Wednesday update

SHORT TERM: gap up and go opening, DOW +236

Overnight the Asian markets finished mixed. Europe opened lower but gained 1.8%. US index futures were higher overnight. The market gapped up to SPX 2089 at the open and continued to rally. The SPX had closed at 2080 yesterday. Just past 11am the SPX hit 2108. Then after a pullback to SPX 2104 by 1:30 the market moved higher again. At 2:30 the SPX hit 2109, then pulled back to close at 2105.

For the day the SPX/DOW were +1.25%, and the NDX/NAZ were +1.25%. Bonds lost 16 ticks, Crude gained $1.05, Gold rose $10, and the USD was lower. Medium term support rises back to the 2085 and 2070 pivots, with resistance at the 2131 and 2198 pivots. Tomorrow: weekly Jobless claims, Retail sales and Export/Import prices all at 8:30, then Business inventories at 10am.

The market gapped up to start the day for the first time since last Wednesday. After the opening we changed the Minute wave a labeling to the proper color. While the rally looked fairly strong today, it does not look much different from the previous Minute wave b rally. Minute b of Minor A retraced exactly 75% of the Minute a decline. This Minute b will have retraced about 75% of its Minute a decline at around SPX 2110. The market hit SPX 2109 today. When this rally does conclude the downtrend should resume. Should the market rally back to SPX 2122, clearly the short term count needs correcting. Until then short term support is at SPX 2099 and the 2085 pivot, with resistance at SPX 2118 and the 2131 pivot. Short term momentum hit extremely overbought today. Best to your trading!

MEDIUM TERM: downtrend

LONG TERM: bull market


About tony caldaro

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134 Responses to Wednesday update

  1. Another Hindenburg today it seems.114 highs 87 lows…mcclellan negative..higher than we were 50 trading days ago.Two in a row fellow marketeers.

  2. stmro says:

    It’s really banging its head up against the 50dma. Hope we close below it.

  3. jon3385 says:

    IMO any strength between now and COB next Friday will be sold into by MF & ETF as they will most likely be locking in gains and freeing up cash for distributions that start going out the door the following week – think that will put a limit on any big upside days. Just my $.02

  4. I think we should test 2100 level. If it Breaks, Down we go. If it bounces hard Up we go.

  5. Peter Sliney says:

    The $VIX has broken downside support of 13.05, and without this participation, I see no real downside threat to the indices. IMO

  6. jobjas says:

    B wave tops at 2106 ES (sept contract) -truncated 5

  7. drwarmington says:

    Great call Financialreportsblog. Your indicator caught it perfectly. I was looking for it to go up and it was nice to get confirmation. Was that a 1 day wonder or are you looking for some follow through today after some consolidation today? Thanks.

    • Thank you Dr. This particular signal is usually good for a quick 500-1000 points (Dow) and has marked most of the bottoms/turns the past 3 years, most recently 10/16/14, 12/16/14 and 1/15/15; I am expecting the same this time, fueled in part by the doubters (somebody has to fund the rally).

      So far this Buy signal has produced gains of 280 points in one day and 345 points in two days. I like to take some profits especially when they come so quickly. The minimum 300-point gain was surpassed today so a pullback wouldn’t surprise me but I’m expecting another leg up soon. Trailing stops in place to lock in profits. GL

  8. zepfan123 says:

    So i see the IMF just said a Greek deal is on the back burner again.- Yesterday it was a done seal supposedly.

    • mjtplayer says:

      The IMF seems very frustrated, they’ve sent their negotiating team home according to The Guardian. They say Greece is just wasting time and still negotiating, not making decisions.

      The deadline is still 3 weeks away, I would be negotiating if I were on the Greece team, make the IMF sweat it out for another couple weeks.

      • $$$NEWBIE$$$ says:

        IMF cites ‘major differences’ with Greece, team leaves Brussels

        • jon3385 says:

          CNBC is garbage IMO – all fear, I don’t know what game they’re trying to play but it’s ridiculous. They ban everyone who is not uber-bearish, and yes, I am being serious. Me and a lot of other folks got banned a few months ago for being critical of their fear mongering. They try to explain market direction every day with ridiculous notions that get revised within a matter of hours.

      • ABchart says:

        Greek save time because they know that Europe is cornered. Also, Putin has promised
        $5 billion and the integration of the BRIC bloc.

        • fionamargaret says:

          ..voila, the better offer……no one negotiates this way, unless there is a card only one of the parties is privy to…, the ports……..

