tuesday update

SHORT TERM: new bull market highs, DOW +40

Overnight the Asian markets gained 0.3%. Europe opened higher and gained 1.0%. US index futures were lower overnight, but rose heading into the open, and at 8:30 the PPI was reported higher: +0.2% v -0.1%. The market opened two points above yesterday’s SPX 2042 close and continued higher. At 10am the NAHB was reported higher: 58 v 54. Just past 3pm the SPX hit 2056, then pulled back to close at 2052.

For the day the SPX/DOW were +0.40%, and the NDX/NAZ were +0.65%. Bonds gained 5 ticks, Crude lost $1.35, Gold rose $10, and the USD was lower. Medium term support remains at the 2019 and 1973 pivots, with resistance at the 2070 and 2085 pivots. Last night the FED released today’s testimony: http://www.federalreserve.gov/newsevents/testimony/sullivan20141118a.htm. Tomorrow: Housing starts and Building permits at 8:30, then the FOMC minutes at 2pm.

The market opened slightly higher today, then cleared the recent high at SPX 2046. As noted in the weekend report, this new high further suggests an extending Primary III scenario is underway. We can now count five waves up from the SPX 1821 low: 1898-1878-2046-2030-2056 so far. This further suggests this uptrend is Int. wave v of Major 3 of Primary III, and not Major B of Primary IV. We updated the SPX hourly chart and the daily chart remained unchanged. Next, there is a solid cluster of Fibonacci resistance between the 2070 and 2085 pivots. Technically, we are starting to see a negative divergence developing in the NDX/NAZ daily charts. The SPX/DOW daily charts remain extremely overbought. Short term support is now at SPX 2049 and the 2019 pivot, with resistance at the 2070 and 2085 pivots. Short term momentum was extremely overbought before the afternoon pullback. Best to your trading!

MEDIUM TERM: uptrend

LONG TERM: bull market

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


About tony caldaro

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160 Responses to tuesday update

  1. gtoptions says:

    Thanks Tony
    SPY/SPX ~ Possible ED or AB=CD Symmetry Targeting 107
    That is if we hold todays low. All bets are off otherwise.

  2. selhai says:

    Could be a running 4th on the SPX?? A is 2046 down to 2030. C is v.similar, 2056 down to 2040. If so, you want to remain long.

  3. leonardofibo says:

    Well if November 20 is a Bradley turn date, it still may not mean anything except if you consider that the P I move from 666 to 1373 =707 x 1.382=977+ 1074(P2 low)=2051.
    No idea what that means but looks good on paper.

  4. Bulls… Do your fellow hardworking government employees a good deed… Give them the day off so they can stimulate the ecomony. They are only 5, 000 petitions short.


  5. Lee X says:

    Hey Uncle and GTO
    You guys also !

  6. SPX targeting 2021 tomorrow evening. That is about 28 points fall from now on

  7. rc1269 says:

    QE4 coming to a theater new you, Spring of 2015.
    i don’t believe the Fed has the fortitude to relinquish the enjoyable power of market manipulation on their own. they will keep the dial at 11 until somebody forces them otherwise. IMO

  8. The large caps and larger mid-caps caps definitely can go up without the small caps, but that condition indicates a later and riskier phase of the advance. There is certainly a connection between the small-caps and the A-D line. It is even less desirable that a market rise finds the A-D line lagging. This bull market has featured the A-D line as a leader, so it will have to depart from it’s previous characteristics to continue rising with a weakening A-D line. In fact, the market has done so this year, but the result has been a much choppier market with weaker uptrends and stronger downtrends. The weekly A-D line still shows a head and shoulders pattern and the daily A-D line is tracing out a downward zig-zag which, so far, is still small.

  9. FiveStars says:

    Do not short the markets on hopes of FOMC minutes. The minutes will be twisted in the positive way and take the markets higher. NYMO made a trip from all way upper BB to lower BB but going back up empty handed. So go long and enjoy the ride to 2100+ by year end.🙂

    • FiveStars, Oh!! No, I should have read your post, Re-Shorted at 2047.8. I am staring at loss, now.

    • Upside versus downside… these types of warnings ” don’t short ” would have been great at 1820, 1850, 1900, etc. but to say don’t short after a 230 point rise from 1820 -2050 on spx seems like crazy talk. In my opinion only a very greedy over bullish complacent person would be holding long right at this moment in time especially with the vix bottoming.

  10. Three pushes down into the low, now three pushes into the reaction highs. The reaction to Fedspeak soon could undo all this neat and tidy PA, however.

    • fionamargaret says:

      When we went through the 2049 pivot, is it more likely we then go through or to the 2019 pivot, or go back up from midstream (so to speak)?

  11. RUT just cant get its act together ….this poses a problem for the rest of the major indices

  12. JeffMilano says:

    My Tna trend system still signaling down from the initial date of last thursay 11/13/2014.

