Wednesday update

SHORT TERM: whipsaw wednesday, DOW -163

Overnight the Asian markets lost 0.9%. Europe opened lower and lost 1.9%. US index futures were lower overnight, and at 8:30 the CPI was reported higher: +0.1% v +0.3%. The market gapped down at the open to SPX 2085. The market had closed at SPX 2097 yesterday. By 10am the SPX had hit 2079 and tried to rally. The rally lasted for a few minutes, the SPX hit 2085, then declined to 2071 by noon. After that the market worked its way back to SPX 2085 when the FOMC minutes were released: After that the market rallied to SPX 2096, and then started heading back down. By 3pm the SPX had hit 2078. Another rally took the SPX to 2086 just before the 2080 close.

For the day the SPX/DOW were -0.90%, and the NDX/NAZ were -0.75%. Bonds gained 21 ticks, Crude lost $2.20, Gold rallied $14, and the USD was lower. Medium term support drops to the 2070 and 2019 pivots, with resistance at the 2085 and 2131 pivots. Tomorrow: weekly Jobless claims at 8:30. Then Existing home sales, Leading indicators and the Philly FED at 10am.

The market gapped down at the open for the second day this week. And just like Monday it tried to rally after hitting SPX 2079. Today, however, it only bounced and headed to SPX 2071 before rallying. After the FOMC minutes the rally hit SPX 2096. Then the market headed back down again. Quite a wild day. It looks like the decline from last Monday’s SPX 2105 high has resumed. After a drop to SPX 2052, then a choppy rally to SPX 2103, the market appears to be heading lower. Short term support drops to the 2070 pivot and SPX 2052, with resistance at the 2085 pivot and SPX 2114. Short term momentum was quite oversold during today’s initial decline then bounced. Best to your trading!

MEDIUM TERM: choppy trend continues

LONG TERM: bull market


About tony caldaro

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220 Responses to Wednesday update

  1. Sincere kudos and well done to all the bears here, who hung on tight and got their pay-day.

  2. EL MATADOR says:

    Well time to discard Inter II, IMO, 100% certain

  3. SPX 2035 is where I think we should get a bounce. How much I do not know.

  4. My indicator generated a Major Sell signal at Monday’s close, got a quick 500-1000 Dow points as usual, major Buy signal (mirror/inverse of Monday’s Sell and the same Buy signal generated on Jan 15) setting up for tomorrow, just two conditions need to be met intraday tomorrow and I’ll be terminating the remainder of my 4x bearish position from Monday’s close and going 6x bullish. GL all.

    • zepfan123 says:

      You should have posted this post a day or two ago….not AFTER a 45 pt down day on the SPX.

    • Nicely done. Please share your buy sig tomorrow if triggered.

    • reddragonleo says:

      Yeah… please post in advance as I didn’t see it either? I’ve asked you to email me several times now. What’s up? I’ve been a supporter of your posts the whole time. If you don’t want to post here regularly (for whatever reason?) at least contact me through email “before” the move and I can verify it for you here when you post after the fact.

      • sorry Red, only been able to visit this blog a couple times in past month, have been doing even better since I started sharing my signals with friends versus publicly but will try to remember to email you. Have had my hands full trying to manage an influx of money but should have more time in the fall, hope to set up a pw-protected blog at that time and invite you and a few others here, will just post the Signals with little or no commentary to keep time invested minimal so I can do for free. You catch this move?

        • reddragonleo says:

          Ok, thanks. I was expecting some of this move but missed a lot of it. Tricky. By the way, I build websites as my other job when I’m not trading. red (at) reddragonleo (dot) com

  5. trondack says:

    I lost my 1 hr charts and my machine is to slow to expand them!

  6. Jim Guthery says:

    Wow, did not anticipate that – feel like I got sucker punched today! Looking forward to the Thursday update.

  7. where or where did all the buyers go? Last call

  8. lunker1 says:

    Last post. Reminder, the correction will be over when AAPL makes a double bottom

  9. blackjak100 says:

    General Rule Of Thumb:

    When it is obvious to short, it is usually too late to short.

