Wednesday update

SHORT TERM: gap down opening pullback, DOW -178

Overnight the Asian markets gained 0.1%. Europe opened higher but lost 0.2%. US index futures were lower overnight, and at 8:30 Q1 GDP was reported in line with expectations: -0.2% v -0.7%. The market gapped down to SPX 2119 at the open, then rallied to 2125 by 10:30. The market had closed at SPX 2124 yesterday. Also at 10:30 a speech from FED vice chair Fischer was released: The market then started to pullback. The decline continued until 2:30 when the SPX hit 2110. After a bounce to SPX 2114 by 3:30, the market closed at 2109.

For the day the SPX/DOW were -0.85%, and the NDX/NAZ were -0.65%. Bonds gained 8 ticks, Crude lost 75 cents, Gold slipped $3, and the USD was lower. 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, along with Personal income/spending and the PCE. Then at 9:45 a speech from FED governor Powell.

The market gapped down at the open today for the first time since the SPX 2072 low was established a week ago Monday. After a rally to close the gap the market headed lower continuing its pullback from Monday’s SPX 2130 high, hitting 2109 at the close. This pullback is now the largest since the rally began. While the recent rally does look impulsive, we would like to see the market remain above SPX 2104 over the next few days. If it drops below that level then we will have conflicting wave patterns from the hourly charts on down to the lesser timeframes. For now, the market found support right at the expected SPX 2109 level. Should be an interesting day tomorrow. Short term support is at the 2085 and 2070 pivots, with resistance at SPX 2109 and the 2131 pivot. Short term momentum ended the day quite oversold. Best to your trading!

MEDIUM TERM: uptrend likely underway

LONG TERM: bull market


About tony caldaro

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115 Responses to Wednesday update

  1. torehund says:

    In a world where every politician is rotten to the core- how can we even define corruptness, “its the way we do it here, and has been for long”.
    Well government bankruptcies is the only solution to bring fresh blood into a rotten system, Russia was first out then hopefully Greece, then Italy, Spain and so the story goes. I guess USA will be the last “woman” standing, it only takes “half a brain” to rule, or ?
    Implications on stocks, well companies aren’t the insolvent parties when interest rates rise, its the governments that will be the first to succumb, their bonds and their currencies. Well the Euro is the one that firstly will experience it has bad breath ahead of itself, much more than most think, regardless of a Greek BK or not.

  2. wavediver says:

    So far, the last 4 days looks similar to the first few days of the drop after 2135. It would be interesting to see if a b-wave tomorrow reaches 2119, then a c-leg down to 2077. Coincidentally, that would be exactly on the lower trend line of the LD.

  3. fishonhook says:

    Re PUG

    His site doesn’t mention 50% correction but a lesser correction before we go up high.
    Copied from his site.

    “Now here in the early summer of 2015 PUG SMA is once again making a bold call that Cycle 1 (C1) of Super Cycle V (SC-V) is coming to end in the 2135 to 2172 area. This should open the door for a 6 month to 1 year-long Cycle 2 (C2) of Super Cycle V (SC-V) correction of between -25% and -33% down to the 38%/50% Fibonacci retrace target area of 1577/1404 (basis 2135). Basically the SP-500 is likely to test the old all-time high of 1575 before moving much higher (3210 to 3388) in Cycle 3 (C3) of Super Cycle V (SC-V) over following decade into the years 2024 to 2027. Ultimately Cycle 5 (C5) of Super Cycle V (SC-V) should reach above 4000 by the years 2031 to 2034.”

  4. zepfan123 says:

    As an aside here..I wonder who bought Carl Ichan’s 1.4 million shares of NFLX this week for $682 a share that he bought a few years ago for around $58 a share.(?) As you know he’s all out of NFLX now.Glad it wasn’t me. Gonna be a lot harder to make a huge profit from 682 than it was from 58. And I see NFLX has been down $20 to $25 a share today so far. Buy low sell high still works.

  5. torehund says:

    Boots are working as hard as I have ever seen them do, manipulating the market, switching the percent up and down as they like… you can only look at the actual price (which is maybe a bit manipulated too), hold on..

  6. manunidhi21 says:

    Namsate Tony!
    2104 breached..recently very difficult counting these waves..
    whats ur call ?

    • tony caldaro says:

      With today’s decline below SPX 2104 the entire rally from SPX 2072 is starting to look sloppy. This still may be a new uptrend, but the hourly pattern is now out of sync with lesser timeframes.

  7. 7dayyss says:

    Well, finally came to fruition, MCP files for bankruptcy. What a long slide it’s been!

