Tuesday update

SHORT TERM: gap down then rebound, DOW -37

Overnight the Asian markets lost 1.2%. Europe opened lower and lost 1.4%. US index futures were lower overnight then started to rebound heading into the open. The market gapped down to SPX 2094 at the open, then dropped to 2086 before starting to recover. The SPX had closed at 2105 yesterday. After the low the market rallied back to SPX 2101 by 11am, dipped to 2095 just past noon, then headed higher again. At 2pm the Budget surplus was reported higher: $157.bn v $106.9bn. At 2:30 the SPX hit 2105, then pulled back to close at 2099.

For the day the SPX/DOW were -0.25%, and the NDX/NAZ were -0.35%. Bonds gained 5 ticks, Crude rallied $1.25, Gold rose $9, and the USD was lower. Medium term support remains at the 2085 and 2070 pivots, with resistance at the 2131 and 2198 pivots. Tomorrow: Retail sales and Export/Import prices at 8:30, then Business inventories at 10am.

The market gapped down at the open today, traded down to the 2085 pivot, then reversed back up to close the gap at 2105, before ending the day at 2099. Despite the rally, today was the second negative close in a row. Yesterday the market closed at the low of the day. Today it closed under SPX 2100. While the market can still challenge the OEW 2131 pivot to complete the diagonal. It could just as easily head lower from here as well. The choppy market continues. Short term support remains at the 2085 and 2070 pivots, with resistance at SPX 2120 and the 2131 pivot. Short term momentum nearly made it back to neutral after today’s extreme oversold reading. Best to your trading this day traders market!

MEDIUM TERM: still an uptrend

LONG TERM: bull market

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

About tony caldaro

This entry was posted in Updates and tagged , , , . Bookmark the permalink.

84 Responses to Tuesday update

  1. CB says:

    hmm. did someone just buy that sharp drop in the futures? 😉

  2. johnnymagicmoney says:

    i am not as versed on the technicals as a lot of you guys but correct me if I am wrong but……….

    just a couple weeks ago the RUT had an ED and it then broke out of its wedge to the downside pretty convincingly. Now the SP500 seems to be doing the same which would explain the super duper tight range today since its at the end of its ED

    Is it that simple??? Seems like we would see a sharp move down soon


  3. GYN LAB says:

    c=a for ii of c should be around 2090

  4. JeffMilano says:

    Today wastrue ket was going. Well we all got the que which direction. NOWHERE!

  5. johnnymagicmoney says:

    if we are in a recession – FED is there so bid up
    if we are in a depression – FED is there so bid up
    if a warhead is dropped on NY – FED is there so bid up
    if FED hikes rates it means things are amazing – bid up
    if inflation rears its ugly head it means we dont have to worry about deflation – bid up
    if deflation rears its ugly head we dont have to worry about inflationits ugly head then FED is there so bid up
    if coporate earnings blow its all because of the weather so bid up
    if China is a complete and utter farce it means they will do more stimuls so bid up
    if Europe has .3% growth it means all is solved so bid up
    If Europe slips back into recesssion or has more deflation it mean more QE so bid up
    If we have two handles down on the S&P it is a correction and the best opportunity you will see in a long time because the market never goes down and two handles is a lot! SO BID UP!!

    such utter delusion its amazing

  6. berniebaruch says:

    The bears are such losers here that they bring it back to break even and just disappear. Can’t say that I blame them as some of the most beautiful setups in the past year have been bought and bullied up for no apparent reason. Playing small ball.

  7. fotis2 says:

    Looks like DB on 15min confirm target 2109

  8. U.S. companies announced $141 billion of new stock buyback programs last month, the highest level ever for new buyback programs during a single month and an increase of 121% from April 2014, according to a count by Birinyi Associates Inc……..But with $50 billion a piece by Apple Inc. and General Electric Corp (71% of all authorized buyback funds). Can they both keep Mr. Market levitated?

  9. $$$NEWBIE$$$ says:

    Darkeness, what’s your position and thoughts on silver?

  10. rc1269 says:

    hope everybody took what the market gave them!

  11. gtoptions says:

    Thanks Tony
    SPY ~ Reversal @ .786 ~ Last Chance Bullish Reversal Support Levels

  12. $$$NEWBIE$$$ says:

    Is everyone bullish yet and expecting 2150-2175. If so than they can pull the rug and get this correction underway.

  13. Dax looks heavy today…Like 2 Melissa McCarthys jumping on a trampoline at the same time.Economic news lousy both here and Europe.We get an interest rate bounce to equities but I don t trust it a bit.Waiting for our correction to get going.Good luck all.

  14. fotis2 says:

    Support 2105 neckline of IHS lets see.

  15. llerias7 says:

    Precious Metals On The Move!

  16. berniebaruch says:

    This needs to be a statement day for the bears. Good luck newby

    • blackjak100 says:

      Looks like i of c completed at 2110 as I can count 9 waves up on 5 min chart – pull back to 2095-2100 expected now.

      • zepfan123 says:

        In other words..nothing happening still.

        • blackjak100 says:

          Not yet, but should get a green close IMO.

          • I will take the other side and say we close down big.

          • zepfan123 says:

            Thanks for your updated opinion. And the way the market is acting these days..a green close is ALWAYS possible. We could be down 300 DJIA points…and a green close is possible. 🙂 Loves staying close to that SPX 2100 area.

          • stephenk1980 says:

            Red close if we break 2096 decisively. I exited my short when we bounced off the trendline at that level, but will re-enter if we drop below. Not enough confidence to go long at the bounce, although currently it looks like I should have.

