wednesday update

SHORT TERM: gap up opening sold, DOW +11

Overnight the Asian markets gained 1.1%. Europe opened higher and gained 0.9%. US index futures were higher overnight, and the market gapped up to SPX 2008. After an uptick to SPX 2009 the market started to pullback. At 10am Factory orders were reported higher: +10.5% v +1.1%, and Auto sales were mixed. The market then pulled back to SPX 1999 by noon and tried to rally again. At 1:30 the SPX hit 2005, and at 2pm the FED’s Beige book was released: Another pullback followed to SPX 1998 by 3pm, then the market bounced to close at 2001.

For the day the SPX/DOW were mixed, and the NDX/NAZ were -0.60%. Bonds gained 2 ticks, Crude rallied $2.45, Gold rose $5, and the USD was lower. Medium term support remains at the 1973 and 1956 pivots, with resistance at the 2019 and 2070 pivots. Tomorrow: the ECB statement, ADP at 8:15, weekly Jobless claims and the Trade deficit at 8:30, then ISM services at 10am.

The market gapped up on the open today following Europe’s early rally. The SPX opened at a new high, then hit 2009 before it started to pullback. Of the three options noted yesterday, two of the three were eliminated at the open. With today’s afternoon pullback to SPX 1998 we are now seeing some choppy activity from the Minor wave 4 low at 1991. We have a rally-pullback SPX 2006-1995, and now another rally-pullback SPX 2009-1998. This morning we labeled the 2006-1995 sequence as Minute waves i and ii of Minor 5. But today’s 2009-1998 sequence appears to be a bit odd, during this uptrend, for a Minute iii. With the much awaited ECB statement tomorrow we remain cautious.

Short term support is at SPX 1995 and the 1973 pivot, with resistance at SPX 2009 and the 2019 pivot. Short term momentum hit overbought this morning then dropped below neutral. The short term OEW charts flip-flopped again today, ending negative, with the reversal at SPX 2002. Best to your trading!

MEDIUM TERM: uptrend

LONG TERM: bull market


About tony caldaro

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200 Responses to wednesday update

  1. pooch77 says:

    Another stick save into the close AMAZING..QE today???

  2. Tony,
    The weekend outlook you sent me was from the prior week, 8/23 and not 8/30?

  3. pcskier says:

    $usd or DXY cleared the resistance it hit 2 days ago. With gusto and swagger. Resistance will now be support.

  4. broke down hard thru the 5-day support line…….which is at around 97-98 ES

  5. lunker1 says:

    SPY DIA NAZ .887 from Minor 4 low to recent high. DIA hit it to the penny 170.22

  6. Lee X says:

    You guys crack me up😉

  7. Gary Lewis says:

    Key reversal in the works? SPX

    • Gary Lewis says:

      they always push it back up in the final minutes. Will today be the same? Probably.

      • pcskier says:

        Hyg is now under its flat 200 ma on the 2 hrs, once jnk get under the same metrics and stays under for a bit, selling will get heavy. If jnk gets bid at its 200 on the 2 hr, the algo will bid equities. But with $bpspx hitting it 200dma and feeling it and $bpcompq hitting its 200 weekly ma and feeling it, its a done deal, top. Like magic said yesterday people know it over and have been trying to exit slowly, it going to be a stamped when everyone heads for the door at once, but that may be still a ways off, buy the dip mentality is ingrained. But it’s coming ” risk off in major way”

      • pcskier says:

        Hyg got the bid at the 200 and the algo got the input to buy equities. Code

      • Gary Lewis says:

        see what they did there? I saw this movie before😉

  8. IMO, today’s price action is definitely bearish. STOP above high and SHORT

  9. pooch77 says:

    OH OH What happened,we gonna lose 96/97???

  10. lunker1 says:

    PCLN from 1:02 to 1:28 I think someone was selling 1220. see 1min chart

  11. Bears now attempting to attack the ECB! Details here!

  12. Tony,
    What are the reasons that you don’t think this is Pri.III top? Or is there a reason? Thank you.

  13. Nice 5 waves up from this morning lows. That should be it for Primary III. With the morning lows now taken out the only other bullish possibility I’m attracted to is that the SPX is still in Minute 4 with yesterday’s high the top of Minute 3. In this case today’s high would be wave b of Minute 4 with the current decline wave c. This will remain a possibility above 1997, but at long odds IMHO. Sold my gold 13 hours ago at $1,272. Thought the USD chart suggested it was one ramp short. Got that right. Gold made it to $1,277 momentarily on the Draghi spike. Now nearly all the way back to yesterday’s low again. I might grab some again.

