Tuesday update

SHORT TERM: volatile day, DOW +72

Overnight the Asian markets gained 0.4%. Europe opened lower and lost 1.6%. US index futures were lower overnight. Last night FED direction Van Der Weide’s testimony: http://www.federalreserve.gov/newsevents/testimony/vanderweide20150428a.htm was released. At 9am Case-Shiller was reported higher: +5.0% v +4.6%. The market opened one point below yesterday’s SPX 2109 close, ticked up to 2110, then started to pullback. At 10am Consumer confidence was reported lower: 95.2 v 101.3. Just past 10am the SPX hit 2095 and then started to rally. The rally continued until 1:30 when the SPX hit 2116. Then after a pullback to SPX 2111 by 2:30 the market bounced to close at 2115.

For the day the SPX/DOW were +0.35%, and the NDX/NAZ were -0.15%. Bonds lost 16 ticks, Crude added 5 cents, Gold rallied $10, and the USD was lower. Medium term support remains at the 2085 and 2070 pivots, with resistance at the 2131 and 2198 pivots. Tomorrow: Q1 GDP (est. +0.7%) at 8:30, Pending home sales at 10am, then the FOMC statement at 2pm.

The market opened about unchanged today then resumed yesterday’s pullback. At the low of the day the SPX had pulled back 31 points from yesterday’s SPX 2126 all time high. After the low the market rallied 21 points to SPX 2116. This now gives us five waves off last week’s SPX 2072 low: 2110-2091-2126-2095-2116. If the market is impulsing higher, in Minor wave 3, it should not drop below SPX 2095 during the rest of this uptrend. Short term support is at SPX 2095 the 2085 pivot, with resistance at the 2131 and 2198 pivots. Short term momentum hit quite oversold this morning, then rose to just above neutral. Best to your trading on the often volatile FOMC Wednesday!

MEDIUM TERM: uptrend

LONG TERM: bull market

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

About tony caldaro

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135 Responses to Tuesday update

  1. I feel a reference to round numbers (18,000/5,000/2,100) is coming in Tony’s daily update on this big GDP/Fed Statement Day

  2. stephenk1980 says:

    Was expecting it to fall significantly quicker than this if my statement on Monday about it being the top was correct. Hopefully we’re getting a wedge forming now on the 15min whose breakout will guide us to which direction it wants to go. So far it looks like something I’ve seen before that breaks out to the upside…

  3. Lee X says:

    @ .618 still @ 2108 ESM
    2119.75 – 2088.25
    silly pivots and fibs
    I’ll take tomorrow off in penance for todays actions

  4. mjtplayer says:

    Nice intra-day rally, but SPX now sporting -div on the hourly. End of month tomorrow, will be interesting to see what happens.

    Now that the Fed meeting is out of the way, I can focus on the NFL draft tomorrow night 🙂

  5. mike7x says:


  6. My two cents….Fed seems totally dovish.If stocks don t rebound from here—have to assume they re headed down to 2020.Good luck.

  7. manunidhi21 says:

    can that be considered as a +ve div. on spx 60 min chart rsi

  8. Lee X says:

    Seeing that Janet hasn’t changed her hairstyle in a few decades how would one expect her to make just 1 decision since she got this job ?

  9. LiveSquawk FOMC keep rates on hold; winter slowdown partly reflect transitory factors, see moderate growth and jobs gain even after Q1 slowdown

    • fishonhook says:

      Old yellen stick-saves Wall street again. Blankfien and goldman will have a nice cushy consulting job for her when she leaves, just like Bernanke who now sells his soul at Pimco or greenspan who works for hedge funds. No conflict of interest here, move along

      • Kinda hard to believe, but it is what it is. Need a close above 2105.20 or we could be on the way down… Would be interesting since that might push the buttons for the next round of QE? This ain’t no normal market, that’s for sure. 🙂

  10. fotis2 says:

    I ncluding yesterday that is a DB close above 2115 and up it goes unless mrs Yellen has other plans.

  11. Lee X says:

    Don’t forget to put $1 in the “Like I Said” jar today 🙂
    GL everyone !

  12. gtoptions says:

    Thanks Tony
    SPY ~ bounced at .886. Here are two potential options. Janet will answer in the next hour.


  13. berniebaruch says:

    Newby. Stay Calm and act like you have been here before

  14. fotis2 says:

    Go With The Flow..

  15. warn about that IHS pattern setting up the HS pattern

    EL MATADOR (@LoLo_MATADOR) says:
    April 28, 2015 at 12:36 pm
    IHS patterns some time lead to a HS setups, so keep your eye on the ball


    Also posted an update chart on April 28, 2015 at 5:48 pm

  16. lunker1 says:

    Stocks down treasuries down dollar flat. So what does that mean?

