Wednesday update

SHORT TERM: pullback continues, DOW -157

Overnight the Asian markets lost 1.0%. Europe opened lower and lost 1.0% as well. US index futures were flat overnight, then at 8:30 the PPI was reported lower: -0.5% v 0.0%, and Retail sales were reported higher: +0.1% v +0.2%. The market opened unchanged at SPX 2004, dipped to 2001 in the opening minutes, then rallied to 2010 by 10am. At 10am Business inventories were reported flat: 0.0% v +0.1%. After that the market declined below SPX 2000 to 1994 by 11:30. After a rally to SPX 2006 by 1pm the market headed lower again. At 2pm the FED released its Beige book: At 3pm the SPX hit 1991, then bounced to close at 1994.

For the day the SPX/DOW were -0.70%, and the NDX/NAZ were -0.20%. Bonds gained 22 ticks, Crude lost 5 cents, Gold rallied $19, 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, the CPI and the NY FED at 8:30, then the Philly FED at 10am and the Treasury budget at 11am.

The market opened flat today, took out yesterday’s low in the first few minutes, bounced, and then headed lower. At today’s low the market has now had its largest pullback (2022-1991) since the rally began at SPX 1872 two weeks ago. This market activity fits with an Int. ii of Major 3 underway, and we updated the hourly/daily charts. There are four potential levels of Fibonacci support SPX: 1987, 1965, 1947 and 1929. Today’s low is close to the first, a 23.6% retracement. The others are quite close to the 1973, 1956 and 1929 pivots, which represent the 38.2%, 50.0%, and 61.8% retracements. Since this is a larger third wave, Major 3, would expect the pullback to be relatively small, i.e. the 1973 or 1956 pivots. With Industrial production reported on Options expiration Friday, Int. ii could be over by Friday//Monday. Short term support is now at the 1973 and 1956 pivots, with resistance at SPX 2000 and the 2019 pivot. Short term momentum is displaying a very slight positive divergence at today’s low. Best to your trading!

MEDIUM TERM: uptrend

LONG TERM: bull market


About tony caldaro

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203 Responses to Wednesday update

  1. Dex T says:

    What the… Brainard is talking AGAIN?? What can possibly have changed ?

    So that’s it that’s the P5 stimulus… It wasn’t more QE, foreign QE heading to U.S. markets, negative rates, etc… but a variety of Fed officials hand holding and giving group therapy sessions to Wallstreeters letting them know that everything is going to be OK.

    The “top” will be in when New Year trading begins and Yellen makes a cameo appearance at the exchange in her Victoria Secret’s Winter Edition business lingerie promising, with a sultry look, to do WHATEVER it takes to reassure investors.

  2. fotis2 says:

    Weekly 3BR target 2089.Weekly close above 2020=DB target 2169. ZBT playing out?Patterns pointing UP.

  3. torehund says:

    .. and about stocks religion and prejudice.
    PCYC (Pharmacyclics) went from 0.57 usd to 265 usd. I didn’t even consider entering (as the CEO is a top Scientologist), maybe there is more to the cult than just the name🙂

  4. rc1269 says:

    2025.41 to complete a bearish gartley on spx…?

    • H D says:

      I am charting symmetry right near there too. 😯

    • aahmichael says:

      There was a reverse head and shoulders on the 5 minute this morning that projects to 2024.99, but I think 2038 is acting like a magnet. I got stopped out of my short at 2007.87 this afternoon. Had entered the short on Monday, and lowered the stop after this morning’s initial up wave ended.

  5. phil1247 says:

    tomorrow should gap up to 2047 to the upper bollband…taking partial profits at 2022…almost 20 points…not bad for a few hours………….

