Tuesday update

SHORT TERM: pullback continues, DOW -130

Overnight the Asian markets lost 2.3%. Europe opened higher but lost 0.5%. US index futures were higher overnight, and the market opened two points above yesterday’s SPX 2021 close. The market continued higher until hitting SPX 2027 by 10am when two economic reports were released: Factory orders -0.7% v -0.7%, and ISM services 56.2 v 59.3. After a quick pullback to SPX 2021 the market rallied to 2030 by 10:30. Then it started to decline. Around 11am the SPX broke below the 2019 pivot range and continued lower. Around 12:30 the SPX hit 1996, bounced to 2005 by 1pm, then hit 1992 by 1:30. Then it started to rally. By 2pm the SPX hit 2003, dipped to 1997 by 2:30, rose to 2013 by 3pm, dipped to 2007, then rose to 2017. Then the market dropped to SPX 2003 to end the day.

For the day the SPX/DOW were -0.80%, and the NDX/NAZ were -1.20%. Bonds gained 22 ticks, Crude lost $2.20 Gold rallied $13, and the USD was higher. Medium term support drops to the 1973 and 1956 pivots, with resistance at the 2019 and 2070 pivots. Tomorrow: the ADP index at 8:15, the Trade deficit at 8:30, then the FOMC minutes at 2pm.

The market started the day on a positive note, rallied to SPX 2030, then headed south into the afternoon. At the low, SPX 1992, the market had retraced over 80% of the 1973-2094 uptrend. Quite unusual, unless of course we are currently in a downtrend. After that low the market staged its best rally since the decline began a week ago Monday. Off that low there were five small waves up: 2003-1997-2013-2007-2017. This in itself is not that conclusive or significant, but potentially the start of a reversal. We continue, despite the decline, to maintain the Minute wave one – Minute wave two count for this uptrend. The Aug13-Jan14 uptrend we noted yesterday, also had an 80+% retracement for its second wave. Short term support is at SPX 1992 and the 1973 pivot, with resistance at the 2019 and 2070 pivots. Short term momentum displayed a slight positive divergence at the low, and the daily RSI is quite oversold. Best to your trading the often volatile FOMC minutes.

MEDIUM TERM: uptrend

LONG TERM: bull market

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

About tony caldaro

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165 Responses to Tuesday update

  1. fibs-R-us says:

    Wow. Truly the nastiest lookin’ sideways slop that i’ve seen in a long time. Good luck counting it 🙂

  2. I don’t care which direction, but could we please move this thing 10 handles one way or the other before the close. Holy Smokes! Most Boring FOMC reaction, ever. ES at 33 or 03, I will take either one. But if this flatlines to a 2015-2018 finish, I’m going to start trading rough rice.

  3. i think wave a of dead cat bounce is done and out and wave b is underway

  4. I am seeing first BULL failure within this entire rise (2009-14). I doubt whether market will hold onto this rise, ideally, it should reach 2047-55 by around 23rd to complete perfect pattern

  5. Anyone interested, here’s a trade I just did. Not picking the exact bottom, but this should be within the area for at least a nice bounce.


    That’s the weekly chart and with the MACD and Stochs that low on a weekly, the 38% retrace doubles your money. If trade doesn’t work out, don’t shoot me. But I am doing this trade myself. It’s called ‘actionable intel’.

  6. reddragonleo says:

    The mid-October bottom and rally that followed was straight up with no real pullback or retest of the low to make a double bottom or lower low. Then it happened again with a mid-December bottom and another straight up rock to the moon rally.

    Is this the first day of a 3rd rocket rally or will the fool the sheep and tank it tomorrow and/or Friday to make a lower low before another face ripper? Past history shows that Skynet tricks the sheep on the 3rd attempt of any recognizable pattern.

    I get the feeling we’re going back down to make a lower low either Thursday or Friday. I don’t know if it’s going to start right after the FOMC minutes today or if they close up near the high today and then gap it down tomorrow but I do think that the move down isn’t done yet.

  7. H D says:

    The EW, Almost clear 5,3,5 up from yesterday. 1 more little 5th of c potential….. IDK really want to crush a spike up

  8. This is a very typical FOMC traders psychological behavior pattern

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