Tuesday update

SHORT TERM: market tries to rebound, DOW -3

Overnight the Asian markets lost 1.1%. Europe opened lower and lost 0.4%. US index futures were lower overnight, and the market opened one point below yesterday’s SPX 2079 close. In the first few minutes the market bounced to SPX 2083, then dropped to 2073 by 10am. At 10am Wholesale inventories were reported higher: +0.4% v +0.1%. The market then bounced back to SPX 2078, before heading down to 2072 by 10:30. After that low the market started to rally. Around 1pm the SPX hit 2086, dipped to 2078 by 3:30, then bounced to 2080 to end the day.

For the day the SPX/DOW were mixed, and the NDX/NAZ were -0.10%. Bonds lost 12 ticks, Crude rallied $1.75, Gold added $2, and the USD was lower. Medium term support remains at the 2070 and 2019 pivots, with resistance at the 2085 and 2131 pivots. Tomorrow: the Budget deficit at 2pm.

The market opened slightly lower today, bounced, made a lower low, bounced again, then hit SPX 2072 before starting to rally. Coming off that low there was a positive short term divergence, and we labeled SPX 2072 with a tentative Minute wave a on the hourly chart. There is a clear five down from Minor b’s SPX 2122: 2102-2113-2086-2101-2072. The rally that followed made it back to SPX 2086, which was the previous low. So until this market can rally higher and produce an overlap, we can only speculate Minute wave b is underway. Short term support is at the 2070 pivot and SPX 2058, with resistance at the 2085 pivot and SPX 2099. Short term momentum bounced to neutral after the positive divergence. Best to your trading!

MEDIUM TERM: downtrend

LONG TERM: bull market

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

About tony caldaro

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143 Responses to Tuesday update

  1. zepfan123 says:

    i think we’re going to stay in this long and unpredictably irritating little range for now. 2130.82 is the SPX all time high and we’re going out at 2106(ish) here. I’m going to say NO NEW HIGHS for a while.

    BUY U$ 72.70
    STOP GAIN U$ 75,09
    STOP LOSS U$ 72,14


  3. Peter Sliney says:

    With the $VIX looking the way it does it could be weeks before any discernable direction is identified. More sideways to come. IMO

    • asaraniti says:


      from Zerohedge. there is a chart from Bloomberg but can’t copy/paste

      While we are well aware of the decay-ridden denigration of VXX (the VIX ETF), today’s plunge (on heavy volume) nears a new record low for the NYFed’s best friend. With 51.695 million shares short (and just 60.5 million shares oustanding) according to Bloomberg data, one can only imagine what happens if we get a true ‘event’ that is allowed to happen.

      VXX nears record lows… 18.50 vs 18.45 lows on May 22nd

    • zepfan123 says:

      I agree with that.

  4. berniebaruch says:

    UVXY trading under 38 (7.50)…Loading up the truck again?
    Must be a big truck.

  5. mjtplayer says:

    The VIX smash has been incredible, from yesterday’s high to today’s low (just 24hrs) the spot VIX has been smashed by 280bps – that’s amazing. Very complacent market, absolutely no fear whatsoever. I thought the VIX would hold-up around 14, we’re now testing the 13 area.

    Selling VXX June 26th 19.5 puts right here for $1.50

  6. Learnedyourlesson, just read the second part of your post. Your logic is flawed: why does Tony charge for his tutoring? Because it’s of value. Why wouldn’t he/I/anyone? In most cases I would agree with your general sentiment but go back to my recent comments, e.g., on the night of 1/15/15 I posted here practically BEGGING people to go long based on my indicator’s Major buy signal generated at the close that day, overnight futures were -100 but I said it would rally immediately, I think Nardobeme was about the only other one who saw that coming. Then see last night’s post – what is that kind of consistent foreknowledge? Have you seen the DIA/SPY call options today? I have. And probably most others here. Just for the record, I’ve had people asking me for months to start a service and still haven’t gotten around to it; when I do I’m going to mark you down as a maybe, lol. GL

    • reddragonleo says:

      I’ve had my blog now since 2009 but I just don’t feel like posting that much anymore. I do a new post now maybe once a month and then just comment on that post daily what I see happening in the market each day. I think you’ll find it’s a lot of work to create new posts every day and you might just decide that it’s not worth your time?

