wednesday update

SHORT TERM: market finishes mixed, DOW +15

Overnight the Asian markets ended mixed. Europe opened higher but closed mixed as well. US index futures were higher overnight, and the market opened two points above yesterday’s SPX 2000 close. That was the high for the day as the market started to pullback. The market declined to SPX 1998 by 10:30, then bounced to 2001 just as Europe was closing at 11:30. After that it went sideways until about 2:30 then started to decline further. Just past 3pm the SPX hit 1996, then rebounded to close at 2000.

For the day the SPX/DOW were +0.05%, and the NDX/NAZ were mixed. Bonds gained 7 ticks, Crude slipped 5 cents, Gold was flat, and the USD was lower. Medium term support remains at the 1973 and 1956 pivots, with resistance at the 2019 and 2070 pivots. Tomorrow: Q2 GDP (est. +4.0%) at 8:30, along with weekly Jobless claims. Then at 10am Pending home sales.

The market opened within three points of the all time high, then started to pullback in quiet trading. When Europe closed for the day the SPX was near its high, and then drifted down like it has done all week. In the last hour of trading the SPX hit 1996, and then rebounded. With the hourly RSI hitting oversold today a pullback of some degree is confirmed. But until we see an overlap of SPX 1995, we can not be sure Minor wave 3 ended at 2005. If the market makes new highs from here we would think Minor wave 3 is extending.

Short term support is at SPX 1985 and the 1973 pivot, with resistance at SPX 2005 and the 2019 pivot. Short term momentum hit oversold and then bounced to neutral. The short term OEW charts flip-flopped at the SPX 2000 level, ended neutral, with the reversal level still at 2000. Best to your trading GDP day!

MEDIUM TERM: uptrend

LONG TERM: bull market


About tony caldaro

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130 Responses to wednesday update

  1. budfox9450 says:

    RSH — How, or Why is this retailer still in biz? I understand
    it is a retailer, of cell phones. But, RSH and BBY, are 2 biz
    that seem, to never have a come-kid story.

  2. mjtplayer says:

    Tony – 14pts seems a but shallow for minor 4, no? Perhaps the drop to 1,991 was minute a, just finished minute b up to 1,998 (exact 50% retrace) now in minute c down to finish minor 4 later today or tomorrow a.m.? If so, c=a at 1,984 which would also test the previous wave 4 of 3 and your original ballpark estimate of mid 1,980’s.

    My trigger finger is getting itchy. Chomping at the bit to short IWM & EWG; but still holding off for now…

  3. tony caldaro says:

    Before things get out of hand.
    Please keep comments market oriented, and not about who said what to who.
    thank you for your continued cooperation

  4. pcskier says:


  5. ariez5 says:

    Hi Tony,
    Over the last few years I have noticed a few very pervasive memes that failed.
    In 2011, it was “you have to have some gold in your portfolio.”
    In 2012, it was the breakup of the EU.
    In 2013 it was the “great rotation” out of bonds.
    Today, one hears from everywhere only of “second-half-of-the-year strength.”
    Just a caution.

  6. gary61b says:

    One more push up should seal the gap from this morning on spx 60

  7. ariez5 says:

    Hi Tony,
    Not even a 23% correction on Minor 4? It’s hard for me to believe.
    I have the feeling many will not want to go into the long weekend long, given the Russian situation. I am guessing there is more selling coming in the next 24 hours.

  8. valunvstr says:

    Thoughts on emerging markets long term? Looks like they are breaking out despite a strong dollar. Some are getting bullish which of course concerns me. Thanks.

  9. travis01 says:

    Concerning appl, I’d be more concerned with whether the launch is postponed. Sapphire glass.

  10. H D says:

    So War is the wall of worry now? everything else looks peachy perfect

  11. gtoptions says:

    Thanks Tony & OEW
    I’m a biased Apple consumer since 1982 😉
    The short trade on AAPL won’t appear until after the products (plural) release. Until then its going to trend towards the 127.2% extension at 113. GL

  12. It looks like minor iv ended today at 1990 Tony.

    Lets see if we break 2005 next days will confirm that view.

