Wednesday update

SHORT TERM: gap down opening, DOW -68

Overnight the Asian markets lost 0.3%. Europe opened lower and lost 0.9%. US index futures were lower overnight, and at 9am the FHFA was reported higher: +0.4% v +0.3%. The market gapped down at the open to SPX 2110, then tried to rally. The market had closed at SPX 2119 yesterday. At 10am Existing home sales were reported higher: 5.49mn v 5.35mn. By 10:30 the SPX had closed the gap when hitting 2119. After that it started to drift lower. After a decline to SPX 2111 by 12:30, a bounce to 2116 by 3pm, the market touched 2110 again at 3:30. Then a bounce into the close ended the day at SPX 2114.

For the day the SPX/DOW were -0.30%, and the NDX/NAZ were -0.90%. Bonds gained 3 ticks, Crude dropped $1.75, Gold slid $5, and the USD was higher. 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, and Leading indicators at 10am.

The market gapped down at the open following yesterday’s earnings reports on a few big name tech stocks. The market opened at SPX 2110, which was the low for the day, rallied to close the gap, then drifted down for the rest of the day. We continue to see four Minute waves off the SPX 2045 downtrend low: 2074-2051-2133-2110. After Minute wave iv bottoms, which is currently equal to Minute ii, the market should rally to a higher high to compete Minor wave 1. It is unlikely, however, the rally will take the market beyond the 2131 pivot range. As there is, and has been, significant resistance there for months. Short term support is now at SPX 2110 and SPX 2102, with resistance at the 2131 and 2198 pivots. Short term momentum was again quite oversold this morning, then ended the day nearly back to neutral. Best to your trading!

MEDIUM TERM: uptrend

LONG TERM: bull market


About tony caldaro

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122 Responses to Wednesday update

  1. elmer510 says:

    I think this dip could be minor 2 of IM III – it should last perhaps a few days more.

  2. Tony just mentioned that he posted something in the forum. Can anyone tell me what that is and how to access?

  3. H D says:

    8 days up and 3 days down, they need to rally asap or that 2011 July fractal starts looking better. JMHMFO

  4. Bad signs:Transports down 200 again…HOs a plenty…Bradley turns, bad reactions to earnings…Russell not so hot…
    Good signs:Uhhhh. hmmm. Uhhh….I give up.

    • Dex T says:

      Another strong rejection of new highs. The only sign of strength has been Nasdaq. We’ll see how Amazon does after the close.

      The ending diagonal is still in play.

  5. lolomatador says:

    New ATH, nope
    2115 support, nope
    2102 support, ah it will get taken out entirely, so ah nope

  6. gtoptions says:

    Thanks Tony
    SPX ~ @ .382 & previous 4
    Seems about right, execute all stops into the last 30 minutes of trade then the Futures traders get to ride it back up. Been doing it for months now. 😉

  7. blackjak100 says:

    TC, this obviously doesn’t appear to be a 4th wave. Any concerns this is not Int iii then?

  8. jwmcbride says:

    2091 sept es target hit 2191 bought 2 contracts

  9. mjtplayer says:

    DOW approaching the .618 retracement at 17,722 – will be interesting to see if that area holds or not, which is coincidentally about SPX 2,100. It looks like the market wants to see how many long stops it can trigger at 2,100 or just below.

    • And the SPX just hit the 32.8 fib. Any thoughts on why the Dow is so much weaker that the SPX?

      • mjtplayer says:

        No biotech, cyber security or go-go internet stocks in the DOW.

        Same thing happened in 2000, where the DOW topped in Jan, the Naz topped 2 months later in March – lead by biotech and internet stocks. Today, DOW topped in May, Naz 2 months later in July.

  10. Peter Sliney says:

    I have learned more in the last six months of trading than in any other time. Sideways action is fertile ground for practicing setups and stops and learning the OEW theory. Thank you Tony.

  11. kvilia says:

    Looking to get back into RUT – watching two trendlines: [IMG][/IMG]

    Not sure which link will work – let’s see.

  12. blackjak100 says:

    NYAD very close to making a lower low again, but price nowhere near 2044. Amazing this market stays afloat with these internals, but shows something is supporting price.

    • fionamargaret says:

      ..I mentioned in yesterday’s comments, I thought the market needed to come back in some before a rally….well, I think it will go back up soon. No chart – just BB.

      • blackjak100 says:

        Me too, but think 2085 pivot is where it bottoms.

