highs and IHS necklines. I awakened to that prospect. Necklines look intact, however, and the gap is being chewed into.
    At the low yesterday, RSI on 10-min SPY had reset back to trend, but I had “left the building” – can’t stay ever-present on a computer.
    It’s a frequent occurrence when traders “sneak” the market higher with overnight gaps up, and smaller declines by day. Are we at the point where sales are stupid, as the risk is missing out on the upside?

    • uncle10 says:

      I suggest a smaller position size in order to allow for a wide ( farther away) stop. Yes you make less when the trade works but over time may/probably do better by avoiding whipsaw spike stop outs. just mo. gl

  16. cmucha68 says:

    In the hourly it does look currently like a double top if it cannot go higher. I would prefer to see it testing the low of yesterday again or near there and building a double bottom.

  17. JK1987 says:

    Tony Thanks for updating the label of minor 2 of int v.

  18. lunker1 says:

    4=1958 .382×3

    4=1968 .382×3

  19. gary61b says:

    gary61b says:
    August 12, 2014 at 2:57 pm
    1935.5 possible IHS needs that rt shoulder
    The IHS on the ES with neckline at 1931.5 completed this morning.

  20. blackjak100 says:

    Looks like the market wants the 1956 pivot which ironically corresponds to the 20 & 50 SMA which are nearly identical @ 1955. Massive RESISTANCE! I’m still convinced Minor B is in progress as a double combination (WXY) with the W being an expanded flat and yesterday an X wave. Obviously the key would be to see another 3 waves up from yesterday’s low for confirmation. Line in the sand for me is a close above 1956 pivot for Int V being underway. I’m thinking that’s when Tony would get an uptrend confirmation anyway. GL and cheers!

    • soulsurfer says:

      agree with that possibility, then again, when has the/this market ever done what we would like it to do😉 !?!? but be careful when R turns into S (futures can do that…😉 )

  21. wildmick says:

    looks like minor 3 could start this morning on the open or shortly afterward!

    Tony are you surprised at the speed in which these minor waves are unfolding? Might see start of P4 by end of august if minor 3 doesn’t extend?

  22. astrofibo says:

    RUT 60min Update…Time Ratio 161.8…

  23. Tony, thanks for the update. Based on the time length of this decline I have to accept the fact that this decline is a Minor 2 and not Minute 4 of Minor 1 per my prior wave count. And as you stated yesterday, small pullbacks are difficult and tricky to count. The good news is that your pivots are more important, for buy/sell setups, then predicting the correct wave count in advance. For when I predicted that this decline was heading towards the SPX 1929 pivot (1923 ES), it didn’t matter whether an individual labeled this corrective decline as minute 4, minor 2 or some wave b, the pivot was the magnet and boy did it get tested spot on.

    Now as to where I see the current count, per the ES, we have a complete abc decline from 1941 ES to 1923 ES. The big question is whether this is the end of Minor 2 or just Minute a of Minor 2. We should get a better picture once the European markets open tomorrow. Nonetheless, this Inter V wave does seem to be in a bit of hurry to making ATH’s as the most hyped ever $20-Billion Alibaba IPO is fast approaching.

    • cmucha68 says:

      Strange thing. Where you made the circles previously the market moved up strongly afterwards. Now you draw a line to the downside ?

  24. Pingback: tuesday update | ewmarkets

  25. Kevin M says:

    Are the SPX Futures and the SPX cash forming an Inverse head and shoulders pattern? It’s quite obvious on the Tony’s 60min chart http://stockcharts.com/public/1269446/tenpp

    Here is my question for Tony or for any other person with knowledge on the subject. Which patten is viewed as the most important. The SPX futures which has a higher price target due to the night time dump to 1890 or is it the Cash market with it’s low of 1904? It’s important to know this answer when determining the price target. Interestingly enough the SPY did get to 189.61 @ 3am in the morning on 8/8.

    My assumption is the SPY and the futures are the most important given there is one more all-time high in store according to EW.

    BTW the $trin numbers again today are suggesting a decent size rally is around the corner http://stockcharts.com/h-sc/ui?s=$TRIN&p=D&b=5&g=0&id=p19411281815


  26. budfox9450 says:

    Looking for a rally, off the recent
    DAX lows, to begin Wednesday
    morning. Thus, lending support
    to a short term weakening SP
    for Wednesday, Very Bullish
    above 1947….Holding VTI long.

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