  14. pooch77 says:

    So we need at least north of 225k jobs for nice pop tomorrow,anything less with QE ending disappoints markets?.Pre 2008 we needed 350k to substain growth,how did this change

  15. H D says:

    that’s 10 handles, new ATH and whammy. same all week, next hit is legit. distribution almost complete! money out of SPX into FTSE?

  16. blackjak100 says:

    Tony, what is the group’s thought on the wave count? It appears this is not a third wave. Could it be 3 nested 1’s and 2’s with tomorrow exploding higher on NFP day?

    • wildmick says:

      lunker as you posted on your blog “what if everything is off by one degree meaning we’re about to finish Minor 1 instead of Minor 5?” this is 1 of my 2 biggest concerns.

  17. I sold my small-cap mutual fund on Monday and I am watching the market action carefully to see if my S&P index fund and my (larger company) mid-cap fund are still holds. So far the Wall Street reaction to Draghi’s speech has been less than explosive, but it’s possible the big and smart money want the rest of us to jump out of the market prematurely. So they are giving us one more line of bricks to add to the height of the wall of worry. Or maybe the lukewarm response to Draghi should be taken at face value, which would mean that today’s ECB monetary stimulus announcement was clearly anticipated and discounted in advance by the previous market rally.

  18. buddyglove says:

    Difficult to get too bearish with this breaking out Aimho.

    • Gary Lewis says:

      Reuters informa: “el ganador del proyecto aeropuerto Ciudad de México, es Fernando Romero, yerno de (Carlos) Slim y el arq Norman Foster. Y el riesgo en la misma ubicación no se consideró? Mayor tráfico mayor probabilidad de una desgracia que se sabe puede pasar.

      Perhaps Carlos Slim’s son-in-law getting the new Mexico City airport contract has something to do with it.

    • BuddyGlove, Please dont forget to charge your battery, it is showing 85%

  19. mjtplayer says:

    Which way do we go? many are bullish, hoping for the nested 1,2’s to pan out. Some are bearish or cautious, per several counts. Tough to say, important inflection point per Tony’s comments.

    I agree this doesn’t “feel” like the start of a move down, but it also doesn’t “feel” like a wave 3 of 3 either – too choppy and taking too long.

    FYI: Just completed 5-waves down in the NAZ from this mornings high.

    The ECB event is now out of the way, 2 more events upcoming: NATO meeting (more Russia sanctions?) and jobs report tomorrow. With a full moon Monday, I think we’ll know which way Mr. Market wants to go by EOD Monday.

    • H D says:

      mj, that’s quite a shift in sentiment for you from the bulldozer thinking last night? Nothing wrong w staying out. I like the pattern more than the news. GL #stops

      • mjtplayer says:

        No change, I still think it’s crazy to be “all-in” long or short here. Small longs with stops? Sure. Small shorts with stops? Sure. But no huge bets in either direction, too risky till we get more confirmation.

  20. pooch77 says:

    Draghi could not provide liftoff for U.S. markets what comes up next that could possibly spark markets up another 2%

  21. Hi Tony,
    I have to respect the new all time high put in today in SPY but IWM looks a lot less bullish, especially stepping back a bit. Looks more like a topping out range in that one. I’m in the sell the ECB news camp at this moment. Am looking for IWM to about 108 in the next few weeks. Increasingly it looks wiser to trade the short side in the smalls from here on out to me.

    Best wishes!

  22. Hello Mr Caldaro,
    Dow jones has failed many times to pass the 17150-17155 level.
    Do you think that we will have the correction soon??
    many thanks
    Best regards

  23. wildmick says:

    im kind of surprised that s&p isn’t up 20+ points on ecb & draghi. instead its up 11+ & falling back. wonder how far stocks will extend or if draghi really extended them worth note?

  24. torehund says:

    Its loose, chicks in the video too🙂 Loose up the tension🙂

  25. Peter Sliney says:

    This market is not acting like it should if we were heading lower. Looks like another leg up is in store.

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