Wednesday update

SHORT TERM: wacky Wednesday, DOW +227

Overnight the Asian markets gained 0.4%. European markets opened lower but gained 0.4% as well. US index futures were lower overnight, and the market gapped down to SPX 2067 at the open. The SPX had closed at 2074 yesterday. In the opening minutes the market dropped to SPX 2065, bounced to 2070 by 11am, then drifted down to 2061 by 1:30. At 2pm the FED released its statement and economic projections with the SPX at 2067:, The market then took off to the upside in one of the biggest spikes up in recent memory. At 3:30 the SPX hit 2107, then pulled back to 2096 just before a 2099 close.

For the day the SPX/DOW were +1.25%, and the NDX/NAZ were +1.00%. Bonds rallied 42 ticks, Crude rose $1.70, Gold added $22, and the USD tanked 1.90%. Medium term support rises to the 2085 and 2070 pivots, with resistance at the 2131 and 2198 pivots. Tomorrow: weekly Jobless claims at 8:30, then the Philly FED and Leading indicators at 10am.

Another volatile FOMC day. The market gapped down at the open, retracing all of yesterday’s rally by 10am. By 1:30 the SPX hit 2061, drifted up to 2067 by 2pm, then spiked to the upside when the FED stated: growth and inflation were slower than expected, and they would like to see more job growth before raising rates. Within one minute of the announcement the SPX rallied past yesterday’s 2079 high on its way to 2107 in the last hour of trading. Today’s pullback looked like a continuation zigzag from Monday’s SPX 2081 high: 2065-2079-2061. We are counting the entire rally from last Wednesday’s SPX 2040 low as a Minute i – ii (2066-2041), then a Micro 1 – 2 – 3 of Minute iii (2081-2061-2107 so far). Today looked like the start of a three of three. Short term support is at the 2085 and 2070 pivots, with resistance SPX 2107 and the 2019 pivot. Short term momentum hit oversold during the pullback, then ended the day quite overbought. Best to your trading!

MEDIUM TERM: uptrend

LONG TERM: bull market


About tony caldaro

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139 Responses to Wednesday update

  1. imanewbietrader says:
    March 18, 2015 at 1:54 pm
    wave 1 at 2039 wave 2 a 2100 and now comes the unsuspected wave 3 down

    Am I a crazy bear? Lol

    • LOL iamnewbie by far my favorite contributor. no your not crazy your just don’t understand the fed is goosing the market. why do you think Caldaro has had the same count for 2 years

    • Lee X says:

      Hey newbie,
      Do you mean wave 2 @ 2107 ?

      • Truth, thanks- its amazing im not BROKE, but I do trade both ways- I just lean bearish.

        LEE X, I posted this yesterday before we hit 2107.

        • Dex T says:

          You’re not crazy. A lot of traders and investors including large hedge funds have been taken by surprise or underestimated the depth of the Fed involvement. Even many of the worlds best traders go for periods where they can’t profit. or even lose money.

          The old techniques of evaluating fundamentals just don’t apply to a large number of stocks. It’s all based upon emotion and crowd behavior- which is why Elliot Wave together with other TA tools are useful.

          The Springtime- until May is historically the most bullish time of year so be careful shorting the market.

          Whether you believe that we are in P3 about to start P4 or P5 about to begin a sustained correction this is the time period in wave theory when investors act most irrationally-and it can last months.

        • Lee X says:

          Impressive , Thanks !

  2. lets see VIX down VIX futures down and DOW down at 3:15. my guess the 330 ramp courtesy of the fed goosing the market to start in 15 mins for a green close.

  3. Very similar chart pattern (fractal) to last Friday where the initial decline bounced around near its lows for a while whilst appearing likely to go to fresh lows but instead squeezed into the close with a nice rally.

  4. mjtplayer says:

    Tony – if you’re using the same count on the DOW as the SPX from last weeks’ low (i,ii, 1,2,3,4), what do yo make of the DOW’s wave 4 crossing into wave 1? SPX hasn’t violated yet, but getting close…

  5. lunker1 says:

    2085 pivot
    HWB 2084

    • blackjak100 says:

      Wave count gets interesting if 2081 gives way. I think everyone expected a 4th wave correction today including myself.

  6. Arthur Knopf says:

    First post, be gentle. This looks like a clear case of an abc correction in SPX since Mar 1 with 5 dn 2040, 5 up at 2100, where c=a at 2020. Yea or nay?

  7. bhuggs52 says:

    On the SPX, hopefully all we’re seeing is a flat correction, before a resumption of the up. This is the part I hate, waiting out these drops, wondering if I should take profits on my long, or stay patient. Patient. Hmmm, now there’s a word with cache.

  8. I see several comments blaming/crediting the Fed for the market’s price action. I can say with certainty that such is determined exclusively by the price data generated by the market each day, not vice versa. At best the Fed can propel the price action but only in the direction pre-determined by the latter.

    Third post so done for the day. Thanks as usual Tony for your hard work.

