Tuesday update

SHORT TERM: gap up opening faded, DOW -85

Overnight the Asian markets gained 1.1%. European markets opened higher and gained 0.2%. US index futures were higher overnight. The market gapped up to the high of the day at SPX 2110 at the open, and then began to pullback. At 10:30 the market dropped below yesterday’s close when hitting SPX 2098. It then bounced to SPX 2103 by 11am before heading lower again. Around 2pm the SPX hit 2094, bounced to 2100 by 2:30, then dipped to 2097 to end the day.

For the day the SPX/DOW were -0.30%, and the NDX/NAZ were +0.40%. Bonds lost 5 ticks, Crude dropped $1.30, Gold rallied $6, 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 FHFA index at 9am, then Existing home sales at 10am.

The market gapped up at the open, hit SPX 2110, and then started to pullback. This morning’s gap up, for the second day in a row, broke the recent gap up then sell off pattern that had occurred a few times over the past month. In fact, this is the first time the market has gapped up two days in a row since the beginning of February – when the uptrend began. Not sure what to make of that factoid in this choppy market. For now the trend is up, and we continue to look for the last leg down of this pullback/correction. Short term support is at the 2085 and 2070 pivots, with resistance at SPX 2112/2115 and SPX 2120. Short term momentum hit overbought at the open, setup a negative divergence, then declined to neutral. Best to your trading!

MEDIUM TERM: still an uptrend

LONG TERM: bull market

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

About tony caldaro

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62 Responses to Tuesday update

  1. 7dayyss says:

    Over 18,000, 2100 and 5000. Do we finally break out tomorrow, or hit our head on the ceiling again? They’ve got us bulls and bears coming and going!

  2. Lots of puts out there, Could be a huge move either way tomorrow. My guess is bears get fried again. And im a bear, to close out my shorts or not to that is the question

  3. So, let the bond market go in favor of the stock market? Normal? 😉

  4. Lee X says:

    Afternoon all
    Not a bad Globex and day range in those minis…4 th time the charm or a hell of a cheap short ? . With my lack of sleep due to the Blackhawks and Cubs games I’m a lil under the weather..I’m getting too old for this stuff

  5. Jack Zhu says:

    wave count in this market means losing money.

  6. robnaardin says:

    AAPL impersonation of a pancake appears to be over. 😯

  7. magnus1234 says:

    It is ridiculous how DOJ believe a single day trader in Hounslow from his parents house caused the flash crash. And if it were true then the structure of the whole futures market smack collusion IMHO. Smell a rat.

  8. stephenk1980 says:

    100% certain that they might do!? I’m 100% certain of that too! 😀

  9. Just a couple ideas…no big down day yesterday…or today(yet).If we can stay positive today, we are probably in that low VIX-slow grind higher UNTIL….
    Someone I read made a bold call that on May 16th Greece may leave the EU.In fact he s 100% certain of it.I m never 100% of anything except that the Cubs won t win the World Series this year lol…but if he s correct,stock market avoidance should probably be undetaken a week or so before.I ll probably start cutting back my stock percentages shortly after the first of the month.Hopefully we ll be up to 2170 or so by then.Good luck.

  10. fotis2 says:

    Triangles at times give a false break especially ones at the top end however a break and daily close above ATH would be bullish, bears get rattled, more buying follows decent 30 pip 1st target bellow 2075 cancels . Lets see.

  11. mjtplayer says:

    GDX is a short, yet another failure at the $20 area, which is also a 50% retrace from the prior decline from $23 to $17. Time for another drop down to the $17’s to test the neckline of the H&S pattern


  12. lunker1 says:

    34 DEMA 2085 = pivot

  13. mjtplayer says:

    The action over the past 2 weeks still looks identical to the action from the last week of Nov and first week of Dec. If the pattern continues, then we should take one more poke higher tomorrow before dropping hard next week.

  14. berniebaruch says:

    Bollinger Band on SPX getting as tight as my 36 inch pants. Pretty day. Golf and trading small.

  15. pooch77 says:

    Ha bears just bitch slapped

  16. If the current rally from 2072 continues it’s inversion/alternation wave structure of the 2046 to 2089 rally then keep an eye on 2115 (+/-5)

  17. H D says:

    Fibs, use fibs

  18. fishonhook says:

    Every tiny drop is still being bought.
    It is bearish that we haven’t broken out yet. But every bearish signal and pattern has flipped over with the weight of free trading money to the world’s banks. Last year Bank/I-Bank trading profits were the highest ever and the bonuses were the highest ever. I read that Goldman UK apparently paid it’s traders $500K up to $6+M on top of high base salaries.
    What a normal person would earn in a lifetime

  19. this market is amazing how it can play both bulls and bears. Just roll over already

  20. fotis2 says:

    Perfect HS on futures lets see what today brings got to get out of this range either way its getting very tiring.

