Tuesday update

SHORT TERM: turbulent Tuesday, DOW -112

Overnight the Asian markets dropped 1.9%. Europe opened higher and gained 2.4%. US index futures were higher then substantially lower overnight. At 8:30 Housing starts were reported higher: 1028k v 1009k, but Building permits were lower: 1035k v 1080k. The market gapped down at the open to SPX 1976, and then started to rally. The SPX had closed at 1990 yesterday. By 11:30 the market had rallied to SPX 2017, with only two 6 – 7 point pullbacks along the way. Then it started to pullback. After a drop to SPX 1987 by 1:30, the market rallied to 1999 by 2pm, then declined again to close at the low for the day 1973.

For the day the SPX/DOW were -0.75%, and the NDX/NAZ were -1.45%. Bonds gained 17 ticks, Crude rose 5 cents, Gold added $3, and the USD was lower. Medium term support remains at the 1973 and 1956 pivots, with resistance at the 2019 and 2070 pivots. Tomorrow: the CPI at 8:30, then the FOMC statement at 2pm and a press conference afterwards.

The market gapped down at the open for the seventh gap opening in a row. Right at the open the SPX entered the 1973 pivot range (1976), and then began to rally. At the low it appeared the market had completed a very complex zigzag, and we then labeled it an Int. wave A low. The rally that followed was the best rally of the entire downtrend, adding to the probability that Int. wave A did bottom at SPX 1976. After the rally to SPX 2017 the market had a substantial pullback retracing the entire advance. We had labeled the high with a tentative green Minor wave a, but that no longer fits. At the close we updated the chart to count the SPX 1976 as Minute a, and 2017 as Minute b. Minute c is underway from the 2017 high. One other note. The market has now corrected 5.1%. Should Int. wave v be subdividing, all the technical parameters have now been met for a possible downtrend low at the next significant low in price. This market is a day traders market, so use stops when trading. Short term support remains at the 1973 and 1956 pivots, with resistance at the 2019 pivot and SPX 2056. Short term momentum rose off the positive divergence, but despite the big rally it never even got overbought. The conclusion of FOMC meetings are often quite volatile market events. Best to your trading!

MEDIUM TERM: downtrend

LONG TERM: bull market

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

About tony caldaro

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249 Responses to Tuesday update

  1. rc1269 says:

    i wonder when was the last time we had a Fed meeting that followed a recent market decline that didn’t result in a rally

  2. cicelyalaska says:

    B pivot as high as 2059.53

  3. afarsid says:

    What’s interesting is we have yet to make a HH from yesterday… 😉
    I’m assuming the B wave started though

  4. jeffbalin says:

    Been bouncing pivot to pivot 1973, 2019. Let’s see if 2019 holds again. But whatever happens, Tonys pivots have been amazing.

  5. llerias7 says:

    Are you sure it is a B wave going on?
    In the month of October we got behind waiting for “the top of a B wave” wich turn in ATH…

  6. Walter Crane says:

    I swear skynet reads any post on the internet and reads the word code and makes me off by a day or two. Anyways, there is your strong rally…..

  7. gtoptions says:

    SPY ~ 50% @ 203.02 & 61.8% @ 204.31

  8. lunker1 says:

    Five up from 1973 and so far 50% retrace for wave two.

  9. jeffbalin says:

    Another 4th quarter ‘rally’ by the bears for another last minute win? Yesterday was exciting, like watching a basketball game. Let’s do it again!

  10. avkanoi says:

    Get ready for explosive upmove guys… Today

  11. John Arella, if 2012 is top for today.. where your next down target? Thanks.

  12. avkanoi says:

    My target for close around 2030 s&p

  13. avkanoi says:

    Target 2020 +++ short covering ++

  14. mjtplayer says:

    Wow – the USO just went red. WTI over $2 from the intra-day high, now in the low $56’s – that’s surprising….

  15. scottycj1 says:

    Remember Laugh-in ? SAY GOODNIGHT DICK !

  16. llerias7 says:

    There is an important IHS in small caps?…

  17. scottycj1 says:

    a b c flat complete….or close…..could try 19 again

  18. lunker1 says:

    17 pts in 5 minutes similar to 20pts in 2 minutes on Oct 16.

  19. scottycj1 says:

    That should have been your rally

  20. H D says:

    oh well… Ho ho ho I guess. Cuban Cigars for everyone. Never understand how they read it so fast.