  8. zepfan123 says:

    At Lunker –

    i’m just going by a 50% drop from the current level of approx SPX 2100. Call it SPX 1050 give or take. But even a drop to SPX 1400 would be a heck of a tree shake. As I said..going back below the 2007 SPX high of 1575(ish) will be headline disaster news for investors who got in a little in the last 2 years or so.A lot of stocks will get huge haircuts if that happens. But again..lets see if we can even get SPX 2070 here soon…which will actually be a pretty big deal to some of the analysts I’m seeing out there.

  9. GYN LAB says:

    Not pressing the long button just yet, even though we are at .500 retrace of 2072-2130 at 2101
    Hourly MACD and RSI +ve div setting up nicely, should hold down until the .618 retrace at 2094

    • GYNLAB, since hourly MACD and RSI set up positive div nicely, why do you still think the market should hold down until the .618 retrace at 2094? Hope to hear your opinion in details.

      • GYN LAB says:

        +ve div should not break ie. should hold even if the market goes down to 2094 which is .618 retracement and my favourite fib entry/exit. Of course I am not a fortune teller so I have no idea if this will even hit 2094, or even if it does it may fall through. I would prefer to see a lower low around 2094 with +ve div holding, in order to be more sure of my entry and also have low risk & high reward.

  10. camper1888 says:

    We haven’t had a 10% correction for god knows how longs, give me a break..dont tell me market is going ATH again .. All BS

  11. Just how complacent are the bulls?

  12. asaraniti says:

    Regarding Pug’s call (@

    I do not subscribe to his service but since he has made his call publicly, I don’t feel that I am violating any rules. His call is that the SPX has topped back in May from the March 2009 lows. He is expecting a 50% correction.

    Personally, at best, I feel he is 1 primary wave off meaning Primary wave 4 completed back in October 2014. Question, does anyone follow Pug and what is his track record.

    • zepfan123 says:

      I’m betting Newb will approve of that prediction. I’ve heard PUG”s name thrown around the blogosphere from time to time but I don’t know if his prediction track record is impressive or not. but calling for a 50% drop from the May ATH of 2130.82 is a biggie. Basically back to SPX 1000 give or take. Wow Even taking out the SPX 2007 high of 1575 would be a market disaster headline!-Hard to say if thats in the cards here in the foreseeable,but going back to at least SPX 1820,the Oct 2014 low by Oct sure seems possible right now if we don’t finally break out to the upside hard with multiple new ATH’s in the next month or so. But SPX 2070 is still encased in steel reinforced concrete as a support level..until it isn’t. First things s first.

      • asaraniti says:


        wave 2 typically corrects 50% of wave 1. So, if his call is correct, that Cycle wave 1 completed, a 50% correction isn’t that unreasonable. When Tony’s C. makes his call of of primary 5 wave complete, his call at that time could be calling for a 50% correction from the March 2009. But I am not speaking for Tony C.

    • pugsma says:

      The May 2015 market Cycle 1 (C1) of Super Cycle V (SC-V) top call @ SPX 2135 is for a Cycle 2 (C2) correction of a 38%/50% Fibonacci retracement the C1 wave up from SPX 667 to 2135 to SPX 1577/1401, which is -25% to -33% market correction (not a -50% market correction to SPX 1000-1100).

      • asaraniti says:

        Pugsma…thank you for replying to my post.

        With all the overlap in the SPX YTD, it seems to me that your primary wave 5 major, wave 3, is forced a bit but I relatively new student to Elliott Wave. Wondering if you would share your thoughts on this. If you are reluctant to do so as this blog and not on your subscription site, I fully understand.

        • pugsma says:

          Primary 5 (P5) of Cycle 1 (C1) has been a classic terminal Ending Diagonal (ED) off the Primary 4 (P4) low of SPX 1820 in October 2014. Wave major [4] into [1] overlap is allowed and expected within an ED. Also the internal waves within an ED are often very choppy after the initial major [1] move up, as has been

  13. gtoptions says:

    Thanks Tony
    SPX ~ .382 ~ would be the typical (imo) long setup.
    Talking unusual, since this market is very!
    If int i started with an LD, It would not be all that unusual for the int iii to begin with a small LD, like the one I see on the 3min chart.
    GL All Happy Fourth of July! 🇺🇸

  14. filipozze says:

    correction is still in play, clearly the advance from 2074 is corrective:”B”.
    now the next buying opportunities will come around 2050/2040 where A=C.
    invalidation bullish level 1.980

  15. blackjak100 says:

    NYAD -.6% indicating to me the ‘b wave’ correction is not over. Still like 2100-2105.

    • Agree ‘b wave correction’ is not over before 2105. Questions: how many percentage down of NYAD means ‘b wave’ over? How do you calculate NYDA is -0.6% now? Can you share a website? Or your calculation in more details? Thanks.