  9. ABchart says:


    No deal..

  10. The 1st of 3 gaps has been filled and the bullish crowd is burning up lot of jet fuel to do just that….

    I expect a pullback before it tries to make an attempt to fill the 2nd gap at 2123.28

  11. fishonhook says:

    Tony looking at the last few months of whipsaw, I note that when you change the trend ie to up-trend or down-trend, almost marks to the day the change in the market direction.
    Maybe the indicators need changing, we could have made good money doing the opposite

    • jon3385 says:

      I have noticed this as well

    • tony caldaro says:

      then do what makes you money
      the indicator is fine
      btw: With the SPX/DOW both in confirmed downtrends this correction could very well end this week.
      that was Monday’s update

    • lunker1 says:

      you’ve been around for a while so I’m sure you know by now that the change in trend doesn’t mean you should suddenly open a trade in the direction of the new trend. the trend changes are one of the ways OEW tracks and quantifies wave history and puts the waves into a current context. it’s basically saying yep we thought there would be a downturn and yep we got the downturn.

  12. Dex T says:

    The EU have to be insane to unlock any additional funding for the Greeks. It is time for them to be default and leave. It may be rough now but in a few years time their economy will slowly head back to normal.

    The EU will survive without Greece and it will a strong warning to the other countries to take their finances seriously.

  13. mjtplayer says:

    The lower TL of my wedge pattern lies at SPX 2,116 today. So far, the rally is just a “backtest” of the broken wedge.

  14. We have a very clear 5 wave impulse up from Tuesday’s 2072 low. This can only be 2 things.
    1. The correction is over and the uptrend is resuming.
    2. The impulse is micro 1 of minute b zig zag which means we will have a pullback and another zig zag up to finish minute b.

  15. berniebaruch says:

    UVXY at the 36th Floor….Looks like an express.

  16. mjtplayer says:

    SPX & DJI both sporting hourly -div

    At 2,112 SPX has hit the .618 retracement from the ATH

    What we do from here will be interesting….

  17. argento1 says:

    Expect some more upside into next week into close-out and only after the bears will be back pushing her down into the October low to finish off Primary 4!Upside wedges usually resolve down to where she began…but for now bears have to wait and we might go and test those previous highs!

  18. stmro says:

    Another professional gap over resistance today? If 2110 doesn’t hold its going to new highs. Ready to be stopped out.

    • $$$NEWBIE$$$ says:

      Its simple market has already topped and we are not going much higher OR we break a new high and go to 2150-200 and then Bull run is OVER. Either way upside versus downside is obvious at this point.

      • JeffMilano says:


  19. Hello Mr Caldaro,
    Is DAX Still in downtrend or uptrend is confirmed?
    thank you

  20. nardobeme says:

    Expecting a minor pullback tomorrow am and then a lead to 2114 area, and not further. My stance on ath’s at this moment has been extinguished. From there, we shall rolly polly down, and around.

  21. fotis2 says:

    Thanks Tony!AH daily CCI bumped just bellow the 0 line going with that am short at 2105+reversal at 200ma on 4hour chart stop 2113 target 2045 wich is where daily 200ma is sitting.GL to all.

  22. I think we had a Hindenburg Wednesday…119 new highs 85 new lows.Not sure if they were mostly bond related.Something to keep an eye on.If we retrace a little tomorrow, could have Hindenburg Jr.I definitely watch that for some kind of 5% correction to be triggered.Stay tuned.

  23. fishonhook says:

    The reason for the huge ramp up has nothing to do wit Greece. It is simply because Prechter predicted the end of the world ….again

  24. CB says:

    Stock Trader’s Almanac on the current sentiment

  25. reddragonleo says:

    financialreportsblog…. whether you are right or wrong on your market calls you’ll find that just making them will invite others to disagree and sometimes attack you. Don’t take it too personal as I’ve seen it happen to many others on this site that made market calls. Personally I respect people that make calls, so keep up the good work. Right or wrong just post them helps others with their own analysis I’m sure.

    • Thanks Red but I don’t mind at all. My sense is that they represent 1 (or 0.1) percent – I would never let the few ruin it for the many, and frankly I love all kinds of feedback as I can always extract some value.