      But I enjoy reading your forecasts as well as many others that are here… so do continue posting please as I will read them at least. P.S. Feel free to contact me directly if you’d like to say more or even do a guest post on my blog? Maybe it will get you a small taste of what it’s like to make posts? red (at) reddragonleo (dot) com

      • I will likely just post when my indicator gives a signal, that’s where the money/benefit is. Thanks for the offer, I might take you up on that.

        • reddragonleo says:

          Sure thing… no hurry and no pressure to say yes. Just an offer. Doesn’t matter to me either way. However, you should email me… I might have some info to assist you and your analysis.

      • torehund says:

        Agree Leo, sometimes the market enters a quiet period when one just have to wait for a move. And in that waiting time it isn’t necessary to micro-master it so closely. And a blog that is free, is also free of obligations, so one may choose to work when it is necessary.

    • Maybe not…I learnedmylesson for a few reasons(Fortunately one of those lessons didn t cost me much money in 1987).Paying someone to tell me what MIGHT be right(and just as easily could be wrong) is not in my future.There are people who might want to do it but my advice to them is figure it out for yourself.

      • Your call, your gain or losss entirely, you must do what you feel is best for you. Your :statement doesn’t line up with reality though – go nack and read my past real-time posts and you’ll see that it’s far; far, far from the 50/50 odds you connote. If I ever come across someone who is right even 75% of the time I would subscribe in a heartbeat if only to use in unison with my own research – if sommeone with that track record and my indicator agree on a given day, I’ll go 8x versus 4x like last night… get it? It’s all about the math. I wish you well, keep posting.

        • reddragonleo says:

          Personally, I like the fact that your system uses math to figure it out as I’m positive we are playing in a market run by a super computer (which I call SkyNet), and understanding it requires thinking like a computer. Since it’s programmed to mathematically move the market one must use math to compete.

      • reddragonleo says:

        I always do my own analysis… but look at what others post as well. Why? Simple… I’m only one man and can’t see everything, I pick up at little here and a little there, which assists me (and/or confirms) my own forecasts. One should always do their own analysis as every trader is different playing different time frames and instruments.

  7. Gary Lewis says:

    Looking for a weekly SPX close above 2126 either this week or the next. If we fail to take out that level, I believe that a major down move will begin. This could be the last gasp! (I have been wrong before on this😉 ) We’ve already failed though on the three month test of the high, so it seems that the market is getting exhausted.

    • zepfan123 says:

      Well the ATH S&P close was on May 21st at 2130.82.- If a day like this isn’t the start of a move to a new ATH very,very soon then all todays rally is… is a move back to the middle of this frustrating little range we’ve been in for 3 or 4 months.- If were going to a new all time high..then we ought to be close to SPX 2130 by Friday I’d think. Should be easy peazy if the bull if finally back on the track.On the other hand..it this is back anywhere near 2080 in the next few trading days..we pretty much know we’re not going anywhere near new highs for a while. Probably at least through the summer.

      • $$$NEWBIE$$$ says:

        wave 2 coming at 2115 then Kaboom wave 3 Down.

        • jon3385 says:

          No offense but you’re starting to sound like a broken record

          Last post of the day, take care all

          • $$$NEWBIE$$$ says:

            Jon3385, Should I not post about a very feasible possibility? Wave 2 at 2115 is a 77% retrace and could happen.

            • jon3385 says:

              Post all you want, it just loses its impact when it gets repeated over and over – every up day is the precursor to a “kaboom”

              At least get the “nerdspeak” right and call me a Padawan🙂

              I’m just giving you a hard time anyways

        • zepfan123 says:

          Ok Newb..here is a little piece I saw on Marketwatch.com a little while ago, written at 4AM EST today by a guy whos thinking we could get a 4000 point drop on the Dow soon. With the Dow up 250 pts right out of the gate today, he probably wishes he could have waited at least one more day to publish it. But I thought of you when I saw it. And who knows..if we don’t go any higher than SPX 2110 here, and drop back below 2080 again soon..maybe he’ll be “sort of right” .-Even a 1000 pt drop on the Dow below 17,000 would be considered a disaster by many right now .The headline and link are below.
          Get ready for a 4,000-point Dow drop-
          Slumping bond market is ominous for U.S. stocks
          Published: June 10, 2015 6:01 a.m. ET
          By Mark D Cook


  8. pooch77 says:

    This what sucks about 401k,went 300% long in 2 roth accounts and trading account pre market.Also went long 401k but buying the close price.Of course thisis the turn you want to see to go long

    • jon3385 says:

      IMO – unless you are high income and need to game taxable income, the only real reason to do a 401k is to get the free money in the form of an employer match – if you consider the free employer money as a gain (a little silly I know), the “returns” on a 401k are fantastic even in a lackluster set of funds

  9. jon3385 says:

    Thanks Tony for your insight! I’m interested to see what the next few days bring…whether it’s higher highs or back down to the bottom of the channel a few % below where we’re at now.

