Wednesday update

SHORT TERM: gap down opening again, DOW -106

Last night FED chair Yellen’s speech was released: Overnight the Asian markets lost 0.8%. Europe opened higher and gained 0.8%. US index futures were lower overnight, and at 8:15 the ADP index was reported lower: 212k v 213k. The SPX gapped down at the open to 2099 and continued lower. The market had closed at SPX 2108 yesterday. At 10am ISM services was reported higher: 56.9 v 56.7. Around 10:30 the SPX hit 2088, was quite oversold, and started to rally. By 12:30 the SPX had reached 2101 before starting to pullback again. At 2pm the FED’s Beige book was released: Just past 2pm the SPX hit 2094 and then tried to rally. Around 3:30 the SPX hit 2100 then dipped to close at 2099.

For the day the SPX/DOW were -0.50%, and the NDX/NAZ were -0.30%. Bonds gained 6 ticks, Crude rallied $1.25, Gold slipped $3, and the USD was higher. Medium term support remains at the 2085 and 2070 pivots, with resistance at the 2131 and 2198 pivots. Tomorrow: the ECB meets before the open, weekly Jobless claims at 8:30, Factory orders at 10am, then Stress test results after the close.

The market gapped down at the open for the second day in a row. Soon after the open the market dropped below yesterday’s SPX 2098 low and entered the 2085 pivot range at 2088. After that the market tried to rally for the rest of the day, hitting a high of SPX 2101, then closing at 2099. The pullback from the recent failed 5th Minor 3 SPX 2118 high reached 30 points today. This is the exact same length as Minor wave 2 (2072-2042).

Should the market continue higher from today’s low, crossing SPX 2109 would help confirm, Minor wave 4 could be done with Minor 5 underway. If the pullback continues lower, especially dropping below SPX 2072, then the entire rally (1981-2120) could have been just Minor wave 1 of this uptrend, and this is a Minor 2 pullback. Short term support is at the 2085 and 2070 pivots, with resistance at SPX 2020 and the 2131 pivot. Short term momentum ended the day at neutral. The ECB meets tomorrow, then monthly Payrolls on Friday. Always interesting. Best to your trading!

MEDIUM TERM: uptrend

LONG TERM: bull market


About tony caldaro

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114 Responses to Wednesday update

  1. CB says:

    let’s hope this TL is out if the way now

  2. GYN LAB says:

    That last squiggle looks like 5 up on 5mins chart.. as I missed the long opp at 2095, I will be a buyer at 2098ish

  3. Anyone here trade KEX (Kirby Corp – )
    It seems that it’s recent plunger is connected to the oil plunger.

    Chart looks like it’s ready for a trend reversal:

  4. fishonhook says:

    The weight of CB money to the chosen few is keeping the market from falling. The high valuations is keeping the market from shooting up without fresh Billions.

    • tommyboys says:

      Play it to your advantage

      • uncle10 says:

        Tboys, you see my XON lately. 😉

        • tommyboys says:

          Oh yeah – its nuts! Hadn’t realized its sort of a recent IPO. I’ve got a ways to catch you. My little guy – as typical – is real slow in starting. It should get going soon. That said don’t know if it’ll double although I still think it will. Could’ve retired on XON!!!

          • uncle10 says:

            hehehe. 🙂
            saw where XON just bought a company that has the artic apple. Apple that doesn’t turn brown. This company is in a lot of different stuff. Just a small cap still. Plenty of upside. 😉
            Your guy needs to close above 10.5 -11 to get me interested.
            Still like BBRY in the 10’s and bought some EBAY. Been in a long 2 year range and sitting on the breakout level. gl

    • CB says:

      so far so good..this bull mkt, is like Dylan’s Never-Ending Tour 😉

  5. Unless my eyes are lying to me, IMO per my count, we just saw another irregular flat.
    the first time it was for W2 and it for w2 of W5

  6. mjtplayer says:

    Tony – you counting this up and down move minute i & ii of minor 5?

