Wednesday update

SHORT TERM: slightly higher then pullback, DOW -3

Overnight the Asian markets gained 0.3%. Europe opened lower but gained 0.2%. US index futures were higher overnight. At 8:30 the PPI was reported higher: +0.3% v +0.4%, the NY FED was reported higher: +3.9 v -2.0, and FED chair Yellen’s testimony: Then at 9:15 Industrial production was reported higher: +0.3% v -0.2%. The market opened one point above yesterday’s SPX 2109 close, then immediately dipped to 2107 in the opening minutes. After that the market started to work its way higher and hit SPX 2114 by 11am. Then it started to pullback. At 2pm the FED’s beige book was released: By 3pm the SPX had hit 2102, then bounced to close at 2107.

For the day the SPX/DOW were -0.05%, and the NDX/NAZ were mixed. Bonds gained 11 ticks, Crude dropped $1.60, Gold slid $6, and the USD was higher. Medium term support remains at the 2085 and 2070 pivots, with resistance at the 2131 and 2198 pivots. Tomorrow: the ECB meets, weekly Jobless claims at 8:30, the Philly FED and NAHB at 10am, then FED chair Yellen continues her testimony in the Senate at 2:30.

The market bounced around in a narrow range at the open today then rallied to SPX 2114. A new high for the rally from last week’s SPX 2045 low. After that it set up a short term negative divergence, and with a little help from protesters in Greece, the market had its first notable pullback of the week down to SPX 2102. We continue to count three waves up from the SPX 2045 as posted on the hourly chart. Today’s pullback could possibly be the fourth wave, or another subdivision of the third wave. Tomorrow should give us that answer. If a fourth wave, the pullback could extend into the mid-2090’s before the rally resumes. Short term support remains at the 2085 and 2070 pivots, with resistance now at SPX 2114 and the 2131 pivot. Short term momentum displayed a negative divergence this morning, then declined to nearly oversold before bouncing the neutral at the close. Best to your trading!

MEDIUM TERM: potential uptrend makes higher high

LONG TERM: bull market


About tony caldaro

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161 Responses to Wednesday update

  1. google up 38 bucks after hours. Tomorrow should be another big up day. 3 week downtrend will be up 100 points in 6 days

  2. gtoptions says:

    Tony, what’s the next pivot above 2031? 😉

  3. Jim Guthery says:

    uvxy from a high of $50 to $28.05 in 5 trading days!! Made some cash over all but gave a little back on gap down in morning – luckily I took my -2.00 loss and bolted. Re-entry maybe later.

  4. bhuggs52 says:

    Hey Newbie, thats on that salmon offer below, I’ll take you up on it when we get the monster wave 3 down. We’ll make money together, since I’m basically a bear by blood and waiting and always with one eye on that side of things. Meanwhile, I still try to make money in the ongoing bull and I agree strongly today with Zepfan, that at the moment, we’re not by any sign close to a monster correction. It’s coming, but not yet.

  5. blackjak100 says:

    Agree with short term count most people have been posting. Possible wave 4 pullback tomorrow which should be greater than 15 pts.

  6. mjtplayer says:

    For those of you who like patterns, this is pretty clear.

    – Rally into OPEX for 1 – 2 weeks
    – Top out around OPEX
    – Sell off over the next 2 weeks

    Rinse and repeat. Each red circle targets monthly OPEX:

  7. Page says:

    Options people are collecting their profit today, selling begins tomorrow.
    I am buying Oil related stocks today.

  8. NEWBIE says:

    Bulls need another wave down to get this going. Bears need a move down to turn into bloodshed. Mr. market is stuck at the moment- everyone looking at 2120 with finger on sell or short button. A nice flash crash could and solve this issue or an overnight gap down.

    • tradeanimal says:

      Everyone picking on you certainly seems like a top is here!
      Rather big and obvious -ve divergences on the 60 minute today. Sold my SPY calls yesterday early afternoon. Not going to chance it going short especially with the weekend coming up. Good luck!

  9. NEWBIE says:

    It about tooooooo you know!

  10. uncle10 says:

    gold sitting on the edge of cliff.

  11. zepfan123 says:

    Wow..NFLX up $16 today. Considering NFLX did a 7 for 1 split 2 days ago…technically it’s up $112 today alone for an amazing new ATH.- With some key stocks making moves like that…and the S&P unbelievably strong here and big moves up on indexes like the COMP,BKX and even the Transports…the odds of getting a big move down here soon look between slim and none..especially with the VIX all the way back to 11 today.