  17. Dax down 378…starting to price in Greek exit already? When WE had QE, stocks never acted like the German market is acting(unless Bernanke was threatening to stop QE).This doesn t look right and I ve cut 40% out of equities.If we make new highs. I ll jump back in.

  18. mjtplayer says:

    Tony – USD getting hit hard today, down 1.34%. Though commodities aren’t really responding, gold and oil basically flat – which is surprising and poor price action on their behalf. Looks like the 94 area you have marked on your daily DXY chart may be a good target, almost there at 94.80

    If the Fed is dovish today, it looks to me as though the market has that mostly priced-in – no?

    • tony caldaro says:

      DXY topped right around the last FOMC

      • mjtplayer says:

        Now a bottom around this FOMC meeting? Very hard to say the Dollar is topping here, down over 2% between yesterday and today. Looks and feels like a short squeeze in the Euro (which is 57% of the DXY) ahead of the Fed meeting.

        Daily RSI closed at 14 yesterday in your daily DXY chart, that will be even lower today with a down 1.34% day. Single digit daily RSI? Looks like a low approaching in the Dollar, not a high.

        • tony caldaro says:

          If the FED is going to raise rates in June, it is time to prepare the market.
          The FED took “patient” out of the statement the last time … the USD dropped
          No longer patient, means to me they are about to do something

  19. thetagurl says:

    where is ashram?

    • CB says:

      That’s a good question…
      Where in the world are you, ashram…I can almost hear you breathing there…come here kitty, kitty 😆

  20. if my count is right, we are going back down to 2090 area than we will bounce over 2100 just to drop like a rock to 2060

    • JeffMilano says:

      Tomorrow, THE DROP!

    • my UVXY is smelling like fresh-baked chocolate chip cookies right now. I don’t want to be in it too long, looking to get out in the mid/high $12’s. Think we get there by mid-May?

      • mr. market, you are going to sell this way to soon. If we go into wave 3 of 3 is targeting 2060 this will go somewhere between $14-16 and when the wave 1 finally completes were looking at $20+

        • you’re probably right. my biggest pitfall in my trading account is just that, I sell way too soon. not always, but close to half of the time. my trading account is 1/5th the size of my investment account because I’m highly speculative with it (hence trades in UVXY, UPRO, SPXU, TVIX, SQQQ, and occasionally individual stocks on huge pullbacks like NFLX, FB, MSFT, TWTR, etc.). My biggest chagrin thus far is having sold 400 shares of NFLX at $78 after making $12/share. But that’s what this account is for – the rush comes from being right on the trade, not whether I got the maximum out of each one. Leaving money on the table is preferable to staying too long. My investment account is dollar cost averaged and much more boring…but great for any market environment (thus far): PM, BP, PFE, T, MSFT.

  21. sloop says:

    there,s a good chance the pb is done

  22. H D says:

    so,,, how ’bout that 2115? Might seem weird to chase 10 point moves but that is the game they give us. If SPX drops and stay below 2095 u can draw fibs on the entire pattern IMO

  23. rc1269 says:

    When I look at the recent moves in rates markets, in particular inflation expectations, I am left with a couple thoughts.
    First, holding off another few months the raising of FF by 25bp can’t possibly lead to a 1.5% increase in inflation over that timeframe. So, in my view the market is starting to consider something bigger from the Fed. Perhaps more QE?
    The move in rates is telling right now. The only thing going higher are inflation expectations. Typically if the economy were struggling and the market started contemplating more stimulus, you wouldn’t see nominal yields rise this fast. But here’s the rub with doing more stimulus right now: real rates are already near zero.
    Think of it this way: when the Fed does QE they try to accomplish one essential thing – they want to augment the composition of longer term tsy yields. Take the 10yr. It’s at 2.06%. That’s made up of inflation expectations and real rates. When they do QE the goal is to decrease the real rate and increase the inflation expectation. In years past, that has mostly led to a decline in the total yield, as real rates indeed went down and inflation exp went up, but not as much as the decline in real yields. Today, however is different. We’re at 2.06% in the 10yr, and 1.93% of that is already inflation expectation, while the remainig 13bp is real rate. So, if you do QE now, how much can you lower the real rate vs. the increase in inflation expectations? So maybe real rates can drop to zero, but then inflation exp go up 50 or even 100bp? That’s a net +37-87bp move in nominal yields. Maybe one last QE push and the Fed will finally get all the inflation they bargained for (and likely more). Food for thought

    • fishonhook says:

      Wow- good post. Not what we are used to reading here, which is more like :”are in ii of 1 of V or are we…or… we are down 6 pints, toldya we were going to crash”

      Please come again and enlighten us

    • Currently the yield is going up, so without QE that means that inflation expectations are going up, right? Or real rate (but that would be indicative of a growing economy where rates turn higher in tandem with the loans volumes) is also moving up – which I would say is not the case? But then inflation expectations would also push safe havens like TIPS and gold up. Gold is not much different than early this year….what gives? Thanks rc for opening this topic.

