wednesday update

SHORT TERM: higher open then pullback, DOW -153

Overnight the Asian markets gained 1.6%. Europe opened lower but gained 0.5%. US index futures were lower, then higher overnight, and at 8:30 the CPI was reported higher: +0.1% v 0.0%. The market opened three points above yesterday’s SPX 1941 close, dipped to 1940, then rallied to 1947 by 10am. Then after a small pullback to SPX 1942 just past 10am, the market rallied to the high of the day at 1949 by 11:30. After that the market started to pullback. Just before 1pm the SPX hit 1935, bounced to 1941 just after 1pm, then dropped to 1930 by 2:30. Another rallied followed to SPX 1938 by 3pm, but the market headed lower and closed at the low of the day 1927.

For the day the SPX/DOW were -0.80%, and the NDX/NAZ were -0.70%. Bonds lost 6 ticks, Crude dropped $2.10, Gold slipped $7, and the USD was higher. Medium term support drops to the 1901 and 1869 pivots, with resistance at the 1929 and 1956 pivots. Tomorrow: weekly Jobless claims at 8:30, the FHFA at 9am, then Leading indicators at 10am.

The market opened higher today, rallied right the edge of the OEW 1956 pivot range, then started to pullback for the first time since Monday’s open. The rally from last week’s Major A low at SPX 1821 has progressed in three Minor waves: 1898-1878-1949. At today’s high wave ‘c’ was nearly equal to wave ‘a’. This may have completed Int. wave A, and a downward Int. B could be underway. Support for Int. B should arrive at the 1901 or 1869 pivots. After that we should see another three wave rally to complete Int. C/Major B. Should the market hold the OEW 1929 pivot range, there is the possibility of one more push to the 1956 pivot to form a negative short term divergence. Then Int. B would follow. Best to your trading!

MEDIUM TERM: Major B uptrend probably underway

LONG TERM: bull market


About tony caldaro

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368 Responses to wednesday update

  1. dirtypino says:

    Hi Tony,
    i am a member of Elliott Wave Trader with Avi Gilbert, and while I am really enjoying my time there, I must say that after having discovered your analysis – I am very very humbled and impressed. Is there anywhere that you can point me to further information about your style of elliott wave counting or further information about how your determine your pivot points?

  2. Just because I’m happy 🙂

  3. all i ask is a close below 1948.46 ……looks like i might not get it!

  4. lunker1 says:

    Yesterday’s 60 minute candle bodies stopped at 1947 which is also where the rising TL from 1821 is. The 62% of 2019 is 1943.

  5. cmucha68 says:

    I think this Ebola thing is not contained at all yet. There will be more cases here and there.

  6. Dex T says:

    QE is expected to end by next Wed, Oct 29. After QE1 and QE2 were finished, the SPY experienced a correction of roughly 15%-20%. This seems highly likely next week and may give credence to the bearish case.

  7. Remember your Livermore: “There is one side to the stock market and it is not the bull side or the bear side, but the right side.”

    Trade the side that makes the money, folks. Or you’ll end up like this friend of mine:

  8. johnnymagicmoney says:


  9. Gary Lewis says:

    I love RED BARS!! 🙂

  10. rc1269 says:

    ebola dr. in ny rushed to hospital. if your’e wondering why the hit

  11. berniebaruch says:

    Vix isn’t firming as much as yesterday……….yet

  12. kvilia says:

    Two thoughts came to mind:
    – Bulls trap
    – Shaking the tree

  13. hour here…a last hour sell off to close below 50ema 1948.46, which incidentally would be 1956 pivot support would be a nice confirmation of int A top at 1961.95…else we extend tomorrow to 1973….

    As I type..i m seeing large candles on 5 min charts…so fingers crossed…looking for int B/major B/P4 down now!!

  14. johnnymagicmoney says:

    bulls feel super confident here………… it ……………SUCKER RALLY!!!

  15. cmucha68 says:

    So far rabbittrader’ estimation of a double top has run a bit out of steam. Now let’s see if his down forecast comes into play.

    • cmucha68 says:

      Well, Tony is on this board for years. I suppose if he got it wrong on one of the primary waves nobody would pay attention anymore. So there must be a reason why so many appear here on the board to follow his ideas. Last time at the very beginning of P4 when the market extended a bit to the upside many people have called for P3 to extend to the sky when the prices went a bit more up only to get wet trousers when the hard decline came.

  16. Someone this morning totally discounted my ABC irregular count on the SP 500, at your own peril. Yeah, I gaffed up the Gold forecast, so did everyone I know… get in line on Gold… nobody has been right for awhile on Gold.

    Back to the markets… IWM ETF (Small Caps) had a clear ABC Zig zag from July 120 highs to 103.xx Lows in October…. thats almost a 14% correciton… sounds like a wave 4 to me

    SP 500 during same time had an irregular ABC with a high B wave at 2019, right around time of the IPO of BABA…. lagged the drop in the SMall caps, then caught up at the end with a 9% decline C wave

    Now we are in Primary 5…. so Wave 4 was July to October … its now typical October lows and most here are sitting around looking for some magic C wave that aint coming… it come and went

    The metrics were moree oversold than at anytime since the 2012 lows…. the number of new low to new highs at extremes, the put to call ratio at extremes, the % of bulish advisors down to 37% from highs of 58% in the summer…. and the list goes on

    So where are you going to get the magic C wave gang? Its over….

    Get long

  17. Tony,
    Any changes to what you are thinking? It has played out almost exactly how you said but like some verification on days like today. Thanks

  18. H D says:

    PA between 1970-1821 and now 1821-19xx is quite stellar wouldn’t you say. Kudos to those that have done well. Been spinning my wheels this rally with little R at pivots. Looks 5 days down 8 days up though. Pivots do need the full range when the bots are running 30 point ranges.
    noted earlier Range 1,931.02 – 1,961.95

  19. gasman88 says:

    Frankly did anybody expect that SPX would be up 140 points in 5 trading days???
    We’ve seen these V-Shape rallies before, but this sell-off felt different and I didn’t think V-shape was in cards.

  20. johnnymagicmoney says:

    Europe doesnt have deflation, China isnt cooking its books, Japan is deploying sound fiscal policy, and the icing on the cake is QE is not ending! All time highs then right? Pain is coming

  21. thecustomer14 says:

    A couple of people have pointed out the bullish engulfing candle that printed on the VIX daily chart yesterday, so I looked at what happened following the last several times this occurred (all in 2014) and this is what I found:

    10/6: Bullish engulfing candle with a closing price of 15.46 was followed by a short-term VIX peak of 31.06 on 10/15.
    7/24: Bullish engulfing candle with a closing price of 11.84 was followed by a short-term VIX peak of 17.57 on 8/1.
    4/3: Bullish engulfing candle with a closing price of 13.37 was followed by a short-term VIX peak of 17.85 on 4/11.
    3/6: Bullish engulfing candle with a closing price of 14.21 was followed by a short-term VIX peak of 18.22 on 3/14.

    • playitkool says:

      I looked at that also. But what I’ve noticed going back 3 years is every time the vix topped out of the upper bollinger and then collapsed it went back to visit it’s moving averages. Its close now but not yet. This was more dramatic when the 50 crossed the 200 like just happened to us. I know it sounds crazy but the odds favor it.

      • thecustomer14 says:

        Yeah, I noticed that as well, but assuming we’re in Primary IV, this could be the time for an exception to that. TVIX was at 3.23 when I posted the above stats, now it just hit 3.45. Let’s see where it is next Friday. 🙂

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