tuesday update

SHORT TERM: gap up and go rally, DOW +215

Overnight Asian markets lost 0.4%. Europe opened lower but rallied 2.0%. US index futures were higher overnight, and the market gapped up at the open to SPX 1916. The SPX had closed at 1904 yesterday. At 10am, as the rally continued, Existing home sales were reported higher: 5.17mn v 5.05mn. Also around this time NY FED Dudley’s speech was released from the closed door meeting yesterday: http://www.ny.frb.org/newsevents/speeches/2014/dud141020a.html. The rally continued, with just small pullbacks, until the SPX hit 1934 at 12:30. Then after a five point pullback the market headed higher again. At 3:30 the SPX hit 1942, then dipped to close at 1941.

For the day the SPX/DOW were +1.60%, and the NDX/NAZ were +2.50%. Bonds lost 9 ticks, Crude added 55 cents, Gold rose $2, and the USD was higher too. Medium term support now rises to the 1929 and 1901 pivots, with resistance at the 1956 and 1973 pivots. Tomorrow: the CPI at 8:30, then at 3:30 a FED open board meeting on Dodd-Frank.

The market gapped up at the open, following AAPL’s earnings beat, various rumors involving the ECB/FED, and the rally in Europe. The rally continued from the open throughout most of the day, except for a 5 point pullback around lunch time. Since yesterday’s SPX 1882 low the market has rallied 60 points. Quite impressive! What is also interesting is that the market took five trading days to drop from SPX 1970 to 1820. And now, has retraced from SPX 1820-1940 in just four days. Volatility continues. We are still counting the entire rally as Int. wave A of a Major wave B uptrend. The Int. A price targets we provided in the weekend update were either the 1929 pivot or the 1956 pivot. After that we expect a very sharp pullback for Int. wave B, followed by another sharp rally to end Major wave B. Short term support now rises to the 1929 and 1901 pivots, with resistance at the 1956 and 1973 pivot. Short term momentum is extremely overbought, with a very slight negative divergence. Best to your trading this wild market!

MEDIUM TERM: Major A downtrend probably bottomed

LONG TERM: bull market

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

About tony caldaro

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190 Responses to tuesday update

  1. Tony,
    You have nailed it again! Thanks

  2. johnnymagicmoney says:


  3. I think a little wave 4 just finished by the looks of it an hour before the close at 16545/1938. The 5th wave could make the market finish near the days lows. I’m thinking Minute c of Minor a of Int. B of Major B. Then up tomorrow for Minor b and then down from Friday for Minor c which should be a bit more scary. Tomorrow 1940 is where the upper downtrend line for the decline would be. Might be a reasonable target for Minor b.

  4. mrgreen2010 says:

    Amazing how the VIX was held in check by OCT OI expiration and now NOV exp call OI at 20 is most written strike. Armstrong has 16660 in the dow as a key level being not held by the end of the week then the possibility of a decline with new lows into Nov 3 increases.

  5. playitkool says:

    I need to point out that I was wrong in previous post about there being a Fed press conf. next wed. Got my months wrong, there is no conf. in Oct. Sorry for bringing false info here.

  6. gary61b says:

    The spx 60 minute IHS if its legite has a potential of 1976 from the 1899 neck. Just an FYI, not an absolute until it happens.

  7. cmucha68 says:

    Not sure if this already bottom now and where we go from here if pivot holds. Back to 1956 pivot again for a last test or further down into the close. Exited shorts at the low but would like to go all in at higher price.

    • cmucha68 says:

      Lunker1’s calculation of a possible move back to 1963/64/65 etc. if pivot holds would be an excellent short entry. But we still have an hour now to get pivot support proof.

  8. magnus1234 says:

    That was Major B. I’ve added to my shorts from above. Caveat: I’m usually to early, meaning one should be able to stomach 2 Std-dev at current VIX.

    • ISINCODE says:

      I think we find 1928 a decent place to bounce into the final leg of B to 1967/8 with plenty of chop. By then QE3 will officially be over and the next black swan will crater this market. probably occur 2nd week in Nov. IMHO….Best of luck everyone and Thanks Tony !

    • mrgreen2010 says:

      Not today your not…right on time…next stop 1900 before a bounce.

  9. mjtplayer says:

    VIX found support in the 15-16 area, now rallying back to prior support/resistance at 18. A meaningful break above 18 and we’re heading to 20 -22

  10. johnnymagicmoney says:

    looks like 29 Pivot is providing support …………..lets see if it holds

  11. nickokc says:

    this Market truck crude more than anything specially S&P

  12. There were 10 little bear in the bed and the little one said…..

  13. johnnymagicmoney says:


  14. cmucha68 says:

    Let’s see if rabbittrader’s view comes into play. Spx will go down from 1941 or a bit higher but will not close the gap from yesterday. Then one more up for a double top and then no help for the Bulls anymore. Tony said sharply down and one more rally also and then finito for the Bulls perhaps. Yesterday reminded me of the FOMC crazy run last time only to give all back and more afterwards. Let’s see.

