tuesday update

SHORT TERM: higher open-new high, DOW +30

Overnight the Asian market lost 0.3%. Europe opened higher and gained 1.0%. US index futures were higher overnight, and at 8:30 Durable goods orders were reported higher: +22.6% v +1.7%. At 9am Case-Shiller was reported lower: +8.1% v +9.3%, and the FHFA index higher: +0.4% v +0.4%. The market opened three points above yesterday’s SPX 1998 close, and continued to move higher. At 10am Consumer confidence was reported higher: 92.4 v 90.9. The market continued to drift higher until European markets closed and the SPX hit 2005. After that, like yesterday, it started to pullback. The pullback lasted into the close with the SPX ending the session just above 2000.

For the day the SPX/DOW were +0.15%, and the NDX/NAZ were +0.20%. Bonds gained 2 ticks, Crude rose 50 cents, Gold rallied $6, and the USD was higher. Medium term support remains at the 1973 and 1956 pivots, with resistance at the 2019 and 2073 pivots. Tomorrow: nothing on the economic schedule.

The market opened higher today, followed the rally in Europe, and hit a new all time high just about when Europe closed at SPX 2005. After that, like yesterday, it went sideways for the rest of the day. Thus far we have counted Minor waves 1 and 2 at SPX 1945 and 1928, and now a five wave Minor 3: 1964-1942-1995-1985-2005. With Minor 3 just about double Minor 1 (77 pts vs 40 pts), and the rising Minute waves of Minor 3 all near fibonacci numbers (36, 53, 20 vs 34, 55, 21), it might be time for a Minor wave 4 pullback. Especially with the ongoing negative divergence on the hourly chart. Thus far all we have seen is a five point pullback to SPX 2000. Should the pullback drop below SPX 1995 Minor 4 is probably underway.

Short term support is at SPX 1985 and the 1973 pivot, with resistance at SPX 2005 and the 2019 pivot. Short term momentum continues to display that negative divergence. The short term OEW charts remain positive with the reversal level now SPX 2000. Best to your trading!

MEDIUM TERM: uptrend

LONG TERM: bull market

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

About tony caldaro

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97 Responses to tuesday update

  1. FiveStars says:

    Bunch of people screaming why markets are up … more they scream, higher the VIX goes .. so is this called volatility?

  2. Tony and One might have nailed it again.

    Any guesses where next stop will be? 1985? 1973? etc.?

  3. gtoptions says:

    Thanks Tony
    SPY ~ WPP @ 198.55
    Gap Fill #1 complete, #2 on tap. 😉
    GL ~ Enjoy the Labor Day WE all.

  4. These criminals are holding the 2000 level hoping a bunch of uniformed sheeple have been reading the SPX 2000 headlines and are at their local Scottrade dumping their 0% interest rate savings accounts back into the market before a massive move to 1700 or simply a crash.

  5. oneandonlyuniverse says:

    @ Red Dragon

    ” I probably only win 70% of time with my own trading. Not really that great as I’d like to be 80-90% accurate, but it’s tough in this market.”

    Seriously ????? 70% puts you ahead of Steve Cohen, Paul Jones , Bruce Kovner ,and
    Jim Simons of Renaissance, most prolific hedgie of all time is high 60’s win rate with his programs.

    70% would put you in the traders hall of fame ( IF ) you knew how to cut losses.

    You sound a bit green and that comment was more than a bit dodgy.

    • Lee X says:

      Keeping in mind this is an internet blog I say that’s a low % 😉
      More than a few guys who stood on the top step in the pits batted about 95% but of course that was back in the day…sucks to get old ok time to mow.

      • oneandonlyuniverse says:

        95% , nothing better than getting in front of customer flow.Yes, those were interesting times . Spear Leeds giving 100 to 1 leverage. The long island dream was Getting a GED / trading natgas / marrying a girl from the city.

      • hrmny358 says:


    • tmac24 says:

      70%? do you only buy every 4-12 years? if you are a daily trader of futures or ETF’s 70% win rate would be good, what is your average gain vs average loss on those trades?

