Tuesday update

SHORT TERM: gap up opening then choppy, DOW +22

Overnight the Asian markets gained 0.7%. Europe opened lower and lost 1.5%. US index futures were higher overnight, and at 9am Case-Shiller was reported lower: 4.9% v 5.0%. The market gapped up at the open to SPX 2072, ticked up to 2074, and then started to pullback. The SPX had closed at 2058 yesterday. At 9:45 the Chicago PMI was reported higher: 49.4 v 46.2, then at 10am Consumer confidence was reported higher: 101.4 v 95.4. The pullback hit SPX 2062 just past 10am. Then the market bounced to SPX 2067 by 10:30, dropped to 2060 just before 11am, bounced to 2068 by 11:30, then hit 2056 by 12:30. After that the market rallied back to the high of the day at SPX 2074 just past 2pm. At 2pm FED vice chair Fischer’s speech was released: http://www.federalreserve.gov/newsevents/speech/fischer20150630a.htm. In the last hour of trading the SPX hit 2062, then bounced to close at 2063.

For the day the SPX/DOW were +0.20%, and the NDX/NAZ were +0.50%. Bonds lost 7 ticks, Crude rallied $1.00, Gold slid $7, and the USD was higher. Medium term support remains at the 2019 and 1973 pivots, with resistance at the 2070 and 2085 pivots. Tomorrow: the ADP at 8:15, then Construction spending, Auto sales, and ISM manufacturing at 10am.

The market gapped up at the open today, made its high for the day in the opening minutes, then declined to a new marginal low for the downtrend. Then it rallied back to the opening high before heading lower again in the last two hours of trading. Choppy day. We can now count seven small waves down to SPX 2056: 2095-2104-2082-2091-2057-2074-2056. This could be a 1-2-3, or an a-b-c. If a 1-2-3 the afternoon rally back to SPX 2074 would likely be the 4th wave, and the current decline the 5th. If an a-b-c the market should rally much higher than SPX 2074 before making lower lows. Short term support is at SPX 2040 and the 2019 pivot, with resistance at the 2070 and 2085 pivots. Short term momentum displayed a positive divergence at the SPX 2056 low, and pushed momentum to neutral during the rally. The growth sector was supporting the general market today. Best to your trading the Greek drama.

MEDIUM TERM: downtrend continues

LONG TERM: bull market

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

About tony caldaro

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115 Responses to Tuesday update

  1. Okay, numbers…
    Bullish if above 2094.93/2096.63 with Stop 2073.49
    Bearish continues if below 2060.68/2062.38 with Stop 2082.06
    In between is limbo; and boring… Numbers will change slightly at tomorrow’s open.

  2. GYN LAB says:

    Very short-term: this could be c of Minute b with: a = 2056-2083 & b = 2083-2068 which was almost .618 retrace. c (and Minute b) targets:
    c=a 2095 (about .500 retrace of Minute a 2130-2056)
    2101 (.618 of Minute a, also gap close) <- this should be an attractive target for Minute b

  3. EagleSeagle says:


  4. zepfan123 says:

    impossible to tell where we go into July and Aug with todays action. Not surprising..SPX 2070 is still at issue as a continuing support level..or a soon to be serious resistance level. Whatever happens I think that SPX 2130.82 May close will stay the ATH for awhile.- Right now i’d say the odds are we start widening the range and work our way lower soon. i’m not going to throw any big target numbers out there like SPX 1400..or even 1700 yet. Closing below SPX 2040 would be a good start getting us back to SPX 2000.

  5. Here it comes from 2069 where we are currently to target in my screen name .

  6. IMO, the inverted flat (expanded in this case) wave 4 is still looking like the winning candidate.

  7. rc1269 says:

    30 points of gap up in two days yet only +14 point net change since the close on Monday. must mean something to somebody

  8. soulsurfer says:

    CPCE spiked to 0.94 on Monday; a rather extreme reading (since the 2011 price low), and even close to the levels during the 2011 correction. Albeit anecdotal evidence, extreme readings often foretell of things to come, imho


  9. One more…IWM broke 126 support Monday.Today we tested 126 as resistance and now sinking lower.Not bullish.

  10. Just going from memory on this but it s my take that previous Hindenburg Omens that are followed by big down days like Monday (-335) are not the end of corrections, but the beginning.Timewise we should have at least another week of volatility.Pricewise would give us 2000 to 2040.See you all Thursday.