    I’m just starting to learn about waves and other technicals. I’m still young, only 30, and have been focused on just building wealth at this point. Going back to May 2014, I’ve been plunking $600 twice per month into VTI on the 15th and 30th without fail.

    Keep up the good work, Tony, and the other commenters as well! I’m learning a lot from you guys and appreciate it…though I could do without the gifs, can go to places like Reddit for that🙂

    • jon3385 says:

      PS – that’s outside of the retirement stuff, so post-tax money that I don’t plan on touching for a minimum of 5 years and at that point, even if I do (for something like a downpayment) will continue the deposits in perpetuity – don’t have a 401k now, but have been doing backdoor ROTH conversions. Just a lowly CPA trying to retire early🙂

      And also trying to buy a house, paying 3k/month for a 2BR is killing me!!

      As soon as VTI hits 109.89, every since buy going back to 5/15/14 will be in the green!

    • tony caldaro says:

      welcome and good luck Jon

  10. Hey…I called this 4 days ago when we went under the 50dma.Why don t you guys want to give ME your money…lol. (I don t want it).Stick with Mr C and Fiona among others…keep it simple.Watch out for guys that pat their own backs and try to publicize it.If he was doing 50k every trade he wouldn t need your money for ANY reason.Think about it.

  11. 56rambler says:

    Mr. Caldaro,

    Is there any significance to the fact that today’s rally has overlapped the minor a (2099)? does that change the wave count? or are you still thinking that we are in minute b of minor c?


  12. reddragonleo says:

    financialreportsblog… does your model have a time frame on this rally of 500-1000 DOW points?

    • It’s 100% price-based (not time-based) but usually gets there in a week or two, very quickly. I prefer to buy half 2-weeks-out options (DIA, SPY or SDS) and half one-month-out. See the Buy signals of 12/16/14 and 1/15/15 for good/recent examples.

      • reddragonleo says:

        Did it catch the 10/15/2014 low of 1820? That one was nuts! It just went up forever and wouldn’t let anyone out that was short. Anyway, looks like your model could put us at a new high late next week for quad witching opex, which is also a week with another FOMC meeting.

        • You mean 10/16/14? It did indeed, same Major signal as yesterday’s. Ditto the Sell of 1/8/15, was good for 600 (closing basis, which I use; 650 intraday) points in one week then Sell signal on 1/15/15 took the market back up. The Buy of 3/26 and ensuing Sell of 3/30/15 were both good for 300 points in just 2 days then reversed so 500-1000 is average but not guaranteed, I find it best to just trade each Signal and take profits along the way (options almost always get 200-400% gain within a week).

  13. mjtplayer says:

    Tony – just curious, why do you have minor A & B labeled from SPX 2,099 – 2,122? This is the smallest rally since the downtrend. From yesterday’s low, this rally clearly looks more appropriate for a minor B wave. That’s how I’ve been labeling anyway. From about 2,009 thus far, C=A down at SPX 2,045 or so.


  14. fotis2 says:

    I was expecting a bit of a rally but this looks like something else.News pop?

    • ABchart says:

      Germany offering Greece a staggered deal on aid – GERMANY SAID TO CONSIDER SETTLING FOR ONE GREEK REFORM UP FRONT

      • fotis2 says:

        Thanks AB one of those again just now they change their minds and down it goes I hate news spikes.

        • Don’t worry Fotis, not a news spike. If it were, how did I know YESTERDAY that it would have “an immediate/sustained rally”? The news follows the signals, not the other way around. The financial media’s (CNBC, Bloomberg, et al) misinformed headlines notwithstanding (when they don’t know WHY the market is moving, they have to try to attribute it to something so they don’t look misinformed; not infrequently, you will see a headline like “market rises on oil price” in the morning then “market falls on oil price” in the afternoon after market reversed, funny).

