Wednesday update

SHORT TERM: volatile FOMC day, DOW +198

Overnight the Asian markets lost 0.3%. Europe opened higher and gained 1.2%. US index futures were higher overnight, and the market opened four points above yesterday’s SPX 2066 close. In the opening minutes the SPX dipped to 2067 then rallied to a new uptrend high at 2082 just past noon. After that the market dipped to SPX 2078 by 12:30 then drifted to an even higher high at 2085 just before the FOMC statement: After the statement was released the market immediately sold of to SPX 2063 within 15 minutes. After that pullback the market rallied to SPX 2090 where it closed.

For the day the SPX/DOW were +1.15%, and the NDX/NAZ were +1.10%. Bonds lost 23 ticks, Crude rallied $2.75, Gold dropped $9, and the USD rallied. Medium term support rises to the 2085 and 2070 pivots, with resistance at the 2131 and 2198 pivots. Tomorrow: Q3 GDP (est. +2.3%) and weekly Jobless claims at 8:30, then Pending home sales at 10am.

The market opened higher today, dipped, and then rallied to a new uptrend high right at the 2085 pivot. After the FOMC statement the market dropped to SPX 2063, and then rallied to a higher high into the close. At SPX 2085 the market had done the minimum required for Int. iii (a higher high), and five Minor waves. However, the market shrugged off the pullback and rallied to new highs into the close: Minor 5 is subdividing. Short term support rises to the 2085 and 2070 pivots, with resistance at SPX 2100 and the 2131 pivot. Short term momentum was quite overbought early, declined, then ended with a potential negative divergence. Best to your GDP trading!

MEDIUM TERM: uptrend

LONG TERM: bull market


About tony caldaro

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142 Responses to Wednesday update

  1. Dex T says:

    Oh dear. Not a happy ending but it was only a matter of time . Cryan (Cryin?) is an apt name for the CEO!

    Deutsche Bank cutting 15,000 jobs as new CEO sets out strategy plan

    “Deutsche Bank is slashing 15,000 jobs and shedding assets in which some 20,000 staff are employed, as new Chief Executive John Cryan starts to implement a deep overhaul aiming to improve returns at Germany’s biggest bank.

    Cryan said the bank will sacrifice its 2015 and 2016 dividends as it seeks to bolster its finances and retain money to pay for sins of the past. “I do not think that 2016 and 2017 will be strong years,” he told reporters on Thursday. ”

    The lender is to axe 9,000 full-time jobs and 6,000 external contractor positions. Three quarters of the other 20,000 jobs to go are at retail unit Postbank, which Deutsche Bank is spinning off.

  2. phil1247 says:

    post triangle thrust coming …….

    selll iinto the POP!!!!!!!!!

  3. mjtplayer says:

    The very short term wave count is a complete mess, with overlapping waves and fits and starts since the post Fed rally. No idea where we stand, maybe still in minute iii of minor 5, but unless we start moving higher soon it might get hard to hold-on to this subdivision count. What a mess…

    Today does “feel” like a wave 4 at some degree, but having overlapped minute i that is suspect too.

    • @Mtjplayer
      If we take the Nasdaq, from yesterday’s close to this morning we find 5 waves down, we count some weird ascending triangle that broke this afternoon but is now retesting the high of that ascending triangle… I agree it is weird.

    • mjtplayer to me today’s action is very bulish given yesterday big move up. Keep in mind we have fully Embedded stochastics and now a bullish cross over (20 crossing 100ma) Keep in mind also that upper Bollinger band is at 2100

    • frommi2 says:

      The FED downmove can be counted as a c-wave and the upmove since then was wave i of v of 3, with wave ii running currently. I can`t see a good bearish count at the moment. The R2K count gives more headaches, but it looks like an EDT is developing there.

  4. sibyn says:

    CH handle Done2086,2 CH Goal 2096,1
    CH Fails at 2083,844

  5. uncle10 says:

    Thanks Mr. T.
    Our choices for the next president is depressing 😦

    • fotis2 says:

      And the ones after that I believe are even more so imagine Kim Kardashian as first lady hahahaha

    • cicelyalaska says:

      Trump for entertainment. Hillary for pants suits. Bush for wars. Sanders for more pro-hipster benefits.

    • Dex T says:

      Who do you think would make a good president?

