SHORT TERM: volatile day, DOW -4
Overnight the Asian markets lost 1.4%. Europe opened lower and lost 2.2%. US index futures were lower overnight, and at 8:30 weekly Jobless claims were reported lower: 287k v 293k. The market opened unchanged at SPX 1946, bounced to 1949 in the opening minutes, and then headed south. At 10am Factory orders were reported lower: -10.1% v +10.5%. By 11:30 the SPX hit the 1929 pivot range, and found support at 1926. Then the market started to rally. The rally continued until just before 3pm when the SPX hit 1952. Then the market dipped to end the day where it started at SPX 1946.
For the day the SPX/DOW were mixed, and the NDX/NAZ were +0.10%. Bonds lost 7 ticks, Crude added 55 cents, Gold was flat, and the USD was lower. Medium term support remains at the 1929 and 1901 pivots, with resistance at the 1956 and 1973 pivots. Tomorrow: nonfarm Payrolls at 8:30 (est. +228k) along with the Trade deficit, then ISM services at 10am.
The market opened unchanged today, bounced a few points, and then headed to SPX 1926. After sitting at extremely oversold for most of the morning the market started to rally. After rallying 9 points it paused and then pushed higher. At the low we had counted seven waves down from the Minor B SPX 1985 high: 1969-1978-1954-1964-1942-1951-1926. Notice all three of the rallies during this decline were 9-10 points. It looks like SPX 1926 just completed Minute A of Minor C, and this afternoon’s rally is Minute B. The next decline should be Minute C, which may end at the OEW 1901 pivot range to complete Intermediate wave A. The OEW 1956 pivot should now provide strong resistance for the rest of this downtrend. We updated the hourly chart to display this wave pattern. Short term support remains at the 1929 and 1901 pivots, with resistance at the 1956 and 1973 pivots. Short term momentum rose above neutral during today’s rally. Best to your Friday trading!
MEDIUM TERM: downtrend
LONG TERM: bull market
the ELLIOTT WAVE lives on 
New kid on the block here. Lots of ABC’s to deal with. Mr. Caldaro a simplistic question please. I think this is major A, but I can’t tell by the color coding on your chart if you consider the upward move today to be intermediate b, minor b or minute b? Or am I completely off course? Thank you for your time. LL
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Not TC, but the answer is minute b, Minor C, Int. A, Major A. See the writeup for today.
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Thank you ariez5. I thought I read the review very carefully and come to find out I missed it. So sorry.
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Welcome LL
Could be Int. B if the market can get to the 1973 pivot
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Namaste Tony!
So 1964 is part of which pivot 1956 pr 1973 ?
:):)
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Hey Tony thx for update. futures worth watching tonight. If you’re bearish, you want to make sure that the IHS doesn’t activate overnight on ES 15 min
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What is the IHS?
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inverted head & shoulders, hawkeyes http://screencast.com/t/uQ3zuhc7Hc
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Good if you are a bull…..
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NBC camera man has Ebola. Being flown back to the states.
I’m not one to worry. But this scares the hell out of me. Can this be controlled.
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Tony,
I wanted to discuss the larger picture in light of something you mentioned in the Wed update. You talked about P4 eventually ending in the 1738 to1560 range with 1627 being the most likely target. Unless I’m mistaken P2 was a zig zag of sorts. If this is correct, wouldn’t that leave us looking for a more shallow flat type of P4 in light of the rule of alternation? Your thoughts appreciated.
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P2 was an elongated flat
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is his an OEW term?
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At 3:01 pm, Sept 29th, I mentioned that test of the 1956 SPX pivot (1950 ES) was coming after after a short rally to around 1978-80 (+/-2 pts) SPX {1970-72 ES). SPX did not see it’s target because the price target was met overnight on ES futures as it hit 1967 ES at 2:30 am Chicago time on Sept 30th. Keep in mind that I am futures trader and I base my price targets base on the ES futures.
