Tuesday update

SHORT TERM: turnaround Tuesday, DOW -212

Overnight the Asian markets lost 0.4%. Europe opened lower and lost 1.9%. US index futures were lower overnight, and the market gapped down at the open to SPX 2091. The market had closed at SPX 2104 yesterday. By 10am the SPX had traded down to 2087 when Wholesale inventories were reported higher: +0.9% v +0.8%. The market then bounced to SPX 2093 by 10:30 before heading even lower. At noon the SPX hit 2079, bounced to 2084 by 12:30, then hit its low for the day at 2076 by 1:30. After that the market worked its way higher. Heading into the close the SPX hit 2086, then dipped to close at 2084.

For the day the SPX/DOW were -1.10%, and the NDX/NAZ were -1.25%. Bonds gained 27 ticks, Crude dropped $1.50, Gold added $5, and the USD was higher. Medium term support drops to the 2070 and 2019 pivots, with resistance at the 2085 and 2131 pivots. Tomorrow: the Treasury deficit at 2pm.

The market gapped down at the open today, and by early afternoon had retraced all of yesterday’s gap up opening gains. The market continues to remain choppy, as it has been for most of the year. We continue to believe SPX 2133 ended a corrective uptrend, and the market has recently been in a downtrend with support in the SPX low 2040’s. The wave pattern posted on the SPX charts displays a completed Minute A and B, with a Minute C underway from SPX 2114. Minute C has been choppy as well. Once a downtrend is confirmed we will start looking for its low. Where ever that low occurs should end this choppy pattern and the bull market should then resume. Short term support is at the 2070 pivot and SPX 2040’s, with resistance at SPX 2114 and the 2131 pivot. Short term momentum was quite oversold today at the lows, then bounced in the afternoon. Best to your trading!

MEDIUM TERM: choppy uptrend again under pressure

LONG TERM: bull market

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

About tony caldaro

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238 Responses to Tuesday update

  1. manunidhi21 says:

    Algo’s are making fun of all swing traders from last 6 months🙂

  2. fotis2 says:

    Ok last post 5up on 15min does look complete now but also looks like wedge?If so could retest low DBottom and back up. thoughts?

  3. Gary Lewis says:

    OK, sold the calls and back into puts. Fun day, no?

  4. Here is another reason not to ignore a down count on the SP500. It is a chart of the DOW. I have been watching this index right along with the SP500 – hand-in-hand. Notice, there is a beautiful contracting diagonal. It measures properly in every aspect : wave (v) shorter than (iii), wave (iii) shorter than (i), wave (iv) shorter than (ii), wave (iv) overlaps wave (i). Further each of the sub-divisions can be counted as a zigzag. The only flat wave is the b wave of (i), but in a zigzag, the b wave can be a flat, so long as the ‘start’ of it’s ‘a’ wave is not exceeded. Then, there is even an exquisite “throw-under” of the diagonal for wave (v) on a divergence with the oscillator shown.

    See chart below, then more text.

    DOWI - Intraday - Aug-12 1433 PM (2 hour)

    Now the question is, is the diagonal “Leading” or “Ending”? Either way an upward retrace is predicted.

  5. blackjak100 says:

    TC, still a C wave and never a downtrend confirmation?

  6. GYN LAB says:

    What a crazy day… puts big doubts to our minds if there really would be OMLL at 2040 area after this monster 36pt 1 wave rally, still patient for 2042 though before any rash entries!

  7. torehund says:

    ..there are green shots somewhere. Just keep searching🙂

  8. Dex T says:

    Has there been any positive news? Everything seems horrible across the board.

    • Ryan Parker says:

      I haven’t seen any positive news in a long time Dex. But there is that saying that bull markets climb a wall of worry and bear markets fall down a slope of hope. I don’t sense much hope and I think everyone is pretty worn out from this sideways grind that has gone on for over a year in the Dow/SPX. Stocks still aren’t exactly cheap but on the other hand I don’t see where else capital can go aside from real estate.

      • Dex T says:

        There is a big difference in the news that was coming out just last year and recently since the market grind. Previously it was all QE, low rates, high oil prices, China etc…-

        Now the only “positive” news is that the Fed may or may not delay a rate rise another month or so. Everything else is pretty terrible but the market has shrugged it off.

