Wednesday update

SHORT TERM: gap up opening sold, DOW -49

Overnight the Asian markets gained 0.9%. Europe opened higher and gained 0.5%. US index futures were higher overnight, and the market gapped up to SPX 2038 at the open. That was the high for the day. After that opening the market pulled back to SPX 2026 by 10:30, rallied to 2035 by 11:30, then declined to 2020 by 1:30. Then the market started to rally. The rally lasted until 2:30 when the SPX hit 2031. Heading into the close the SPX hit 2017, then ended the day at 2019.

For the day the SPX/DOW were -0.45%, and the NDX/NAZ were -0.70%. Bonds gained 11 ticks, Crude dropped $1.15, Gold slid $10, and the USD was higher. Medium term support remains at the 2019 and 1973 pivots, with resistance at the 2070 and 2085 pivots. Tomorrow: weekly Jobless claims at 8:30, the FHFA at 9am, then Existing home sales and Leading indicators 10am. Before the open the ECB meets.

The market gapped up at the open to SPX 2038, a point below yesterday’s 2039 uptrend high, then pulled back into the afternoon to 2017. We labeled the SPX 2039 as Minor wave 1 of Int. iii, and today’s pullback is Minor wave 2. Thus far, the market got sufficiently oversold at the SPX 2017 low where Minor 2 might have ended. If so, Minor 3 should soon be underway to new uptrend highs. Short term support is at the 2019 pivot and SPX 2000, with resistance at SPX 2040 and the 2070 pivot. Short term momentum declined to oversold after yesterday’s negative divergence. Best to your trading!

MEDIUM TERM: uptrend

LONG TERM: bull market


About tony caldaro

This entry was posted in Updates and tagged , , , . Bookmark the permalink.

165 Responses to Wednesday update

  1. Has anyone noticed the after-hours on Google and Amazon?

  2. cicelyalaska says:

    Keep it going, don’t stop now … 2077

  3. sibyn says:

    SPX/DAX 255015502

  4. rc1269 says:

    ‘back to the scene of the crime on the Dow’, as Lee might say

  5. Some big boys reporting tonight. MSFT AMZN GOOG. tomorrow is going to be interesting ,

  6. phil1247 says:

    hitting -23% level from below now……… stalled the rally and gave pullback….taking some profits from SSO bot this am……..upro was stopped out

  7. Dex T says:

    Another good article on Valeant. In a nutshell the company over expanded by acquiring a bunch of (mostly) useless companies with cheap money to inflate their market cap and then used fictitious accounting practices to mask their earnings.

    The market is seriously loaded with companies like this across all sectors. Without access to endless credit they can’t expand and have no chance of growing earnings to pay back their debt.

    Short-Sellers Aren’t Valeant’s Biggest Problem

    “Valeant’s most actively traded bonds due in 2025 fell off a cliff on Wednesday, and JPMorgan credit analysts have subsequently cut their rating on the company’s debt: “We have to admit we underestimated the degree to which Valeant developed into a lightning rod for controversy,” they deadpanned.

    “The good news here is that Valeant does not have any bonds coming due until 2018. The bad news is that it now needs to prove it can transition to a growth-oriented business that can exist without the backing of cheap access to capital. And it must do all this while fighting off politicians, prosecutors and a new crop of short-sellers.”

  8. magnus1234 says:

    This will move all the way to 2130 before it taper off….funds are fighting there raison d’être

  9. blackjak100 says:

    TC, any concerns about this 11-12 pt pullback in a third of a third of a third? Assuming 2040 should hold if it’s correct?

  10. perversionofthemean says:

    SPHB and IWM are major laggards. Do they count any more? Is this the opposite of the run-up to the 2000 peak, where value lagged? Doesn’t totally feel like it, because NDX is still leading.

    Flat again; bumped head into wrong side of the 200-day m.avg.
    Neutral, wondering how to count 7 waves up and one down from RTH close. Willing to try another long at 2040 SPX equivalent pivot, but curious about impact of 200-day vs. the n-month avgs all fighting each other and OEW.

  11. mjtplayer says:

    Possible LD for int i? Pattern would be busted above SPX 2,063. Just something to give the bears hope and to keep the bulls honest 😉

    A couple observances today:

    – The VIX has not made a LL
    – Oil just went red and is in danger of breaking $45
    – 10yr Treasuries are below yesterday’s low, now trading 2.00%

  12. It looks like the first sub-wave of int iii completed late morning with an up sloping correction since then. I’m wondering if we start another wave up late in the day with a huge gap up tomorrow.

  13. nsteve24 says:

    Have to luv that PE multiple expansion on declining earnings and revenue, just satin’

    • Octobermania.This stock market doesn t care about economic fundamentals, just debt spreads and black swans.Where s the next black swan? The South China Sea? Or don t they collide out there.It s supposed to happen soon.Either China lets our SS Ronald Reagan in or they start a war.who s going to blink?

  14. CONGRATS MR had it from August on beautifully.Really impressive analysis and now hopefully some last gasp profits from this PV bull.Nothing but respect…but that s why I call you Mr C. (Wish I d have taken “the Fonz”as my moniker for obvious

Comments are closed.