    • chrisk44342 says:

      I am counting on that mentality. The time to start looking for shorts is when the VIX is in this position.

      • zepfan123 says:

        Ok..but bear in mind the VIX has been known to trade in the 9 ‘s for several months straight during prolonged rally periods even dipping into the 8’s intra day. The All Time Low VIX close was at 9.31 on 22 December 1993,about 3 pts lower than where we are now.- Impossible to say what were going to do here the rest of the summer going into fall.- 2 weeks ago i thought..and was hoping we were really ready to drop hard for a while and get back under SPX 2000 soon.- Obviously that was dead wrong. The bottom line is…is for the market to drop good now…90% of stocks and sectors will have to drop together at the same time. Sector rotation corrections will not get it done obviously.- Example is the Transports have had a really good 10%+ correction the last few months,and would have normally been a catalyst for other sectors and the broad market to start correcting hard too.- But not this time…as too many other the COMP and BKX rallied good at the same time…keeping us more or less sideways.-I’ve been mostly short the last 3 months on my short term trades but it’s been very difficult to get anything substantial going as they keep taking us quickly and unexpectedly back up near the ATH’s out of the blue.
        When you feel the entire broad market and it’s key indexes are ready to correct all at once, let us know your targets and time frames.
        By the way back to the VIX..the all time high close was at 80.86..on Nov 20th,2008…68 pts higher than 12..where it is right now.-

        • chrisk44342 says:

          I appreciate history for the vix, but none of that impacts me at all as a trader. I am looking for an event i track on hourly and daily charts, not how high or low the vix goes over lon periods of time. You see, I said ‘watch for shorts’. This does not mean ‘take shorts’.

    • Dex T says:

      Pure Euphoria. Netflix consistently loses money yet gets rewarded with dramatic price increases. This stock is clearly in a bubble reminiscent of 1999.

      Having additional subscribers would only make sense if they earned you money but in Netflix’s case they cost them more.

      • zepfan123 says:

        Oh I sure wouldn’t buy NFLX now. Not even with somebody else’s money. But it’s very hard to time the top on way over the top stocks like a NFLX or an AMZN.. Anybody who had a short on NFLX last week is probably in the hospital today.

        • Dex T says:

          I won’t buy it or plan on shorting it. it seems like it’s in a 5th wave but no telling when it will break.

          It just stands as an example of bubble behavior

          • zepfan123 says:

            Right or wrong it would be insane to buy a stock like NFLX here considering just a few years ago you could have bought it for over 90% less.- Carl Ichan just got out of all his NFLX 3 weeks ago at $672 which he bought for $58. Now thats a home run,and I’m sure he’s not worried about leaving money on the table with a 1000% profit. Let some other suckers see if they can make a buck on it from there. Buy real low and sell real high almost always works.- But buying super high hoping it goes even more super high so you too can make some money is usually a suckers game. But the 7 to 1 split taking NFLX down to the $100 area will definitely get some small time retail investors to roll the dice on it for the first time. But they need to remind themselves first that NFLX is really an $800 stock today that could have been bought for $60 just 3 years.- NFLX might go even higher but it’s way too rich and dangerous for me here. So is AMZN.- On the flip side though I’m watching the Dow stocks and S&P of course coming back up near the ATH’s again…but I’m also paying close attention to the banks(BKX) at a 7 year high here,the COMP,also almost at a new ATH..and last but not least..the Transports.- If the Trannies have bottomed here in the 8250 area,the case for much downside from here soon look all but dead. Gonna take a lot of across the board sector selling at the same time to get the market to really correct good here. At the moment…I see no clue of that happening real soon.

  12. camper1888 says:

    Thanks Tony c , for all the updates.. What i learned from this blog is not charts or ew, but how to filter out noises .. LOL

  13. bhuggs52 says:

    Could be a sweet short lining up for tomorrow with OPEX, and the possible wave 3 top in today.

  14. NEWBIE says:

    You guys ever notice when big moves happen they catch many off guard and then they stretch for about 5+ days just so the clowns on margin have to sell, and what do you know they usually sell right at a top or bottom in preparation of the next wave.

  15. For da bears, for today…
    This bull move doesn’t come under stress unless a close below 2096.04 and trend change doesn’t happen unless sustained move below 2083.09.