      • Mjt is the ax on gold
        Seriously , lay off the gold calls this is like the 10th bad call in a row.
        Hint- u do this on lows.
        Your oil calls are suspect too

        mjtplayer says:
        March 31, 2015 at 9:26 pm
        Gold Miners’s via GDX. If the pattern confirms, downside target is $12.

        Don’t shoot the messenger, just reading the charts. I see gold falling below $1,000 to at least $900, so this wouldn’t surprise me.


        mjtplayer says:
        April 22, 2015 at 10:59 am
        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


      • rc1269 says:

        a) yes, inflation expectations are going up. i wasn’t clear on my opening comment about how pushing off a fed funds hike could not lead to a “1.5% rise in inflation expectations.” that comment was based on the 1.5% rise in 2yr inflation expectations (TIPS breakevens) that has occurred YTD.
        b) correct, real rates have not gone up, at least not YTD.
        c) TIPS are essentially real rates. as such, they don’t necessarily have to go up (in price) when inflation expectations go up. that’s a common misperception. that *can* go up, but don’t have to. all they will do is outperform regular treasuries if inflation expectations increase. that’s all. you can have a situation where treasuries decline (in price) and TIPS decline in price as well (perhaps at a lesser rate, but still negative). for instance, if real rates increase and inflation expectations also increase, then both TIPS and treasuries will depreciate. just not by the same amount.
        d) gold is a strange animal and not my forte, sorry. it’s a manipulated market in a non-income generating asset that has limited industrial use, so hard for me to make any strong call on that one either way. i’d say if you’re worried about inflation buy land not gold, but that’s just me.

        • Lee X says:

          +1 on the land comment R C and thanks for a most informative read as always
          That’s 4 ..Security !!!

    • H D says:

      RC, very well written, Wish I could contribute but this topic is way above my pay grade.

    • mjtplayer says:

      Rising inflation expectations due to rising oil? Could be that simple in the short-term…

      • rc1269 says:

        not so sure. if you graph 2yr inflation expecations on top of crude they tracked right on top of each other on the way down, from June 2014 until early january. since then, however, crude has retraced only about 23% of the decline while inflation has come back about 80% of the way to where it was. oil surely could be a part, but definitely not all.

    • trondack says:

      What about lower GDP = higher federal deficit, causing increase in rates?

      • rc1269 says:

        we’re a long way from that prospect. just keep in mind, the last time the Federal government saw the possibility of a ratings downgrade treasuries *rallied*. the scenario you suggest, which would be a global aversion to UST due to weakening sovereign fundamentals, would ultimately drive UST real yields higher. excecpt, that’s not what’s going higher right now. UST are far from losing safe haven status, fwiw.

  24. imnotanewbietraderanymore says:

    April 28, 2015 at 9:41 am

    wave 1 at todays low, now wave 2 to 2115 followed by wave 3 down to 2040

  25. Lee X says:

    Just going to mention the floor pivots since they seem to be magnets in the last 48 hrs
    ESM just hit the S1 @ 2095.50 and S2 is @ 2079.75 right at the 2085 SPX pivot
    PP @2104 R1 @ 2119.75 R2 @2128.25
    That’s 3
    Have a nice day

  26. manunidhi21 says:

    Namaste Tony!

    WLSH will be around 30 % prmium when updated..
    higher than housing bubble of 9% but still lower than 59% tech bubble..

    i think we must call this bio-apple bubble 🙂

  27. Lee X says:

    I didn’t think the weather was that bad

  28. This market does not seem to me to be in impulse mode. Yet neither does it seem to want to correct too sharply. What does that make it in OEW terms? How about a standing wave?

  29. Hi,

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    • blackjak100 says:

      agree on the VIX and I think you can short 2130ish when we get there and here’s why. Assuming we are completing wave iii of an ED to complete P3 (as the EW site I’m trying out thinks but don’t do conventional hourly analysis), then what if a triangle ended at 2048 for the b wave of wave iii? Then you would have an ED forming for the c wave from 2048,,,,2112-2072-2126-2095-2134? I’m using 2134 because c = .618a. This fits with your VIX chart. It also fits with the unconventional EW analysis of the site I’m trying out which thinks 2122-2140 will start a correction to 2085 pivot minimum.

