Tuesday update

SHORT TERM: turnaround Tuesday, DOW -180

Overnight the Asian markets gained 0.2%. Europe opened lower and lost 0.7%. US index futures were relatively flat overnight, and the market opened three points below yesterday’s SPX 2128 close. By 10am the market had bounced back to SPX 2128 and then started to pullback. Just past 10:30 the pullback dropped below SPX 2124, yesterday’s low, breaking the eight day streak of higher highs/lows. Then the pullback gained some momentum to the downside. Just past 2pm the SPX hit 2115. Then it worked its way higher to SPX 2121 just before a 2019 close.

For the day the SPX/DOW were -0.70%, and the NDX/NAZ were -0.15%. Bonds gained 10 ticks, Crude added 45 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: FHFA housing at 9am, then Existing home sales at 10am.

Over the weekend we posted the following; “… unless this third wave extends, early next week could be somewhat choppy as the market yet again deals with the OEW 2131 pivot.” Yesterday the market rose to SPX 2133 and then started to pullback in the last hour of trading. That pullback continued into today as the SPX hit 2115. The rally from the downtrend low at SPX 2045 now looks like four Minute waves: 2074-2051-2133-2115 so far. Once this pullback concludes we should see a rally up to, and probably above, SPX 2133 to complete Minor wave 1. Short term support is now at SPX 2115 and 2102, with resistance at the 2131 and 2198 pivots. Short term momentum was quite oversold during today’s pullback, then bounced a bit at the close. Best to your trading!

MEDIUM TERM: uptrend

LONG TERM: bull market

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

About tony caldaro

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80 Responses to Tuesday update

  1. Dex T says:

    Technological change is what oil is fighting against. While the next few years I expect it to rally it’s long term prospects are dim.


    Tesla’s CTO envisions a future in which low cost batteries change everything

    “Straubel is also one of the core executives working on Tesla’s massive battery factory, which is under construction outside Reno and is supposed to produce enough batteries for 500,000 electric cars annually by 2020.”

  2. Page says:

    SPX will close green and then tomorrow actually rally begins.

  3. mjtplayer says:

    Oil down over 2.5% and now trading well below the psychological $50 support area at $49.50

    Below $50, oil has retraced more than .618, it needs to hold right here, otherwise it may fall and retest the $42 low. Clearly, Iran dumping more oil on the market is, and will continue, having a negative effect on oil prices.

  4. torehund says:

    Tony and Martin are right, the market can only be manipulated to one extreme, thereafter whichever option the manipulators employ the result will be the same. We are there or very close to it happening….

  5. fionamargaret says:

    …sounds good 25, and of course there is oil at 32!!

    Look back to Friday’s update – I had AAPL missing its numbers, but wished Matador well.

    Yes, I am long TMF, but that could change soon – rally coming up tomorrow thereabouts. (BB)

    • torehund says:

      could be a double 5 down in oil, just to spook the market. Think it will follow gold.

    • Fiona, thx and nice call on AAPL. I was long AAPL from last Tuesday at 125ish…Bears kicked me out on the curb with no gains as my stop lost was hit at my entry price. I was hoping for a pop to at least 140 prior to any sell off. Bots never gave me a chance on this one. Better luck next time I guess.

  6. gtoptions says:

    Thanks Tony
    SPY ~ So Far has held above symmetry support @ 210.70
    That little declining wedge looks promising. 😉

    Bears break SPX 2040 and I’ll begin to listen to you. Until then you have some work to do.
    GL All


  7. Dex T says:

    Another Goldman Protégé at work. The worse a company a does the more compensation you deserve!

    Goldman Sach’s Ex-President Is Increasingly Presiding Over A Fiasco At Barrick Gold

    “With mine maintenance capital expenditures already reduced, Thornton might also need to raise more capital by issuing equity. Shareholders were already frustrated by Thornton’s continually lavish pay packages. He was paid $12.9 million last year even as the company’s stock plunged, a compensation package that shareholders overwhelmingly rejected in a non-binding vote in late April.”


