tuesday update

SHORT TERM: gap up and go, DOW +188

Overnight the Asian markets gained 0.6%. Europe opened higher and gained 1.0%. US index futures were higher overnight. At 8:30 Durable goods orders were reported lower: -1.3% v -18.4%, and at 9am Case-Shiller was reported lower: +5.6% v +6.7%. The market gapped up at the open to SPX 1969 and continued to rally. At 10am Consumer sentiment was reported higher: 94.5 v 86.0. At 11:30 the SPX hit 1975, pulled back to 1970 by 12:30, then moved higher again. Heading into the close the SPX hit 1985 and closed there.

For the day the SPX/DOW were +1.15%, and the NDX/NAZ were +1.60%. Bonds lost 8 ticks, Crude added 25 cents, Gold rose $1, and the USD was lower. Medium term support rises to the 1973 and 1956 pivots, with resistance at the 2019 and 2070 pivots. Tomorrow: the FOMC statement at 2pm.

The market gapped up at the open today, above yesterday’s high. It then rallied to the OEW 1973 pivot, pulled back, and then exceeded the +/- 7 point pivot range when it reached 1981. This rally has now extended somewhat beyond what was expected. However, we continue to see only three waves from the SPX 1821 low. Should it turn into five waves then we would consider adjusting the Primary III count. Also of note. We posted yesterday that the entire, now nine day rally, has produced higher highs/lows every day. The one exception was yesterday’s 1965 high, equaling Friday’s high. When this changes the trend may change as well. Short term support is at the 1973 and 1956 pivots, with resistance now at SPX 1986 and SPX 2000. Short term momentum is extremely overbought with a negative divergence. FOMC day tomorrow, which are often volatile, best to your trading!

MEDIUM TERM: Major B uptrend continues

LONG TERM: bull market

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

About tony caldaro

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358 Responses to tuesday update

  1. berniebaruch says:

    Lots of praise to those who have held long the last 40 handles.

  2. John B says:

    Minute a down,minute b up of minor A down?

  3. All the bulls n pooches are in now…gobbling up this dip…if this market is to sell off, it’s gotto gap down tomorrow and take out 1169. Should accelerate down on it’s way to filling all the gaps to 1861 in the next week or two.

  4. H D says:

    Tony, some symmetry w 10/17 hit. Possible waves 2&4?

  5. purplember says:

    if this goes about 1991, is that 5 waves up and signal we’re in wave 5 of P3 ?

  6. llerias7 says:

    “Someone” is spending the last dime of QE to prop market one more time…some sort of addiction…

  7. vivelaamo says:

    People on here amaze me. Do you really think the market will be that predictable to just crash down and suggest a C wave straight away?

    As I said a C wave will come. But not until many believe it’s no longer Primary 4.

    • johnnymagicmoney says:

      exactly…………..its coming

    • jeffbalin says:

      C will commence when there isnt a single bear left. That means the market is waiting on newbie. When newbie changes his view…….. …awwww, forget it. This market is going to the moon! 🙂

  8. pooch77 says:

    Could small caps bag 4% in 2 days?

  9. FiveStars says:

    Can’t believe it they gobbled up on dip. 🙂

  10. scottycj1 says:

    If the market does not sell down here and closes above todays high (1991) ….we could be at 2065 by Election day

  11. pooch77 says:

    Small caps leading the way up, anyone not on bull train yet?

  12. dirtypino says:

    only one comment post fomc??! wow

  13. fibs-R-us says:

    wrestling with the 1973 pivot, just like it did on the way up.

  14. magnus1234 says:

    RC whats Ur take? I dont get the Bonds reaction after 2.20pm?

    • rc1269 says:

      sure makes sense to me my friend. we have been flattening for a while now on the QE wind-down trade. the curve is still very steep by historical standards, so expect flattening to continue. as long as inflation remains relatively tame, figure the 30yr is anchored well and the rest starts drifting up, led by the front end. if we get a big market correction then all bets are off. new QE will begin to be priced in again, all rates will rally and the belly of the curve will outperform. cheers

      • magnus1234 says:

        Thnx RC. I appreciate the flattening idea. But Yellen’s “the likelihood of inflation running persistently below 2 percent has diminished somewhat.” should “scare” the longs so probably the run was just a short cover.