    • tommyboys says:

      Concur emphatically… last post as well. Good day all…

      • simpleiam says:

        You’re absolutely right, tommyboys. Tony doesn’t need any more money from any of my referrals. I’ll put a stop to that right now…

    • fishonhook says:

      No offence but that post was gibberish worthy of Rabbit. Of course the Fed has huge effect on the market. Everything is priced according to the Fed funds rate.
      maybe you are too young to remember Volker who said he would concur inflation, punish speculators and humble Wall Street which, like now, thought they ran the country and could ask the tax payer to pay off their losses.
      he ratchetted up rates and margin requirement and the market dropped and the economy slowed but was refreashed. The Fed is the MOST powerful market mover.

      • The Fed, the fed, the fed. The feds board members control the Big Banks, they are a privately owned (non governmental entity) Yes the FED is very very very powerful and just as equally dangerous!

  9. ashram says:
  10. Seems as if everyone has become Ubber bullish again. Anyone looking for a pull back today after more dissapointing economic data to 2085-2090 then the buy the dip crowd steps in and we rally to 2130 into Friday where we hit the top of the large wedge and drop 8-10 percent next week.

  11. sibyn says:

    sold all bears.
    My last post.

  12. rabbittrader1 says:

    robnarrdin: Are you out of your mind? You make crazy inferences out of NOTHING! I like to know to whom I am speaking. Nobody should be afraid of the question “Male or Female” or “. Human or Animal” A man walks on the street side of a woman ,. It is a custom since olden times when carriages and horses could splash MUD .. I will answer the question PAGE asked :::My answer is : approximately $1188 (more or less) ,within a day or two. BUT I do not think gold will even get that high , before dropping below $1000 Rabbit.

    • I’ll be your huckleberry, I have taken the opposite side of your oil call, was wondering if you have altered your stance going forward, yesterday looks like a hiccup and the trend is still down to around 35 WTI (my guess).

  13. #SPY #JNUG #GOLD market update and plan for thursday is now on-line (at end of blog’s commnets sect.):

  14. soulsurfer says:

    thanks tony!

    ii retraced exactly 50% of i (2041-2081-2061); classic!
    iii, iv and v should then ideally hit: 2115-2125, 2100-2110, 2130-2140, respectively, to finish 3.

    all systems go. my buy-sell indicator already gave a buy signal last Friday, which was confirmed on Monday 🙂 Long since SPX 2050ish.

  15. fotis2 says:

    Interesting to watch the whole Greek fiasco from the sidelines at the end the Bean Counters will have the final say as usual.

  16. rabbittrader1 says:

    Page You do not wish to answer my very simple question, ARE YOU A WOMAN OR A MAN? So I do not ,therefore, give you an answer to your question Rabbit.

    • Its a pretty tight range isn t it? 2120 to 2040 .Somethings got to give….Tony obviously is in the upside breakout camp….why not, I suppose with all the dovishness.Also the monthly MACD on the S&P crossed back to the positive.In 1998 when it dipped below but then jumped back above after the Asian Financial Crisis faded away…Spx went up about 40-50% before the final 2000 crash.That could happen again if the Fed can keep the dollar under control.One day does not a trend make.

  17. rabbittrader1 says:

    baldeagletrader page, Tony c, etal. : Not to worry., for someone who has been here ,on earth . 11 times in 1,479 years ( with some time spent in Heaven, and Hell ) I assure you we will see a strong SPX into MAY 10Also Gold ,which is making a minutte 2 high , will continue DOWN to approx $960 into MAY=June. I am buying July UCO $19 strike calls at 40 cents or better . Yours Rabbit.

  18. By: Dr. Robert McHugh –

    “We are about to see a series of cycle turns occur simultaneously over the next 30 trading days, a period which includes a Fibonacci Cluster turn window with 10 observations. Within this 30 trading day period are a number of very unusual astrological events, which can affect markets.

    In the past, we have pointed out that major trend turns often come around the spring equinox, which this year arrives within the important Fibonacci Cluster we discuss below, on March 20th, 2015. Within this cluster turn period we also have a rare Total Solar eclipse (also on March 20th, 2015), the first day of the Hebrew calendar, (Nissan 1, evening also on March 20th), and a New Moon on March 20th.

    March 20th is also a quadruple witching hour on Wall Street, an options and futures expiration date. Also within this Fibonacci cluster turn period, on April 1st, 2015 is a phi mate turn date, and on April 4th we see a Bradley model turn date, which is also Passover, and also has a Full Moon — not just any Full Moon, but a Blood Moon, the third of four in the 2014-2015 tetrad, a very rare event, that has the additional extremely rare occurrence that all four of these Blood Moons fall on the Hebrew Holy days of Passover and the Feast of Tabernacles (see Genesis 1:14).

    Something big is about to change.

    • Page says:

      I am scared now. I hope Yellen knows about these events and be more dovish.

    • tommyboys says:

      A steeper trajectory ushering in the euphoria stage. Dow 20, 22, 24k? Exciting times just ahead strap in!!!