    • llerias7 says:

      The “road to nowhere” is a loong road…4 months now in the same range…mkt as flat as can be…frustrating for bulls and bears alike…

    • mjtplayer says:

      Futures were hit overnight, only to rally back before the open. That’s happened several times over the past few weeks. E-mini’s were down 14pts at one point last night

  21. And so it begins…


  22. berniebaruch says:

    Newby…..Best way to get the market to drop…………Sell 1/4 of your bearish positions…..guaranteed.

  23. This is going to likely spark a good debate, but IMO, the air needs to be cleared and if i’m wrong please correct me, ok so here it goes:
    I don’t know about you guys, but i’m sick and tired of hearing/reading BS articles like this WSJ article ( http://blogs.wsj.com/moneybeat/2015/04/09/major-correction-unlikely-considering-investor-appetite-says-citi/?mod=yahoo_hs. ) claiming that the retail investor (aka Mom and Pop) is not participating in this bull market or that they always buy at the top and sell at the bottom. The percentage that do this is small relative to the mass participant. As a matter of fact mommy and daddy is a hardcore “Buy and Hold” investor. According to EBRI, 401-k plan assets concentration from 1996 to 2013 has ALWAYS been heavily invested in EQUITIES and lightly invested in bonds/cash/stable-funds



    Here is another thingy to take note of and believe or not but IMO the dump money buying the top is not Mom and Pop but rather the STUPID govts sovereign funds/CB’s QE/Corp buybacks/Pensions. These clowns are now the liquidity drivers of the 2009-ongoing bull market cycle. The Mom and Pop 401-k participation mania from 1984 to 2006 were basically the main liquidity bull drivers of the 1987-2000 and 2002-2007 bull markets as participation rocket from 7.54M participants with $91.75B in assets in 1984 to 50M participants with $2.7T in assets by 2006 since then Mom and Pop has proven to be “saturated” with participation remaining flat-lined as participation drop to 48.5M in 2007 but only to rebound back to 53M in 2013 and at the same time assets drop to $2.3T in 2007 also only rebound to $4.2T by 2013 as Mom and Pop decide to ride the bear and bull markets from 2007 to 2013. So what do we know Mom and Pop is doing right now, damn right, buy and hold forever.

    I also recall reading in a book written by Warren Buffett’s ex-daughter in-law that stated that Warren Buffett said that the he felt strongly that the Tax Reform Act of 1984 modifying the rules for 401-k was going to spark the biggest bull market in the history of the world.

    • It seems to me that you are always bearish in your observation of the counts. A recipe for correcting one’s count lies before you, me thinks.

      • jobjas says:

        same can be said about the bullish view – the strongest wave 3 has been elusive for the last 4 months. Look back at any topping process – very similar to present. According to my analysis M4 of P3 is not done . How that is achieved as a deep retrace or a very prolonged side way movement , only time will tell. Meanwhile consider this as a contrarian view !

    • joecthetruthteller says:

      Stochastics and the RSI are turning neutral to bearish signaling that sideways to lower prices are possible near-term. If June extends last Friday’s decline, March’s low crossing at 2031.50 is the next downside target.

  24. bhuggs52 says:

    From the Curious Fact Department. The trend now is for CEOs of major corporations to take cash over equities for their hefty salary adjustments (read–increases). At one point the article below from WSJ suggests these top dogs see the markets topping, hence cash over equities. Can we imagine these captains of industry know something we don’t? I suppose it may simply constitute another checkmark for the suggestion of a major top lying somewhere out there–and not too far off.


  25. JeffMilano says:

    Thank Tony, my software is giving me that we are in at the start of the downtrend meaning “C” wave. The gaps up have me scratching my head as well. Can this be the start of 3 wave. — Thanks

  26. torehund says:

    This also implies where the Euro is headed…

    Thanks Tony.

  27. asaraniti says:

    TC Regarding you wave count for the DAX… do you think the DAX printed major wave 3 last week or do you think the chart will be updated and the recent pullback was minor 4 and the DAX is in minor wave 5 up.

  28. Don’t be greedy and don’t be this guy.

  29. Some earnings not so good, so is bad news actually going to be bad news? We shall see…

  30. berniebaruch says:

    BB’s are tighter than a Kardashian’s jeans……..2118 on the top end. 2050 on the low end. Something is going to give soon.

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