Wednesday update

SHORT TERM: gap up opening reversed, DOW -86

Overnight the Asian markets open lost 1.5%. Europe opened higher and gained 0.2%. US index futures were higher overnight. At 8:30 the ADP index was reported lower: 169k v 189k, then FED chair Yellen’s speech was released: The market gapped up at the open to SPX 2097, ticked up to 2098, and then started to pullback. Just after 10am the SPX hit 2077. Then after a rally to SPX 2089 just before 11am, the market headed lower again. Around 2:30 the SPX hit 2068, and then started to rally. Heading into the close the SPX hit 2080 and closed there.

For the day the SPX/DOW were -0.45%, and the NDX/NAZ were -0.55%. Bonds lost 11 ticks, Crude gained 25 cents, Gold slipped $1, and the USD was lower. Medium term support drops to the 2070 and 2019 pivots, with resistance at the 2085 and 2131 pivots. Tomorrow: weekly Jobless claims, then Consumer credit at 3pm.

The market gapped up at the open today, hit SPX 2098, and then the market was immediately sold off. The pullback that followed took the SPX to its lowest level since the first few days of April. During the pullback the market broke below the rising lower trend line since late-March on the hourly chart, and mid-March on the daily chart. It continues to look like a correction is underway. Should the SPX confirm at downtrend we will upgrade the SPX 2120 high to Intermediate wave i, and this lengthy correction would be Intermediate wave ii. Initial support would be around SPX 2040, then the 2019 pivot. Should the market break below the OEW 1973 pivot, then we are probably looking at a much steeper Primary IV correction. For now we will just deal with the smaller correction and see what unfolds. Short term support is at the 2070 pivot and SPX 2040, with resistance at the 2085 pivot and the SPX 2120’s. Short term momentum put in a positive divergence at today’s lows ad ended the day rising toward neutral. Best to your trading!

MEDIUM TERM: downtrend likely underway

LONG TERM: bull market


About tony caldaro

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163 Responses to Wednesday update

  1. Page says:

    I think we will see SPX 2120+ soon but not sure about new highs.
    Oil is consolidating before next leg higher.

  2. Peter Sliney says:

    You have a point Tony. ☺

  3. Peter Sliney says:

    The market reminds me of the Mayweather – Pacquiao fight. I keep thinking something big is going to happen and nothing does. At the end of the day the brokers make money.

  4. sweinv says:

    DJ Tran +1,50%

  5. stephenk1980 says:

    SPX has just broken back into a channel it dropped out of yesterday, whilst dow has just bounced off a support resistance. Both are in good fib reversal zones. IMO it’s now or never. Either dow bounce continues and succeeds and SPX was a false breakout and dips back below the channel, or dow breaks through as well and my bearish thoughts are over for now.

  6. blackjak100 says:

    Just a heads up if 2095 is breached, it solidifies a 3 wave decline 2126-2068 as it would overlap a potential wave i.

    • llerias7 says:

      A 61,8% retrace from recent fall points to 2100…should see it tomorrow b4 a steep plunge…

      • blackjak100 says:

        Then it can only be a leading diagonal from 2126. It would need to be a zigzag and probably would hit 2105-2110ish before reversing.

        • $$$NEWBIE$$$ says:

          either way in bearish case reverse from here or 2105 still we going down to 2015-2000 on s&p

          • JeffMilano says:

            Newbie, that was a good BuddyGlove bullish setup today and Yesterday. Cannot be so dogmatic.

          • blackjak100 says:

            Yes, we know newbie but I think you will be wrong. I think 4th wave can be eliminated since its retraced about 45% of 2121-2068 already.

          • HW says:

            BJ, how about ED for this C wave from 2126? If it rolls over here then could be ED in play..

          • zepfan123 says:

            We’ve gotta get a close below SPX 2070 by next Tuesday to get me excited about downside possibilities. Of course longs want the SPX well above 2100 once and for the stalemate continues.

          • blackjak100 says:

            I assume you mean from 2121 which ended b wave? High unlikely because 2121-2068 looks like a clear 5 wave structure. If it was an ED, must be 3.

          • HW says:

            No i mean from 2126:
            2126-2078 w1
            2078-2121 w2
            2121-2068 w3
            2068-2093? w4
            so basically a big ED of c wave to end near the 2040 support (maybe 5 more down to touch 2035)

          • $$$NEWBIE$$$ says:

            my primary count….
            wave 1 at 2077
            wave 2 at 2120
            In progress wave 3 at 2030

            yesterday wave 1 at 2067
            wave 2 at 2095- 2105
            wave 3 at 2040

            either way same outcome 2015-2000 coming

          • blackjak100 says:

            HW, then you are assuming b wave ended at 2126. Where did a & b wave start then?

          • HW says:

            As per Tony’s hourly chart…

          • blackjak100 says:

            It would have to be an expanding ED and they are rare. I wouldn’t bank on it but possible.

  7. next stop 2087-2090 then drop to 2035-2025

  8. stephenk1980 says:

    Short Tuesday’s close; SL Wednesday’s high.

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