    • magicianme says:

      I thought Tony said it needed to go to at least 1985 (possibly 1973).

      Tony: “Should the pullback drop below SPX 1995 Minor 4 is probably underway.” Seeing that the pullback went below 1995, that “probably” was minor 4, but since price didn’t get to 1985 maybe Tony will decide that the drop below 1995 was a false alarm and that it wasn’t minor 4 at all. Or is it still the expectation that it will reverse to 1985?

  13. JeffMilano says:

    Tony – your work is great!

  14. pcskier says:

    SPX sell the bounce at 1996.66.

  15. mjtplayer says:

    AAPL coming out with bigger screens, longer battery life and better camera on the new iPhones. All the things already available with a Samsung phone 🙂 Not to mention Google Android OS, which blows away the crappy iOS.

    AAPL went from an innovation company several years ago to a “me too” company today. The new Samsung phones are slightly curved to better fit in a back pocket and are waterproof. Maybe the iPhone 7 or 8 will catch up to that technology, in a couple years…

    • H D says:

      I disagree, I’ve been using AAPL products for about 2 years now. iPhone 6, I’m a buyer, home automation. Can’t wait.

      sent from my iPhone

      • bob623 says:

        Totally agree with you H D. Have had tablets and phones from Apple, Samsung and etc. Apple is still a quality product, far above others. Always get superb help at the Apple stores and it basically free. Can’t ever beat that!

    • kjb0 says:

      icash coming soon

    • lunker1 says:

      AAPL blew it with the small screen iPhone 4 and 5 and the stock tanked but a great value dip to buy. now a huge run up coming into the 6 and the phone should be a hit. people love the products and brand. I bought the 5 and was bummed about the not so large size increase. my 45+ year old eyes need a larger 6! lol.

  16. Tony
    Does 1990 qualify minor iv or it has to be lower ?

  17. pcskier says:

    Back with short on AAPL call, It broke a line and retested the backside of line and failed at high yesterday.

  18. Footsie strengthening, INDU falling, SPX falling but percentage fall is less compared to INDU..

    I know all of this you can see this on your screens, but, just in case, if some one cant see, then this is gentle reminder

  19. 8in8 says:

    Thank you
    Blog fantastic
    Good luck

  20. Hi Tony!
    Minor 4 seems to send the market down today.
    Minor 2 was a zig-zag, and minor 4 should then be a flat.
    This makes me suggest, that minor 4 started already on the monday top at 2002.
    The SPX top 2005 was then the B-wave, and now we witness the sharp C-wave down.
    Minor 4 may then come to a conclusion today.
    Best wishes Sverker

  21. michael sim says:

    Prepared 3 possible SPX Elliot Wave counts:

    My 3rd scenario is somewhat same with Tony.

    Might want to look and comment 🙂

  22. pcskier says:

    Margin debt peaked earlier this year, decreased than bounce up, now as of last month it is decreasing again. In 2000 and 2007 when margin peaked and went down, the final top was close behind. BLow off top in NDX may of completed today, major downside ahead. Any guesses on tomorrow GDP?

  23. XScaler HB says:

    I saw this today on CNBC and just found it on their website. It was pretty interesting especially since Abigail isn’t this bearish.

  24. manunidhi21 says:

    Lately many I’s on the blog. 😉

  25. student8888 says:

    Mr. C, if 2005 was the minor 3 high, would it be possible for minor 5 to fail early and not reach that high again before P4 hits? Thanks for sharing your knowledge with all of us.

  26. alexhartley1 says:

    Thanks for the report Tony. IBB (the biotech ETF) looks close to breaking out to the upside after a well publicised fall earlier in the year. When you see action like this in an area of this sort, does this lend credence to your view about a potential extension of this rally into the rest of the year. Others have targets of 2200+ and I see Jan-Apr as potentially being a difficult time. Cheers

    • tony caldaro says:

      Playing Biotech in this market is like going to a casino

      • torehund says:

        Tony, agree its Dangerous. However there are som nice setups, like Aeterna Zentaris(AEZS) (cup and handle). A sturdy ph 3 drug which is an old trusted one in which a transport veickle is attatched, so that the toxic molecule goes directly to target and lessens burden on the body as a Whole. Its starting to run up now for an interrim analysis closer to Christmas. As always this one is risky too, but maybe less risky than some others out there.