        Longer term it seems to me that the Primary Dealers will hold on to their stockage of Bonds/notes shorter and shorter time now when there is no “sure” absorber out there meaning more supply to 2nd market and prices falling. Add to that the prospect of rising inflation which leads to risk-off in the Bond market and rates rising. My speculation is that that is what FED/ECB wants.

        Always nice to exchange ideas.

  15. blackjak100 says:

    From triangle completion at 1958, wave iv has overlapped wave i. Looks like 1-2-3 or ABC complete at 1991. Not going to see 1995-2000 like I thought. 1956 pivot bare min target IMO. Will that mark 4 from 1821 is the mystery question?

  16. mike7x says:


  17. uncle10 says:

    afternoon. Thanks Mr. T. 😉
    iv joined the bears again. not all in hahaha

  18. pooch77 says:

    Here comes the bulls stampeding back…get out of the wayyyy

  19. Tony it looks like we can stick a fork and a potential Major B at today highs.

  20. In any single day (In next 30 days), market will teach life time lesson for BALD BRAINLESS BEN BERNANKE

    • FiveStars says:

      BALD BRAINLESS BEN BERNANKE has saved the nation from going into Depression. He has not only saved the US, he has also saved the world.

      • Fivestar, all he did was kick the can down the road and future generations will pay the price or possibly even our generation will also pay the price when our currency is kicked to the curb and thrown off the petro dollar. We are in a monster BUBBLE, if you don’t see it you are clueless.

      • FiveStars, Thank you for agreeing BRAINLESS word. Five years look nothing over a period of 40 years. In another 10 years, people will look back and blame BEN for what he did to America. Believe me, Ben is not my enemy.

        If I ask myself question what I would have done if I were FOMC Chairman. The answer is, “What Ben did”

      • FiveStars says:

        “damned if you do and damned if you don’t”

      • agreed Newbie……history has shown that printing ALWAYS ends badly…..they should have take the medicine in 2008 and just let the market work…BEN was BAD news for America

      • pimacanyon says:

        The US has been “printing” since we set up the banking system the way it is. Every time a bank loans out money it does not have, that’s “printing”. The Fed is just part of that system and yet gets all the blame. The problem is the banking system, not the Fed. The solution is not to get rid of the Fed, unless that includes revamping the entire banking system.

      • where do you think the banking system came from……the fed has done no good since the sinking of the titanic….as it was formed shortly after that ……but that is a story for another day

  21. lunker1 says:

    You could make the argument that the August high of 1991 is a pivot and now this drop is to the 1973 pivot. More pivot to pivot

  22. thecustomer14 says:

    Who shut the floodgates? Shoo bots, shoo! Just let the market do its thing already. 🙂

  23. rc1269 says:

    man, i made the mistake of un-muting CNBC a few minutes ago. head somebody say something to the effect of “Now Yellen is a hawk?!” ughh. back to mute. where do they find these people?

  24. Major B in , confirmed now Tony.

  25. Why does everyone look surprised?

  26. FiveStars says:

    Welcome to “C” Wave.

  27. magnus1234 says:

    “likely to occur sooner”….. booho hoooooooo

  28. Tony,
    I see an abc abc abc three wave pattern up in IWM going back to October 15th, and it looks heavy today. c of c was the strongest move (yesterday). The rest of the week should be very interesting.

  29. FiveStars says:

    The initial market reaction will be “Nothing” just confused, what to do? and wait for someone else to push buy/sell button then everyone will follow either ‘buy buy buy’ or ‘sell sell sell’ and ask questions later … 🙂

  30. blackjak100 says:

    I’m not a great squiggle counter but with the help of 3 people better than me, a pop to 1995-2000 would be a great spot to short for a trade. Either completes 1-2-3 or abc at all degrees. It looks like 1991 is 3 of 5 and currently in 4 of 5. 1956 pivot would be first target with high probability.

  31. playitkool says:

    Might be something brewing here. Trend lines are in the eye of the beholder but the one I’m watching is broken. Waiting for back test and rejection as high as 1988 by fed statement. If rejected, Correction of trend should bring min. spx 1960ish by early next week. Best to all. http://tos.mx/VJZwMI

  32. magnus1234 says:

    “considerable period of time” or not?
    It will be there for sure. Which in the end means zilt.

  33. hawkeyes2014 says:

    VIX up 8%, RUT down .75%.
    Rally could have been a BIG dead cat bounce and now kitty is on life 9………

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