    Rabbit will b the hero of this board.


    • randomacts4 says:

      Jeff – Because he came in with trumpets blaring, flags waving, and a few stories to keep us amused, doesn’t make him a hero, even if what he said comes to pass. He garnered the attention because he just happened to be one of the loudest at the party. I’m not casting him in a bad light at all, so don’t misunderstand me; I’m just trying to help keep some perspective as we move along in this market.

      • cicelyalaska says:

        He got lucky with the early october call and sounded like a genius. Everyone thought he was worth listening to. If you watch though, even the best here blow their calls. It’s just the nature of trading the market and these blogs. Stay here long enough and you’ll see the new amateurs get slaughtered after Tony makes a few correct calls and they bet it all on the missed wave. Anyone new shouting big up from 1820 would be hailed the current genius.. for awhile anyway.

  13. Well, well. Look at what the RUT via TNA did today. Could be a launch setup???


    BTW – The Bradley turn date is Nov 22, not the 20th. Could be a top or low. It’s a highlighted date which means it could just mean a turning point eventhough the chart looks like it’s supposed to be a low.

    • pooch77 says:

      2014 Bradley Turn Dates List

      Most important dates

      January 1
      July 16
      November 20

      • randomacts4 says:

        Pooch – I’ve been trying without much success to locate a link showing the major and minor turn dates for 2015. Do you happen to know what they are? Thank you very much…..

    • shadow305 says:

      Is the date not +/- 4 days. I get the sense the chart direction doesn’t mean much.

      • randomacts4 says:

        Shadow – It’s usually in that range. The focus should not be on the chart. One should focus instead on the direction of the market heading into the date. Bradley dates are changes in market trend.

    • randomacts4 says:

      Echo – I believe the Bradley date is the 20th. New moon on the 22nd.

  14. torehund says:

    Expecting some big ups in the BDI the comming week(s)).

  15. H D says:

    If you liked 2055 yesterday, u’ll like 2044

  16. If the market turns out to have “bottomed” here after three intraday pushes down, and we now see new ATH’s over the coming days or weeks, does “Mr. Bradley” get credit for having caught the “low”?

  17. buddyglove says:

    Added to my Gold short today, still looks like bear flag to me on daily…looking for 1068/72. Good health/fortune to all

  18. scottycj1 says:

    Appears as though Mr. Bradley may be early……………………

  19. zzzalpha says:

    Hello Tony, I’m a long time follower, but this is my first time posting.
    I have been meaning to ask you something about the alternate counts.
    Given that the SnP is now in Int.V and expected to reverse into Major 4 around the 2080 pivot, the DAX which is also in Int.V may not be able to clear and exceed the Int. III 10050 level by the time the SnP reaches its short term limit.
    Would that be acceptable? (Int.V of DAX ends below Int.III)

  20. pooch77 says:

    11-20 is da turndate ,with yellen yelling maybe we get pullback,think da correction went out the window

  21. manunidhi21 says:

    Namaste Tony..
    I was just reading through traditional EW and found that even 10 % correction can also be marked as P4 if the rally ahead is swift and clears the top in 5 waves..is my reading wrong or oew is d key..

  22. The $VIX is not a market. It is not a freely traded, liquid market (all the funky derivatives notwithstanding). Unless you are an options market maker, trying to read technical tea leaves into the day to day fluctuations of the $VIX will likely lead to error in your judgments concerning the actual market for freely traded liquid securities. You will do yourself much more good to think in terms of range expansion and contraction – which direction is the market going on trend days vs consolidation days.

  23. pooch77 says:

    I thought that Germany economy was contracting and der Dax would pullback possibly pulling U.S. back.Boy was i wrong.Der Dax going back up to 10k

  24. The NYSE A-D line looked as though it were going to resolve it’s chart conundrum until the usual late sell off hit and prevented that from happening. Sometimes I think the market wants to keep us in a state of uncertainty, if not suspense.

  25. fotis2 says:

    Futures on houry looks like falling wedge break out retest of yesterdays high?

    • fotis2, Please ..please. I am looking for answers here. Most of the financial commentators put question mark after the sentence (like; will spx make new high? Is this end of bull market?). The Q mark says to me that that they are either “asking question” or “raising doubts”. Now, my point is, if financial commentators themselves are confused, where poor people like me will go??

      • fotis2 says:

        Im on the same boat times like these best to watch from the sidelines cash is also a position

      • spindoc73 says:

        the answer to a question at any moment in time is like a pixel in a sculpture that is eroding, so it will not be of much use even if accurate. on the other hand, the market will propose games designed to help players learn. like here is a frying pan, now hold your face still and imagine whether it will go up or down. then ‘whack’, and you are enlightened!

        having said that, i covered short positions taken near the peak yesterday, because the frying pan shows a motion that could swing higher to nh’s today/tomorrow. a new high would be shorted on a brief time scale.