    • lunker1 says:

      pivot to pivot
      1821 (bottom of 1828)
      1869 (pivot)
      1835 (top of 1828)
      1898 (1901 pivot)
      1878 (top of 1869) fib 21
      1949 (bottom of 1956)
      1929? (pivot) fib 21
      1963? (top of 1956) fib 34
      1966? (bottom of 1973)

  15. afarsid says:

    I see a double inverted hangman candle with a serpentine wick on the spx 30 min. Anyone else?? Very bearish

  16. at 2:50 pm, Oct 21, I mention that IMO we could be in wave 5 of Minor c of Inter a…..let see if my predictive count is correct and hold true….hope so…..it’s tough to kill a bull…..here is how I currently have my count down………

    1898 Minor a (78 pts)
    1978 Minor b (21 pts)
    Minor c (72 pts) subdivided as follows:
    1897 W1 (19 pts)
    1892 W2 (5 pts)
    1934 W3 (43 pts)
    1929 W4 (5 pts)
    1949 W5 (20 pts)………..Inter a (128 pts)

  17. elmer510 says:

    First signs of IM B now?

    Should at least reach 1901 or about 38,2% retrace.

  18. gtoptions says:

    FYI SPY ~ Rising Wedge LTL Broken.

  19. kvilia says:

    In UVXY@30. See you at 40🙂
    Feels like sheet music to me…

    • FiveStars says:

      🙂 you have been doing good in VIX related etns/etfs … when you planning to pick XIV?

      • kvilia says:

        Will be a gut feeling this time. Tony’s take is that next two waves to complete Major B will be sharp, so in this case I’ll switch two more times between XIV and UVXY before the start of Major C. Now I expect it to be absolutely brutal and bring lots of panic, so I may hold UVXY all the way down until PIV ends. It will be in triple digits, as we can expect VIX to get as high as 40 this time around, and that’s where I would be looking to get back in XIV again. Too early for a detailed road map, just sketching… Ret. funds: DXRSX will be bought start of Major C and DXRLX end of PIV. Nothing really complicated, guru Tony laid it all out as I tend to think, just need to look for PPs.
        Thank you, Tony and cheers all!

    • thecustomer14 says:

      If the Primary IV is anything like Primary II (20%+ drop), we will see UVXY in the triple digits before it’s all said and done.

  20. rc1269 says:

    well that was fun while it lasted

  21. johnnymagicmoney says:


  22. johnnymagicmoney says:

    here we go…………………….. weeeeeeeeee

  23. OneAndOnlyUniverse says:

    Sold all my Baba 92.85 ( it is not going to 38 ) …i am very large short $spx here @ 1944….hint energy…. good luck

  24. John B says:

    Scotty are you still short and waiting for a lower low beyond 1820?

  25. johnnymagicmoney says:

    doubling down on my short ………………I just listen and hear dumb ………………….bid it up if you wish Mr Market but the problems did not go away in 5 days and Dragi is financially impotent (plus we hit the lower end of the second pivot that i dont think anyone thought wed hit on the B rally so soon………………..too much too fast ……………200 day is resistance

  26. uncle10 says:

    Thx. Tony. Back to a little boy market for a while imo. never know but not seeing any big moves at least until fomc.

  27. berniebaruch says:

    Vix Futures Firming. Let’s Roll

  28. Gary Lewis says:

    Minutes away from 195 SPY handle. Will we see 196 today, 197/198 tomorrow?

  29. blackjak100 says:

    If wave i=1821-1869 and wave ii=1869-1835, then wave iii=1960ish or 1956 pivot where 2.618*wave i.

    No significant pullback until 1956 pivot favoring upper end. GL and cheers!

    • JK1987 says:

      wave iii? Sounds like a bullish count.
      Yesterday you posted “Zweigh Breadth Thrust” event here and on your blog.
      Daniel Millard, Is that the reason you changed wave c to wave iii?

      • lunker1 says:

        what do you think Jack Kendo?

      • JK1987 says:

        Tony, I think we are going down for major C from 1949 (low end of 1956 pivot).
        I hold shorts after took profits on longs (from 1838 to 1894, all in).

        JK1987 says:
        October 21, 2014 at 3:07 pm
        I double the shorts right at the close at 1941.
        I did not exit the short from 1892 yet.
        Primary IV is not done yet.

        JK1987 says:
        October 17, 2014 at 10:17 am
        1894, that’s enough for me for Major B, all out.

        JK1987 says:
        October 15, 2014 at 9:04 am
        Apparent Major A, or that’s all for Primary IV?


        Anybody all in at 1837.22, or close to the panic bottom?

  30. gtoptions says:

    Thanks Tony
    AAPL did exactly as I expected it would when I telegraphed a potential position on a Public Blog. LOL 😳
    FYI ~ The bearish Hanging Man candle would certainly be negated if it closes above the Tues. high. But the day is not over with yet. GL

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