At 8:44, Oct 2nd, am I mention that the next batter up was the 1929 SPX pivot (+/-4 pts)
At 9:42 am, Oct 2nd, I reiterated it was test the daily 144 EMA near the 1929 pivot (+/-4 pts)
At 12.:57 pm, Oct 2nd, I mention for bulls not to get to comfortable being long for too long and to watch this dead cat bounce rally be rejected at the 1956 SPX pivot as we rally in an abc fashion show for the NFP data tomorrow……………So what lead me to these price target conclusions, well here is one way how I have been reading the market’s untold story (see link to chart below).
http://tos.mx/OoJqn5
Credit goes to Tony and the board here for helping me navigate market noise and recognizing importance price targets. A special thanks to Tony and everyone here, bulls and bears alike, for making this a great blog to share our market thoughts. Cheers and GL to all traders.
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El Matador, Good Calls ! Gotta give credit- where credit is due, you are on fire thus far. Keep up the great work.
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+1
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Thanks for sharing. You nailed it today! Felicidades!
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Nice chart and nice calls, Matador. It appears as if some of us are interpreting the squiggles in very much the same way ;):
thecustomer14 says:
October 1, 2014 at 7:02 pm
“FWIW, I just noticed the 200 day SMA is cozying right up to the SPX 1901 pivot (it’s currently at 1900.48). It keeps looking more and more like the place this market is destined to go over the next week or so. Tomorrow I think we test the 1929 pivot before it’s all said and done.”
I’d also like to give a big thanks to Tony and all of the regular contributors for teaching me something new every day.
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Thanks everyone. There are definitely many ways to decipher the charts untold story and way too many smart traders on this blog for anyone not to take their comments seriously, including all of you. WS may have the super AI algo bot “Watson,” but we have each other and unite we can beat Watson.
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Nice calls and great chart!
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can’t open. EM what’s next?
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Try this one Lunker. For a chart blow up, make sure to click on the gray box located on the lower right corner of the chart .
http://tos.mx/u1NGUb
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Big up tomorrow
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All of the indices were crushed when yesterday’s flimsy short-covering, no-volume-rally, could not hold the market up. Short-covering rally, which is normal when markets are weak. ALERT:: The entire world’s central planning banks are still in control – of everything!
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Panic on Tuesday was uncalled for. ASA, I was sighted near Wall Street, everyone panicked. Just FYI, Last time I was physically present on wall street was in June 2007. Market plunged on my sighting but the went to make ATH (that time) eventually collapsing… Last time, I did not walk to take photo of Bull, but this time I took one.
ASA, I boarded flight to Chicago, Ben Bernanke raised toast and looked relieved.
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RUT ~ Test of 50% Fibonacci Fan Support.
Repeat of August 2011 or Go Long? You Decide!
http://gtwaves.com/2014/10/02/russell-2000-weekly-test-50-fib-fan-line/
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Go long…No Pri-iv yet imho.
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Tony does fionas wave count fit in with your minor c down given that she has an uncompleted third
with a 4th up and then a fifth down to complete 5? or do you count abc pairs instead? which is prefered in your case? how does it differ thanks
http://stockcharts.com/members/analysis/20141002-1.html
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during corrections, abc pairs
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is the “c” in an abc pair always a 5 wave impulse or does it also break down into 3 subwaves (abc) ?
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5’s, contrary to popular belief, are not that common in corrections
and when they do appear there will certainly be another five to follow
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i think i asked that last year…. but now a better question since the dax only made a 23% retrace from its minor b high would you expect it to go for a 38% or is that typical for dax and show its weakness; and do you expect the 56 pivot to be challenged in s&p and dax doing 38% before heading down?
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1956 pivot range was challenged today
Do not follow the DAX that closely
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thanks, Tony, for that clarification!
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I think you are referring to my other chart Kisshu2, so in case…
http://www.amateur-investor.net/AII_Daily_Report_Oct_2_2014.htm
x
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Anyone else looking at today’s price action as a Big Up set up? New low with a close near the high and in upper half of the day’s range, the divergence between the prior swing low’s close on low on 9/25 and today’s close 77% of the day’s range above the low. A rally from here that makes new ATH’s would likely target 2040-2050, and above 2050 probably head straight for Tony’s 2070 pivot. Of course, it would have to get at least half way back first, and the HWB is 1973. I’ll be darned if that number don’t ring a bell for some reason 😉 At any rate, price action sure looks like it ended something today with a new chapter starting as early as tomorrow. As always, beware of gap opens above Big Up triggers. A gap open above today’s high and I’ll be waiting for a pullback or an opening range break before doing anything long. Now, if we open below today’s high and trade through it … 🙂
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Drum Roll please for Big Up.