  26. pooch77 says:

    Der does the Dax again,we never ever going down again

  27. mkt. update and strategy for wednesday (within blog’s remarks sect.):
    #gold, #uvxy, #JNUG

  28. torehund says:

    One question of vital importance to Elliot wave: In the environment we are currently in ,With weekly and longer term macd swinging high, corrections may be mistaken for real impulsive Waves like we are experiencing right now in Our count. Vice verca in a bear environment With macd far below 0 the impulsive Waves are tilting downwards and the real corrective Waves Down in a much more profound way. EW theory doesnt seem to take into account the macd position and sometimes the corrective Waves are hard to differentiate from the motive ones. I keep open to the yearlong churning Waves of somewhat dubious impulsive character With macd steadily declining. Seeing the last upturn it has the strength that you would normaly expect of a above macd zero line implulsive move.Previous years move didnt have exhibit that strength.

  29. fotis2 says:

    On the 5hour S&P futures that is one classic reversal candlestick doji.

  30. Here’s the prob with all this bullish talk. Look at the put to call ratio. Clearly bigtime positions (long) are being protected by puts that expire next month. Problem? They are decaying daily as the market grinds. That means those put costs are adding to the intrinsic costs of these positions daily. You buy a stock for $40 and then pay $3 for a put, your cost is $43, but if the stock grinds, that’s a loser for you. The idea in a put protection play (married put) is that you’re truly hoping for volatility or a big breakout. Either of those two situations you win because a big decline allows you to sell the put on a spike down and roll that money into your long. But the worst case is what is happening now. You figure based on that latest info over 80% of professional wealth managers are not even coming close to matching the SPX. They only have a little over a month left to produce something or else. Imagine getting your year end statement and you aren’t coming close to what the SPX did? You’re gonna be pissed. I think the selling will be by these guys who just aren’t making it and don’t want to see what winners they might have turn into losers.

    Of course that’s just an assumption. With the Russell lagging the way it is (what an ugly day today!), something’s gotta give. Let’s not even talk about that MACD and Stochastic on the SPX daily and monthly charts. Yowza.

  31. John Arella says:

    my dow jones count, needs to go over 18000 to end

  32. valunvstr says:

    After a 35% move in 1995, there was a “blink of an eye” 10% correction in 1996 that led to higher prices. The dollar strengthened, commodities fell apart and emerging markets followed commodities. Sound familiar?

  33. I have always struggled to view the move from the Oct. 2008 lows thru to the late 2011 highs in the $XAU/$HUI/GDX senior gold mining indices as a 5 waver even though it took those indices to ATHs. TC’s GDX chart has this move as a C wave. Today 2 separate assessments have come out with an extraordinarily bullish interpretation on the 2011 highs marking them as a wave B in a running correction with wave C in the process of bottoming for the end of wave 2.


    (Note: Click the chart link at the bottom of this webpage for the $HUI long-term count.)

  34. bhupal777 says:

    Thanks Tony. Appreciate your objective analysis. Based on the price action you adopted the alternate count unlike others who stick to their bearish count. Not only that if this 5th wave subdivides I am sure you would go accordingly and your blog followers will be on the right track.

  35. Great post tony, awesome stuff.

    I think…

    1) Its all about the VIX, this video shows why vix is about to get pounded and market will rocket. Good video. => http://bit.ly/1fMcakI

    2) Earnings or 70% of earnings are good lately.

    3) USD that is still rallying will give tailwinds to stocks soon.

    4) Lower crude, bad for oil producers, however…. good for consumers, good for transports, companies listed on market.

    • 16golfer says:

      $VIX has had higher lows since July. Don’t agree it’s about to get pounded….in fact, I think December will be volatile and $VIX will rally. The vertical rocket ride in the $SPX will come back down to earth as air is pretty thin up here.

      • CB says:

        that’s a good idea, golfer🙂 …our politicians have lots to discuss now, so a little bit of conflict in Washington D.C. would be just the perfect background music for some re-testing…and if they do it as quickly as the last time, most holiday shoppers won’t even notice.. ..

    • torehund says:

      E-truths, the US felt decline in oil price is merely a Deception if you live elsewhere in the fiat countries, oil is just as expesive as it used to be. However if the US strength is for real, not just relative, then consumption should rise and cause heavy stagflation elsewhere. If that happens Beyond a certain threshold, expect riots, anti-government impulses to strengthen in Europe. Like in the 20s, it was the US strength that inadvertently caused Europe to implode. In Europe there is a innate tendency not to panic deflate when thats the real solution, we tend to strike instead of increasing Our efforts. Americans know how to “bust the economy” when needed, Europeans dont have that resilience….. Americans tend to get collective euphoric on tops, and that helps to pop bubbles. Guess you can thank Greenspan and Clinton. Europeans are lead heads, and wil just sail until there is no more wind….