    • I trade options mostly. I do call spreads and put spreads where you can make 50%, 100% and even 200% on a small amount of money. Why put a $100,000 at risk to make a 5% gain when you can put $5,000 at risk to make a 100% gain? Not saying that I make $5,000 dollar bets on options all the time but I have in the past.

      On the losing side I have a stop lost of 25%-50% depending on how much money is at risk. Sometimes I’ll play both sides to offset possible losses, while also limiting the gain on the other trade.

      It’s not easy by any means. I’ve won 7 in a row with low gains in the 50% area and the best trade was 250-300% (I forget the exact amount). Then I lost 3 in a row and took a 50% hit on each one. Only betting a certain amount on each trade keeps me in the game.

      If I double down (or triple down) on some bet and then that one turns into a 25-50% loser then it’s going to take a lot of winners to make up for it. So I try not to do that (although I have been stupid enough in the past to do a few times… but survived).

      I may trade 3-5 times a month, or 3-5 times a week. Just depends on the setup. I have to wait for that wave 3 or C wave to appear. I missed the recent one up as I wanted a decent pullback to join in on it but never got it.

      But believe me…. it’s not easy to watch your position go up and down such large percentage moves from day to day. Seeing it drop 20% quickly because you missed the top or bottom sucks, but if you know (or think you know) that’s a turn is near you wait it out.

      The trade that gained me 250%-300% started out the first 2 days down 25-30%, but I felt that it would turn back up and rally before it expired a week later. So I hung on and sold it the day it expired “in the money” 250-300%. Not all trades work out like that of course.

  6. uncle10 says:

    Thanks Tony.
    Think it may be a good time to start buying some Corn. gd and gl

  7. magicianme says:

    Almost four hours into trading and my futures screen shows volume at under 500K. It usually crosses that half a million mark within the first 30 minutes after the market has opened. Heck, I’ve seen days where it hit 500K before the market opened.

    Amazing! Where is everybody?

  8. oneandonlyuniverse says:

    they never ring the bell ….
    $spx 15-27 down from here@ 2,000.16

  9. drwarmington says:

    Rabbittrader ….. I am looking to buy a home in Florida in the multi million range. What is your view on the real estate market over the next 6 months? Thanks

    • lunker1 says:

      I live in Fort Myers. Prices are going to keep going up. Peak season starts in Nov/dec so I would buy before then before the inventory gets picked over and tight supply bumps up prices. Otherwise I would wait till next summer

  10. filemissile says:

    Thank you
    Blog fantastic
    Good luck

  11. pcskier says:

    aapl is doing the heavy lifting today. Short aapl with stop 102.20 low risk high reward trade. My trade of the day.

  12. If this is Minor 4, which I think is most likely, it’s not hard to find 3 waves off the lows for Minute b. Can do this on the SPX, DOW & DAX. DOW retracement was a near perfect 61.8% with the others between 50% & 60%. The other possibility I’m contemplating is the move off the lows being 5 waves and therefore only i of Minute b. Any views?

  13. Wavegenius Daily 10 min Podcast: S&P Long Term Update, Positions and The Daily Top 10 picks from the Top 100 Wavegenius List: http://bit.ly/1leTVNU

  14. purplember says:

    A of minor 4 just complete at 1998 and in b of minor 4 ???

  15. fionamargaret says:

    rabbittrader do come back – you lent an air of verisimilitude to an otherwise bald and unconvincing narrative (WS Gilbert).. seeing we are injecting quotes along with quotes.
    Don’t let the criticism of your work here make you run away like a ……well, rabbit.
    You are interesting, different and fun.

    • buddyglove says:

      Yes +1 to that Fiona.
      “Verisimilitude”, what a lovely word, I had to look it up….early 17th century: from Latin verisimilitudo…The appearance of being true or real.

    • Agreed… do “enlighten” us sheep more about this coming crash. I was told in November 2012 by a friend (who was told by his source) that we’d crash in late 2014 and that 666 was to be revisited again.