  8. Page says:

    Huge rally starts tomorrow and there is a good chance SPX will make new high by Friday. Also shorts covering will help fuel this rally. Oil looks attractive here, took some position.

  9. torehund says:

    Out of clues of how to repair the unrepairable there is emerging splits from within the Eu, and seeing the ship taking in water even Germany themselves considers an exit. Eu is entering an all for ONESELF stage (end stage). This phase invites a chaotic temper that finally brings out the true colors of the politicians in major nations like France and Germany.
    The pitfall is that Germany has done what is beneficial to themselves and not whats Right for the member states, and then this inequality starts to piggy back. “When you are the strongest, you are actually the weakest, and every strength eventually becomes a weakness at the very end of a spectrum”. The Zero sum game.

  10. mjtplayer says:

    DOW down 90 at 17,828, just 35pts from 17,793.45 – the potential minute wave i high. A breach of that level would invalidate the impulse wave higher as potential minute iv would breach minute i, making 3 waves up (not 5) and blowing-up the bullish count. A, B, 1,2,3,4,5

    • MJT, you know very well that the bull camp will just counter with oh I meant we in minor 2 …. This is one great example why I always say that if your basing your count off the prior trend ending in truncation you better look harder for a non-truncated wave count. Truncation is a rare fish so let’s keep it that way.

    • wantforanail says:

      This is exactly how I am looking at. Trading DIA against those levels. Better risk reward.

  11. HW says:

    This w4 could be a nice abc with a wave yesterday hitting .236 retrace at 2115, quick b wave to 2121 and now possibly c down to Tony’s 2102 support where .382 retrace lies. Break below 2110 today could have 2102 next stop where I will try small long.

  12. They re pounding the table on Apple this morning…
    Question:Who sold yesterday then? Same oxymoronic stock market experts or what?

    • Interesting that the oil inventory reports got overall stocks to drop somewhat…so let me theorize about a correction scenario.
      Dollar breaks out…oil drops..commodities drop..more worries about the effect of the dollar on profits..investors go BACK to bonds from stocks
      We ve already seen mini corrections because yields rose over 2.48% (10 year).Just seems the sweet spot for stocks is getting smaller and smaller.
      .It doesn t want yields to rise but when they fall, it s for non bullish reasons.Interesting stuff.

  13. Hey xscaler-
    I know you liked agq around 39 – now u can start buying here current 31.80

  14. Well Tony,
    We hit the 2110 level but if you blinked you missed it LOL.

  15. @Tony,

    As you suggest in crude that ‘C’ over at 42.41.
    Can we go long in crude or wait ??


  16. mjtplayer says:

    VIX at 12.34, absolutely no fear whatsoever, still an extremely complacent market. That tells me everyone is positioned for this to be just a small pullback, there’s no fear of a deeper pullback, thus nobody is buying puts.

  17. https://caldaro.wordpress.com/2015/05/14/commodity-update-2015/
    “This update will suggest some sectors may have just started Primary wave counter-trend rallies that could last for a few years. ”
    Tony ( no others ) –
    Any change of opinion ?? Using $ GTX ( too oil heavy ) down 10 % from report ? Gold down 9% from report . I get the $ strong , , but Anything telling you a reverse is at hand ?
    I have a thought but would like to hear your’s first .

  18. filipozze says:

    In my opinion minor wave have already top, now we are in minor 2

  19. Waking up to another gold selloff, oil selloff, stock selloff.Bonds? Ahh a place to relax while all this deflation gets sorted out…especially if the dxy breaks out(98).I see a couple gold sites are predicting $1000 in 2 days or so.You would have thought with record volume 2 days ago GDX would ve have bottomed butnow we test the 1080 level from Monday morning futures crash.I ll add more soon with further weakness…why not?

    • fionamargaret says:

      910-950 for GLD are what my charts suggest…..