        • Really Fiona? Another HO on Nasdaq today (two days running) on the NYSE as well.It may bounce (or not), but wouldn t be surprised if we head down 3-5% from here minimum.1980-2000 looks very attainable.Good luck all (I ve got my own stuff going on with GDX lol)

  13. Dex T says:

    If the deal with Iran occurs then the oil market will be flooded! The Iranian economy is a mess so they are going to ramp up production ASAP!

    Iran eyes $185 billion oil and gas projects after sanctions

    “Iran’s deputy oil minister for commerce and international affairs, Hossein Zamaninia, said Tehran had identified nearly 50 oil and gas projects worth $185 billion that it hoped to sign by 2020. OPEC-member Iran has the world’s largest gas reserves and is fourth on the global list of top oil reserves holders.”

  14. Newbie,
    I think you are looking for a crash , and have been for a long time. Let me try to help you
    and perhaps you could free up some time for you . 1)Get a monthly chart 2) Put a 10 & 12 day
    sma into the format. At the end of closing of each month see if $SPX closed below the 10 & 12
    sma. IT HAS TO BE ON A CLOSING BASIS AT MONTH END. If that happens , you might have shot that a new trend is developing and you can ride it. You will also have some ammo to come on here and do what you do best , talk trash. Currently, Monthy close on 10 sma is ( 2068 ) 12 sma ( 2054.
    I AM linking a site so you can see with your own eyes.

    Also , go here and set up chart for yourself.

    I hope i have helped you and now you can have a ton of free time to do other stuff.


    • Thank you, Darkness.

    • chrisk44342 says:

      lol, now that’s funny. I would add that for long term investors, you look at that chart, and now you use EW to provide you with market context. Then you have a fairly useful set of tools to help guide you in the market.

      • chrisk44342 says:

        ps someone else on here posted a similar idea on a weekly chart using the 34 MA. Obviously a few more whipsaws but a bit more granular. To each his own.

    • uncle10 says:

      Hey dark. good advice and good chart. I use something similar for long term trends. You know its time to go when it closes below and then holds on the test back up. Thats when you know the bear is here. plenty of work to do until then it seems, but you never know for sure about anything. thanks for the free bee. 🙂

  15. fotis2 says:

    Long here lets see target back up

  16. stmro says:

    2100 inevitable. That goes and its 2080.

    Taking 1/2 on my shorts here. Stop 2120 (breach of today’s high) on the other half.

  17. HW says:

    In fact .382 retrace at 2102… if w5 starts here then there will be one more HH in this uptrend Minor 1

  18. due for a bounce back up to 2110. see what happens there, Then again maybe not

  19. john b says:

    I have some support in the 2102 area

    • john b says:

      lol just saw tonys support there too,nice

    • That is one of Tony’s pivot points. If this leg is 3 waves C=A at 2094 which is just below the bottom of the pivot. If this leg is A of a larger ABC it could become a 5 wave move and 2102 will be voilated.

      • john b says:

        Pb Tom I have a b where you spotted it in real time yesterday(nice) and then another a at 2110ish with b at 2116ish and finishing up c now,will see also im not heavy into fibs,,i use my own stuff for targets so its always an area and not specifics

  20. Tony,
    It has been bandied about that possibly (especially in light of a wave 1 overlap on the Dow) That perhaps the 2132.82 high was in fact all of minor 1 and we may be in minor 2 down on both the Dow and SPX. Wondering what your take is at this point?

  21. mjtplayer says:

    DOW just breached the potential minute wave i high of 17,793.45 – meaning we have 3-waves up on the DOW, not 5. Off the lows: A, B, 1, 2, 3, 4, 5 to complete C

  22. 83 new highs 170 new lows.Conservatively 7 more new highs will give another NYSE HO.Breadth about even so I d guess its a sure thing today.

  23. argento1 says:

    Looks like I’m the only bull here expecting much more higher prices into end of year…with Tony!
    Emerging markets looking bullish and ready to move…together with Europe..seaonals and cycles turning up nicely as well!
    Thanks again for all the charts and excellent analysis Tony!

  24. jeffbalin says:

    I’m thinking, that possibly, 2132 was a B, and we are now in C, int 2 not done? Im expecting much more down, so I have this count on the table, for myself anyway. I count 3 waves up from 2044, no new highs yet in Dow, s&p, but, naz yes. Possibly still in int 2.