      I also think that learnedhislesson and the very few other skeptics are well-intended and probably good people like so many here. Learned sounds a bit jealous but we all succumb to human nature from time to time, myself certainly included. When one is making money, comments from others just don’t matter. And I absolutely understand their skepticism – I’ve never seen anything like my indicator when it comes to accuracy and immediacy, extremely powerful and valuable when it comes to trading options in particular.

      • drwarmington says:

        Great call. Your indicator caught it perfectly. I was looking for it to go up and it was nice to get confirmation. Was that a 1 day wonder or are you looking for some follow through today after some consolidation today? Thanks.

    • I was sorry to see CN let a few people run him out of town, his posts were among the most valuable, posted actual trades and made predictions, not fluff. Come back CN!

      • fotis2 says:

        Dito that fnb CN truly was very good however there are quite a few on this site who are also exceptional traders.Fiona,bj,bouraq,matador,nardobeme,uncle,AB to name just a few.

        • Thanks fotis. Admittedly I haven’t spent much time tracking them but most (not just here but in general) are a bit vague, not very useful or conducive to making real money. I also haven’t seen a whole lot of consistency – it’s not just about being right, it’s about not being wrong. Unc and BJ are among my favorites here, though BJ seems to be in a slump lately.

          • fotis2 says:

            More of a platform for traders to exchange views according to the various indicators and systems they favour not really to post trading setups with stops and targets and the few that do that, and CN is a very good example are eventually targeted by trolls even TC himself has been attacked on many occasions.

        • Nardobeme is quite good. Jedi MIA in recent months but one of the best.

  26. If (recent) history repeats, we should consolidate a couple days and move up from there to (barely) new highs.Then maybe the – divergences show up some more and we dive again.That s how I m playing it right now.Good luck all.

  27. bhupal777 says:

    Thanks Tony.

    No trade on SPX until it decisively either breaks out or breaks down on a weekly chart.
    Plenty of long setups on individual stocks that gave me a buy signal last week are working fine right out of the gate. So no predictions, just following the price. If big down days are coming then my stops will be hit and I will take the small loss and move onto next trade.

    Novice EW traders: The hourly EW count can very well morph into something else so go nimble if you are trying to go short in the hopes of riding that C wave down.

    Good Luck All.

  28. gtoptions says:

    Thanks Tony
    Close above that wide range bar in the next three sessions would be the ticket to ride the trend! Drop below the Spinning Top and it sets up 2040/20ish. GL All

  29. mjtplayer says:

    Thanks Tony!

    Welcome to the market of the next few weeks, when Greece rumors and headlines will rule the day. Today, it was rumors of a potential deal, so we went higher. Who knows what tomorrow will bring, but the current meetings are scheduled to end Friday. If no Greece deal by the weekend, expect today’s gains to be reversed just as quick.

    Someone forgot to tell the Greek government bond market that we were rallying today. Greek 2yr notes moved HIGHER by 80bps today, now trading at 25.86% and getting very close to the 26% resistance area. If 26% if broken to the upside, next stop is a test of 30% – the April high.

    • Mjt, if rumors moved the market how was it known YESTERDAY that market would rally today? Rumors, even news, aren’t causal, they are coincidental. E.g., the internal market data is the steering wheel, news/rumors are merely the gas pedal, i.e., the data are what determine direction/turns in the market, news/rumors simply get it to where it’s going more quickly.

      Thanks for the update Tony, always a good read. Market sometimes gives a second chance to get on-board before the train leaves the station for good, sometimes it doesn’t, let’s see how it plays out this time. Would be very surprised if we go below yesterday’s low for a while.

    • asaraniti says:

      My take on today’s activity is simple and very technical. It is the June futures contract rolling over into the September contract. Traders bought the June contract to cover their hedged short position. Thursday/Friday these investors will start shorting the September contract as portfolio insurance. At today’s high the e mini’s came close to a 50% retracement which stopped the rally dead in it’s track.

      The back and forth late in the afternoon was the net balance of traders buying the June contract to cover their hedges and traders shorting the September contract as a hedge.

  30. Nice rally but Transports underperformed again. It also looks like large caps are regaining relative strength. This must be because of improvement in the world economy and corrective action in the dollar. By the way is there an index or site map to this site where one can find archived articles?

    • blackjak100 says:

      no comment on the +1383 NYAD? Not overly strong for a +25 day. If we do make another ATH on $SPX immediately, it appears the NYAD would exhibit a triple neg divergence.

      • Good point about the A-D. If the market continues to rally and the NYSE A-D doesn’t post daily readings of over +1500 that would be a sign of internal weakness.

