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
the ELLIOTT WAVE lives on 
caldaro IBB smash almost done or a lot more to go?
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has more room to go if need be
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TommyBoys/MrCoolWig/other people long metals/mining-
today looked/felt like a capitulatory move in metals/mining credits. names gapped down big at the open and then closed the day very strong, in some cases up several points on HY names. i’m not personally a big longer term fan of the space but today’s move in credit land would lend some support to your recent bullish call on mining equities. could be the start of something more meaningful. we’ll see. cheers
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Yep. Plus anti-dumping legislation in route within my space.. bullish.
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Good stuff as always, Tony! Big Downs have been working better than Big Ups lately, which only happens during extended corrections and bear markets. Most of the time Big Ups will eventually hit target (which makes sense as most of the time the market is bullish). So, that having been said, today’s $SPX is, for me, a Big Up daily set up, trigger above today’s high, confirm with a close above today’s high. Target for a swing long would be $SPX 1947 – 1953. I will trade it with a stop on a close below today’s low, but I am also staying short from the 9/17 Big Down. And it “ain’t” my fault if someone can’t figure out how one can be both long and short at the same time.
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Thx CN, thought daily BU setup required a close in top half of range? No?
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A big up as a with trend pullback, yes, that is usually one of the characteristics. But as a counter-trend set up an intraday V-like reversal with a close above the day’s open is significant. And remember, a set-up is not a signal until price action triggers a trade. Until then it is just a set up. $SPX could gap down 50 points tomorrow morning – no harm no foul.
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Hi CN,
We agree, 1899 is important at current levels.
A rally above and 5 down is done.
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Thanks CN!
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thanks for the updates… the 9/17 Big Down is it a weekly big down you have been shorting since?
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No it ain’t – 🙂
Thanks, CN. Long from 9/28 as well – UPRO and XIV. I was looking to get out at around 1925-1930 or so – 50MA. Good luck.
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Friggin P-II W1 vs PIV W5 alteration fractal looking friggin scary close. Notice that today’s LOD is where Tony has his minute wave iii and today EOD is part of the ongoing wave rally where Tony has his minute iv. Note saying to trade the remainder of the analog but it interesting to note that the analog does support one more long as Toy mentioned. And like I said humans can make this stuff up only bots can.
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i see +div on 15 minute but no other chart
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MAT – So if this plays out to form would this imply say a rally up to say the 1899 level then drop to 1840 or so to complete the IV???
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If it was to play out then yes it sounds about right. basically a back test of the neckline (say 1900 to 1915) then a drop to test the 1941 Pivot.
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sorry meant 1841 Pivot
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https://pbs.twimg.com/media/CQGi_kAUEAAN4zV.png:large
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Carl Icahn releasing a video about how scary the markets are has to be some kind of contrarian indicator, right? haha
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Agree and I know you are no longer short. Last day in sept has been bad last 6 of 7 years and last day of month has been down 9 of past 10 months. Next week is last of three that is bearish. Normally I don’t worry about seasonality, but the pattern still does not look complete along with seasonality. everyone looking for 1867 could mean we blow right through it or today was it. I lean the former.
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totally hear you my man. everybody has their own trade and strategy and mine is by no means infallable. i’ve also been looking for a lower low, but seeing some stuff in the last hour of the day today made me feel less confident about that call. so, i try to recognize when i’m more likely to be right/wrong and trade accordingly. we absolutely could tag a lower number shortly. either way i think we’ll get that answer soon
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hey rc – I’m really digging your stuff. Keep up the great work. While I am mostly gone, you’ve not been forgotten by me. I agree with you as to all the “high conviction” stuff getting spouted about in the peanut gallery. No one should follow anyone here. Use this place as a mine for ideas and then form and test your own hypotheses, right? Keep ’em honest, rc!
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thx bud. just last week the commentary was trying my patience and i typed a very long “farewell, it’s been nice knowing you” post here with my parting opinions. it sat there unposted for an hour or two. then i changed my mind and realized if it bothers me that’s my problem and i can always just stop reading it. and that i can’t ever control what others read and believe, so just gotta let it go and hope people have sound judgment for themselves. GL to you and all; i like to believe it’s us vs them and not us vs us.
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us v them it is
the us v us crowd can go somewhere else
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+1
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please don’t let the trolls get to “you” experienced EW traders. there are MANY less experienced ppl here that learn from your posts. sure there are different EW counts but i think it’s healthy to hear what other people have. NO ONE is right all the time – just play the odds.
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Only traders understand that there is no such thing as high conviction. It never occurred to me that people would go to blog full of strangers and act on trading advice but people actually do it so just take it for what it is I guess.
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Hey. It’s free!
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Dennis Gartman said today that SPX is going to crash to 1420-1550 😉
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There s your BIG UP!!!!
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Eventually, he might be right.
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dang it gartman, now i have to go long
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That’s my gut feeling too, SPX momentum is down, there is a 7 year old Bearish Butterfly pattern that topped out at the full 1.618 extension in May from 666 to 2134, monthly MACD & PMO support the trend change, the jury is no longer out IMHO…
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Lots of calls for the big crash, Gartman, Icahn (“bloodbath”), Gross and a host of “other” regulars. I only found one bullish article today – and that was only a “possible” scenario. Getting close regardless 🙂
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Tony: “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…. 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.”
Did you mean the 5th wave of the 5th wave of the 5th wave? In other words a 5th wave starting from 1899?
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yes, 1899 is now a key level
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I find it impossible to label 1899-1972 as a 5th wave (an impulse wave,) because it clearly only subdivided by three. The way I see it, 1899 was an A wave that subdivided by three, and 1872 was a B wave (or an x wave,) and the bounce off the lows is a C wave (or the start of another a-b-c) still in progress. All of today’s action is corrective.
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We were talking about a fifth wave down to conclude the correction, not 5 waves up. I believe Tony meant that the 5th wave of the last declining 5 wave series could possibly subdivide into 5 more waves down.
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correct
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I understand that. What I was saying is that 1899-1972 can not be a 5th wave down to my eyes, because it didn’t subdivide by 5. It subdivided as a simple a-b-c, which makes that move a b wave or an x wave.
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oops…meant to say 1899 to 1872. Is there a way to edit posts here?
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The standard protocol is that 1899-1972 indicates up direction; 1972-1899 indicates down direction.
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I see now that you meant 1872, not 1972. So my previous comment was unnecessary. I personally can see the whole pattern as 5 waves down, not 3.
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Thanks Tony. good stuff
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Tony,
To the untrained eye it looks as if the recent decline could be counted a couple of ways. Is there any significant probability that we have only seen 3 waves down instead of 5?
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see no reason to think we have
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PS: Raining here. Cards game is in doubt.
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magic #2
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Thank you, Tony – how about that sneaky market!
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i agree with that one. all eyes on exactly 1867, so i think either we get just nearly there (aka the pivot but not the point), or we blow right past it. we’ll soon see which is the case!
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Thanks Tony.
My C ball says more down side tomorrow in the am. gl all
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