  16. berniebaruch says:

    Waiting for Newby’s Daily Armageddon Call, brought to you by Colt Firearms and

  17. gasman88 says:

    The path of least resistance is still pointing up.I don’t think anybody seriously doubts that the politicians will allow Europe to slide into chaos. Greece will be saved and market participants don’t want to miss ‘Greece is saved for good this time’ rally.

    • ISINCODE says:

      I would agree. Sentiment is leaning towards a positive outcome. My bet is that market will settle right around TC’s 2104 mark today setting up a pos div for a huge rally next week and finally ending the multi month chop. Good luck all !

      • We haven’t had sequential down NFP weeks since 2012, so I’ad agree too that next week overall the bias should be up.

        For post-seasonal-expiration weeks, today’s low being down just 2 points would be tied for third best max-downs in 4 years. I suspect the low this week isn’t in yet.

  18. zepfan123 says:

    SPX aside..looks like the Dow Jones ind Avg is still trying to decide if it’s going to be north or south of 18,000 going into the short July 4th week.- Been dancing right on 18K give or take 10 pts for the last 30 minutes.

  19. Dex T says:

    All talks of a Greek resolution this week will amount to nothing

    Even if Tsipras and team were to acquiesce to all demands made by the EU – the Greeks would simply call another election vote them out and elect a new group who would disavow any deal made. They only hold a slim majority inn

    Then it’s back to the beginning again.

    The Greeks don’t seem bothered:

    “Austrian Finance Minister Hans Joerg Schelling is amazed at the apparent lack of urgency in Greece’s negotiations over a bailout deal.

    With the clock clicking down to Tuesday, when Greece has a debt repayment it cannot afford, Schelling says “it is really surprising how carefree Greece deals with its business and constantly comes up with new requests.”

  20. mjtplayer says:

    Supreme Court upholds Obamacare subsidies, gov’t wins. HMO stocks are popping

    • reddragonleo says:

      Why is it called Obamacare when Obama, the Senate, and Congress have their own private insurance? Should it be called Sheepcare and their insurance Wolfcare?

      • zepfan123 says:

        Well technically it really is called The Affordable Care Act.

        • reddragonleo says:

          An “Oxymoron” of course. Kinda like calling Death Insurance “Life Insurance”. I’ve heard as much as 60% increases in premiums from Obummercare.

          • zepfan123 says:

            Ha….somewhat true. But Life Insurance just sounds so much better from a marketing stand point. And of course for the beneficiary…they usually do get some “life” out of the payoff.-And yes..many are paying more for health insurance now than they were prior to Obamacare getting passed.

        • mjtplayer says:

          The old joke in Washington is that whatever a bill is named, it usually accomplishes the opposite🙂

          Young healthy people in their 20’s & 30’s would agree, after watching their premiums go up by 200% – 300% under Obamacare. Taxing the young and/or healthy to pay for the old and/or sick. But hey, at least my 61 year old single male neighbor now has pregnancy coverage.

      • budfox9450 says:

        I suspect, you know the answer.

  21. Obamacare subsidies upheld… stocks up .

  22. Bulls you guys wait for 2120, ill be sitting back waiting for 2090 coming today

  23. Thanks TC!
    System Neutral (though Aug strangle in play)
    Prelim numbers show the following after Long position stopping out yesterday:
    Buy above 2131.48 with Stop 2109.68
    Sell below 2096.65 with Stop 2118.39

  24. sibyn says:

    SPX Goal 2090 very short term

  25. Great comments this morning, nice call BJ.

    You too Red. I expect this pop to be sold into with lower lows coming.

    GL everyone.

  26. blackjak100 says:

    If my calculations are correct from a fib ratio and EW standpoint….2133ish is the perfect entry for a short with STOP at ATH. Risk/reward is enormous…2-3 pts risk for 25ish pts downside. This is all assuming we don’t gap up and crap down right after market open. GL and Cheers!

  27. I had a nightmare last night about a trio of laughing dancing bears who suddenly turned angry and started chasing me. Where could such a weird dream come from? ☹

  28. stmro says:

    Following the headlines this morning in London. I count 5 swings and 4 reversals all based on Greece. If you must trade the next 2 days, keep your positions small and your stops wide.

  29. Gary Lewis says:

    Oh my! I was right for one day but wake up to see the market back up, silver down. It’s as if yesterday never happened. I wasn’t fast enough to profit on my “once a year” correct down call. Someone will just never let this market fall. Once again, it seems that SP puts are for suckers. When will I ever learn?

    • fotis2 says:

      Think it needs to start trading above 2130 to shake Bears a Daily close above that would be tricky for the Bears.

    • futures can be misleading, market doesn’t open for 2.5 hours, a lot can happen between now and then.