      • uncle10 says:

        None of the ones I see currently running?
        Someone that leads in:
        1. Ending the terrible drug war. The laws and policies that we have in dealing with drugs/users/dealers is not solving or helping anything or anyone. It only causes more crime and more drugs and more users/dealers.
        2. Start completely over with a new tax system that is simple and easily understund by most people. a. Remove all loop holes and deductions b. lower taxes on all but the very rich ( people making over 10 million). c. lower corp taxes.
        3. Cut defense spending by at least 50% on all big war hardware. ie planes. tanks, subs, ships etc.
        4. Completely change health care system. combo public/private. For people that can’t afford private have access to govt. run health service ( yes, govt. stinks at running anything and it will not be great service, but it is better than not having access to basic health care). Allow the Govt. ( biggest buyer of drugs) negotiate for better prices. There are plenty more things to do and change but too complex to write about here…
        5. Close the us postal service or raise prices to at least break even, prolly better to just close it. us postal service is just a subsidy for businesses to send junk mail.
        6. Remove legal immunity for the exchanges and enforce the rules to somewhat get the market back on some what of a stable structure. #hfts
        7. Reduce the amount people can get for education. The more and higher the govt. gives the higher the colleges raise prices. There is a direct correlation.
        I could go on and on but need to get back to work..

    • purplember says:

      anyone has to be better than what we have. weak foreign policy. good leaders unite not divide

      • fionamargaret says:

        Oh no, no, no, I think Obama is terrific – yes, I hear the media-produced negatives you hear, but he is loved by all the world leaders.
        I like intelligence in the White House.

        • Dex T says:

          Obama is not very intelligent. He gives good speeches and is well spoken but his knowledge in many things is very poor. He has little experience in anything except as a “community organizer”. He is carried by a competent White House staff.

          Obama is a president who has been lucky because he represents the U.S. If it was a small nation then it would be a disaster and run it into the ground.

          • fionamargaret says:

            Oh Dex, you know intelligence takes many forms……

          • torehund says:

            Same goes for Norway, leaders are the kind you used to find at preschool classes when I grew up. They have a great mother instinct, and have been told that all should be shared equally. They are “Collective thinkers”, solving day to day problems, devoid of longer term strategy.

    • tony caldaro says:

      you must be reading my mind

      • lunker1 says:

        “a sane man wouldn’t take the job”.

        doesn’t matter much who gets the job…it all comes out on the wash. some think Obama is good, some don’t. some thought the Bush or Clinton was good, others don’t. now Clinton and the Bush’s are fundraising buddies. the pendulum swings from side to side. taxes increased, taxes cut…wash, rinse, repeat (if you want to waste shampoo).

  6. So green by 1 Eastern time?

  7. With DXY breaking out last week above 96, gold and GDX are on the defensive again.Unless the dollar reverses under 96 I won t be buying gold stocks until the latter part of December.As I ve said, GDX should fill 14.50 gap–at least.Drop below 50d reinforces short term bear case.Bounce at 50d would be interesting, but dollar could end the year on a run up to 98.Also stocks in general:Looking for an inverted hammer in November-maybe due to the rising dollar at some point…close to Mr Cs target would be fine.But we ll all know this big reversal when we see it.Good luck all.

  8. Dex T says:

    All the oil giants continue to get hit. But demand has still not increased. With peak driving season behind us not certain what could be bullish.

    Oil price impact leaves Shell with $7.4bn loss

    “Shell, one of the biggest of the oil majors, has capped off a week in which the impact of persistently low oil prices has been laid bare by revealing it slumped to a massive $7.4bn (£4.9bn) loss in the third quarter.

    The big profit deficit is mainly the result of one-off charges and write-downs in the value of reserves, as the company scales back project spending to protect investor dividends.”

  9. ok it looks like we are going higher from here (spx 2084) to 2110 A weekly close above likely in my view.

  10. stephenk1980 says:

    And that, as they say, is that! See you in the 1800’s.


  11. Lee X says:

    RE CL
    Can anybody count 5 waves up from this weeks low on the 60 min ? Or just 3 waves ?

  12. Here is an update to my blog, for your reading pleasure.

    Cheers and enjoy the chart!

  13. Dex T says:


    Regarding your post at the bottom.

    Very nice-. Norway has a growing population so it’s not applicable in Japan’s case.

    Generally speaking as populations show significant declines the demand for everything except healthcare plummets. It’s been complicated by globalization since outside people and countries can step in and invest increasing the demand. Local regions in the country have to be examined in a case by case basis. However in Japan’s case losing 40+ million people in the next 80 years is going to leave a lot of areas depopulated and a lot of reduced demand across the board. Printing money can’t shore up such a decline.

    However a Zimbabwe style inflation is highly unlikely in Japan’s case. Zimbabwe has an growing population and Mugabe persecuted the minority whites who had all of the land and administrative capabilities. His black supporters took over the duties and ran the country into the ground. They did not know how to grow food or produce anything so inflating the currency had no effect- thus hyperinflation.