  10. johnnymagicmoney says:

    If it rebounds from here significantly Ill buy Tony box seats to the Cubs the next time they make the world series (that of course may not be ever)

  11. lunker1 says:

    All the talk about 2040 makes me think we’re going to have end of day 15 point flush

  12. There was a pundit / trader on CNBC yesterday saying that there was a ton of cash on the sidelines waiting for 2040. For what that’s worth.

    • reddragonleo says:

      If it’s on CNBC then we can now fully expect 2040 to break.

      • zepfan123 says:

        Well based on what the SPX has done over the last several’s impossible NOT to mention SPX 2040,,be it CNBC.Bloomberg..or whoever. Every U.S, market trader and analyst on the planet is watching this 2040 area closely here for a predictive clue. – 6 weeks ago in early July when the market dropped on all that Greek crisis jazz….2040 is the area that held on a closing basis…so 2040 is a fairly big deal here short term. I still say we break below it sooner than later.

        • zepfan123 says:

          Looks like closing below SPX 2040 will come a lot sooner than later. Like today at around 2035(ish). And maybe even a close below Dow 17,000. Wow. The stakes just got raised. And every key index like the COMO,TRAN,RUT,SOX got killed and closing at their respective LOD..with a VIX at almost 19.00.Based on all that… more to come I say.

  13. 56rambler says:

    Mr. Caldaro,

    Are any of your three cases off the table? Or are they all still viable?


  14. gtoptions says:

    DJI sitting on DEC/FEB lows. Will it Hold? Scary! 😳

  15. frommi2 says:

    Smallcap+Biotech crash!🙂

  16. Dex T says:

    We broke 2044 on S&P!!

    Next stop 2020 then 1981!

    • tommyboys says:

      2033 bottom of 2040 pivot…

    • GYN LAB says:

      Right in the zone of Mr T’s 2040-2044.. broke nothing here
      Just got in long at 2043 for at least a decent bounce or hopefully more as I am in the int ii camp

      • Dex T says:

        As I wrote above I wasn’t referring to Tony’s count. Although I admire his skills and appreciate the board I follow a different count that has had a higher success rate over the past 5 years.

        Nothing is 100% but 2044 was a major turning point that I was looking for.

  17. kvilia says:

    TNA buy order is at 73.7. Pop corn time.

  18. zepfan123 says:

    One more day like this in the next 2 or 3 trading days and I don’t think it will be out of line to think a return to that Oct low of SPX 1820 is possible before we get a real bottom.- Looks we’re going to see if SPX 2040 holds as support today. I don’t believe it will…even if we run back up to that SPX 2055 area again. That quick failed 200 pt intra-day fake rally yesterday shows rallys right now are sucker rallys. I see a ton of stocks that could fall 10 or 15% still and still be a 1000% higher than their 2009 lows. The insider fund boys that got in on the QE free money back then at the 2009 bottom probably have no problem doing some real profit taking here and letting a new buyer try to make “their” 1000% profit. I know if I had bought a million shares of AMZN for my hedge fund back in 2009 for $50 bucks..I wouldn’t mind unloading 20 or 30% of it here at well over $500.
    SPX 2040 coming right up. Swing trade short 2,3 or 4 months out looks like a decent plan.. This will be very hard to day trade in and out of if were going to get a real pullback here.

  19. rc1269 says:

    surprisingly quiet on here today for a -1.5% down day. hmm…

    • purplember says:

      sell off feels very powerful like 2011 or even summer 2008 days

      • blackjak100 says:

        let’s put it in perspective…2011 saw 3% down days and 2008 saw 5% down days. We are not even down 2%

    • lunker1 says:

      166 posts isn’t quiet but Yesterday’s fill the gap and crap told today’s story.

    • blackjak100 says:

      we are getting that significant +div on the hourly at 2043 now. I bought more SPY calls. RC, you have a valid concern about weekly MACD. The larger trend sure appears to be down right now, but I’m open to TC’s count where 2040 marks the end of a 2nd wave. A crash in my eyes would be blowing through 2019 pivot in the next 1-2 days.

    • H D says:

      hey RC, I’m waiting for the vix to confirm a +- 7 day “turn window” and then I’ll look at price. Not to be confused with CNBC fear gauge, near earth objects, Greece, China, or POMO. Those all trump price too.