      This “source” of his apparently pays $1 million (per year I guess?) to attend meetings every 3 months at the bank that isn’t a bank but runs the whole show with a CEO that thinks he’s God. They created the 1929 stock market crash, the 1987 one and the 2008 one…. and they are going to create this coming one.

      If my math is correct you are 79 years young and probably know a lot more then you are letting on. Feel free to email me anytime… red (at) reddragonleo.com

      • Libor Val says:

        are you paranoid? I was following your blog in the past and you have been talking about a crash – iluminati etc. all the time and nothing happened. Who believed you lost lots of money on this rally. Now a friend told you… funny

      • Libor, I missed this rally for sure. I haven’t made a trade since around 1940 SPX area. Been sitting and waiting to go short. I’d go long if we get a nice pullback to 1985 area but it doesn’t look likely. The longer they trade sideways the less likely we are to go down there.

        Choppy sideways action just resets the short term charts from the overbought conditions and makes a bull flag. Tomorrow’s economy news is about all that “could” cause a move down to 1985 area. If bad numbers cause a drop I’ll go long. If not I’ll wait to go short.

        Have I lost in the past? Sure. We all have. But I’m still in the game. I probably only win 70% of time with my own trading. Not really that great as I’d like to be 80-90% accurate, but it’s tough in this market.

        Am I paranoid? No, not at all. I’m 100% positive the market is rigged and ran by the elite. It was created to steal the money from the sheep and is absolutely NOT a freely traded market.

        As for my friend’s contact… I never mentioned it on the blog over the last 2 years as there was no way of knowing if it was accurate or not. I mean, who calls for a crash in late 2014 and move to 666 when it’s only November of 2012? Someone crazy, someone on the inside, or someone that time traveled to the future… I don’t know but I just didn’t talk about then.

        Now that we are so close to this Primary Wave 4 down starting that information seems more possible now then back then. Of course Tony’s P4 drop is probably more like 200-400 SPX points and not 2/3rd’s of the market. But what if Daneric’s wave count is right and we are about to start a massive Wave E down from a huge megaphone pattern?

        Then the move down to 666 is totally possible. Either way I guess it all depends on what the ECB does next Thursday. If they raise rates then America could follow… and that will certainly cause a very large drop in the market. How large is anyone’s guess.

      • Libor Val says:

        thanks for reply. not sure where this comment appears. in regards to ECB they dont raise rates for sure – no way. maybe some sort of QE. I dont know if we get a correction at all no to mention PIV.

    • Quo Vadis says:

      Things are seldom what they seem, skim milk masquerades as cream.

  16. Hey soul, that was one brilliant essay you wrote….thanks for sharing it with everyone.

  17. jeffbalin says:

    Before minor 4 starts, should see one more Spx higher high from what I’m looking at. But confusing, not seeing that as necessary in the other indices….. and that’s a nice slowly diverging macd on the 60 min on s&p comp indu.

    • IMO, I think Tony nailed top of Minor 3 and Minor 4 is underway with Minute a about to complete….then IMO we will see a minute b rally for rest of the day and should get the minute C tomorrow to complete Minor 4 after release of GDP data

  18. Hi Tony,
    In your opinion, do we have the minimum requirement to establish minor 5,int 5, major 5, Pri 3?

  19. infantguru says:

    Still looking at the cup and handle formation. The handle is yet to form (P4 probably, unconfirmed inverted hammer formed yesterday).
    A successful handle formation should take P5 to 207+ in my opinion..
    An unsuccessful one should produce a failed 5th.

  20. lunker1 says:

    I forgot to add…watch the EMAs. The first two are rising pretty fast.
    1975 x2

  21. pcskier says:

    If you take 666.79 march close times 3 you get yesterday close. That may be meaningful to the algo.

  22. pcskier says:


    A WHO lab workers gets Ebola while working in the WHO lab. Very scary, who workers are well train. You have to suspect the reason a couple of hundred healthcare workers came down with Ebola is the transmission of the disease evolved beyond simple contact. Obviously a global Ebola breakout will not be good for stocks or humanity. This Ebola story is slow but semi truck are slow going down mountain passes until they lose control and have to exit/crash onto the runaway truck ramp.