    • torehund says:

      Population growth in Norway is due to migrants and refugees ( 30 percent in capitol Oslo). Then add Romanians, Polish and Sweedes, +++ working here due to high currency and higher wages.

  14. skmcobra says:

    Tony, I am new to your site so please allow me to pose a potentially already asked question. I don’t see the P4 wave as completed in just a few days in late Aug. It appears to me that we are either still in P4, awaiting a c wave pb OR it was completed in late Sept with the drop back into the 1800s. I am leaning towards still being in wave b of P4 awaiting wave c to lower lows since the Sept pb didn’t go lower than the Aug pb. Please share your reasoning for P4 being complete and the SPX now being in P5.

    • tony caldaro says:

      Welcome, will keep it short.
      P3 completed in May with a diagonal Major 5.
      P4 did an abc down, three waves, to late-August, with the most oversold condition since P2. It also alternated with P2: zigzag versus and elongated flat.
      If you look at the other indices, i.e. DOW, NDX. NAZ that low looks cleaner.

  15. argento1 says:

    I had a look into history and found something interesting, whenever the US kicks off such a strong uptrend with the dialy macd being as high as it is she could take up to a month to bring down the macd to put in negative divergence first while grinding higher before she tops out!The upper montly bb on SPX is around 2162 and it would fit for a breach first before Primary V concludes and in line with Tony’s targets!So November paints just another bear killing grind higher month into first week of December!


    • skmcobra says:

      I don’t think so. If we are truly in P5, wave 3, then a wave 4 pb is coming any day now. I we are still in P4 in wave b, then a huge pb into the 1800s is pending for coming wave c. Either way a pb is around the corner. This market can’t keep grinding up and extending the current wave structure. If so EWT isn’t worth its salt!

      • argento1 says:

        Can’t just rely on EWT…lot of other factors involved. Charts saying strong uptrend in motion…until then me sitting on them long eggs since beginning of October!


  16. Thank you, Tony!
    With intermediate wave-1 covering 150.43 from the low at 1871.91, barring some kind of truncated short wave scenario, intermediate wave-3 should go to 2141.16 to avoid being shorter. I think the probability that $SPX is still in minor wave-3
    of intermediate wave-3 of major wave-3 of primary wave-5 is greater than zero. Expect wild whip saw swings as time runs out for beefing up bonuses for 2015.

    • That’s why I was wondering if minor wave 5 could be extended because of minor 1 being about 50 pts. and minor 3 not much longer at about 60 pts. and what you are saying adds to that.

  17. kbtxforever says:

    Different topic… Sorry. Not the biggest Elliot Wave guy, but looks like commodity cycle is nearing a bottom… Namely on the monthly and annual timeframes. Seems like wave 4 is wrapping up with the 2008 low ~18% from here as the worst case scenario, with an additional 6% down getting the CCI Index into the bottom range. Seems crazy given current USD strength and rate hike potential going forward… Any thoughts?

  18. Jim Guthery says:

    deGrom getting pounding in the bottom of 5th.

  19. purplember says:

    CNBC shouldn’t be doing a debate and stick to financial network. too bias & liberal.

  20. 21-34 Mystery Ratio

    21 Trading Days today

  21. Looking for >2,110 S&P by next Tuesday to flip my UPRO to SPXU very short-term, anticipating 4% pullback into mid-Nov. From there, markets likely resume choppiness until mid-Dec, lacking any discernible trend, meager volume and mounting frustration as pundits talk up the next Fed rate rise meeting. Once that is finally put to bed…I’m back in UPRO for the year end burst (likely into early-Jan) to Pri V highs and the end of this Bull. Looking forward to taking a month off (mid-Nov to mid-Dec) from trades and at-risk positions.
    From earlier:
    S&P nearing a cross of the 20 & 50-day MA up through the 200-day. If it happens, I’d expect that to trigger flood of sidelined dollars to enter equities chasing year end performance (from mutual funds primarily) simultaneously with a squeezing of exasperated Bears. A lot of “if” involved, but certainly possible especially with the Fed sidelined until March (as most believe, despite their recent cryptic & incongruent messaging).

  22. The only weak area I saw today was the Transport sector. Does it foretell a slowdown in the economy? Weakness in the Transports preceded the Aug-Sept decline by about 5 months. It would be desirable to see the DJTA at least exceed it’s late July high of 8530. There is virtually no chance it will surpass it’s all-time Nov, 2014 high of 9310.$TRAN

    A strong Minor 5 will allow Int 3 to be longer than Int 1, thereby allowing Int 5 to be longer than Int 3 if it has the strength to do so.