    • Gary Lewis says:

      And if the market just continues going up, it will prove beyond doubt that the Fed is absolutely terrified to allow the market to go down. With so much leverage in the system now, any serious defaults will absolutely bring the world to an end. Seems that they are also terrified with the strong dollar. Be long – or wrong 😉

      • tommyboys says:

        World won’t end. “Fed” is just a group of humans like the rest of us with same fears and concerns. Bull will run ’til it’s done then correct as always. With so much chronic concern for bubbles and hated rallies and Fed ragging a top is likely a ways off. If we’re in ’95/’96 timeframe we ‘ll have a LOT more whining and frustration over the coming several years all the way up. Get cautious when complaining halts.

    • Walter Crane says:

      That guy has been bearish and wrong since eight years ago at least. And charges you 2k almost for reading his stuff. Nice scam. In my opinion.

      • pooch77 says:

        He has been forcasting his megaphone top now for 5 years,but sooner or later we will correct

    • simpleiam says:

      What kind of Dr. is this? A witch doctor has better forecasts and charges less…

  19. mjtplayer says:

    Tony – any ideas as to what type of break you’re looking for in the Euro? A fast rip higher to 1.16 – 1.18? Or a sideways correction for many months, like the Yen, but no meaningful or sizable rally? It took the Yen a long time to break 120, but never traded down below 114/5 in the process.

    A side note – watch the spot VIX if/when the SPX trades up to 2,119 in the days ahead. If 12.87 isn’t broken or breached and we make a “higher low” while the SPX makes a HH that would be a red flag and very bullish for the VIX.

  20. So the fed downgraded the economy today and stocks soared. Go figure.

  21. bhupal777 says:

    Thanks Tony. To confirm your count, tomorrow we should see a good follow through. Because we are in sweet 3 of 3 count. If it stalls or reverses tomorrow then I am going to be more careful of my long positions.

    Except KRE and ZSL all my portfolio positions are on a great run today. Well even the PEK which I entered yesterday is up over 3%. Stopped out of hedge (FAS short). But entered KRE short with a stop at 42. Now we need a good follow through action tomorrow for both my longs and shorts. Good Luck all.

    • tommyboys says:

      As a 29 year veteran of the steel biz my view is that while servicenters, warehouses and brokers with fat inventories will suffer over the coming few Qs – some will fold (already a few) – mills will begin to thrive with the lower input costs. Oil’s drop has killed steel prices and anyone holding inventory but the reduced commodity complex are a boon to producers – both the integrateds’ and minis’ for different reasons…jmho

  22. esvxm says:

    Thanks Tony for the analysis!
    German DAX, Dow Jones, S&P 500, NASDAQ, NYA, TLT and Dollar Index here:

  23. Page says:

    Thanks Tony.
    Thanks Janet.

  24. jeffbalin says:

    Excellent work Tony, thank you

  25. blackjak100 says:

    Blowoff top in progress towards a 1.618 fib square out in time & price which is 2191ish first week in April…IMO of course. Obviously, some error can occur on either side since we are talking about a large long lasting wave (P3).

    Investors were net long volatility in an all time record fashion about 6-8 weeks ago, but historically they are early yet correct. P3 will top in 1-3 weeks 2150-2200 IMO of course.

    • pooch77 says:

      B.J,Friday 3-13 stated Bradley turn today,next Bradley turn April 4th Sat.Then April 14th i belive.So if earning start on 6th woner if we top on 4th payroll Friday and slide into 14th,maybe anothe brad in April

      • simpleiam says:

        pooch, I haven’t read Bradley site in a while, but it states that the forecast is + or – 4 days either side. Don’t you think that’s a bit convenient?

  26. tony caldaro says:

    like everything
    even Gregorian chant

  27. mjtplayer says:

    Thanks Tony! Massive short covering rally in the Euro, up 331bps vs. the USD!! Resistance at the 1.10 area, getting close already.

    I know you don’t like this count, but wave 4 stopped exactly where it should have; so until it’s broken, it’s working. Wave 5 could end anywhere and could happen as early as this Friday or next week. Martin Armstrong looking for a “directional change” next week, which would obviously be a high and reversing lower, based upon where we are now.

    Many astro events occurring tomorrow and Friday: major solar storm, solar eclipse, new moon & spring equinox – all by Friday.

    • tony caldaro says:

      have a high of 110.40 EU today
      been a very long downtrend
      now forex traders have reason to buy

      • mjtplayer says:

        I’m not so sure, during the Yen’s downtrend there were short-lived violent bursts, but the trend lower remained. I think this could be the same in the Euro, a short-covering rally for a few days, maybe even a week or 2, then the downtrend resumes. We’ll see…

        Bottom line, the EU is printing money and the US isn’t, the Euro heads lower until that changes in some way – same as the Yen

  28. simpleiam says:

    Thanks Tony!
    So it’s 3’s all the way around, huh?
    Micro 3(?), Minutte 3, Minor 3.
    Gotta love it.

  29. mharrison60 says:

    Thanks Tony.

    I am sure you have been asked before but why don’t you think we are in PV?

  30. fotis2 says:

    Thanking you mr.T you count is tops.

  31. CB says:

    Thanks Tony. It’s Janet’s world, we just live in it.. : ) Nice job Tony!

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