    But keep your spirits up, it’s bound to go down at some point.

  16. NEWBIE says:

    too much weight on one side

  17. Tony , what do you think about :

    2074-2051-2112-2102- and today wave 5 at 2121

    it is possible?

    If yes, how deep is pullback?


  18. Thanks TC; globe getting to be an interesting place.

    How about, trade what you see and not what you feel?

    Gap on ES at about 2127.04 that should get filled; after that, we shall see. 😉

  19. torehund says:

    ..sometimes its when you succumb to the force you have been fighting, you Win.
    Also fighting hyperinflation (by inducing austerity) creates exactly what you feared the most. Good luck to Merkel and the world of opposites 🙂
    Let the market speak for itself…

  20. mjtplayer says:

    Gap-up open above yesterday’s high, I have this as wave 5 of c to complete int B. Massive hourly -div and spot VIX smashed into the low 12’s at 12.20 with the LOD at 12.11

    Bottom and int A = 2,044.02
    A = 2,083.74
    B = 2,044.66
    1 = 2,074.28
    2 = 2,049.73
    3 = 2,014.14
    4 = 2,002.49
    5 = 2,121.42 so far…

    New Moon yesterday into today, Bradley turn date today, OPEX tomorrow – this time frame is a great place on the calendar to top-out.

    Bigger picture, a failure here around the SPX 2,120 area would be a perfect RS of a H&S pattern; with the late Feb highs around 2,120 being the LS, the May high of 2,134 being the head and the 2,040-5 area being the neckline. If we reverse and drop down below 2,040, downside target from the H&S pattern is around the 1,950 area.

    Last area of resistance for the bears around 2,120 and 2,124 (downtrend line connecting May high and June lower high).

    • mjtplayer says:

      Sorry, wave 3 should be 2,114.14 and wave 4 should be 2,102.49

    • NEWBIE says:

      mjt, ok so say we start c down and hit 1950. then where do you think we go from there? thanks.

      • mjtplayer says:

        That would conclude major A (1,950 – 1,980), so a major B rally thereafter.

        Need the market to reverse first, once we get through today and perhaps OPEX tomorrow we can really start moving down next week, typical post-OPEX give-back the following week.

        I see many sectors that look terrible, really only 3 sectors holding-up the entire market right now: healthcare, biotech & financials – along with a few select Nasdaq stocks like: NFLX, GOOG, FB & SBUX. Software doesn’t look good, semi’s look terrible – thin leadership in the Nasdaq, it’s all about the biotech bubble. IBB up over 10% in 5 trading days, that’s what’s really propelling the Nasdaq and also helping the S&P; no biotech in the DOW, which is why the DOW is lagging behind.

  21. uncle10 says:

    UVXY $49 to $29 in a week. you can always buy it lower…..

  22. Dex T says:

    So all the Greek drama about austerity turned out to be a big joke! When finally backed into a corner it became apparent that the Greeks would sign ANYTHING as long as it allowed them to remain in the EU. The Greek parliament voted 229 out of 300 in favor and polls showed the majority of Greeks were found to be in favor of it!

    I guess they can stomach a whole lot more austerity o figure they aren’t going to follow the bailout terms anyway.

    Unfortunately Greece will be back in the news within a year regardless of what happens.

  23. JeffMilano says:

    Thanks Tony for your blog. One learns more than books. A great experience this blog and your course. Are the any new updates from last year. Thank you

  24. I can’t help but think that there will be an enormous feeling of “crisis fatigue” after Greece and China fade from the front pages of all forms of market media. Further, I suspect that the EU will experience a bad case of Buyer’s Remorse by month-end. I’m long via UPRO, USO and SLV (since 2,046) looking for 2,180 but may have to hedge if fatigue and remorse begin to manifest.

  25. Gary Lewis says:

    Silver starting another leg down. Looks like $5 is my next target down. I’m sure SPX will soar beyond anyone’s wildest expectations. Central Banks are in total control. Long SPX/short SLV is the only way to go I think.

  26. blackjak100 says:

    With fires suggesting higher open than 2114, will still need a pullback and another HH to complete 17 wave impulse before any pullback occurs. 2130 could be a target.

    • NEWBIE says:

      Every tom, dick, and harry looking for new highs. Bears have capitulated & Bulls are euphoric once again.

      • blackjak100 says:

        Newbie, wouldn’t call it capitulation just try to read squiggles which looks impulsive. Need that big overthrow in ED for buying climax then big correction can ensue.