  7. torehund says:

    BIB-biotech etf is entering the smooth part of prim 3.

  8. lunker1 says:

    AAPL leads down. Topped first.

    • mjtplayer says:

      Watch biotech, big gap-up today in the IBB. It’s rolling-over today and if it closes around $344+/- and gaps-down tomorrow a couple bucks it could be a daily shooting star candle – very bearish.

    • tommyboys says:

      Just profit taking in AAPL. Wait for $160-180…it’s coming.

  9. cicelyalaska says:

    Anyone else been along for the ride on the LL short?

  10. purplember says:

    Mark Cuban says tech bubble today is “far worse” than 2000. mark’s not investment guy but he is a smart guy. saw valuation way high in 99′ and sold his company. he knows tech industry pretty well.

  11. Did the bears just fumble on the 1 yard line again?

  12. fotis2 says:

    Wave b of minor 4?maybe

  13. Back on board now. INDU stalled and couldn’t get passed its prior 4 which is a concern for the rally so I’m out at 2002-2003 for the time being. The Daffy DAX is on steroids. Off yesterday’s low it has run up the equivalent of 551 INDU points whilst the bounce in the INDU itself was a much more modest 131. Prior to today the DAX has run green 10 of the last 11 and up 38% off the October lows or 6,000 INDU points. Mein gott!

  14. gtoptions says:

    Thanks Tony
    SPY ~ Obviously Failed at the Gap!
    Daily 13CCI below zero, looking for a test of the 34 dema @ 208.
    GL all

  15. ashram says:

    Witnessing excellence inspires the creation of excellence, and it is in that spirit that the following is presented to inspire each of you to have a most profitable trading day:

    • Lee X says:

      Consider this guy inspired Thank You

    • CB says:

      looks like Savalas and Yanis 😉 have something in common…an impeccable sense of style…
      but why those gold chains, Savalas…lol..

      Thanks for the update, Tony.

  16. sibyn says:

    No strength, advantage bears 2094

  17. bhupal777 says:

    Thanks Tony.
    This is what we know so far…. monthly and weekly trend is up. Your primary count is bullish. All my watch list stocks that broke out a month ago (which I did update on this blog) made sizeable moves and consolidating nicely. My stops didn’t hit yet means I am not shaken out yet.
    But my KRE position is taking longer than what I thought to breakout. But good sign is it did reverse at 20 day SMA and the down day volumes are lot less than up day volumes. More over I see a cup and handle pattern started on 02/17 after a huge January and February months upside move. I consider that as bullish pattern. Let’s see what market brings to me in coming days.
    Good Luck All.

  18. I am looking for 5 waves down from 2117.52 for the completion of this wave iv and I can find them at yesterday’s lows (24 hour basis). I am cautiously long with stops layered between 2087 to 2091. The primary bearish alternate count I like suggests Wednesday’s 2087.62 low only marked 3 waves down. This alternate possibility would make the bounce off 2087.62 only a 4th wave with a 5th wave down to new lows to follow. This would require an interpretation of the 1st wave ending in the 2012-2013 area rather than the more obvious (at least at first glance) 2098.26 which would indeed be a violation. This is a close call IMHO, therefore cautiously long. My secondary bearish alternative is that Primary IV started at 2119.59 (but don’t say this in polite company).

    • bhuggs52 says:

      TJ, yours is a stouter heart than mine, going long this early in a potential Minor 5, but the rewards await. Thanks for mentioning your stops, something I’m currently working to learn more about, both through advice from posters on this blog, some reading, and practical experience. What I would gather–stops in the 2087-91 realm make sense, as the spread at the recent bottom, a possible area that might see a retest before a solid launch up, and certainly anything below that area could portend lower lows–hence the stops. Those are my thoughts. Thanks again for your post.

      • Yes BH, a retest or a shallow 5 is a concern. That would stop me out. I generally don’t use stops when I’m monitoring the action in real time which is the vast majority of the time. I just adjust as I go. I do many, many trades in a day. I find this quite prudent when using 200 times leverage. But on this occasion I have a commitment to attend to so a limited loss is better than an unlimited one.