  11. lunker1 says:

    10 down from 10am

    • uncle10 says:

      been happening like that for years. over and over. short term controlled by bots but always short term/ always controlled by bots/computers. Funny to read and see here and on tv people talking about Greece. So much irony of Greece and the markets.
      Good day

  12. manunidhi21 says:

    Namaste Tony!
    I still do not see a purple Int i on 60 min charts. Any reasons ?
    Do you think EU will EVER set a precedent for a Greece default and open doors for others ?

  13. ABchart says:

    Tsipras live speech: referendum will go ahead.

    • mjtplayer says:

      Nothing has changed, referendum Sunday, period.

      • ABchart says:

        Yes, but the guy called to vote “NO”, which means that he does not seek any agreement and there is another deadline to pay to the ECB on July 20

        • rc1269 says:

          not true. he still seeks an agreement. he just feels (perhaps incorrectly) that having a popular mandate from a “no” vote will give him greater negotiating leverage

        • rc1269 says:

          one alternate theory that some Euro econ experts have been batting around: Syriza/Tsipras never had any intention of dealing and staying the Euro since they came to power. that it was all merely buying time for the Greeks to siphon another 50bn EUR from the banking system (and ECB via ELA) before then saying goodbye.
          it’s just a theory. i’m not expert, personally, but some experts i know think this thesis might have some merit

  14. Interesting observation from the twitterverse:
    SPX when the low for the month occurs on the last day of the month, that low is breached in the following month 82.5% of the time.
    … and that low is breached w/in the first 5 trading days of the new month 71.4% of the time. ($SPX results from 63 instances since 1962).

    Of course, as we know, past performance is no guarantee…

    • There is or was a Bradley date somewhere between 6/29 and today depending on the source, and at extremes (multi-week high or low on the S&P) they have resulted in reversals each time the past 18 months. Would love to see what you write play out with a quick lower low for a wave 5 of C down today.

  15. GYN LAB says:

    Possibly in Minute b of Minor C down with retracement targets:
    .500 = 2093
    .618 = 2101
    w4 scenario looking weaker as European indices pulling up the others with DAX already past 11250

  16. mjtplayer says:

    Given the size and time of the rally (yesterday and today) plus the higher high above yesterday I agree with Tony and I’m going with this being a “B” wave. Minute A down to 2,056, rallying in minute B now, minute C down to complete int A still to come.

    The alt count would be that 2,056 completed int A and we’re now rallying in minor A of int B. If we rally up to the 2,100 area on the SPX I will favor the alt count.


    The market is rallying this a.m. b/c the Puerto Rican electric power company made it’s 430m debt payment today, not b/c of ridiculous Greece rumors. It looks like Puerto Rico will not default today, delaying the inevitable to another day. Greece is going to referendum on Sunday, period, ignore the rumors.

    • I thought it was a given two days ago Puerto Rico was toast…guess I have to relearn my lesson…not to believe any news story.
      If I remember Fionas blog from earlier in the week, the 125d had been at 2083…new resistance & then a selloff? I cut back from 30 to 20% on stocks yesterday, upped gold from 10 to 13 %.Rest in cash.Interesting to see if we get above the 50d within four trading days or not.Love the GYN LAB factoid.Until the wild swings stop, we re in a correction.Good luck all.

  17. Dex T says:

    The Greek bailout acceptance terms are bullshit. The Greeks are only willing to accept the bailout with certain “changes” that the EU has not been willing to negotiate on. Nothing has changed so far.

    Also this shows that the EU had the upper hand all along. Now that the Greeks can’t make payment and have no money they are going to keep prolonging the talks.

    The EU may lose some money with a Greek exit but they will stand to lose far more if it continues.

    • Dex T says:

      Also the Greeks are again demanding a 2 year $29 billion bailout as part of the “acceptance”. This is clearly just a delaying tactic to keep the talks ongoing.

      They keep repackaging the same information over and over again.


      • what interest would they (greeks) have to delay all this Greek drama? I found interesting that China and Russia have not made any statements, but Turkey got behind Greece. Something still is lurking underneath maybe after Sunday, will have more clarity. Suspicious the support of democratic process in EU…but not for referendum in Greece. have the cake and eat it too…when you want it.
        This game of ping-pong between EU and Greece is clearly benefiting somebody.

  18. Tony,

    Good Evening,
    As NIfty Index Reverse from 7940, and the indicators turn positive zone like MACD Entering positive, RSI & Stoch in positive.

    You had mentioned 7940 as end of wave-4, and we are in 5th.and the number’s you had quoted in Black colours not in green.So now you confirm that Nifty in 5th wave now. not in wave-B??