  23. Anyone see that blimp over Pennsylvania today? Thought it was a Hindenburg Omen for sure.I checked the high/lows and for Nasdaq 144 highs 85 lows.WOULD VE been an HO except it squeaked up above zero at 22 on the oscillator.That would ve been a DOUBLE HO in n my

  24. purplember says:

    tony, once int III completes, do you think Int IV will drop 30-40 points or more? int II didn’t retrace much.

  25. gasman88 says:

    I’m beginning to think that 2007 scenario maybe playing out here, as new all time high on spx is looking more and more likely. I never thought that a massive V-shape move like the one we saw last October was possible, but it happening. There are too many headwinds to think we can go much higher from here, but momentum may may carry us for a while. I think truncated V wave is all we’re gonna get, then there is Newbie time.

  26. stephenk1980 says:

    Dow just hit a brick wall of resistance and closed beneath it. Shorting from here as this is my C wave line in the sand.

  27. EL MATADOR says:

    SPX P/E continues to make new ath for this bull market it now at 22.02.
    and the Schiller P/E ratio now at 26.41. As I mentioned during the 2nd Qtr back in July we are going to see an SPX P/E of +23 before EOY. Welcome to bubble land

    • mjtplayer says:

      You said it Mat, declining earnings and rallying share prices = higher highs in the P/E

      Beginning to look like a 5th wave in many regards, both technically and fundamentally, with the bad earnings to go along with the bad economic data.

  28. ES TA says:

    Tony, thanks for your update!

    I’m just curious what makes today’s move to be part of divided minor 5, not part of divided minor 3? Is it because it has met the minimum required for Int. iii?

  29. llerias7 says:

    So unfinished business?…minute iii – minute iv – minute v, yet to conclude Int. III at 2100…(0,5%-1%)

  30. Jim Guthery says:

    Tony are we to anticipate the next wave to 2120?

  31. pbnj123 says:

    I posted in Tuesdays section and I am sure it was missed because it was right at FOMC release but if you wouldn’t mind looking over I would appreciate it.

    Going back over your older posts – I came across this one and would like to have some light shown on it please if you wouldn’t mind sir.
    This is from the Nov 7th 2007 weekend post
    “A bull market does not end until a completed OEW wave pattern, and a completed MMI cycle has formed” – now I know we are all waiting for the waves to complete and you have done a great job of showing the way – but what is a MMI cycle and will we be notified when it triggers?

    Thank you

  32. phil1247 says:

    this is the -23% level i am referencing…

    took profits at 1: 55 pm

    avoided the plunge……probably more lucky than good

    bought back at 2060 on first up 5 min bar

    took profits at upper -23% line

    e mini addict will guide you through all this

  33. pooch77 says:

    So 2105 after Japan announcement,bad gdp means no rate increase until mid 2016? 2200 here we come

    • torehund says:

      Thanks Tony.
      …big, big wave 3 ahead in the japanese market, equally dump in the yen/usd ahead.

        • torehund says:

          Dex, when the productive population declines relative to the supported population, then cost of goods and services increases.

          • torehund says:

            ..and when you have a bubble in state workers, well they are by themselves inflationary.
            Thats the demise of my own country, less and less production of goods and more and more bureaucracy. In essence the rate of producers shrinks relative to the supported, and the currency goes into extreme dilution. Drifting into a nonfunctioning collectivistic state where more and more citizens shares an ever declining production of real goods.

          • Dex T says:


            That is only partially true. There is an increase in only certain goods and services (those more in demand by the elderly like healthcare) while others are going to drop dramatically. The price of many Japanese assets (like real estate) are going to collapse. By 2100 with only around $80 million people there is going to much less demand than there is today. Elderly people generally consume far less than younger people.

            You can already see the effects of this in other countries (like Bulgaria) where population has tapered off.

            And I forget, but are you Norwegian or Swedish?

          • torehund says:

            Dex T: Its difficult to discuss housing prices if not on a world scale that take into account the level of the currency. Like for example Norway (my home), the house prices are still increasing in NOK, but if you look at it in USD house prices are already declining (you would have been better off holding USD). As I invest cross border, I always have to take the currency into account too. Sure it becomes more complex..
            Guess real estate in Japan and Europe will increase in local fiat still for some time, until it also declines in their own currency. So in a sense both Europe and Japan is in a deflationary spiral due to plummeting currencies. I believe Japan stocks and gold will keep up for the yen decline for some time. And if the course isnt changed radically at some point, its Zimbabwe new exit for a lot of countries.

  34. fotis2 says:

    Thanks Tony what a day! amazing good for the day traders.GL trade safe

  35. Lee X says:

    Thanks Tony
    Great job here gto !

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