  30. stormchaser80 says:

    I called the end of the 2009 bull market, with a high in the SPX on Monday morning. I made this call Tuesday morning when I witnessed IBB went through my blue parabolic trend line. IBB represents the bubble, like real estate in 2007. I am 65% confident right now. I am watching several other signals that could increase my confidence if they confirm as well in future months.

    But its not just based on this. I have been sitting on 2 important observations. First the numerous Hindenburg Omens since Nov 2014. Second, DOW theory failure since Fall 2014.

    We are witnessing a shift in social mood, and the collapse could be scary at times. I think we just finished a “B” or “X” corrective move higher (yes to new all time highs), followed by a 5 wave move down to end the decade, that will feature some nice corrective waves higher between scary moves down. I think we make new lows below March 2009. Too many people called it a generational low in 2009. A new low should follow around the year 2020.


  31. gtoptions says:

    Thanks Tony
    Here you go CB, a young Janet Yellen. 🙂

  32. fishonhook says:

    Ladies and gentlemen do not fret too much over counts and patterns or check futures. Negative divergences reign over all the world’s indices , but that means nothing compared to what an old lass will say tomorrow. Nothing else matters for now. she is probably on the phone to Lloyd Blankfein asking him what to do.

    the question is which would shock us more a 30 point S and P rise or a 30 point drop?

    that’s how the CB have made us think.

    • robnaardin says:

      Screw that. Thinking is hard work. I just look at Fib YR1 and sing God save the CB…

      • CB says:

        haha…cool rebels , Rob! the best ones one can find.. 🙂 Was just reading about that album, all the controversy it sparked and Branson’s role at that time, and that hilarious court case. Amazing times…and amazing people..
        Branson can pull off a publicity stunt like nobody else. He’s a real tiger…amazing guy whose talent helped so many great musicians…just an amazing person

        • robnaardin says:

          What’s the name of the book, CB?

          • CB says:

            No book, Rob, Just googled the album.

          • robnaardin says:

            Insomnia? Doctor Rob says: Take 4 melatonin, have sex and call me in the morning

          • CB says:

            LOL.. Rob, ur trying to bring that wabbit back w/ your sex talk, right..?
            Here’s what Dr. CB says: if you have sex, you can skip the melatonin part 😉 and do not call Dr. Rob in the morning or it’ll cost you extra..

  33. ABchart says:

    Thanks Tony and everyone!

    SPX: http://hpics.li/6e2c651

  34. SPX started to climb in April without stocks backing it up

  35. Thanks Tony, I will let my chart do the talking. As I’ve mentioned before May historically is responsible for starting or setting up many of the market corrections and/or larger pullbacks. about 40-50% of time these corrections start +/-3 trading days from the 1st trading day in May. I’m still betting that history will have it’s way once again.


  36. stormchaser80 says:

    This morning, I made my first call of THE TOP from 2009 (at Monday’s high). I have a confidence of 65%. This is based on numerous Hindenburg Omens since late Nov 2014 (my calculations), Dow Theory Failure since the Fall of 2014, and now, our IBB bubble has broken its parabolic blue trend line https://www.tradingview.com/x/Ry5Fo4lC/.

    I am watching several other signals that would raise my confidence should they validate in the future.

  37. chicotheman says:

    Still tracking best as diagonal from 1820 in final leg. First alt would be like Tony’s bullish scenario.


  38. learner3078 says:

    Thanks Tony. On a separate note, the US dollar (DXY Index) has continued to downtrend and/or correct, where and when do you see it bottoming and is the trend for DXY still up over the medium term and till where. Thks.

  39. FOMC Wednesday indeed… Tricky day.
    Numbers at EOD:
    Buy above 2128.68 Stop 2103.47
    Sell below 2093.86 Stop 2115.61

    So, not much happening but minor mods expected as numbers trickle in tomorrow. GL

  40. fishonhook says:

    Dollar down big. Long bond hammered. Looks like the news of do-nothing-Fed has been shared with the people that matter.

    Wish they would just raise 0.25 and be done with it. There is twice as much private and corporate debt in the world as there was when we had the financial crisis of 2008! thanks CB for a job well done. And we thought Greenspan was an idiot (he was)

  41. torehund says:

    Thanks Tony.
    ..two counts, the second one an end pattern c1,c2,c3.

  42. sweinv says:

    Thx Tony,
    Seems like wave 3 is shorter than wave 1. Not so many points left in wave 5? Is it micro 1/minute 3/minor 3?

  43. fotis2 says:

    Thanks well ok looks fine from here on a mini V structure lets see if it can follow up.

  44. Lee X says:

    Thanks Tony

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