  36. gasman88 says:

    I have this hopeless feeling that this will grind until Christmas, but for me it’s too late to buy, too early to short. I hate this market

    • simpleiam says:

      LOL! I’m not laughing at you gasman. Anyone whose been around markets for any extended amount of time has felt exactly what you’re expressing. It’s rough. Maybe you can turn the heat down, save money, let your hate keep you warm, I dunno. GL gman.

  37. Just to keep everyone up to date –
    AVI – this is wave 1 of five about to top any day now.
    Pretzel – No way this is wave 1 of 5 or B because it’s too powerful. Has to be all of 5
    Tony – 5 of 3 of Primary 3.

    Strange days.

    • bhupal777 says:

      My own analysis of other stocks tells me that Avi count has greater probability. But if that doesn’t play out we will see the damage in the charts and I am happy to go short at that time. As I say everyday on this blog, I am not front running this market with any shorts with out any clue from the charts.

    • XScaler, can you provide the link to Pretzel’s chart again. Me bones tell me he just might be right about this wave being all of wave 5. The wave strength and many of the TA indicators remind me a bit of the March 2000 rally which was a whopping 17.2% SPX rally in 20 trading days. What interesting is that the $TRAN has actually rallied a whopping 18.5% in 23 trading from the Oct low.

    • soulsurfer says:

      avi’s count would mean that in tony’s count int. med. v will subdivide. target??? up, up and away: say 250p for 1, then 2 down to 1950 (50% retrace), 5 then targets 2350… (200% extension)…

      • torehund says:

        Soul we have to take into account the 5th charcter of a wave, they are in habit of beeing churning and relentless With few discernible pullbacks, so in that respect I would not anticipate lage retraces alonng the way, its the classic buy and hold or lever up kind of wave.

        • soulsurfer says:

          Agree. A market without any decent pullbacks (we’ve had 35p on the morning of October 16, which was gobbled up in hours and that’s all we got unless 20p these days are considered corrections) is not what many consider a healthy uptrend, but instead is a (very) dangerous place to be.

      • torehund says:

        Soul no 5 Th wave was ever healthy🙂 Its when the smell of something rotten really starts to tickle in Our nostrils.

      • torehund says:

        Soul: However if the crazy counts of 3rd or 3rd is still Ahead🙂 (all I see is 2 Waves up scenario), Martin Armstrongs crazy predictions may come true..he is launching a financial documentary that is a must see..

      • jp7972 says:

        I think that’s exactly what he is saying. His weekend report is available to all at Marketwatch.

  38. Just so I understand, looking at this chart, primary 4 should retrace at least 38%, right? Primary 3 started, we all agree, at 1074 in 2011. Assuming 2056 (just using that number for charting purposes) is the top area, the 38% retrace as of today is way down at 1675.


  39. scottycj1 says:

    This chart makes me feel ‘B’ is still alive……..that and everyone is now got sky high targets and has been stopped out or turned bullish. Thursday is a Bradley turn date and we are climbing into it…indicating it will be a high. Thing is the mkt usually cheats the turn by a day or so…….it may come early. The Trans closed below the 1X1 uptrend line and my new super trade indicator is about to give a sell on a little further weakness.

    From tonights post I read this and laughed out loud. I think Tony might have had a glass of wine while writing his post tonight…………
    “Last night the FED released today’s testimony:”


  40. 2075 on the December S&P is 1.618 0f wave 1 which fits nicely with Tony’s thoughts

  41. JK1987 says:

    Tony Thanks
    DOW and COMPQ still are Major B of Primary IV, or need to be adjusted?


    My all in shorts from 2040 stopped out when SPX hit new record high with rc’s excellent diamond breakout post.

  42. lunker1 says:

    top to bottom the SPX diamond measured 16 points. Mon afternoon price broke out and backtested the diamond at 2040. add the 16 = 2056 target

    Bulkowski’s method is to take the 16 x his .69 factor = 11 + 2046 = 2057 target.
    although he is calling for 2100 by Dec 1.


  43. paul_in_aus says:

    Hi Tony,

    Do you see this Int. wave v of Major 3 subdividing – meaning we’re approaching the end of Minor 1 or is it too early to tell and the nature of the next pullback would help determine?

    Thanks for all your work.


  44. fotis2 says:

    Thanks Tony would you expect w5 =w1?

  45. lunker1 says:

    thx Tony.
    your chart linky no worky

  46. mharrison60 says:

    Thanks Tony for the update.

    Do you expect to change the count on FTSE and DAX or are you comfortable they topped mid year and we are in major B.

    Much appreciated

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