      • tommyboys says:

        Utter redundant nonsense. Just look at the blog. Many calling for a top, a “B” wave, a “wave 2” high etc…
        We are on the edge of an historic run and bears -with bear pics ad nausea – will again be chewed up as they have been the past few years. You want to blame the Fed, Greece, Germany, Iran, the Eurozone, the Dollar, Yellen, Bernanke, Greenspan, Gold, Oil, Fracking, Rates, Profits, Growth, GDP, rhyming patterns, Trump😎 – WHATEVER… Every pullback is not the end of the world. No bubble, no 1929, 2000 or 2008, no depression, no crash – not now – some day – but not now. You will miss the run
        – but we do need the fuel of your negativity – so thanks and carry on the redundancy.

  27. argento1 says:

    I’m with newbie expecting another nasty leg down into first week of August once this upmove is done (and close), that should produce a significant low together with a spike in the SPYDER volume that we have not seen with the last low!From there longer term cycles calling for much higher prices for the rest of the year into February 2016 where Primary IV should kick off at last!

  28. stmro says:

    Futures jumped on the Greek vote result (Yes won by a large majority). We should fill the gap today or tomorrow.

    • fionamargaret says: if this is to be proven true, and we have a nasty Aug/Sept/Oct we have to rise enough in the last 2 months to break even or above for the year…
      .think down to-morrow, at least initially.

      Thanks Tony and everyone.

      • Futures are up 33 pts on Naz…once Shanghai turned around,we jumped.Gap to be filled at 2080 but when? VIX may get into single numbers before long….See if we restart the pattern of nominal new highs then a selloff.Key is the 10 year not jumping above 2.50%…Lots of keys actually lol.Good luck all.

  29. blackjak100 says:

    No surprise IMO that Nates has moved 4 of ED to recent low and has 5 up to complete ‘a of 5’. Futures will need to falter for this to be correct, otherwise we would need to see 2 additional new highs above 2114 to complete 17 wave count.

    • manunidhi21 says:

      Thanks BJ..
      very tough to count..enough liquidity to even test bases..not even a 15 % correction from 2012 which is presumed to be bench mark for shifting long term hedges and averaging equities..

      Here in Canada, Central Bank is cutting Interest rate, Bank of Canada lends to Banks interest free and to Provincial(state) with interest and IS a Govt. institution..Avrg Canadaian Income is $33k and avrg price in Toront is 600,k My Friend bought las year with 35k deposit a 700K house, sold for 925k.

      History will remember Greenspan

  30. Gary Lewis says:

    Anyone have a downside target for SLV?

  31. A Hindenburg that wasn t.107 new highs 101 new lows…but McClellan is positive so no cigar.I figured they d pass the Greek agreement.It was all prearranged on Sunday night.Same thing coming up when EU votes.They have the votes.

  32. The moving vans are in the process of transferring the Parthenon and Acropolis to downtown Berlin.Should be quite a tourist attraction.

    • bhuggs52 says:

      Poor Greece. Doomed. More debt to get out of debt. And less ability to raise revenue to pay it back built into the equation. Poor Greece. Doomed. Dang. Hardball times are a-coming.

      • It’s true that even a drowning person will grab onto a shark in hopes that they might live. As a former Gov’t Stooge, I regularly served on source selection boards where we evaluated proposals/bids for construction and/or services contracts. Value vs Lowest Price/Technically Acceptable considerations aside, I had a moral & legal obligation to ensure that the contractor (in error, or by attempting to win the contract award at all costs) did not submit a bid that would obligate them to fail or lose money, thus cause themselves harm & likely cause the Gov’t harm as well. In Greece’s/EU’s case, who or where is the “honest broker” in this instance? If one doesn’t emerge soon…it will be settled abruptly by the only entity with Absolute Authority, The Global Market! Collateral Damage notwithstanding…

        • fotis2 says:

          The IMF(On the recommendation of the US or so it has bee claimed) has thrown a spanner in the works albeit a bit late or just at the right time depending on each side’s viewpoint by stating that the bailout is far too little and the measures way too harsh for it to work properly and is almost guaranteed to fail.