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thanks CN. Yes, you have that bullish doji today(SPY), and the Vix closing inside the BB; also the yen tried to rally and got a -div intraday. I agree with mjtplayer that “another poke lower” is quite possible. In fact, on any intraday chart: 1 1min, 5min, 60min, we could really use a decent +div, which isn’t there. So we may do that. But that would be positive rather than negative, for some long exposure here.
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typo, menat..1 min, 5 min etc…
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yeah, meant 1 min, 5min..I need a personal typist to help me =)
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Respectfully, I don’t know much about “bullish doji,” and without you saying what you’d like to see diverge, I’m not sure what divergence you’re looking for. Again, respectfully.
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this looks problematic -RSI http://screencast.com/t/KIv1MrPCHdbB need to see +div – self-explanatory, I hope. I don’t know what Big Up is either, don’t use that term..most people know what a bullish doji is, just google it, CN, it refers to hi, low, open, and close…similar things you’re referring to…just a different term
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Hi CB, “doji” is a candlestick term. I’ve never been a student of candlesticks. Seems candlestick practitioners put more emphasis on the open than I. The open, as it relates to my trading, is of little importance beyond a day trade (where I think it is VERY important). For swing trades, the range (high & low) and the close are all that matter to me. I do not place much importance on intraday bar intervals when looking for intermediate swing highs/lows, so I myself would not find the lack of an indicator divergence on a bar interval equal to 1% of the day’s price action troubling. I would think that would be more relevant to day trading.
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CN, that explains it, thanks.
I also like what Ariez has said: that we need a combination of tools.
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I don’t know… looking at the 60 minute chart for SPX, today’s action doesn’t look all that different than minute b of minor a on 9/24. In fact, the retracement of minute a today was less than before, %-wise. And look at what happened on 9/25. Nothing I saw today changes my expectation of the SPX descending to the 1901 pivot for minor a.
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Don’t know if you look at the patterns, but we broke through a head and shoulders neckline with a downside projection of the 1905 lows. Thought that prices had every reason to rally more strongly this afternoon considering the severity of the oversold conditions both yesterday and today. Think we did just enough to relieve the oversold conditions. It’s not the typical roaring-back market we’ve been getting accustomed to. Many here cite the “P4” as the reason. We shall see.
I’ll be watching for your Big Up setup. GL.
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Thank you Gary. As of today, oversold as it may be, the market is at a higher low than the August low. So until we rally to a lower high and print a lower low, the up trend is still intact in my view. So this, for me, is potentially, yet simply, just another “buy the dip moment.” 🙂
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thanks for your insight CN
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CN, It could be a set up, but I completely agree with CB that the lack of a positive RSI divergence makes this rally suspect. You have taught us that price action is a key ingredient in trading, but it is not the only one. A combination of price, technical indicators, and TC is becoming quite successful for me.
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Trading is a highly personal endeavor. As a trader, YOU need to OWN your set ups. For each of us, what that means and what we require to do so will be different. For me, one thing I decided a long time ago was that the only thing that makes a rally suspect to me is lower prices 🙂
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I was thinking today put us on big up alert. Thanks CN.
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You don’t need me to tell you Uncle. You’re seeing it for yourself 😉
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CN, wouldn’t you need to see a price holding above 1964 to confirm or are you only working with the intraday high of 1951? you mention one and two day set ups and this seem like less than one day since you’re not using yesterday’s high?
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First day sets it up, the trigger occurs on a subsequent day (usually, but not always the very next day). I show a cash SPX high of 1652.32 for 10/2, and all I need is for price to trade through that price. If price gaps above it, then I will often wait a pullback of some sort, or an opening range high break. You are certainly right that a rally and close above the August-Sept HWB would be a positive for a long trade scenario, but the opportunity I am looking for is independent of such considerations. What I am trying to do is to find high probability potential swing lows or swing highs to identify the lowest risk as measured by the $$$ amount necessary to risk to take the trade with the highest potential reward as measured by the expectation of a retest of the prior high or low. Waiting for price to get more than HWB increase risk while diminishing potential reward.
