Wednesday update

SHORT TERM: rally continues, DOW +140

Overnight the Asian markets gained 1.4%. Europe opened higher and gained 0.9%. US index futures were basically flat overnight, and at 8:30 the CPI was reported lower: -0.1% v +0.1%. The market opened three points above yesterday’s SPX 1978 close, ticked up to 1984, then pulled back to 1978 by 10am. At 10am the NAHB was reported higher: 62 v 61. The market then hit SPX 1984 again by 10:30, pulled back to 1979 by 11am, then rallied to 1994 by 2pm. After a pullback to SPX 1986 by 2:30 the market rallied to 1997 by 3:30, then dipped to close at 1995.

For the day the SPX/DOW were +0.85%, and the NDX/NAZ were +0.55%. Bonds lost 4 ticks, Crude rallied $2.55, Gold rose $14, and the USD was lower. Medium term support remains at the 1973 and 1956 pivots, with resistance at the 2019 and 2070 pivots. Tomorrow: weekly Jobless claims at 8:30, along with Housing starts and Building permits, the Philly FED at 10am, then the FOMC statement at 2pm.

The market opened higher today, hit SPX 1984, pulled back, then exceeded the late August 1993 high when reaching 1997 late in the day. Now all four major indices have exceeded that initial rebound high after the SPX 1867 low. Is a new uptrend underway, or is a retest of the lows next? Despite the early choppiness, if this rally can continue into next week, it will break the Primary II analog, supporting a potential new uptrend underway. FED statement tomorrow, Options expiration on Friday, and the 2019/1973 pivots overhead/below. Short term support is at the 1973 and 1956 pivots, with resistance at the 2019 and 2070 pivots. Short term momentum ended the day with a very slight negative divergence. Best to your trading FED day!

MEDIUM TERM: downtrend

LONG TERM: bull market


About tony caldaro

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203 Responses to Wednesday update

  1. Am I the only one that sees a possible irregular correction this afternoon?

  2. Leonardo says:

    Now, that was fun. Ha! I thank El Mat for “sticking to his guns”. I was in the camp that was expecting market to turn lower at any time. Boy did it ever…

  3. tommyboys says:

    Kind of amazing the VIX is net flat today based on Fed day alone…forget about the huge swings…

  4. GYN LAB says:

    I will be kicking myself over the weekend if this goes straight down, but still hoping for 1 more HH with hourly -ve div tomorrow around 2026-2032 area. I am trying hard not to chase this and hopefully it pays off… GL all!

  5. johnnymagicmoney says:

    sheet it might end up 20 handles by days end but I took profits when it was up around 2015-2020. Thank God! small profit but still a profit! The way I am reading this is that the market has lost a lot of faith in them. A lot. They also are now going to focus on China and the global world again. Amazing the other day when S&P downgraded Japan’s debt and said that the situation would not change any time soon and the market didnt even fart on that news. It aint just China folks. Its much of the global world outside the US

    • 3 Senators will ream Yellen the next time she appears. The fed knows what happens to the economy when the stock market crashes they will do everything possible to stop that from happening. At some point it will fail.

    • Dex T says:

      It’s the entire world. Most of the world’s economies are commodities dependent. Look at the charts of oil and the other commodities.

      The U.S. and Japan have it relatively easy. Places like the Middle east, South America, and Africa are/will collapse into civil war.

  6. Sandra Dons says:

    It’s falling down

    • blackjak100 says:

      A market which can’t rally with really bullish news is ripe for a decline

    • rc1269 says:

      Sandra- your prior posts were quite depressing to read when the market was much lower. it’s not fun to lose money.
      the market gave you another chance to pare back risk over 2000, a full 140 spx points above the low. i hope you took what the mkt gave you and reduced your risk at this point.
      successful trading isn’t about great winners; it’s about risk management and loss mitigation. best of luck.

  7. mjtplayer says:

    The top of the TL was tagged at the HOD, SPX 2,020; potentially completing wave E of int C and major B.

  8. johnnymagicmoney says:

    “Inflation is much lower but its temporary” 1 year from now they will say the same thing

    “Overseas is a big issue but we dont see it affecting us” 1 year from now they will say differently

    “Unemployment will reach our target” 1 year from now they will contradict it

  9. rc1269 says:

    getting pretty close to that target spot to get short again. fwiw

    • stmro says:

      Yep – we’re so close to both the 20 and 50dma that i’d expect a tag of at least one of those before rolling over. The 20 should be at the upper end of the 2019 pivot tomorrow.

    • H D says:

      rc, next HH? I got creamed, didn’t even have the spirit to try 2019 pivot…..

      • rc1269 says:

        i think that’s why we’re getting close. 😉

        i put on a 1/2 short position as i wrote that last comment. ~ 2018 area. will put on what i would consider a full position *if* we get another HH. not sure we do tho. from my seat it seems shorts are nearly fully slaughtered and towels are thrown at this point, so smells ripe.