  27. bouraq says:

    The guardian gave in:

  28. david soble says:

    Yesterday I made the comment that I expected the market to correct when most EW trends were flashing a buy signal. This provoked two comments. First Cmparis asked whether more than 1% of investors followed EW. Of course, there are other sites that espouse EW principles such as Daneric and Jason Haver and they all have strikingly similar counts. The question seems to imply that 1% is too small to care about. My own view is that a small percentage of people practice EW to the extent that you do on this site but there are many people like myself who follow this site as a check against the system that we regularly employ to trade.
    The second comment was from Lumpert1 wherein he stated EW does not use buy signals. Oh really! Ay the present moment Tony is tracking a third wave. That is a BUY wave by another name. Then he says we will have a wave 4 down that will be the biggest correction since 2011. Lumpert1 that means sell or short if you don’t understand the terminology. Then there will be a fifth wave UP (as in BUY) to end the current cycle. Let me help you out, EW just uses different terminology but when you strip away waves, minutes and minors it is all about buying on waves 1,3,5 and selling 2 &4. Hopefully, you will figure this out before your minutes get washed away by the waves.
    Anyway, let me make the point again. Whatever system you follow, you are all assuming that you will have time to sell your long positions. EW is going to help you right, You might want to reexamine that assumption. When P4 or whatever hits, I doubt that it will give you any warning, That is not going to be the way this works. I will check back in a few weeks in case you want to tell me I got it wrong.

    • lunker1 says:

      nobody has told anybody how or when to trade or not trade on which waves. these are all your words.

      some here daytrade, or swing trade, or LTBH, or combinations. people trade futures, options, 3x ETFs, Indexes, 401K, Mutual Funds.

      this site is not EW. it’s OEW. it uses RSI, MACD, Fibs and several proprietary quantitative methods to calculate the wave count so lumping OEW into other EW is apples and oranges. sometimes the counts sync up (likely copying Tony) but often times they don’t.

      which then begs the questions: how have you stayed on the bull from 1200 to 2000 and beyond? how are you going to identify the next large correction or bear market? why is your method better than anyone elses?

    • lunker1 says:

      Any trading or investing system takes time and work and I wouldn’t advise anyone to blindly follow something they don’t understand. So I’d recommend that you take the time to learn more about OEW because you will be very pleasantly surprised with all that it offers.

    • Why do you believe nobody will have enough time to put in a sell order when Primary IV starts?

    • I an an avid follower of this site even though I haven’t posted in a very long time.
      But you compel me to. First of all yesterday THIS SITE was not promoting a buy signal.
      In fact the main count presumes we will have 2 down waves ( the 2nd being very significant) sandwiched between a comparatively small up wave. That doesn’t sound like a buy signal to me. At the present time Tony is tracking the very tail end of a third wave that has lasted for approx 3 years. That is not a buy signal! If we could, I would bet you that most people here have already significantly scaled out of their long positions.
      I know I have.
      So get your facts right please before you spout off and at least try to contribute something useful.

      • soulsurfer says:

        agree! buying should have been done 80-90 points ago, and selling/scaling out is what one should do now, at least I do. I have only 25% of my SSO position left. I don’t see why one would want to buy minor 4 for minor 5, since internal waves have often truncated, as tony has pointed out many times.

        there are still individual tickers going strong, JCP, BBRY to name a few, but many are in their very last legs…

      • aresoonparted says:

        Sheldon, Since I read the comments up from the bottom I came to yours first. Thought it most intelligent and the poster to whom you were replying a terrible person. Then I read his comment and switched.
        Of course, indicting a possible 5th wave of small degree by posting a green 4 as Tony did today is a buy signal for active traders who know how to be careful which is the audience the poster you were so rude to was addressing. Did you even read his comments, which while in poor taste, are equally as cogent as yours? And you were quite rude although not quite as rude as the poster you were addressing.