  31. Hi Tony

    Thanks for all you do.

    If the count does need correcting if it plows through 2122. What would it be corrected to?

    Is that decline enough for Int 2?

    Cheers again

  32. I would imagine no one was surprised we gapped up. At 2100 we had some resistance, then Greece news popped it up 8 points. Traded there the remaining day. All on no volume.,so what’s changed nada. Markets drop hard next couple days.

    • zepfan123 says:

      If we drop back to SPX 2090 or lower the next couple one should be surprised.

    • Go back and read various comments, there wasn’t a plethora of people calling for an immediate rally. Hindsight is a tricky sucker but not very useful when it comes to making money.

      Per comment above, sometimes the market grants a seconnnd chance to get in, good example in January: got a Buy signal at 17100 (Dow), popped nicely to 17400 next day (as usual), gave second chance at 17100 again the next day, then rallied hard and didn’t look back. Either way, I don’t see us breaching yesterday’s lows by much if at all, far better to be long in my view, yesterday’s signal has been very powerful in the past, doubt today is all we get.

      • Go back and read my comments last night, lots of comments on 2093 – 2000 level. I posted we could see 2011 today. If your following Tony’s count this rally fits perfect for b of minor c. If not Play your cards as you see them. Casino opens 9:30 eastern. Posting 20 times saying it will go up wont make it so.

        • I think the facts are obvious to objective people. Possible we re-test like we did in January but would be surprised if we breach yesterday’s lows. Yes, play it as you see it and reap the profits or losses, that’s the nature of this profession. Hope you make lots of money, today was a very good day.

        • Saying we “could” hit 2011 doesn’t seem to be of much use in helping others and oneself make money, all due respect. Did you go long and post that? Big difference, that’s all I’m saying. GL

  33. ABchart says:

    Thanks Tony!

    Merkel, Hollande and Tsipras meeting over now.
    MERKEL does not comment, but German government statement says three leaders agreed Greek talks must continue with more intensity.


  34. $$$NEWBIE$$$ says:

    Am I the only one that consistently confuses jobjas and bouraq? Thanks to the both of you for the charts you post and of course thanks to our Master Caldaro.

  35. torehund says:

    …The bear is asleep, the bear is asleep, it isn’t dangerous if one threads lightly. The bear is a sleep, the bear is as asleep in its cosily tempered cave…

  36. “….While the rally looked fairly strong today, it does not look much different from the previous Minute wave b rally…..”

    Tony, it’s also worth noting that this rally also don’t look much different from many other previously proclaimed “impulsive” rallies since the beginning of 2015. Some of the more recent rallies being the rallies from 2046 to 2089, 2078 to 2121, 2068 to 2118.

    • IMO, there is way too much supply and not enough demand. The rallies will continue to be counter with jolts of selling as the Rounding Top continues to display wave symmetry from left to right.

    • zepfan123 says:

      Between SPX 2070 and 2130..we’ve had several of these big rally days that put 200 to 300 Dow pts on the board in the first 30 minutes and then just basically went idle the rest of the day..and then never really being a catalyst with a follow thru to real new all time highs. One of these days we’re going to be shocked by a huge quick move one way or the other..but today’s action,although impressive just doesn’t feel like the start of the next “BIG ONE” to the upside. Unless we’re up another 300 to 400 points by Fridays close…i think we’re going to stay in our tiny trading range for a while. I hope it’s not the rest of the summer..but it already being the middle of’s possible.- But lets see if we get another triple digit rally tomorrow.

    • tony caldaro says:

      tend to agree, except for February

      • zepfan123 says:

        Yes. Mr Caldaro..that rally off of SPX 1993 back in Feb was a ball buster alright,..quickly taking us up to our current levels above SPX 2100 in only about 3 weeks.- Guess we’ll know soon if we started the next one of those here soon towards the 2200 area. As I said before..I don’t think so. But lets see what they give us tomorrow.

  37. bhuggs52 says:

    Thanks Tony. I finally jumped in on this move today, as it looked too certain from the opening that it would carry toward 2010. Made a small chunk on the day trade. As always, thank you for your assessments. Next up, a wave c down to the 2040 area would be a perfect setup for the summer rally. Then bulls take shelter come this Fall. Another prognosticator suggests a top in mid-July, then hold onto your shorts toward Sept-Oct. Cheers!

  38. 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 2105 here. I’m going to say NO NEW HIGHS for a while.

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