Tuesday update

SHORT TERM: consolidation day, DOW +47

Overnight the Asian markets lost 2.2%. Europe opened lower and lost 0.4%. US index futures were higher overnight, and at 9am Case-Shiller was reported unchanged: +5.0% v +5.0%. The market opened four points above yesterday’s SPX 1882 close. In the opening minutes it then made a lower low at SPX 1876. Then it began to rally. At 10am Consumer confidence was reported higher: 103.0 v 101.5. By 10:30 the SPX had hit 1899. After that it dropped to SPX 1979 by 1pm, bounced to 1891 by 1:30, then dropped to 1872 by 3:30. After that low the market spiked higher hitting SPX 1887 before dipping to close at 1884.

For the day the SPX/DOW were +0.20%, and the NDX/NAZ were -0.50%. Bonds gained 11 ticks, Crude rose 75 cents, Gold dropped $4, and the USD was lower. Medium term support remains at the 1869 and 1848 pivots, with resistance at the 1901 and 1929 pivots. Tomorrow: the ADP index at 8:15, the Chicago PMI at 9:45, a speech from FED chair Yellen at 3pm, then a speech from FED governor Brainard at 8pm.

The market opened higher today, made a slightly lower low than yesterday, then rallied to SPX 1899. After that it headed back down to make another lower low at SPX 1872. Then just as the SPX futures were about to break the overnight low the market surged into the close. We can now count five waves down from SPX 2021: 1953-1980-1909-1953-1872. With the fifth wave subdividing into five waves of its own: 1922-1935-1876-1899-1872. This entire decline could be counted as a retest as it bottomed within 5 points of the August SPX 1867 low. However, it was not exactly the finish we expected for this decline. So we are left with the possibility that the fifth wave is subdividing. Tomorrow should provide that answer. Short term support is at the 1869 and 1841 pivots, with resistance at the 1901 and 1929 pivots. Short term momentum rose toward neutral after a positive divergence at the low. Best to your trading!

MEDIUM TERM: downtrend

LONG TERM: bull market

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

About tony caldaro

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213 Responses to Tuesday update

  1. Dex T says:

    The last worst quarter as P2 in 2011.

    US stocks gain, but still head for worst quarter in 4 years

    “NEW YORK (AP) — U.S. stocks are rising across the board Wednesday following big gains in Asia and Europe, a buoyant end to the worst quarter for major indexes in four years”


  2. rc1269 says:

    i think if we can close here or higher (1912 ish) then that looks pretty bullish to me. near term that is, within the context of everything else i’ve said about where i see the mkt going longer term. cheers

  3. Nice how the market makers ran spy back above 190.00 and continue to hold it above….yesterday there were over 88,000 put contracts at 190 strike priced at $2.11…today opt interest vol has declined to 67,000 and now the price is $.21 that’s a decline of $1.90. That’s how they move the market for their benefit. Need to keep an eye on the market makers or they will pick your pocket.

    I looked quickly at opex for Friday and it’s more difficult to see where they might try to close this weekly opex since many of the strike levels are pretty much in balance when you look at qty and value. If I see something I will post it. Tony, thanks for all you do here….really appreciate it.

  4. For these past few days to be the Pri IV bottom and beginning of a new uptrend into Pri V, the only corresponding spike in volume has been here – on TC’s forum. Methinks we’re a ways from Pri V still. 1820s first maybe?

  5. Dex T says:

    Another Yellen speech is absurd!! She just spoke a few days ago!! What new info can she possibly give?

  6. EL MATADOR says:

    Well it’s 2pm ET and the SPX cash boys have not done shee-it since the big cash gap open. So that said, what does this tell you, bullish or bearish? I think bots are just sucking in the sheeps and it’s going to get ugly by tomorrow.

  7. fishonhook says:

    Well according to trader Joe and PUG this should be a 4th wave of sorts …no? with 5th down to 1850 +/-

  8. Gary Lewis says:

    Closed out the near term calls. Only positions left are the January calls I bought at 1945 when Tony was calling this level as Major 4 bottom of P3. Think that he was targeting 2250 in January? How quickly things change in the OEW world.

  9. Dow Jones monthly index came out of the bullish channel and did pullback very careful not to shut down the 16.805k. If you come meet the channel may drop strong index.

    click on the link below to view the graphic

  10. tigertrader1 says:

    New to EW… Can anyone confirm and or poke holes in the veracity of this count. Many thanks.

    • H D says:

      I am not counting impulsive down from 2021 as it channeled perfectly, did not make LL on any index and found support at retracement levels, that’s corrective until proven otherwise.

      • tigertrader1 says:

        Thanks. /TFdid not make a lower low but IWM did.. (perhaps that does not count). So when you say corrective from 2021 are you implying this PB from 2021 as w2 of P5.. Sorry to be a bother.. Just trying to understand..learning yet to cross my t’s and dot my i’s

  11. 3 wave up then down

  12. EL MATADOR says:

    Have you guys notice who the bots have been selling the downtrend for past few days? Hint “staircase” or how about “stair stops”. Sounds like something Edwards and Magee wrote in their book, no?

  13. Well I added 25% equities at noon, probably for no more than a couple days.We break 1899, I m out.Good luck all.

  14. I’m lost. After waiting for months for Pri III to complete at 2,500+ target in Q1-Q2’16 only to learn that it topped in Q2’15 at 2,135 and we were already in the latter stages if Pri IV, I’ve been waiting for a significant/tradable Pri IV bottom (something significant) to add to my 3x Longs for Pri V with minimum targets above 2,200. Now, from what I’m seeing here, yesterday’s 1,872 satisfies the retest and today’s intraday rally – despite its fade – constitutes a new uptrend and the beginning of Pri V. Am I missing something here?

  15. kvilia says:

    In the same camp as many – 1899 is the short term key. Stops@1885.

  16. phil1247 says:

    5 waves down now …bounce to 1911 possible…. take partial profits

    • kvilia says:

      Are you sure the 5th is not subdividing?

      • phil1247 says:

        ha…..not sure of anything kv….just trading what i see and that could change in 5 min…..if this decline picks up steam its possible you are looking at 1 2 12 with possible gap down tomorrow but we will have to accellerate down soon for that…

  17. phil1247 says:

    short was at 1913 spx…….stop should now be at 1912.50 with lower low…..interestingly..trader joe has a target of 1855

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