  15. is there a greek deal/rumor news hitting the airwaves?

  16. OK, Im short at 2100 Stop at 2111 lets see what happens

  17. gtoptions says:

    Thanks Tony
    SPY ~ WPP @ 210.47 ~ 2.618 ext. @ 210.47
    Nice work all.

    • gtoptions says:

      My non-proprietary daily 13/34 CCI still signals test of the recent low.😉

      • GTO, I agree that the 2072 low will be retested and eventually taken out. IMO this rally is just a gap filler rally but what i’m not sure of is how many of the 3 gap will it fill? my guess is one or two of the three gaps will be filled.

        • CB says:

          Thanks guys. You can make a lot of $$ just filling all those gaps🙂 …this market is pretty amazing.. Thanks Tony. GL everyone.

  18. Same pattern as the last few dips below the 50d.Four day max under, then a rally to (barely) new highs.Sell again and repeat.We re in a 4% wide slowly uptrending channel that looks like the way to make money right now.See you at 2140.

  19. Measured move of the mini-IHS on 5 min chart I mentioned yday is 2099 (+/-4); hence is a great spot for forming the Neckline of the next bigger degree IHS and pullback for it’s RS to say 2090 (+/-5) then back up for some gap filling

  20. Said that I’m expecting 500-1000 Dow points for the Buy signal generated at yesterday’s close, already have 150 points in the first 25 minutes, cha-ching! I love this game.

  21. UUP has filled the last lower gap at 24.80….down from last weeks 25.80.Looks like stocks want to go up 250 today and 20+ on the S&P to get above the 50d.Will Gold go along for the ride or give it all back by the closing bell? Questions to be answered in this episode of “As the Stock Market Churns”…lol.

  22. stmro says:

    Well bouncing as expected, but that’s a long way to go in 30 mins.

    IMO it’s just the heavyweights running some stops and we’ll top out around 2100 before continuing down. Might even happen today. Downtrends are characterized by morning highs that get faded.

    • I was expecting 10 to 12 above the weekly close last week, but on Monday or Tuesday. Same idea though, so maybe a C wave into a lower low from a bit higher.

      Not married to the 10 or 12, as they were just the last three post-NFP week highs when we had down pre-NFP weeks and down NFP weeks together (only 3 previous I see in the past 3.5 years).

      Anyway, that would put us just above 2100, which a bunch of folks are watching for a bunch of different reasons I guess.

  23. The interesting part about this, and TC has alluded to this as well; this has got to be the most hated bull market, in like 4-EVAH. Though anything can happen, I’m starting to get comfortable with the notion that this can continue for quite some time. Not betting the proverbial farm, and still safe in strangle at this point, but really in awe of the resilience demonstrated thus far.

    • tony caldaro says:

      Ralph Acampora recently stated that too

    • torehund says:

      Drew how will the public react when they find out its a 666-Ram ? It sure has horns comparable to a bull and even more so comparing body length to horn length.
      Bulls reign in prosperous times, the Goat however thrives in war-economics, supply destrucions/supply flooding, ala Saudi-Arabia, currency shakeups/government intervention, and finally it is happy to ferment on the utterly agitated pessimism that we all find ourselves in right now🙂

      • torehund; there are so many moving parts that this is way beyond me. Probably why I just go with my gut, and with everyone being so negative (some with good reason though the markets reign supreme), I say let it ride… 🙂

  24. ABchart says:

    ES daily update with slight shift downwards: http://hpics.li/f5f406c

  25. stmro says:

    Perhaps a professional gap over resistance today. Let’s see if it holds the first hour.

  26. mjtplayer says:

    Don’t know if anyone on this blog is long SHLD, but get out if you are. Today’s candle was devastating, breaking the uptrend line from the Sept/Oct lows and late Jan lows. Worse, today’s candle confirms a rare “3 black crows” sell signal. Get out if you’re long, sell everything.

    I stated about a year ago this company will go BK, I still stand by that call. They will stick around for a while, possibly several years until the financing options run out; but the path towards BK is clear as day.

  27. I went from 90% cash to 70% cash 30% stocks…if we get above the 50d, I ll add more , thinking we go to 2140.The last few dips below the 50d have resulted in 70pt gains 3 times.Always a slightly higher high than before.Good luck all.