    Thanks in advance


    • tony caldaro says:

      Hi Prithvi,
      The B wave completed in March.
      It has been in a C wave ever since.
      Confirmed the uptrend, so the C wave and Major 4 look done

  19. sibyn says:

    DAX —> 12456 double top.

  20. “This could be a 1-2-3, or an a-b-c. If a 1-2-3 the afternoon rally back to SPX 2074 would likely be the 4th wave, and the current decline the 5th. If an a-b-c the market should rally much higher than SPX 2074 before making lower lows.”

    What is the difference between a 1-2-3 and an a-b-c and how could a 1-2-3 have 5 waves?

  21. blackjak100 says:

    On the daily chart, it looks like we need one more lower low to give it a 5 wave look. 2085 pivot must contain today’s rally and preferably the lower end of range. 2084ish would be 38.2% retrace of wave iii.

  22. alexhartley1 says:

    Hi Tony – what level would you need to see us get past on the upside to think that we’ve seen the end of this correction (in the S&P) and we’re moving into intermediate iii please? Would this be at all likely in your opinion or does the wave count suggest we really need to have at least 1 more wave down? Thanks in advance.

    • ABchart says:

      Hi Alex,

      The market is highly speculative at this time because of Greece. The most competent analysts can only make probabilities because it can happen anything at any time that would be pretext for such a scenario or another.
      The last paragraph of Tony’s analysis is very clear (12345 or abc)
      For my part, I fixed the limits bulls / bears at DAX 11250, CAC 4940 and SPX 2085 daily close.
      Best regards.

      • alexhartley1 says:

        Thanks AB. I am aware of this. That doesn’t alter the fact that there are certain levels where the risk/reward changes in going long. Tony’s analysis in the report which I’ve read implies we need another wave down either way but that doesn’t mean we’ll definitely get one therefore I am interested in potential levels that could mean the correction is more likely over.

        I don’t think a close over 2085 necessarily implies that’s it for the correction (low 2100s perhaps). That’s why I am checking to see what Tony thinks.

        If the Greece situation is resolved then I don’t think we’ll see another wave down though I accept this could still take a while.

        Personally I think there are much higher highs ahead this year and that recent low oil prices which take a while to filter through to the economy will help drive this market forward in a continuation of PIII throughout the rest of the year.

    • tony caldaro says:

      Think we need a downtrend confirm in the NDX/NAZ first.
      If the SPX rallies above 2074 today, it will break a six day losing streak of lower H/L.
      Then the next push lower should do it.

  23. ABchart says:

    Thanks Tony!

    Rally in Europe because Tsipras prepared to accept all bailout conditions (?)

    FT: http://www.ft.com/fastft/353421

    • ABchart says:

      DAX has touched its resistance at 11250, CAC at 4940 and the ES at 2077 (SPX 2085)
      Under these levels, the trend remains bearish in very short term.

    • ABchart says:

      Schaeuble, reserved (realistic) as usual:


    • ABchart says:

      Latest from Shaeuble:
      – Problem with Greek ‘yes’ vote: How can we trust a gov’t to carry out a program it encouraged its people to reject?

    • ABchart says:

      Merkel: Germany has decided: we are waiting for referendum.

  24. cmucha68 says:

    And: the trend is still up, up and away. It’s no time for a crash yet. There must be a false break out above the old highs (S&P) and a blow off top. Then it’s time for a deeper correction.

  25. cmucha68 says:

    Oh guys, havr you forgotten ? There is nothing new in Wall Street. There can’t be because speculation is as old as the hills. Whatever happens in the stock market today has happened before and will happen again (Jesse Livermore). It has nothing to do what happens in Greece or whether there is unrest in Ukraine or an Arab spring or not. The market has its own dynamic. If you are using EW or OEW you should count only on that and not interfere with analysis of politics and the economy. To mix fundamental analysis with technical stuff never worked at all anyway.

  26. fotis2 says:

    Greece latest: 24 hours ago everyone was saying NO today everyone is ralying for YES.Geez these politicians can sell sand to the Tuareg wouldn’t suprise they cancel referendum before the day is over.

  27. fishonhook says:

    Just noticed you labelled the recent high in the SSEC as D. Bold move Tony.

  28. I see the MACD s for S&P(especially monthly) keep looking worse and worse.Seems to be getting some separation between the fast and slow lines-the most yet.Sure looks bearish to me….would take a heckuva rally to save it.Good luck all.