          • bhuggs52 says:

            Good points from MrMkt, concerning the absence of honest oversight that would contain or work to avoid the harm of any contract. And yes to Fotis2, IMF has stepped in and made very clear its position against this deal, where there’s no haircut on the bonds and some pain felt by the creditors as well and not just more pain down the road for the Greek people. It’s depression-time for the Greeks. They ended up in a weak position and membership in the EU will turn out to be membership in a pretty rough gang. Hardball yeah. More like killball. Here’s a link to a great interview with the former Greek finance minister Yanis Varoufakis who worked tireslessly through the negotiations, only to get canned in the end by his own people for maintaining a firm defense of Greek sovereignty.


            • fotis2 says:

              It seems the big problem in the eurozone right now is too many Chiefs and no Indians if the euro is to survive they have to come up with a different strategy when faced with problems or alternatively elect a central european goverment.

  33. NEWBIE says:

    Any Bears or Shorts or just me? Will I ride the biggest down wave of the year alone- just me and Goldman Sachs?

    • Be careful with GS, they do the opposite of what they tell the public.

    • mjtplayer says:

      I’m bearish too Newbie, I have this whole move as a “B” wave with “C” to come. But, you may get one more poke higher to finish wave 5 of c of B.

      I have some VXX and I started shorting the S&P today, 1/2 positions each. Will add more in the days ahead, little by little..

    • I’m looking lower, but still paying attention to Tony’s count. The Bradley thing today or tomorrow. Bradley’s at extremes are 9 for 9 but the question is if today or tomorrow is the extreme.

      Anyway, if tomorrow we could label somehow 5 of 1 of 3 up, I think a 2 of 3 retrace of minimum 49 SPX points within the next two weeks would fit the Bradley pattern (at extremes only) since the beginning of 2014.

      Of course, if the count is more bearish, the max reaction from a bradley at extremes was almost 200 up from the mid-October low, so there’s room for more than 49 of course! Either way, 49 SPX points from today’s high or tomorrow’s high by 7/31 is my call.

    • uncle10 says:

      looks like we need one more spike up newbs. Then it will look very similar.

  34. torehund says:

    as before the bailout “bypasses” Greece and goes straight to the banks directly (50 percent) and indirectly to scoop up assets named “investment”. Its like taking a loan to repay your neighbor for money you don’t owe him in the first place…Who has any confidence left for the future of the Euro-zone ?

  35. mjtplayer says:

    SPX futures up 7pts on the Greek bailout package being approved by the Greek Parliament

  36. zepfan123 says:

    Heck of a big move up on NFLX in after hours up about $8…or 8% more or less at about $108. Considering NFLX did that 7 for 1 split yesterday,thats equivalent to about a $56 gain in one second.- I’ll admit I thought NFLX had topped out for a while 2 weeks ago at about $680. This AH rally puts it at about the equivalent price of $750…a huge new ATH of course.- I see NFLX is up about $6.50 as I finish here..but still a big move.

  37. fotis2 says:

    Thanks Tony

  38. john b says:

    Thanks Tony, now that was a quick zz, the last spike up musta been the shorts covering!

    • WHAT! not even close. IMO volume didn’t even exhibit any signs of short covering. It look like the algos had to automatically fabricate a dip to get more buyers interested.

      Look at Y2011 P1 RS wave form and TI’s (RSI 5, MACD) in the hourly chart below

      Then go look at today’s hourly of this potential RS and ask yourself if the two are not strikingly similar. IMO neither the 2011 RS nor today’s potential RS wave structure is impulsive. Just saying.

      • gtoptions says:

        EL, I told you all the shorts secretly covered during the NYSE fiasco. LOL 😉

        • LOL….totally agree GTO, that’s why those traders like you and myself immediately posted comments of the like

          EL MATADOR (@LoLo_MATADOR) says:
          July 8, 2015 at 2:09 pm
          get ready folks, NYSE has re-programmed it’s algo bots ….ramp up coming real soon NYSE to re-open at 3:10 pm ET

          gtoptions says:
          July 8, 2015 at 2:19 pm
          Just in time for a test of the lows. 😉

        • Hey GTO, I notice you got a real hot hand going right now too, keep up the good work. I regret not having have gone long on Sunday after that Sunday mini-plunger. I took my mini-plunger profit and sat out this rally. I’m current short as of last night from 2107 ES even though I still think we might tag the 2111-13 ES (2118-2120 SPX) tomorrow. I plan to add a second lot of short around there if the wave structure looks complete.

      • H D says:

        Hey EL, nice fractal!

  39. stmro says:

    What a day of nothing!

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