  6. johnnymagicmoney says:

    well this caught me with my pants down. Completely retarded rally but IWM just did a 2% reversal, Goldman did a 6% reversal, oil did a 3% plus reversal. IWM which had broken its trendline yesterday has now reversed and closed back above it. Apple is once again bucking up against the top of its channel (7th time now in last few weeks) and that upper line can only last so long. this is either one hell of a fake out or this is going to impulse much higher on complete BS

    • fishonhook says:

      yup . nailed me too. Looked like a good down. Maybe tony is right and this is the start of a third wave. has that relentless up feel to it.

  7. fishonhook says:

    hard to know what is driving this up. Must be the bad earnings results.

    Even if tony’s count is correct don’t we need a three wave structure for the int ii
    So far we have just had down and right back up again!

  8. rc1269 says:

    i remember way back when a bunch of people were talking about how raising rates we be bullish. “give us the certainty!” they said.

    but gosh darn if this market isn’t acting like it still likes low rates

    • Dex T says:

      To that crowd everything is bullish. The market is always at a discount to some ridiculously high price.

      Now the headline news for this rally is that “some” at the Fed are calling for negative rates. I have a feeling this is another make believe “news ” story Wall Street keep floating hoping the Fed catches on.

    • tommyboys says:

      Rates at 0 or 2% don’t matter. It IS the uncertainty markets hate. Right now they’re feeling a bit more certain about things…

    • aahmichael says:

      One of the basic principles of EW, and really, all TA, is that the market is going to go where it wants to go, no matter what the fundamentals are. On 9/17, the market was at 2021 and the news came out that rates would not be raised. The market promptly declined 149 points. Now it’s rallied right back to the same place. When people tell me that the market declined 149 points because rates were not raised, and then they say that it’s rallied 152 points because rates were not raised…I just smile.

  9. magnus1234 says:

    DAX and SP500 looks like 5 in bigger one, whatever one call it.

  10. stephenk1980 says:

    Interesting day. My shorts were stopped out for an insignificant profit and the yen has just broken out of a ‘perfected’ h&s. Is this the start of a big impulse up, or a fake out? I guess the coming days will tell. Long usd vs yen short term, but I’ll be shorting the s&p before 2040.

  11. johnnymagicmoney says:

    Goldman misses revenue and earnings, Walmart disasterous earnings report, JPM misses, Alcoa misses, Citigroup misses revenue, retail sales dissapoint, Philly FED bad, Chicago PMI bad, China imports down 20%, deflation prints globally, and a slew of other crappy data and market is higher in last 3 days now. I am sorry but this is beyond dumb regardless of the squiggles, BOTS, and waves.

  12. H D says:

    2019P very user friendly- USA! Jobless claims the lowest in how long?

  13. johnnymagicmoney says:

    All I know is this market is retarded. Absolutely 100% retarded

  14. mike7x says:

    A break above SPX 2022 and ~2040 is next. Above that and the trend is your friend, and it’s up. Did the ZBT signal last week foretell this rally? Decide for yourself. Gold can rally to ~$1450 IMO. GLTA

  15. mjtplayer says:

    .786 retrace from 2,022 to 1,990 = 2,015

    We’re there, not what? Rally through it and test 2,022 or reverse and drop below 1,990? Hard to say with OPEX pulling us higher. The “window” for OPEX is usually 1 day +/-, so we could top-out anytime today, tomorrow or Monday.

    Side note: we hit the debt ceiling “extraordinary measures” limit on Nov 3rd, less than 3 weeks away. Nobody is talking about this. All the media attention is on the presidential politics, markets don’t care with the VIX back into the 16’s and the Republicans are not discussing it – all their attention is on who will be the next speaker. The big question is: when will markets start to care?

    • blackjak100 says:

      Tomorrow would be 13 trading days from 1872. I like to give +/- 1 day. 2025 is first level I’m looking for pause but not necessarily top. 2030-2045 would be nice target for top. -div could be setting up nicely on daily chart.

  16. fotis2 says:

    Bit of a long shot 2026 triple topish?

  17. phil1247 says:

    gentlemen we have liftoff .. longs from 2004 performing well… repeat…..the rocket lands at 2044…enjoy!!!

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