Wednesday update

SHORT TERM: pullback continues, DOW -160

Overnight the Asian markets that were open gained 0.4%. European markets that were open gained 0.4% as well. US index futures were higher overnight, and at 9:15 the Chicago PMI was reported lower: 58.3 v 60.8. The market opened four points above Tuesday’s SPX 2080 close, dipped to 2081, then bounced to 2086 by 11am. Then the market started to pullback. At 12:30 the SPX hit 2074, bounced to 2078 by 1:30, then dropped to 2066 by 3pm. After a rally to SPX 2071 by 3:30 the market dropped to 2058, then closed at 2059.

For the day the SPX/DOW were -0.95%, and the NDX/NAZ were -1.00%. Bonds gained 3 ticks, Crude dropped 35 cents, Gold slid $15, and the USD was higher. Medium term support drops to the 2019 and 1973 pivots, with resistance at the 2070 and 2085 pivots.

The market opened higher today, rallied to 2086, then resumed the pullback that started on Monday. Last night we noticed that Micro wave 3 (1992-2094) was exactly 2.618 times Micro wave 1 (1973-2012). Micro wave 2 (2012-1992) was 20 points for a 50% retracement, and Micro wave 4 (2094-2058) thus far is 36 points. We expected the 2070 pivot range (2063-2077) to provide support for Micro 4, but it failed to do so in the last hour. This suggests the next level of support is around a 38.2% retracement, i.e. SPX 2055. Short term support is now at SPX 2055 and SPX 2043, with resistance at the 2070 and 2085 pivots. Short term momentum ended the day extremely oversold. Happy New Year to all readers and participants!

MEDIUM TERM: uptrend

LONG TERM: bull market


About tony caldaro

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191 Responses to Wednesday update

  1. IHS breakout on 5 min chart target is inside the 1970 pivot range

  2. spindoc73 says:

    I would guess near term lows are in – great market to trade during the holiday season!

  3. fotis2 says:

    $/yen on 4hour formed a ascending triangle if it breaks measured target should take it to 122600

  4. llerias7 says:

    Seems like a minute (ii) down to OEW 2019!
    What comes to my mind is a descending formation until Jan 20th…then some kind of QE will result from ECB meeting on Jan22…then minute (iii) of minor 3 should take us over 2150!…
    Speculation? At least has some “logic”…

  5. sibyn says:

    CH handle now—>2035 then goal 2188.

  6. Page says:

    Monday will be another down day for SPX. Tuesday will be change in trend.
    Oil and Nat Gas going higher.
    Gold going lower.

  7. I was early with my Dec 29th bullish Natgas call but that’s ok cuz Natgas is on a tear today

  8. blackjak100 says:

    Tony, do you agree it sure looks like 5 down from 2094-2049?

  9. lunker1 says:

    Tony any concern w the count here? Change count below 2043?

  10. uncle10 says:

    going to be interesting 🙂

  11. I’m not an active blogger, but I’m trying one out so I can post a chart once in a while. Here is the link. I hope it is ok to share this here. If not, my apologies. Thank you, Tony – I’ve been following you for some time.

  12. Tony, any reason why it cannot be an irregular flat…..the daily and weekly reversal doji’s support a downtrend of this size
    1976 wave a
    2094 wave b
    1987 wave c =1* a
    1921 wave c =1.618*a

  13. simpleiam says:

    In 1st paragraph, explains the bond buying at YE 2014, although it’s probably been going on a while.

  14. uncle10 says:

    HNY!! ok, first trade of the year. buying spx here. pretty close stop. gl all

    • fotis2 says:

      Uncle went long the 3rd touch on hourly downtrend line bounce 2048 looks like ww3 with bulls and bears fingers crossed. seems the $ leading the way

  15. The R2K has etched out what is called an orthodox broadening top. That pattern signaled a short sale on 12/31 and has a current target at 1124, and it will get lower day after day as the trendline drawn from 11/19 and 12/16 lows heads lower.

    • buddyglove says:

      Is that pattern just for Jewish people with black hats and long beards ?

      • lunker1 says:

        no but the Hasidic top is

      • randomacts4 says:

        This is one of the best Hasidic stories I’ve heard to date:

        A Hasidic Jew walks into a bank in New York City and asks for the loan officer. He says he is going to Europe on business for two weeks and needs to borrow $5,000. The bank officer says the bank will need some kind of security for such a loan, so the man hands over the keys to a new Rolls Royce parked on the street in front of the bank. Everything checks out, and the bank agrees to accept the car as collateral for the loan. An employee drives the Rolls into the bank’s underground garage and parks it there. Two weeks later, the man returns, repays the $5,000 and the interest, which comes to $15.41. The loan officer says, “We are very happy to have had your business, and this transaction has worked out very nicely, but we are a little puzzled. While you were away, we checked you out and found that you are a multimillionaire. What puzzles us is why would you bother to borrow $5,000?” The Hasidic Jew replied, “Where else in New York can I park my car for two weeks for 15 bucks?”

        I’ve heard it told countless times and it still makes me smile. HNY to all!

      • simpleiam says:

        Yeah, I like that one too, random!

  16. So WS and Uncle Sam want us to believe the goodie O’le USA is on sound footing and rock n rocking…….well ask Paul and Paul;

  17. pooch77 says:

    This could get ugly as small caps are leading down

    • Big Down – first target is $SPX 1972

      • jeffbalin says:

        I’m getting a sell signal, and my sell signals are usually not for 20-30 point drops. Minimum I think is the 2019 pivot, but it does look like the last rally could be a B wave, minor 2 still in progress at the moment. 1973 pivot at minimum if this is the case. I think the daily RSI and the 60 min macd is dropping too far for this point in the preferred count, I don’t like the daily macd divergence at the 2093 top, and, too many lines starting to cross all over the place. Your big down CN strengthens the sell case greatly, thank you.

      • 1313jitu says:

        Big down on what time frame, CN?

      • Daily & weekly – but I really don’t count weekly Big Downs for much except during an established bear market.

  18. Nice hit from 2070 pivot. Good trades all in 2015. C ya’s next week.

    BTW…. GO PAC12! Where’s the SEC??? :mrgreen:

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