Tuesday update

SHORT TERM: gap down opening again, DOW -51

Overnight the Asian markets lost 1.4%. Europe opened lower and lost 2.1%. US index futures were lower and the market gapped down to SPX 2045 at the open. The market had closed at SPX 2060 yesterday. In the opening minutes the market dropped to SPX 2036, and then rallied to SPX 2046 by 10am. When Wholesale inventories were reported higher: +0.4% v +0.3%, the market dropped to SPX 2034 by 10:30. Then the market started a larger rally. At 1:30 the SPX hit 2058, dipped to 2052 by 2:30, then rallied to close at 2060 to close the gap.

For the day the SPX/DOW were -0.15%, and the NDX/NAZ were +0.45%. Bonds gained 13 ticks, Crude rose 70 cents, Gold rallied $25, and the USD was lower. Medium term support remains at the 2019 and 1973 pivots, with resistance at the 2070 and 2085 pivots. Tomorrow: the Budget deficit at 2pm.

The market gapped down at the open for the second day in a row. This has not happened since the recent downtrend bottomed in mid-October. By 10:30 the SPX had declined to 2034, for a 45 point drop from Friday’s 2079 uptrend high. This is the largest decline since the uptrend began in mid-October. This morning’s decline also took out the important SPX 2050 support. When one adds these three factors to the negative factors detailed in the Weekend and Monday’s reports, it certainly looks like a downtrend may be underway. From Friday’s SPX 2079 high we can count five waves down into this morning’s low: 2054-2063-2036-2046-2034. The rallied that followed into the afternoon, could be a B wave of some degree with upside potential limited to the 2070 pivot range. Short term support is now at SPX 2034 and the 2019 pivot, with resistance at the 2070 and 2085 pivots. Short term momentum rallied to above neutral from extremely oversold. Best to your trading!

MEDIUM TERM: uptrend may have topped

LONG TERM: bull market

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

About tony caldaro

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184 Responses to Tuesday update

  1. CB says:

    gee, walking away from the “broken shoulder “pattern is going to be a nice challenge today 😉 shld be lots of resist @ 2045 ( if we get that far) .

  2. VIX still think it will hit 21 area…made it to almost 19 yesterday…gl long tvix http://tos.mx/dms/configShare/itemData/u/6/u6cikH.png

  3. Hi Tony,

    Is the SPX in a final move of an A-B-C correction or are we about to start a new leg of a wave 3 down? I counted this as an A-B-C correction but if the market takes out yesterdays low then I would think my observation was wrong.and this is just the beginning of a bigger pullback.

  4. buddyglove says:

    TLTRO programme in 20 mins. Weak take-up could accelerate likelihood of QE by ECB.
    Watching Dax. gl.

  5. JK1987 says:

    Signs of panic selling could bode well for the stock market
    MARKETWATCH 12:49 PM ET 12/10/2014

  6. trondack – Below are my charts. I went long off the bottom hit of my orange channel for a short term uptrend play. Caution, if break down of orange channel then next resistance is around 57ish bottom of cyan channel


  7. rabbittrader1 says:

    I beg to differ: The proper Elliot Wave count is from the wave 2 low at 1074 to 2079 ( or 1005 points on SPX . If multiplied by a (minimum .382 equals 384 points on the SPX . So 2079 minus 382 equals 1695. Now when?? I say by Dec 24th in a fast down move.. Ever see the Patriots pull out a game in 5 minutes ? or the Red Sox do the same in 2 innings? BELIEVE !!

  8. buddyglove says:

    Nice bullish set-up in Usd/Jpy imo..
    UnCLe10…What say you ?.

    • FiveStars says:

      Well … then this will crush Gold and miners.

    • mjtplayer says:

      FYI: Japan lower house elections Sunday. Abe will lose seats and support, the question is how much and how many seats? If the election to a blowout against Abe and he loses more seats than expected, be careful shorting the Yen, could cause a huge short squeeze. Short the Yen is THE most overcrowded trade on the street.

    • uncle10 says:

      Hey Buddy. don’t have a strong opinion currently–.no position— I do feel short term 120 area will be resistance. As u know it will probably move with the market and I am cautious on the market ( still have half my short position from a few days ago. gl
      long term target remains 200 😉

  9. FiveStars says:

    Putin comments about oil: “I cannot take it anymore, stop this black blood”

    Tony, Nice Call about Market.

  10. Talk of interest rates going higher is to blame. Tomorrow may get ugly if we get any glitch on debt ceiling. No bounce tomorrow morning also means lots of margin call selling. So far only a little of the froth has come off the top.

    • fotis2 says:

      Was wondering whos going to get blamed for the drop tmrw already have a few canditates China ,Mario ,Greek index,but i say its all THE RABBITS FAULT:)Could also just be more sellers than buyers but that just sounds sooo boring…

  11. mjtplayer says:

    Into the low thus far today, SPX only down 2.6% from the ATH. Hardly a sizable pullback of any significant degree. Even a .382 retrace from the Oct lows gets you into SPX 1,980 area – just a 5% pullback from ATH.

  12. buddyglove says:

    Could be the last chance to Front-Run the Crowd that buy the Year end rally imho.

  13. fotis2 says:

    Hats off to Tony even yesterday where it looked a bit iffy to the downside he clearly stuck to his count and his view.

  14. buddyglove says:

    P.B. looks like it may be over imo, got stopped on my long earlier, trying again here @2027…good health/luck to all. (Russell looks the best technically imo)

  15. rabbittrader1 says:

    No the CB’s are not going to run to rescue the Stock market. And the Investment Bankers have run out of money ,as under the new banking laws they must increase reserves. Even Janet Yellen knows that many senior citizens have suffered under the almost ZERO interest policy of the FED, and need to be able to earn a risk free return on their money.. The PARTY IS OVER (except for a small repreive from Jan to May 2015, but not to exceed the highs of today. R

  16. H D says:

    Sometimes you see the waves and sometimes you don’t. Lot’s a chatter about oil. There are fibonacci numbers all over the WTIC chart. That’s where I’d start if you are brave enough to trade that widowmaker.

  17. rabbittrader1 says:

    Klopharmd : No, in my opinion this is not a C wave but a small c wave of an A wave down. We are not in the final drop C wave yet, my friend. IMVHO

  18. jeffbalin says:

    I’m anticipating the expected big Santa Claus rally is here…….. To the downside. Take it to the ground so papa can buy new shoes.

  19. H D says:

    Monday,, 2062 confirms EDT wave termination, it rallied right back to scene of crime yesterday and failed. 2024 is (55) hit.

  20. klopharmd says:

    Any chance this is the C wave? And if it was what would you expect down? Abc? 5 wave? 7?

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