    • chrisk44342 says:

      Yes I agree with you, does look a bit ominous. I don’t look at MACD too much but when you combine it with a possible terminal pattern, and the fib timing cycle ending on a monthly basis, it’s cause for concern. We all have to remember that EW or OEW is an inexact theory and will not predict anything. That said, Tony is a master at what he does and I really respect him for it.

  29. mjtplayer says:

    FYI: The rating agencies have all come out and said that Greece missing the IMF payment is not a default, technically. Something to do with direct loans and not bond payments, instead Greece will be in “arrears”. Greece would however be in default if they missed the 3.5b Euro bond payment due the ECB on July 20th.

    Conveniently timed Greece rumors mid-day to help goose the market in the afternoon, just so happens today is the last trading day of the month & quarter – last minute desperate attempt to rally the market for window dressing??

    Tomorrow will be interesting. The bulls have always expected (hoped) there would be some type of Greece deal to kick the can, but that ended about an hour ago. More important than Greece missing the IMF payment is that the bailout fund just expired. No deal today/tonight now means no more money for Greece, it’s over. The referendum is scheduled for Sunday, but the larger question is what if they vote “yes” to the deal? The deal, as part of receiving the last tranche of bailout money, ended today. There is no longer a “deal” upon which to vote “yes” or “no”. If Greece votes “no”, than it’s back to the Drachma and a “Gre-fault”, we all know that. What a mess…

    In the meanwhile, before Greece’s referendum on Sunday, pay attention to the possibility of Puerto Rico defaulting tomorrow.

    • torehund says:

      EU-wants Greece Dead or a Alive. Its a strong constricting sign to all other union members that they have already been taken over by another power in a “sneaky” way by an unelected bunch of totalitarians clinging to power against the will of Europes population..Room 101 next, or break(X)it ? Man up Greece.

      • tomasso60 says:

        how true your words are.
        power is held by lawyers, bankers, politicians (all interchangeable) but no one of any substance that can represent the people of Europe or most any nation in a manner that is “for the people”.
        best thing for Greece is to say no to the Troika, maybe then the power elite will know that there is a man standing.

        • senrex says:

          I agree with your comments about “lawyers, bankers, politicians (all interchangeable).” But I also fear the concept of “the people.” Too quickly turns into a mob with mob rule. I really don’t know what the answer is.

    • rc1269 says:

      That may be the information that CNBC is reporting but isn’t quite entirely the story. They can vote “no” and stay in the Euro. They can vote “yes” and things can still fall apart (especially since what they’re voting on seems to change by the day)

      Other than being able to say theiy’re “European” there is nothing in it for the Greeks to stay at this point other than years more of debt laden depression.

      Only two solutions: debt write down, or exit and reintroduce the Drachma. Both have the same ultimate effect to creditors. If we get anything else then we’ll be revisiting the Greek drama yet again in the not too distant future

  30. Page says:

    Thanks Tony.

    Today’s rally was a just sneak preview, tomorrow is actual reversal day, markets are going to rally hard.

  31. Gary Lewis says:

    So the failed three month test of the high last month proved to be a good signal. This month, SPX is lower. A monthly failed test of the high usually a key topping signal. So while I liked Tony’s 2019-2040 range and then a move higher, my experience tells me that the top is in and lower prices are in the cards. Not just for the next month but for many months forward. Perhaps the Greek default will be the marker that signalled the end of the bull. But only time will tell.

      • Very clever. The diamond ring is Euro membership for Greece. Maybe the markets are not going to view Greece’s exist as disaster for the European economy.

        • tony caldaro says:

          For the EU, it is a bump in the road

          • torehund says:

            True Tony, but who would get married if one knew beforehand that divorce was impossible. In such a setting there is an uncanny overhang of eternal dictatorship, and no matter how bad it becomes you just have to endure it until death separates. If Greece proves its possible to break out, it will be like injecting a breath of freedom into the remaining EU nations, and they DONT have to use that potential release button. Its comforting enough to know there is an escape door, if not you take away the most essential in human life, namely freedom to choose ones own destiny.

          • tony caldaro says:

            If England decides to leave the EU, will German troops invade the country?
            It’s not a prison. It’s a bureaucratic dream: the few controlling the many

          • torehund says:

            Agree, the EU is a soft dictatorship (snare), you lure them in with numerous benefit of riches (population getting more and more satisfied, greedy and corrupt; from an already high base level🙂 ), then when the bubble pops the super comfy rug is drawn away under their feet like at no time in history before. If they hadn’t joined their downfall would have been more moderate. We all knew that the Greeks would never adopt the work-ethics and cultural rigor of a German (average person), nor will a Gypsy ever become an all A student.