    • chicotheman says:

      I think you are making the point that there will be a surprise ending, and I agree with that. You may also be making the point that the drop will kick off with a big gap and that is certainly possible. My guess is that the surprise may be a stop short on minor 5. In int 3, minor 5 peak was only 6 pts higher than 3. That would be about 2011 next week. Give or take.

      • soulsurfer says:

        how about 2014 😉

        personally i don’t think the market will just gap down big and be done with it: too obvious. tops take time, it will IMHO likely slowly role over, making lower lows and lower highs. remember it’s a market of stocks (not a stockmarket): so not all stocks peak at the same time. this will cause the market to slowly descend. takes about 2 weeks i’d say.

    • perversionofthemean says:

      EW is required study for all Chartered Market Technician candidates. Not all will adopt it, of course, but it’s studied and known, and includes wave counting, fib, and oscillator correlations.
      At the same time, lots of hedgies are technicians, but would never tell a client “I bought because wave 3 began” or “I bought because the purple line crossed over the yellow one”. They might “increase the price target” or state that their “valuation target was reached” and then sell…
      I’ll bet no one on this blog uses EW to the exclusion of all other indicators. It’s an art, not science.

  29. astrofibo says:

    Silver Daily Price Ratio 138.2…

  30. astrofibo says:

    TFc1 60min Price Ratio 161.8…80.9…

  31. Two people on cnbc today calling for a 50 percent correction. Rabbit posted he believes on 9-4 a 50 percent correction. I would be happy with a 10 percent correction. Then you have the opposite side saying were going to 2200. Low interest rates low inflation, allows for pe of 20. We all know it doesn’t end well, just when is the one billion dollar question.

    GDP being lowered third and fourth qtr seems like goldielocks, so i guess, if we do have a correction the catalyst will be from europe or the Mideast.

    • nickokc says:

      50 percent correction if Putin make Ukraine part of Russian federation and Israel attack Iran and Iran close Strait of Hormuz hmmm oil jump to to 350$ heck that will be 70% correction lol Game Over ( reminds of Charles Nenner who said dow to 5000 prediction for 2013 lol) nobody can predict how this rigged market going to end.

      • Charles Nenner…have not heard from him from long..I think he going wrong all along..

        All these people, when their any one forecast works (irrespective of other 100 forecast that have gone wrong..), they get hold of fund to which they advised that correct forecast and then appear on Bloomberg.

        The set up is; Bloomberg is informed beforehand questions to be asked. For example; his one call of identifying apple top at 707 went right (years before, before apple split). He came on Bloomberg, Bloomberg asked him his opinion about Apple, he made great statements, 5.5 billion people watching Bloomberg over…

  32. lunker1 says:

    similar to the three prior pullbacks SPX 60min RSI5 pulled back to the 30 area and then rebounded. the pullback from 2005 is a small abc.
    a 1998
    b 2001
    c 1996

    if the 1996 low holds then perhaps:
    2005 was Micro 1 of Minute 5
    1996 was Micro 2 of Minute 5
    if SPX impulses up through 2005 then this count is likely.

    Or this small abc might be the A of a larger ABC . then B would target 2001/2 (50%/62%) and then C would move below 1996 where:

    Or if small c isn’t done at 1996 lower targets are
    which could complete the entire abc Minor 4 or just A of ABC.

  33. Hi Tony

    I’m pretty sure you mentioned it , but how many points of pullback you expect on minor iv if minor 3 topped 2005 ?

    Thank you

  34. tony caldaro says:

    If you mean during larger third waves … yes

  35. Gary Lewis says:

    Is there any possibility that SPX Wave 1 could have been from 1910 to 1990 with the area between 1930 and 1960 being a wave 1 extension? I see that usually occurs with wave three, but on my daily close chart, 1910 to 1990 looks like 1 main wave to me. I have no expertise in EW so curious what the experienced EW folks might say. Thanks

  36. soulsurfer says:

    thanks tony – general question. Isn’t it uncommon for 5th (of 5th) waves to barely subdivide/minimal pullbacks!? It would fit the “exuberance” pattern and lull everybody into believing this thing is going up for ever.

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