    Have a great Holiday Tony and all.

  21. rc1269 says:

    “Federal Reserve officials see the federal funds rate rising less by the end of 2015 than they projected three months ago, according to the median estimate of new forecasts released today.”

    things are doing sooo well, we better keep rates lower longer.

  22. John Arella says:

    most likely outcome is jump to 2010-2020 spx then turn down to new lows, chart 2

  23. Will the Fed Save the day or will they kick a bull when he’s down?

  24. I have run the model for tiny time frame, and here are the results; In next 100 minutes; SPX 1978.9 touch and return, INDU 17092 touch and return. Let me see how it goes in next 100 minutes.

  25. fotis2 says:

    It looks from yesterdays low like a diagonal could be in for a suprise by close

  26. afarsid says:

    Similar pattern as yesterday developing? perhaps Yellen’s speech will have us ending the day like it did yesterday

  27. simpleiam says:

    I know how controversial this post is going to be, but FINALLY, Obama has done something that’s really useful = Lifting Sanctions and other blocking measures against Cuba!!! Yay!

    If WYNN and others in the businesses are really on que, they will swoop in there but QUICK!

    Of course, the Europeans will be very upset, as now they don’t have a vacate spot where Americans aren’t allowed… GET OVER IT!

  28. mjtplayer says:

    Here’s what’s going on in Greece – today is first of 3 rounds of elections and voting just started. The next 2 rounds are Dec 23rd & Dec 29th. If greece fails to elect a president with 2/3 majority by the 3rd round of voting, which is expected to happen, then there will be an early general election in Feb – this is what the market is concerned about. Polls show the “Syriza” party leading, which is the anti-austerity and anti-bailout party, They vowed to cancel the bailout programs. Keep an eye on this in the weeks ahead….


  29. Is the fed gonna rain on this parade bringing us to 1950? Thoughts?

  30. This is almost last day of the volatility or real trades. Market will go in Christmas mood from tomorrow.

  31. H D says:

    today is whipsaw Wednesday

  32. sweinv says:

    Hi Tony!
    If this is major 4, can it be a flat? 2080: 1970-2080-1970?
    I think this is only minor 2 of intermediate 5. Major 4 later in march next year.

  33. That was “Greece election” jump

  34. IHS on 2 minute chart measure target 1995

  35. H D says:

    GM all, CL does not like below $55. Keep your hands at 10 and 2 o clock

  36. manunidhi21 says:

    Namaste Tony !
    Is 5 % correction good enough /
    I am confused with so many counts..which one we are following primarily and what we are expecting..

    Please clarify

  37. afarsid says:

    Is this the c leg of an abc up before that last 5th wave down? If so it should clear 1988 and then reverse…

  38. FTSE was first to trigger in SELL on my model in this downfall. Now, it will be first to trigger BUY. Even if it closes at present level (6321), it is BUY but only Short term.

  39. fotis2 says:

    Its the worst when it bets sticky at the pivot really could go anywhere

  40. gtoptions says:

    Thanks Tony
    SPY ~ Looking for HH/LL confirmation of bullish inverted hammer (tues).
    GL All.

  41. mjtplayer says:

    Hey Tony – question for you. Yesterday’s intra-day rally off SPX 1,976 up to 2,019 was the largest rally of the downtrend, why would this not be minor B? Doesn’t really change much in the overall count, but I was just curious….

    Thank you as always!

    • tony caldaro says:

      difficult count with all the zigzags
      was actually a surprise they took out the lows at the close

    • mjtplayer says:

      Yeah, nice reversal and rally yesterday. Rolling over in the afternoon and making new lows must have caught a lot of people off guard; definitely in a downtrend. Gap-up opening today, each time we gap-up or rally intra-day it alleviates the oversold conditions, providing more room to the downside. Need a gap-down open and reversal like yesterday and for the rally to hold. If we stay positive until the Fed, perhaps they remove the extended period language and that triggers the next push down to complete int A.

      Many are pointing to the SPX 1,950 area; 50% retrace from the Oct lows and 200-day EMA. Maybe that’s where int A bottoms…

  42. mjtplayer says:

    A gap up opening in a downtrend? Always suspect, looks like yesterday’s opening – watch for a reversal…

  43. John Arella says:

    One last drop to complete 5 waves down for first chart – max downside is opening spx -30 points to get potential max bottom 🙂

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