  28. Major Buy signal at the close, went 4x bullish (quadruple position).

    • brettmersch says:

      +1 Classic move. Should see a gap and go to the upside.

    • zepfan123 says:

      A quadruple position of WHAT ?

    • blackjak100 says:

      a stock market buy signal in the VIX is a major buy signal? There have been 2 other signals in 2015 which produced decent rally legs. While I’m confident we rally towards 50 dma @ 2100, will it hold? A breach of 2105 keeps the bullish hopes alive. I still would fade tomorrow’s rally in the 2090’s with a stop at 2105.

      • I’m looking for 2000-2011 to reshort. Will,see

      • VIX??? My indicator disregards the backward-looking VIX, only considers market price action. Let’s see how it plays out, very very confident in immediate and likely sustained rally (500-1000 Dow points). See my post on night of 1/15/15, same signal. Previous to that was 12/16/14. GL, I enjoy your work/posts.

        • blackjak100 says:

          signal when the 3 week chart turns down?

        • fotis2 says:

          This will be interesting your target?

          • I simply stay long until my indicator generates a Sell signal and vice versa. Major signals haven’t been wrong even a signal time in past three years and are usually good for 500-1000 points (DJIA, which roughly translates to 50-100 SPX points). Minor signals are usually right but have had 3 misses in that time and are usually good for 100-300 points. I use options to maximize gains. Many have asked me to start a service and list all of my signals real-time, am looking into that, in the meantime will post my signals here and elsewhere so others can benefit as well.

    • kvilia says:

      Uhhh, this sounds scary to me. But I like the courage… to post.

      • Kvilia, it’s only scary if one doesn’t know how to interpret and correctly predict the market. When one does, it’s easy money with nearly all upside and little downside. When you find something that actually works like my proprietary indicator (has been right 38 of past 41 signals, about to be 39 of 42 after the Buy signal at yesterday’s close), it produces an extremely high level of confidence, such that you can take quadruple positions (SDS puts and/or SPY calls for Buy signals) without hesitation. I look to make at least 50K per signal. Enjoy the rally.

        • uncle10 says:

          50k per signal? wow you rich! the last failed right? or you just averaged down?

          • No Unc, took the 1% loss (25% of options order, 1% on the Dow). That was a different signal so I only had. 1x position, yesterday at the close was 4x position because much stronger signal, came out around +300% net between the two trades so far, I always like to take some profits when first day wins big.

    • stephenk1980 says:

      I am actually in agreement. Think it is major bullish now. in my mind 70/30 we will not go any lower until new highs.

      However I am not as certain as short dollar, so I have zero position and am all in against the dollar at the moment.

  29. 7dayyss says:

    Thanks Tony!

  30. klopharmd says:

    So if it goes over 2086 then it’s not a minor b?

  31. ABchart says:


    Thanks Tony and all!

    SPX: http://hpics.li/384d240

  32. zepfan123 says:

    Tough market here still keeping us all clueless about the next break-out direction. Still staying short with 2 trades on the SPX and SPY hoping we get trading below SPX 2070 and SPY 207 fairly soon.- I still see a case to be made for that or else i’d get on the sidelines again for a bit trading wise.- I don’t see all that much good action for the upside near term although we know we can run back up to SPX 2100/2110 on hot air. Could be a very long summer if this market doesn’t find or get catalyst to break out one way or the other soon.

    • “Still keeping us all clueless”… lol. Sorry you stayed in your short position. Fortunately, the market usually gives a second/final-for-a-while opportunity to take a mulligan on any given trade, good example was in January when got a Buy signal at 17100, popped nicely to 17400 next day (as usual), gave one more chance to get in the next day at 17100 again, then bye bye baby.

  33. nardobeme says:

    Thanks Tony. Took off bear suit this am, as my third target was met. My eyes are on 2100 tomorrow. GL all.

  34. CB says:

    Thanks Tony.
    The Naz Comp. has formed a bullish hammer today (daily) right on its 50 EMA.

  35. fotis2 says:

    Thanks Tony also think fair chance for a bit of a rally from here may be a wee bit early but went long bounce off 200ma on 5hour.GL to all and be carefull in this cutthroat business.

  36. JeffMilano says:

    Thank you TONY. Tomorrow is a key day.

  37. thx Tony, well with the media littered with big correction/crash headlines story for sure a respectable bounce is within striking distance just to shut them up…..lol

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