    • FiveStars says:

      WOW! this looks very scary for stocks. Ebola is worst than Putin, I am selling my long positions and buying short positions as soon bell rings today.

      • pcskier says:

        Long term picture, we are way past due for a pandemic or world war 3 (china and Russia on one side) or at the very least a the biggest global credit bubble ever popping. Yesterday’s charts told me to buy vxx let’s see if $vix confirms it today.

    • pcskier says:

      I posted this before zero hedge did this morning.

  23. The wsj wrote an article on 8-7 lowering GDP in the second half of the year to 3 percent. So a 2 percent yearly growth. So is that bullish? Interest rates remain low or bearish? Other sites posting similar range of 2.7 to 3 percent for third and fourth qtr

  24. Tony, do you have a link to Draghi referring to September 4th? I can’t find anything about that date? Where did you come up with that?

  25. Today had the lowest volume of the year for the sp 500. Nazdaq tenth up day in a row. No sellers out there to even allow minor 4 to get underway.

    • pcskier says:

      Sellers in Japan last night and tonight. When volume picks up you know price is going to be to the down side. All the Kids(traders) will be back to school after Labor Day if not sooner.

  26. bouraq says:

    Guardian of the rally:

  27. Hi Tony

    Fully agree with you that Minor 4 could reach the 1973 pivot – and if we should not be surprised if they took a move down to 1956 pivot either. But maybe that is a bit too much for minor 4 pullback.

  28. budfox9450 says:

    Question concerning the RUT index.
    Why is the RUT High, a C wave high,
    vs a P3 high? The 1173 is now at
    a 61.8 retracement level, Indications
    of a 8/1 low exceeding the 1174 level
    might suggest, something more
    is happening with the Russell 2000.

  29. lunker1 says:

    high 2005 close at 2000. 60min RSI5 working off overbought now at 45. previous 3 bottoms have been 30-35. a solid move below 30 could be the clue that this is more than a shallow quick dip. Daily RSI5 has -D as well so it could provide a deeper 18-32pt Minor 4. I show the deeper retraces bc what goes up fast can come down fast. Minor 4 into 1 = 1945 so plenty of room for the bots to play. NAZ needs a backtest of 4486. A push above 2008 opens up 2017/2021.

    Normal Retrace Targets
    23.6% of Minor 3 = 1987
    Minute 4 = 1985
    Top of Pivot = 1980
    38.2% = 1976
    Pivot = 1973
    Deeper Retrace Targets
    44.7% = 1971
    50% = 1967
    Bottom of Pivot = 1966
    Upside Targets
    Minute 5 = .62 x 1 = 2007
    Minute 5 = 1 = 2021

    Minor 3 = 2 x 1 = 2008
    Minor 3 = 2.236 x 1 = 2017

    • to David’s point below. one would think we either end this trend were everyone believes indicators are pointing higher, or you just keep churning higher while those waiting for a pull back get frustrated there going to miss the boat that never comes, so they jump in and boom, P4

      So a question. does anyone know how often minor 4 and 5 fail at a top? In a perfect world, I would love to see it drop to 1973 rally 40 points and end at 2013 just like its supposed to. Just cant see it.

      I believe we roll over (Not to be confused with rollover, LOL I actually had to look that up) on Tuesday, Then on Thurs when Dragi disappoints we fall really hard

  30. david soble says:

    The market is setting up for a massive failure of the buy the dip mentality in early Sept. My guess is that the people who will start the selling are well versed in EW and have a trick that will defeat your system.
    Just a warning that I would engineer the sell off after manufacturing an EW buy signal.

  31. sunset2014 says:

    Namaste Tony

    4th waves have of any degree have been weak during this bull market. Would a 10pt pullback to 1995 qualify for minor 4?


  32. 56rambler says:

    Thanks, Mr Caldaro,

    Can you update us on where you think Minor 4 could complete? And the timeframe please?

    Thank you!

  33. pcskier says:

    6th day in a row $indu finished the last 30 minutes of the day with a red candle and significant volume for the day. Aug 19 till now. Not bullish sign. That is a sign of institutional selling.

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