    • blackjak100 says:

      agree about everything above, but it sure looks like Nate’s count is playing out. A new high slightly above 2130 (to complete a flat) should be expected before a decline to 2105ish. Simply more whip-saw city before ascending to the final P3 high.

  30. fotis2 says:

    CCI day 2 close bellow 100(keeping a watcher on 0 line 2104-5 line in sand). 3bar reversal on daily target 2086. 200ma 2095 4hour 2052 on Daily.Hanging on the shorts till daily reversal CCI.Thanks for the Pivots!

    • fotis2 says:

      Apologies Inside Day setup not 3bar reversal same target on Daily must have 3bar reversals on my mind😉

  31. New highs soon….once a month we make new highs.So simple even a caveman can do it…lol. (but I have a nice cave with a Dish antenna).Good luck all.

  32. gtoptions says:

    Thanks Tony
    SPX ~ 5up + 3down! Let’s Boogie Greece!

  33. blackjak100 says:

    2103ish is the target for the expanded flat correction. I would expect this correction to at least move to 2105ish (38.2% retrace) and most likely lower. I was hoping to see it complete tomorrow AM, but if it doesn’t…Nate Kautz suggesting the b wave of expanded flat is not even complete. In this case, we should see a lot of upwards movement tomorrow AM to 2131-2132 before targeting 2103ish. From there, a blow off top to complete ED which I still think will be 2160-2200. GL and Cheers!

    • Tops never look like tops at tops and I think you should be open to the wild side and be open to wave 3 down in progress.

      • blackjak100 says:

        every wave is a potential wave 3 down in progress for you NEWB….hahahahahahaha

    • Bj thanks for sharing that it helps a lot. So, we should rally tomorrow. 2121 ish and drop, would be part of the abc from 2130. 2130 ish opens up your count with a drop back down to 2100ish. Then either way a monster up say to July 17th. Then a pull back or a collapse for An ending diagnal. obviously there are other options, but 2 good ones. Market won’t go down hard unless apple goes down. Don’t think that happens until after earnings.
      Thanks everyone. Good luck

      • blackjak100 says:

        No problem…whether my count or Nate’s squiggle count is correct, we are on the same page with the expanded flat correction ending 2100-2105 in the next 1-3 days. Keep in mind, we have not even retraced 38.2% of 2072.5-2127. One thing I’m fairly confident of is five waves occurred from 2072.5-2127 (not 2130). Personally, I hope it ends tomorrow to make things less complicated

  34. zepfan123 says:

    Interesting day as it turned out. Any one or all of the next 3 trading days could be interesting as well I think now. So much for me not watching the market again until July 6th.

  35. lunker1 says:

    Hi Tony, if there’s been five waves up and then wouldn’t you expect a three-wave 50-62% pullback here? Or is the problem(s) that a new high and/or uptrend confirmation didn’t occur yet? Do you normally see an uptrend confirmation in the first five waves of an intermediate degree move? TY

    • tony caldaro says:

      Would like to see the five waves on all time frames.
      Uptrend confirmation would certainly help =)

      • GYN LAB says:

        On the same page here. I am expecting a b-wave bounce tomorrow into 2121 area then a possible c of Minor 2 into 2101 (.500) or 2094 (.618). Even better would be a deep .786 retrace to kiss the 2085 pivot last time before a powerful 3 of iii up to confirm uptrend!

        • mjtplayer says:

          I’d like to see that too GYN, a bounce to 2,120 or so, then a drop down to 2,093 – 2,100 (.50 – .618 retrace) and we’ll see what happens from there

      • lunker1 says:

        All time frames = which ones? How many waves up do you see on the daily? Thx

  36. CB says:

    Your EMAs are like magnets Tony.🙂
    Good stuff, Thanks!

  37. magnus1234 says:

    Just maybe ii? is d and 2129 is e that ended the ED/LD. BTW it is ED for me…but been wrong before.

  38. JeffMilano says:

    It seams that there is support. It Tomorrow reverses like you mentioned then 2135 will be broken to the upside. If not then a 10 days downside will ensue and the low is not in yet for the next intermidiate cycle to start. Tx TONY.

  39. Looks like key levels of 2,127 to the upside and 2,104 to the downside (mentioned in the weekend update) will both be exceeded this week. Depending on where the index closes out the week, it’s almost as though the week never happened, price-wise anyway. Time-wise it has to be significant, I would think. Not to sound conspiratorial, but it feels like near highs are being propped up despite legitimate reasons to sell off. While the big players are quietly exiting the theater, us Regular Joes are enthralled with the big screen (Greece, Confederate Flags, etc.) …unwittingly about to be slaughtered after the Smart Money toss Molotov Cocktails and bar the doors shut on their way out.

  40. Jack Zhu says:

    I just think it’s too unreliable to do any wave count in this market.

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