    • My bearish count also has Primary IV started at 2120.

  19. fionamargaret says:

    Thanks Tony………good helpful stuff as always everyone.

  20. fotis2 says:

    $/yen looks good for another leg up 120.00 was waiting for retest of 118.00 support so still not in a trade.Light crude holding well still long momentum on daily turning positive looks like a retest 55.00 on the cards for next couple days lets see how it plays out.GL people..

    • buddyglove says:

      All this continued talk about “Deflation” from self styled market gurus really grinds my gears.We are done with Deflation, Deflation is yesterdays news and imo Deflation is fully factored in to prices.
      Don’t believe me, just look at any long term chart of gas,oil or other global resources and see for yourself.
      Markets are forward looking, and very soon they will start to re-price assets for Global Re-inflation and Treasuries are already starting to take note.
      Aimho and Gl.

      • fotis2 says:

        Yip all the ‘dumb money buying every dip they will eventually be left holding the bag’.In the meantime back at the ranch the ‘dumb money’ has already banked a couple of those bags and busy filling up the latest one with the ‘clever’ money that helps along by getting squeezed out the market at the slightest pullback and reversal.. 😉

  21. M1 says:

    should we expect a rebound tomorrow ?

  22. soulsurfer says:

    Thanks Tony!! Decision time. Should we again give the bulls the benefit of the doubt?

    I figured it could be helpful to share a tool that can help the “longer term” investors among us in making trading decisions. With this you don’t even need to know the markets’ level (price), just follow the moving averages in relation to each other, KISS 🙂 :

    • torehund says:

      Soul, could not agree more, its the long term projection and the “boring” sitting that scoops in the dough, history tells us that; both from a market history perspective, and from Our own previous experiences ( look at what you once owned, and where they are today ). School of Hard Knocks, Tonys blog and a tint of M. Armstrong, that is my current recipie.

      • soulsurfer says:

        Right on torehund. Though a quick trade here and there to keep the trading skills sharp, and for the rush of nailing a bottom and the thrill of selling a peak is nice every now and then too 🙂

        • torehund says:

          Agree on that too, if one is good enough to sell an Intermediate top and buy back the same share double amount on a dip 🙂 However nailing a bottom is a precious gift and justifies scrutiny of counting, before exiting the position. Previously I havent been skillfull enough to ridde out my picks of 10 baggers, Hoping to revenge that now 🙂 Good luck to all of us for the coming months.

    • jeffbalin says:

      Soul, what are the specifics on the charts, what moving averages? Maybe weekly chart, 20 and up?
      Thanks, Great post!

  23. bouraq says:

    Today’s post:

  24. fishonhook says:

    Tony any scenarios or counts which would lead to a more substantive top having been put in?
    Just saying as spx about to have a macd crossover to the downside depending on tomorrow’s action

  25. torehund says:

    Thanks Tony, scale-wise I favor the minor one and minor 2 scenario.

  26. blackjak100 says:

    Is the market ready for an extended minor 5 to complete fib time/price square out at 2200ish first week in April? This would suggest volatility surging with a melt up this month

  27. lunker1 says:

    last night I noticed 3 linked set ups
    the first was the measured move to 2088
    2105 sets up RS for H&S targeting 2054
    which then sets up another neckline off the 2042 low
    with H&S target of 1982

  28. lunker1 says:

    then the entire rally (1981-2020) *2120*

  29. simpleiam says:

    Thanks Tony. Below are the little gems I look for in your Updates:

    “Should the market continue higher from today’s low, crossing SPX 2109 would help confirm, Minor wave 4 could be done with Minor 5 underway. If the pullback continues lower, especially dropping below SPX 2072, then the entire rally (1981-2020) could have been just Minor wave 1 of this uptrend, and this is a Minor 2 pullback.”

  30. CB says:

    Thanks Tony

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