      • Hopefully not straight down….lol.Going to start adding to my 10% gold stocks by dollar cost averaging in starting at $1000…then every $50 down from there.Should be some rally very soon but thats the plan.

  20. Hi Tony,

    I run a trading podcast and I’m currently looking for successful Elliott Wave traders to interview.

    If you’re interested, search for “52 Traders” in google to listen to some of the older episodes or you can reach me on my twitter @metatradercam or email cam@52traders.com.

    I look forward to hearing from you.



  21. rc1269 says:

    Somebody was trying to convince me here the other day that things like no earnings growth, P/Es and other whacky fundamental things didn’t matter for stocks.

    I’ll still need some more convincing

    • uncle10 says:

      RC, you probably won’t be convinced. after every move one can always say look the pe’s, earnings, gdp, etc. really did matter. Its the old chicken or egg first eh?
      My main point is this : Given all the current data ( pe’s, earnings, gdp, rates, etc..) the market could go up 50 percent from here or down 50 percent from here correct? So what good does knowing what all the current data is? It doesn’t help in determining what is going to happen in the future.
      If you knew what the data was going to be next year and the years after that then you might be able to use it to help forecast where the market might be. maybe 😉

      • rc1269 says:

        Except, I did say it before the move. And I also said it would merely be dismissed as a convenient after the fact excuse.
        My point is I don’t believe the market is as efficient as many people like to believe. Market efficiency requires logic and rational decision making in order to fully incorporate all info in real time. People are neither of those things, in my experience.
        Someday perhaps the bots will truly run 100% of the show. But until then we can still rely on some typical behavioral finance phenomena to continue to be present. Again, just my opinion

        • uncle10 says:

          you said what, before what move?
          you talking about this 20 points spx drop??
          I don’t think the market is efficient.

          • rc1269 says:


            You pretty much perfectly described the efficient market hypothesis, then say you don’t believe the market is efficient

            Good luck my friend

          • uncle10 says:

            nope. dont think the market is efficient at all. Did a quick google just to make sure:

            In financial economics, the efficient-market hypothesis (EMH) states that it is impossible to “beat the market” because stock market efficiency causes existing share prices to always incorporate and reflect all relevant information.

            Given I have actively traded for about 20 years and have done well and for sure “beat the market” and know many others that have “beat the market”. I think there is a big difference between believing everything is priced in and reflect all data/info– which I disagree with– and believing that all current fundymental data tells you nothing about where the market is going- which I agree with.

            good luck amigo and cheers 🙂

          • rc1269 says:

            “Given all the current data ( pe’s, earnings, gdp, rates, etc..) the market could go up 50 percent from here or down 50 percent from here correct?” you stated. that is the EMH, in a nutshell.

            the fact is that either all known data is incorporated – fundamental, technical, or otherwise – or it’s not. you’ve tried to state that only fundamental data is incorporated, but somehow other, equally known but not “fundamental” information, is not? my friend that is nonsense.

            i don’t doubt that you have made money trading. that is fantastic. that doesn’t really support or refute anything we’re discussing however.

  22. The last 3 days were about as close to having 3 HOs as you can have without having one.Yesterday 118 new highs and 280 new lows but McClellan +24..Today 69 new highs and 198 new lows and McClellan goes to -5.So we miss it by yhat much or is it close enough for government work? We ll see if we get a 3-5% correction again .Or do we get an official HO tomorrow?
    As far as gold stocks….just watching and waiting and listening to all the bears.Good luck all.

  23. So BHP recently last week warned us of their $2B oil write-down as of that was not bad enough. Now they are warning us of their bloated over production of their iron-ore and expectations of further “one-off charges” (aka write-down) by between $350 million and $650 million. Mark my words BHP is low balling that next write off. Can’t wait to starting hearing from all the other mining/oil corps to start firing some of these $Billion dollar “one-off charges.” Get ready for that SPX PE GAAP 25 maybe before EOY.