          • torehund says:

            …just one more comment Tony, Eu- is an organization made by old folks to benefit old folks through generous pensions and high wage administrative “jobs”, at the expense of the youth that still have to live with their highly pensioned old folks due to insufficient wages and unemployment.
            There is an impending youth revolution right around the corner, especially if this stagnant situation prevails much further. We all know where the real work went (China and Asia), whats left in the developed world is mostly an over bloated bureaucracy and huge pensions.
            A plummeting Euro may bump that trend.
            To the EU- pensioners its just one thing to say; when all jump into the honey-jar at once, its already nearly empty.

  32. blackjak100 says:

    From 2130, I see 13 squiggles indicating an impulsive move down with wave ii in progress. If I’m wrong because wave iv was a flat confirmation is simple…trade above HOD Tuesday confirms wave ii bounce and trade below Tuesday LOD indicates wave v of i is in progress. This is basically what TC said except I’m seeing it as impulsive (13 squiggles) either way. EIther scenario suggests a rally to the 2085 pivot.

    • Hi blackjak, do you think SPX goes to new lower (such as 2040) first, and then 2085, or 2085 first? Thanks.

      • blackjak100 says:

        I didn’t favor either scenario last night although the huge +div on the 60min indicated a possible 5 waves down complete. We now know what scenario is playing out based on the futures assuming they hold up. Market would open around 2080ish as of right now. 38.2% retrace from 2130 is at 2085ish. 50% retrace is at 2093ish. Sustained trade above 2085 pivot would start to get me cautious on the short side. If I remember right, 2088 is a significant Gann level as well. GL and Cheers!

  33. torehund says:

    Greece has now defaulted on the IMF loan as the 2nd nation latter to Zimbabwe. Question is if Legarde will attempt Zoombify them further. Lets see.

    • torehund says:

      Nice Bouraq, the Euro had that ugly dip that isn’t easy to repair…And Gold may shine in the region of waning confidence (EU), and nowhere else..

      • bouraq says:

        Yes Euro did that stupid damage to the technical picture so what do we do? Nothing. Wait and see. Not sure about Gold. 1085-1100 perhaps before a true dip.

  34. What’s striking about TC’s 60 min charts is the fishing line nature of yesterday’s decline. Market did not finish on its lowest print of the day yesterday but came very close. On this basis I’d be inclined to call yesterday’s sell-off 3 of 3. If correct today’s action would be 4 of 3 rather than the larger 4. Either way we may get another failed rally back to today’s highs which should hold. Market weatherman says choppy action, promising from time to time but with a downhill bias.

    • torehund says:

      looks like a tempting double abc down. Equal length (a=c) abc to where you have the Large A. Then a final abc from where you placed ii to iii, b to your iv and c to here you have the large C. If you think its a bottom I would tend to agree, lets see.

    • I believe Stockcharts.com only allows publishing of links to it’s charts, not the charts themselves. You don’t want them to come after you for copyright violation. However, I am a free-level member. Maybe different rules apply to paying members (but I doubt it).

  35. chrisk44342 says:

    I vote higher still for a counter trend rally, even if we make another low. 18 pts is a little light given how the hourly chart looks.

    • joecthetruthteller says:

      Stochastics and the RSI remain neutral to bearish signaling that sideways to lower prices are possible near-term

  36. gtoptions says:

    Thanks Tony
    With the 5th wave scenario, that could conclude the Minor c wave and possibly end the DT?🙂

  37. torehund says:

    Thanks Tony.
    Growth sector YES, smells inflation somewhere down the line, but waiting for currencies to elicit it.
    I smell a Ra…oops Goat.

    • torehund says:

      ..for mankind the fall of an autocratic, (and even tilting towards a totalitarian EU-dictatorship) is very healthy. Its important that the bureaucrats “loose it or TILT” To have a game theorist as the leader of Greece-economy is also timely. He kind of lures EUs inner, now barely hidden totalitarian attitude out of them and makes it flourish in its inherent grotesqueness, at a time when the public all over Europe is severely sick of it all.
      What a contrived Greek Economist, or better still why not call him a mathematician… the bad boy of the class frees all, yet again ?

  38. CB says:

    Thanks Tony

  39. fotis2 says:

    Thanks Tony!Don’t like that lower low it made today the DB potential setup would look better with a higher low.On the bright side 3bar reversal on hourly chart still valid+ 2nd day support holds on 200ma.

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