        The Wall of Worry was 2009, 2010, 2011, 2012- that’s all in the past. This bull need a driver to continue the climb.

        None of that of course explains the 30 point down day to be turned around. Anyway the comment someone made about stock buybacks seems the most reasonable and I’ve heard it confirmed elsewhere so back and forth we go.

        • EL MATADOR says:

          IMO, aside from buybacks, we are seeing a lot of foreign fund inflows as many of these investors are fearing and running away from many of those countries that are causing dislocations to their financial markets due to currency wars.

          • Ryan Parker says:

            Agree Matador. US Dollar is holding up relatively well which is good for foreign fund flows. I watch a lot of Canadian stocks but won’t own very many of them because they have to appreciate 15-20% just to make up for the decline in the Canadian Dollar.

        • Ryan Parker says:

          Stock buybacks are huge. Note that almost all corrections since 2014 began have come at the end of quarter/beginning of next quarter when most companies were blacked out from buying back shares. Corrections were January 2014, July 2014, October 2014, January 2015, April 2015, and July 2015. Agree with you on QE. US market was directly correlated to QE by the Fed. Since they stopped the market has pretty much gone nowhere. But, it has had plenty of opportunities to fall apart and thus far it has held up.

          In my work I see a major selling climax at the end of June. Since the early July bottom I see a lot of positive divergences in the market internals. Sentiment reported recently is correlated with bottoms we have seen. Haven’t talked to one person not in the biz that thinks the market can go up.

          I’m waiting for a break one way or the other personally but if I have to pick a side ahead of time I think this break is going to be on the upside.

  9. wantforanail says:

    Just some food for thought…a lot of desks commenting on how companies are extremely active today buying back stock. One making the comment that it’s 40% of the buy side flow running through the desk. Not saying it’s bullish or bearish, just passing along.

  10. ariez5 says:

    Who sees 5 completed waves up?

  11. Was 15% gdx…tomorrow will be 6%…might go to 50d at 16.25.Hoping for EOD surge for bonus money…but I m satisfied with the last few days.Good luck all.

  12. Gary Lewis says:

    OK, so that was c of C? And now we are on to int iii? or do we start looking like silver and other commodity stocks doing a-b-a-b-a-b-a-b-a-b ……?

  13. blackjak100 says:

    Well that was fun while it lasted.

  14. ABchart says:

    European futures remain nearly -3%. US rebound could fade here. Need a lower low, before a strong rallye that will surprise the bears🙂

  15. OK. So, earlier in the week I was asked a question like “well, if you can’t even tell P4 from P5, how do you know where we are?” .. essentially. The answer to that Elliott Wave question lies in the nature of fourth waves, and the way they can form, and fifth waves.

    So, ‘now and only now’ that there is a further upward overlap, we can cite this clear alternate for a wave P4, as follows : the running triangle. The requirements of the triangle are that the (e) wave MUST cross back over the P3 wave, so that P4 is corrective to it. I want to emphasize that a triangle call has very specific requirements, and only one wave can be the complex wave. This does ‘look’ like there are too many complex waves, so a topping call may ‘still’ be the better one. If so, price will remain in the bearish acceleration channel for the most part. However, it is ‘interesting’ where today reversed : a number of trend line players out there. Can this wave also be just Intermediate (4)? Yes! More study on some specific indicators is needed. More later.. ..

    ES 09-15 (Daily)  11_21_2014 - 8_12_2015c

  16. fotis2 says:

    AAPL helped a bit there +1.3% today think someone mentioned it here yesterday.

  17. PPT in action for YOU.

  18. Close below 2067.75 would confirm bearish view; otherwise, limbo…

  19. Peter Sliney says:

    We may be looking to fill the gap.

  20. manunidhi21 says:

    Namaste Tony!
    “Where ever that low occurs should end this choppy pattern and the bull market should then resume”

    if we close abv 1970, is that bottom in possible ?

  21. gtoptions says:

    Thanks Tony
    SPX ~ comparable to Hammer on 7/7 should it close in the upper 25%.
    I wouldn’t ignore it.😉
    That’s all I got. GL All

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