Wednesday update

SHORT TERM: gap up opening, DOW +64

Overnight the Asian markets lost 0.3%. Europe opened higher and gained 0.6%. US index futures were higher overnight as well. At 8:15 the ADP was reported higher: 201k v 169k, then at 8:30 the Trade deficit was reported lower: -$40.9bn v -$51.4bn. The market gapped up at the open to SPX 2117, but immediately pulled back. The SPX had closed at 2110 yesterday. In the opening minutes the SPX closed the gap hitting 2110, and then started to rally. At 10am ISM services were reported lower: 55.7 v 57.8. By 10:30 the SPX had hit 2122, and then started to pullback. By 12:30 the SPX had dropped to 2111, then rallied ahead of and into the FED’s Beige book, hitting 2118 around 2:30: After that a pullback into a SPX 2114 close.

For the day the SPX/DOW were +0.30%, and the NDX/NAZ were +0.35%. Bonds lost 25 ticks, Crude slid $1.45, Gold dropped $8, and the USD was lower too. Medium term support remains at the 2085 and 2070 pivots, with resistance at the 2131 and 2198 pivots. Tomorrow: weekly Jobless claims at 8:30.

The market had its second gap up opening this week, and both gaps were closed in the opening minutes of trading. After today’s gap was closed at SPX 2110 the market rallied to 2122, above yesterday’s 2118 high. This suggests the current advance from Tuesday’s SPX 2099 low is an a-b-c rally: 2118-2109-2122. This rally stopped right in the SPX 2117/2122 resistance area before pulling back for the rest of the day. This morning we placed a Minor a at the recent SPX 2099 low, which completed a complex flat. This rally should be a three wave Minor b. When concluded, a three wave Minor c to the downside should follow. Short term support remains at SPX 2096/2099 and the 2085 pivot, with resistance at SPX 2117/2122 and the 2131 pivot. Short term momentum hit overbought this morning before heading back to neutral at the close. Best to your trading!

MEDIUM TERM: uptrend appears to be rolling over

LONG TERM: bull market


About tony caldaro

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144 Responses to Wednesday update

  1. stmro says:

    Massive volume spike there into the close. I’m guessing some short covering.

    That brought us close enough to the 50d MA, that i’d say it hasn’t been decisively broken. Need confirmation down move tomorrow or we’ll just rubber band back up to 2120 again.

    • zepfan123 says:

      Could be..but we had several here who thought today would be a gap up and go today based on yesterdays close. The next 2 trading days are true wild cards.

      • stmro says:

        I don’t know how anyone can be making confident directional calls given the last 5 months we’ve had. We really need to see a decisive break of the range and then to hold that break on a retest.

        Making a big directional bet without seeing those two things happen first is just not worth it from a risk perspective.

        • zepfan123 says:

          I’m sure they weren’t confident. I’m in a couple of short trades(SPX & SPY) myself here..and these put in the gambling category.- As far as my long term portfolio goes..i’m not doing much with it. If we keep going up..I’ll just keep raising loose stops on most of it.- if we seem be getting into a corrective phase..i’ll start liquidating in 10% increments every 100 S&P point drop or so. I have no idea where we’ll be in 2 years from now though…as there is a good case for both a bull and bear market scenario.

  2. zepfan123 says:

    Well tomorrow and Mondays action could be interesting. If we drop good next week I’ll bet we’ve seen the highs for a while…which would not be a big deal in the big picture. To drop 5 or 10% here would be perfectly normal even if we’re still in a bull market for a while.

  3. $$$NEWBIE$$$ says:

    I think we may close 2100-2105 and all hell breaks loose tomorrow

  4. Peter Sliney says:

    This should be about the time Yellen wakes up from her afternoon nap and presses the buy button.
    Time to tighten stops.

  5. torehund says:

    Nothing but the truth, or ? That boy looks credible, more so than the Germanwings girlfriend. Anything goes in this farce of a cold war, but the Nato alliance feels more “rigged” than the counterpart this time around, opinions ?

  6. Page says:

    Oil rally tomorrow?

  7. stmro says:

    Please can we not have an end of day rally back into the range? Is that too much to ask for?

  8. mjtplayer says:

    The latest on Greece is that they will bundle all 4 IMF payments, due June 5th – 19th, into 1 payment on June 30th.

    Greece may have the money to make tomorrow’s payment, but they don’t have the money to make all 4 payments. By bundling all 4 payments, they’re putting pressure on the EU to release the last 7.2b Euro tranche of the bailout fund. Without this last tranche being released, Greece cannot make this payment – the game of debt chicken deadline of June 30th. Late June is also when the Supreme court is scheduled to rule on Obamacare subsidies, so late June looks to be an interesting time.

    Assuming they get the last tranche, Greece will be able to meet it’s debt obligations in June, July and perhaps Aug – then what? What happens in Sept with an empty bailout fund and no more emergency cash? Answer: default – unless more bailout money is somehow made available.

    • Makes sense. The idea is for EU to come up with the money and IMF will accept Greece’s suggestion for bundling, even though everybody knows that they do not have a chance in hell to come up with the money.

    • Funny, Lagarde says they/Greece will make the payment tomorrow, so then what’s left to bundle? the next 3 payments? Total rumor war…

    • ABchart says:

      In september: Tony’s P4 🙂

    • magnus1234 says:

      Enough with the cheating comunists in Greece. Either you pay your debts or you quit EU. The pbm is that the poor people in Greece doesnt want that. Go for a new election and the “bad” coalition between fascist and comunists in Greece will be over.

  9. EL MATADOR (@LoLo_MATADOR) says:
    June 2, 2015 at 8:41 am
    2085 pivot here we come

    EL MATADOR (@LoLo_MATADOR) says:
    June 2, 2015 at 9:06 am
    very tough spot here….
    Bearish pattern targets 2085 pivot zone
    Bullish pattern (triangle b wave from 2135 to today’s lod) where;
    triangle breakout measured moved = 2140ish
    or c = a = 2165

    EL MATADOR (@LoLo_MATADOR) says:
    June 2, 2015 at 11:36 am
    If today’s rally starts to splutter and zigzags in wedgie like behavior without making much upward progress then it possible we are witnessing a potential for an inverted b wave

    EL MATADOR (@LoLo_MATADOR) says:
    June 2, 2015 at 12:13 pm
    Rally from LOD definitely wedging which could be wave a and now setting up wave b pullback for say a RS to say 2105-ish of an IHS set-up.

    So let see updated chart on how it played out and what coming next

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