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you don’t seem to be concerned w Tony’s 1956 pivot but you were April 8/9. it would seem a big up would have triggered April 9 but you seemed to defer to the power of the pivot. why not the same now?
CygnetNoir says:
April 9, 2014 at 1:27 pm
Just a Pivot time reminder: Tony says, “However, we would like to see the SPX clear the 1869 pivot to feel more confident that this decline is over. We suspect, as long as the NDX/NAZ hold their lows the SPX/DOW will resume their uptrend. Should the NDX/NAZ drop lower, the SPX/DOW will likely confirm downtrends of their own.” If that doesn’t help you keep most of what you got, or even help you make more $$$, then nothing will. Thanks Tony.
Folks, if you trade the chart rather than your heart, you will never want fro anything materially in your life. It is when you get emotionally invested in your opinions that the equity wheels tend to come off.
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high April 8 1958
pivot range 1962-1976
today high 1952
pivot range 1949-1963
pivot range 1966-1980
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*edit*
high April 8 1858
pivot range 1862-1876
today high 1952
pivot range 1949-1963
pivot range 1966-1980
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I’m pretty sure I was short and looking for at least a “C” of an ABC which came 4/11 (I remember feeling kind of bearish at the time). I count three 3 down now (1965 – 1986 – 1926). I do remember that post, but I cannot recall what prompted me to write other than I thought it would be helpful to someone or some few – either in response to what I was reading others post in the blog that day or something I was seeing on the level 2s that day. But in the end, I think I was short and expecting another push lower.
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CygnetNoir says:
April 16, 2014 at 6:53 pm
RUT triggered a Big Up today. Dow, SP, and NDX triggered Big Ups yesterday. Dow has a real pretty three waves down from its 4/4 high (best viewed on the daily chart A=16180, B=16456, C=16015. S&P also nice ABC and RUT and NDX triple zigs, imo. I saw the Big Ups but said and did nothing. For whatever reason, I screwed up. I am human (all too human 😉 ) Sorry folks, my bad …
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say tomorrow a buy triggers in the 1952/56 area
how would you calculate your stop?
use afternoon low of 1945?
use 1926?
stop on an intraday break or close only?
or
stop on a negative close for the day?
stop or a negative close that ends in the bottom x% of it’s day range?
stop on a close below 1926?
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Since the rise of overnight futures jitters, I have “placed” my stop for index trades as a cash close below the set up day low. For stocks and most other markets, I’ll stop out a few cents below the set up day low, the amount of the stop is usually adjusted for volatility, price of the stock etc. (a 5 cent stop may be more than enough on a stock like GE, but would be reckless in a stock like TSLA). But most importantly, for me is that Price action itself always dictates. For example, a red close today would almost certainly see me go flat into the weekend (presuming I started longs during the course of the day). As a swing progresses, I will typically “trail” a stop below a 3-day or 5-day low (and I do not count “inside” days as a separate day). This is where the “observation exercise can help folks – you only come to learn for yourself how to manage your trades by watching price action unfold.
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that is what its suppose to look like when there is a top……this little surge will suck bulls in and then boom….the waterfall will continue….all just my opinion of course…. the bulls have had their way long enough…….
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>>Anyone else looking at today’s price action as a Big Up set up?
I agree. The volume on Thursday was even higher than Wednesday’s and, yes, the setup does look like there’s potential to the upside more than the downside. There’s cyclical resistance formed on the daily (using Hilbert’s sinewave), large contracts/heavy institutional buying under 1950 and other indications that price is headed north. If there are bad numbers in the news today that could be a setback … but only for a while. If the numbers are good or neutral it looks like we’re headed up.
That’s why I’m surprised Tony’s nailed his flag so firmly to the mast first increasing the PIV probability to 75% and then, since Wednesday’s post, giving every indication that he’s expecting prices to head down (the 1956 pivot may well turn out to be Tony’s strong resistance for “the rest of this downturn” but from the appearance of futures so far that resistance could get blown even before the market opens).
I’m nervous when someone like Tony’s reading is so significantly different from my own, but I shall have to continue based on my own analysis. That worked out yesterday when I bucked the consensus and posted that I was looking for a long trade. I’m looking for a long trade again today but, as usual, shall go flat prior to big news announcements.
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Thanks CN. learning from the best…. 😉
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