    • jeffbalin says:

      I guess because I think we’re headed for the 2085 pivot, which means could cross wave 1.

  25. frommi2 says:

    Last chance for the bulls to get out 🙂
    Aug->October is the weakest season of the market, you can`t really expect a wave iii here. Wave 4 is now running in all major indices, get ready for a 20% drop.

    • NEWBIE says:

      frommi2, I like your style. best of luck.

      • frommi2 says:

        In the end all predictions are pretty useless imho, just figure out a system that works and stick to it through thick and thin. There are always and at every point two possible counts, those who tell you otherwise are liars. (Or they don`t know it better.)

  26. mjtplayer says:

    Bulls desperately trying to hold DOW 17,800 & SPX 2,110. They held the line yesterday, battle there again today. It tells you if these levels are breached, the SPX will quickly drop to 2,100 or perhaps lower..

  27. In the words of Agent 86 “missed by that much”. INDU near waves i & iv overlap 17793.45 v 17796.19.

  28. GYN LAB says:

    Looks like INDU could have entered Minor 2 already… while SPX makes a HH for Minute 5 of Minor 1, INDU could lag around and only make a LH below 18137 for Minute b of Minor 2, and as SPX enters Minor 2 correction INDU falls in Minute c. Just thinking that for Minute 4, INDU has fallen too much, even though it is still above Minute 1 so technically could still be Min4…

  29. H D says:

    “The number of people who applied for U.S. unemployment benefits slid to the lowest level since 1973” USA!

  30. jwmcbride says:

    Computer took a crap had to buy a new one and set up . what a pain. Not much has changed watch for support at the M avg wave count is pretty simple looks like 3 of 3 complete on sept es 4 of 3 next then minor 4

  31. blackjak100 says:

    TC says wave 4 in progress and Nate says it’s done. Keep in mind Nate starts his impulse from a truncation. Whatever the case, this wave 4 is looking long in the tooth compared to wave 2. A close lower today solidifies wave B in progress IMO.

  32. hkloon says:

    Hi Tony, Trying to make sense of the short term count….
    minute 1 = 2045 – 2074 (29)

    minute 2 = 2074 – 2051 (23)

    minute 3 = 2051 – 2133 (82)

    minute 4 = 2133 – 2110 (23)

    minute 5 = minute 1 = 2110 – 2139 (29)

    it looks picture perfect for minute 5 to end near high side of pivot of 2131…. and noticed also the pullback of minute 2 and minute 4 is similar in points… thx…

  33. sibyn says:

    I see DAX@9232 now and SPX@1820. (sept)


    Regars NybisSibyn

  34. bhuggs52 says:

    Futures are looking encouraging for my long. Could be a week-long ride, if Page is on the right page.

  35. torehund says:

    lets see 🙂

  36. Dex T says:

    Anybody have an opinion on AMZN? They are reporting tomorrow after the close so will they rocket up after earnings like Netflix or drop like Apple?

    I took a look at the chart and it’s been straight up this year! It’s gone up $50 since the beginning of this month! Earnings are nonexistent.

  37. Since I follow Hindenburg Omens and was checking out new highs/lows today…just as an after thought I saw the Nasdaq had 125 new highs and 175 new lows.I wondered whether there was a McClellan Oscillator for the Nasdaq—there was!!!! And using the same criteria as the NYSE…we were negative on the Oscillator and therefore qualified for a Nasdaq HO.Well see what it means I guess.I ll keep an eye on it.Good luck all.

    • torehund says:

      Hindenburg Omen, well thats a German phenomenon, for now 🙂 Lots of ever downscaling 2s on the Rut all back from the inception of the bull…It could be close to merging into 3s. Not sure but 🙂

    • Page says:

      Bears will have to wait little longer for Hindenburg Omens result. First thing first, Bulls have a nice rally to enjoy until the end of the month.

  38. Page says:

    Thanks Tony.

  39. Lee X says:

    Thanks Tony

    Tired of mowing yet ? 😉

  40. Well, minute 5 should be choppy if only looking at 2131 pivot area.I believe minor one was 29 points

    Maybe something like this

    Good luck all

  41. Hi Tony,
    how possible do u think the scenario that the wave you count as wave i-ii (2044-2074-2051) was part of a previous triangle correction an we are already on the bigger ii?
    Thank you

  42. bhuggs52 says:

    Thx Tony for your cogent analysis. Took a small long position at the close. Life is gud.

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