    • mjtplayer says:

      By my count for iron ore, I have 5 waves down off the Feb 2011 top of $187 down to the Sept 2012 lows of $99 for “A”. Then a “B” wave up to $154 in Feb 2013 and from there I count waves 1,2,3 and we might have just finished a wave 4 bounce from $50 to $62.

      So below $50 would be wave 5 of C by my count. I’m targeting around $36 per metric ton, where we were in 2007 before the parabolic rise into 2011 began. Back to the scene of the crime?


  24. Crickets…
    My guess is that most folks are feeling pretty vulnerable right now…first IBM & UTX took down the Dow, now AAPL & MSFT are about to pull down the entire market. Still supremely confident in TC’s forecast here, this pullback is a gift for those to either get long or, as in my case, add to long positions. Adding UPRO on a pullback under 2,090.

    • Don’t beleive minute 4 goes below 2100 maybe not even 2107. Minor 2 could takes us to 2080-2100

      • bhuggs52 says:

        Good point on minute 4. It will equal wave 2 at 2109, so I’m thinking if the present drama in tech earnings takes the mkt down to 2080 levels and below, the damage might be such, we’re in wave 2 and the smart money’s already thinking wave 3 back up. IMHO.

        • bhuggs52 says:

          Frankly, the sweetest, the SPX goes through wave 4, then onto an ATH, before a wave 2. I’d be much more comfortable then with the idea we’re heading to higher highs.

        • bhuggs52 says:

          Frankly the sweetest, the market goes through wave 4 near term, then onto an ATH, before correcting into wave 2. Then I’m more comfortable with the idea of higher highs in the making.

    • bhuggs52 says:

      Precisely on the UPRO. Same here.

    • Sounds like you guys don’t seem to think much of the various Doji Candle reversal patterns recorded on the indices. For e.g. SPX recorded an Evening Doji Candle reveral pattern, IMO, 2102 doesn’t have a shot of stopping the decline. 2080 on the other hand might attempt to put up a fight but doubt it will put an end to the trend reversal.

      • jeffbalin says:

        Thanks el mat. I don’t know candles but it looks to me that this drop will be more serious then a small blip. Nice pos div on the 60 min Dow s&p, probably a nice bounce coming but only a bounce. Tonys 2085 pivot looks like a good bet and I think we’re getting more then that.

  25. bhuggs52 says:

    Kudos Tony for nailing it again. So far the four waves look quite clear. Despite the earnings negativity with the tech heavyweights, the markets feel to me primed for ATHs.

  26. On the minute Iv count since it appears we will head lower tomorrow if the futures are any indication. Micro c = micro a at 2103.37 which is right in the heart of the 2102 pivot and a little below Tony’s 2110ish target.

  27. mjtplayer says:

    WOW, AAPL tanking over $11 after hours! Forget about a rally tomorrow, we’re going to gap down. QQQ’s already down over $1.10 AA

    • looks like AAPL and MSFT are going to burn the house down. Made they both need to report Red Ink like NFLX and AMZN then WS would have rewarded them both with a popping rally…..LOL

      • mjtplayer says:

        Yep, AAPL & MSFT are the #1 and #3 weights in the Nasdaq and the QQQ’s. GOOG is the #2 weight, surpassing MSFT due to last weeks rally, in case anyone was wondering.

        AMZN reports Thursday, the #4 weight in the Nasdaq; options market pricing-in a 10% move. Me thinks it’s down, given the run it’s had, near ATH’s and a valuation of 1,109 x 2015 earnings.

        FB is the #5 weight, rounding out the top 5

    • stmro says:

      If Dow & SPX starts losing its tech leadership we’ll see at least 2100, but more likely 2080.

  28. fotis2 says:

    Thanks Tony daily CCI close bellow 100 however it still can break out above 100 for a final push strength to bull no validation of 3B reversal on daily for 12 cents close but not close enough no short or long let this play out.GL

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