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.


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