  20. NEWBIE says:

    Mr. Caldaro, are you a buyer here or are you waiting for more downside possibly 2020 area?

  21. Dex T says:

    Buying power is very weak today and the market is having trouble rallying. Occurring the day before OPEX is not a good sign and indicates lower lows ahead.

    We may finally break the 2044 barrier

  22. EL MATADOR says:

    RUT has a beautiful wedge set up in case anyone interested in playing it for a respectablebounce

    • llerias7 says:

      One thing I learn is that an oversold mkt may turn even more oversold! Most of the crashes happen when mkt is oversold. So be very careful. I would not front run it and wait for a change of trend…

      • EL MATADOR says:

        Agree I never go in just because something is oversold you need all TA’s and price exhaustion to tell you when to play the set up and use stops….I expect 2044 on spx to be taken out no exception

  23. GYN LAB says:

    Good afternoon Mr T and all!
    A lot of excitement as we approach the long standing target of low 2040s, came within 2 points but without pos div… does it mean we will have an LL towards 2040? I am wary of entering long positions without pos div…

  24. rc1269 says:

    looks like a lot of people already ready to buy this dip / cover shorts

    • blackjak100 says:

      Extremely oversold on about every metric follow – should bounce barring an outright crash but they are rare events

      • rc1269 says:

        yeah. one of the interesting things about a board like this is everybody here trades different timeframes. can be a little challenging for some people to discern, when there are day traders, short, medium and long term traders, all chiming in with buys and sells.
        i agree that for a 10-15 point swing, sure it’s decent place to take a stab
        i dont personally day trade though. for me, i see today’s action and i’m just starting to get a little more bearish on my typical horizon, which is usually 3 mo’s +/-. so it makes me happy to hear that so many are already ready to buy this little dip here.

        • when is last time you made a loss rc? just out of curiosity?
          if you turn more bearish, how you plan to trade this then?

          • rc1269 says:

            i make losses all the time my friend. i just try to have my gains be larger and more frequent. knock on wood i’ve done okay with that.
            how i trade this may not be the appropriate way for you to trade this, so i’ll kindly refrain from offering that specific trade advice. do i believe odds have increased that we see 1950 before 2150 by October? yes. if you believe that too, then surely you can find a way to profit from it in a manner best suited to your and your portfolio. cheers

        • blackjak100 says:

          I hear ya RC. It’s hard for me to get too bearish when the home builders and financials are not under performing the indices.

          • rc1269 says:

            understood. from what i see, it’s becoming much easier to be bearish. builders and fins notwithstanding
            one comment on the “and crashes are rare events.” absolutely they are. first, i assume by ‘crash’ you more likely mean something akin to 2011, but not quite 1987. my response would be: they are rare and usually require a multitude of setups to happen.
            one of those might be, for instance, the weekly MACD dropping below zero. that happened last in 2011. we’ve been far above it during every little blip the last 4 years. until now. it now stands at… 4.6. one more day like today and we’ll prob go below zero. does that make me a little more concerned about this blip vs all the others we’ve seen the last few years? you bet.
            so yes, crashes are rare. but that doesnt mean the odds of major declines stay at a fixed probability every single day. i do believe the odds go up and down. right now i think it’s up is all. cheers

    • rc I think we have the 3rd wave down now concluded. Expecting the rally for wave 4 to 17240/2068 in the vicinity of the morning highs. 5th and final wave down from there to complete the set. After that a rally. What type of rally or count … take your pick.

    • They ve all been trained now for 6 years beautifully.Wouldn t surprise me today to see a nice 300+ down day today.Silver not confirming gold yet…Good luck all.

  25. blackjak100 says:

    Is everyone buying spy calls right here at least for a 20+ bounce? I sure am!

  26. Tony,
    Micro c playing out very well. Looking like nano 3 is just finishing. A bounce followed by another move down could finish the whole Int II right in the long awaited 2040 range. Kudo’s

  27. llerias7 says:

    So, DAX stil in major 4 (P3) down? Might bottom at 10100 or lower?

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