    • blackjak100 says:

      yes I added around 2015ish

  10. rc1269 says:

    what baffles me is how many people actually thought the Fed would raise rates today

    • blackjak100 says:

      They are trying to find the perfect time which will never happen….so not sure what that means going forward.

    • Dex T says:

      Why not? They already announced that they were going to a number of times and stated so at previous meetings. We should be able to take them at their word.

      There were a number of members who spoke in favor of a rise and the GDP and unemployment met their requirements.

      It shouldn’t be such a big deal except for the crybabies on wall street.

      • rc1269 says:

        “We should be able to take them at their word.”

        yes, you should. the issue is that many people don’t pay attention to the right words. the FOMC has many members, and they have different views. but it’s not a democracy.

        • Dex T says:

          Granted but they’ve been discussing the idea of a rate hike for over a year. They announced an end to QE in October last year and followed through with it.

          They’ve been talking about a potential hike in September since the beginning of the year, At their June meeting they proposed 2 hikes to take place in September and December.

          All their vague language aside they should not be proposing anything if they aren’t going to go through with. They are economists in charge of the nations money -not used car salesmen.

          They just don’t have the courage to stand up to wall street and an obviously negative of the economy in general.

      • blackjak100 says:

        yep per CC tweet…Fed has backed off all comments made in last 2 months

  11. stmro says:

    Breadth is strong today – strongest in a while. This move will spill over into tomorrow.

  12. H D says:

    Trader Joe! nice work amigo. You nailed it.

  13. EL MATADOR says:

    Ok, so who’s brave enough to go long starting today and into next week in an attempt to discredit historical stats? Anyone?…..ya’ll know where I stand.

  14. fishonhook says:

    The FIVE YEAR Bond shot up 30mins before the ‘no hike’ news.

    this was clearly insider info ‘leaking’ out to a big buyer on WS. Wonder how much Goldman Sach made today?

    Maybe we need more diversity in Fed Chairmen?

    We had Greenspan and Bernanke and Yellen and the alternate was Larry Summer.

    I would not be happy if they were all black, or Chinese or Mormons or Gay. We need diversity in all positions

  15. mjtplayer says:

    Clearly the Fed is scared, they chickened-out.

  16. johnnymagicmoney says:

    Its actually become comical

    Global growth is slower, US growth is slower, and their inflation target (ie deflation) is lower but they arent raising rates 25 basis points even though we already priced it in!!! BUY MOAR!

  17. Gary Lewis says:

    Silver and Gold, baby!!!

  18. Dex T says:

    Terrible news. No point in paying attention to the Fed anymore. They are never going to raise interest rates unless new governors are elected.

    I guess the U.S. economy really isn’t strong enough to sustain an interest rate increase.

    • mjtplayer says:

      Pretty sad isn’t it, after 6+ years of “recovery” the economy isn’t strong enough to handle a 0.25% rate increase to get off 0%

    • johnnymagicmoney says:

      Japan Europe United Sates – are you really suprised?

    • H D says:

      I’m a simple guy, what does rate have to do with recovery?

      • Dex T says:

        The Fed will raise or lower the rate which control the money supply depending on their view of the economy. Raising the rate means that growth is increasing and lowering the rate means that is decreasing. By not increasing the rate as promised their view is that the economy is not going great.

        • H D says:

          they can mess w rates during cycle wave 3, JMHO we don’t know what or why they do anything. All speculation. Recovery is going great by any metric

          • Dex T says:

            Actions speak louder than words. The recovery obviously isn’t going great or they would have raised the rate- it’s that simple.

            It’s like not wanting to give a healthy man a 5lb weight to hold because you fear it will injure him/make him fall down, etc…. If the man can’t hold it then he has something very wrong with him even if it’s not immediately apparent.

          • H D says:

            no, pic a benchmark, any of them, recovery is strong. they will raise in cycle W 3 up. that’s just the EW.

          • Dex T says:

            They don’t seem to think so… What is your count?

    • lbhkinqa says:

      You make the assumption that the Fed’s view of the US economy is correct. Very dangerous assumption indeed lol 🙂

      There definitely is no point in paying attention to the Fed anymore, but mainly to their opinion on the economy. It’s strong enough but they still won’t raise rates. Their decisions are beyond hope, it’s their flawed opinions we need to question

      • fishonhook says:


      • Dex T says:

        No, I don’t think their viewpoint is always correct and know that a lot of their statistics can be biased or inaccurate based on their methodologies. They always love to discard uncomfortable information and present everything as rosy as possible.

        However, they are the official central bank of the U.S. and their actions and opinions carry meaning throughout the world.

  19. GYN LAB says:

    Finally out of the way… Just waiting to tag 2026(13ema weekly + top of the rising September channel) for short. Will allow possible overshoot to 2032 (.618 retrace), should be tomorrow or Monday IF it manages to climb up there.

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