          • blackjak100 says:

            looks like ii of c still continuing so may not close red….looks like it wants 2095ish first. wave i lasted 7 hrs so wave ii is on it’s 6th hr so nothing surprising yet.

          • blackjak100 says:

            may not close green I meant

      • fotis2 says:

        Got stopped out of long for a solid loss 😉 looks like bulls have to close above 2100 at least. I noticed $/yen took a nosedive on retail news but looks like support on weekly S1 taken a small long hoping for back to pivot past 2 weeks the forex guys been going long S1 weekly maybe work this time too.

  17. That’s more like it. Dow up 50 points. Looked like it was going to open flat. With a horrible retail sales number and a 1 st half of the year GDP of 1 percent I couldn’t figure out why. No interest rate hike this year. Yea.

    • fishonhook says:

      Astro- have you ever looked at your success? failure rate? Got any reading on that?

      Not trying to be sarcy here, all opinions welcome. But I see a big red arrow down for the Nikkei and it went the other way.

  18. Listening to the Financial Symphony – What’s next?

    This blog does a great job of reading the sheet music for each instrument. It sometimes seems like each asset class got its sheet from the same source as Tony Caldaro reads – and Tony puts his out his score before we hear the tune played. It is a great achievement!

    GEI is now trying to get an understanding of the whole symphony. How do all these different instruments (asset classes) create the Big Picture, which we hear as the financial symphony – I mean the music played by our global economy. There are some great charts on the link here:
    The overall picture looks a bit different picture than I am seeing in Tony’s work. Have we just seen a major Turn in dollar denominated assets? A peak In bonds?, and a peak in the USD, and maybe now we are seeing one in US stocks? It seems possible. Take a look at some charts using a little-appreciated Ratio: Gold-to-Bonds, it is a ratio between two major Safe Haven assets, which made an important upturn on March 20th. Do you recall that date? That’s when we had a rare event, a Total Solar Eclipse. Many other major markets turned around the same time. For me, the turn that was synchronized with an eclipse increases my confidence that The Big Turn may be behind us, rather than ahead. Might it be time to get excited about precious metals once again? If the pieces of the puzzle continue to slide into place, I would say, Yes !

  19. stephenk1980 says:

    I don’t do much candlestick trading, but yesterdays doji is literally unprecedented – it must be retraced at least partially unless it really is a new occurance. Scrolled back years on the daily to try and find another like it and couldn’t.

    Futures are now at pretty much the highest reversal levels possible, so shorting a bit here as a last short attempt. Too late to go long and a good short entry if new highs are not going to be made.

    IHS and shoulder people have shown def looks plausible though, so I guess we’ll see.

  20. Lot of gap filling accomplished by Tuesday’s decline in the US & Europe. The small 4 degree correction went much farther down than I anticipated. Yet the decline still can’t be ruled out as being a 4. However the waters have been muddied to the degree that other possible scenarios have to come under consideration. The bullish case is the rally from last week’s lows was actually 5 waves and this subsequent pullback 3 waves. The bearish scenario is the market will simply continue lower and take out last week’s LTL lows. Right now the futures have marched back up to match the highs achieved late in the cash session. This is a fairly critical level on the short term charts. On the DAX/CAC in particular this presently passes as a 3-3-5 flat upward correction which would be very near term bearish at least on these indices and, if it plays out, would mean yesterday’s lows would have to be taken out to the downside on the DAX/CAC. INDU/SPX have a different look but will likely follow if Europe opens up weak. The Aussie indices have moved further away from the dreaded 4th wave overlap so, for the time being, I view this as positive for global equities in general. All-in-all more bird watching required.

    • argento1 says:

      Thanks Tj2014, find your views very useful!The emerging markets also concluded with a major 4th wave and now commenced on the last 5th wave up…it supports your view on bullish equities till end of May but then the bull party should end!Russell-2000,NDX,SOX,DJT, consumer discretionary held their key support levels…for now!But the rising yields and USD becoming a concern!

  21. Everyone keeps saying this market is about to crash, what a load of crap.

    This chart says otherwise ==> http://www.bit.ly/1fMcakI

    1) The S&P 500 has repeatedly failed to break out decisively to new highs. This is making many traders a bit crazy, but a sideways movement within a narrow range is not a bad thing in the environment. Lowry’s, the oldest technical analysis service in the United States, said in a note to clients “the ability to consolidate gains by trading sideways is generally considered a sign of longer term strength.”

    All of yield curve-steepening is leading to some speculation that regional banks will benefit; the SPDR Regional Banking ETF closed at its highest levels since March 2014.

    And higher yields in developed markets attracts funds from emerging market currencies.

  22. torehund says:


    ..interesting chart where commodity-price is adjusted for inflation from 1932 until now.

  23. tradeanimal says:

    Seeing the possible beginning of an inverse head and shoulder pattern on the 60 minute chart.

  24. gtoptions says:

    Thanks Tony
    SPX ~ 3 failures at 2120, now with a series of LH’s & LL’s.
    Failed ‘e’? Drop below 207 will give us the answer.

  25. ABchart says:

    Thanks Tony and BJ!

    Tonight there is a rumor in France that French GDP tomorrow will be + 0.6% instead of + 0.4% and German GDP will be at +0.7% instead of + 0.5%.
    If it is confirmed, it could support the trend tomorrow (+ 1%?)
    We’ll see. Good night to you all!

    • jobjas, ES is running above your wave 2 of C. That is, your wave counting should be invalidated now. So, do you want to update your wave counting? Or review if it is totally wrong?

      • jobjas says:

        This was my count today and traded that count . Tomorrow will re-evaluate after overnight action – the bias remains to the downside

Comments are closed.