Wednesday update

SHORT TERM: gap up opening then volatility, DOW +183

Overnight the Asian markets lost 2.3%. Europe opened lower and lost 1.4%. US index futures were higher overnight, and at 8:15 ADP was reported lower: 205K v 257K. The market gapped up at the open to SPX 1914 and then headed lower. The SPX had closed at 1903 yesterday. At 10am ISM services was reported lower: 53.5 v 55.3. The market continued to decline until 10:30 when the SPX hit 1872. After that there were a series of rallies and pullbacks: 1891-1879-1899-1885-1895-1881. Just after 2pm the market took of to the upside, hitting SPX 1918 just before 3pm. Then after a pullback to SPX 1904 by 3:30, the market rallied into a 1913 close.

For the day the SPX/DOW gained 0.80%, and the NDX/NAZ lost 0.40%.Bonds lost 2 ticks, Crude rallied $2.65, Gold rose $12, and the USD fell. Medium term support remains at the 1901 and 1869 pivots, with resistance at the 1929 and 1956 pivots. Tomorrow: weekly Jobless claims at 8:30, then Factory orders at 10am.

The market gapped up at the open this morning then immediately sold off to SPX 1872. At that low we could count three waves down from SPX 1947: 1897-1914-1872. We have labeled this Minor A on the hourly chart. After that the market rallied, in a choppy pattern, closing the gap and hitting a higher high on the day at SPX 1918. This is most likely part of a Minor B counter-rally. Today was quite volatile compared to Monday/Tuesday. Short term support remains at the 1901 and 1869 pivots, with resistance at the 1929 and 1956 pivots. Short term momentum rose from quite oversold to nearly overbought in the afternoon. Best to your trading this volatility!

MEDIUM TERM: tentative Major wave labels remain

LONG TERM: bear market


About tony caldaro

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213 Responses to Wednesday update

  1. tomasso60 says:

    taxes and more taxes….

  2. frommi2 says:

    That`s it! I think Major 3 of Primary V has started yesterday and nobody even realized it.🙂🙂
    Should be a pretty violent day for the bears tomorrow.

  3. blackjak100 says:

    If 1900-1903 holds into the close, we have a chance to rocket higher tomorrow which would be targeting a HH above 1947 to complete Major B. The move down from 1947 has not been impulsive and should have taken out 1872 if it were going lower and in Major C. Lots looking for 1970-1980 for Major B, but I’m a seller/shorter tomorrow if we see 1955ish.

  4. stmro says:

    Ok i’m feeling carsick. I’d like to get off please.

  5. So, larger B not finish yet. Counting waves we should have no more than 20 point down and reap 100 points up for the c of larger B.

  6. Had to update the DXY trendline which is at 96.25 actually.Went to 96.26 this morning and bounced slightly.Drop below 96.25 probably takes gold to 1225 as DXY goes to 94.A bad jobs # tomorrow would do it.Anyone have any pull at the Labor Dept?lol.

  7. Dex T says:

    America is pumping so much oil that it’s running out of places to keep it all.

    “The U.S. now has nearly 503 million barrels of commercial crude oil stockpiled, the Energy Information Administration said on Wednesday. It’s the highest level of supply for this time of the year in at least 80 years. ”

    “Cushing, Oklahoma is the delivery point for most of the oil produced in the U.S. This key trading hub is currently swelling with 64 million barrels of oil. That represents a near-record 87% of the facility’s total storage capacity as of November, according to the EIA. ”

    “Global inventories also remain high, with the International Energy Agency recently saying the world is “drowning” in oil. The agency is bracing for oversupply of 1.5 million barrels per day in the first half of 2016. ”

  8. mjtplayer says:

    johnnymagicmoney says:
    February 4, 2016 at 11:21 am
    mjt – so in your opinion …………..what would be your targets under both scenarios

    Intermediate C of Major B would equate to?

    And then lets say its Major A still…………….what would be your target of Major A?, and then correspondingly Major B thereafter?

    johnny – impossible to know. The market seems to be leaning lower, by my work, and my count it would be minor c, but I don’t know if it’s a higher low above SPX 1,812 for an int B (of major B higher) or if we take-out 1,812 for int E (some are labeling int 5, but I disagree) of a continued major A. If we do take-out 1,872 then there’s not much support below 1,867 until 1,812 – 1,820 and we have a building potential H&S pattern forming too – with the neckline at 1,872.

    The candlestick patterns are bearish and we potentially just completed a bear flag minor b, more evidence for a turn lower.

    It’s also possible we don’t take-out yesterday’s low of 1,872 – which would really confuse things. Too many possibilities right now, the market needs to give us more info.

  9. johnnymagicmoney says:

    upon MJT’s point

    best earnings recently ………….MSFT, FB, GOOG (down 1%, 2.4%, and 2.7% respectively today)

    total garbage rally …………….don’t know how the market will hold up here when those three are getting whacked

  10. lunker1 says:

    since 11:45
    3 drives in a wedge to break above the wpp but no dice.
    so is it an ED or an LD?
    1904 should tell

  11. To me GDX RSI is over 70 and there s a gap at the 15.31 breakout level.My plan is to take profits and wait for some kind of move to fill the gap.This despite knowing that a poor jobs # tomorrow could drop the dollar past support and give us a $40 gold jump.Could go the other way too.Tough call…but overbought is overbought.Good luck all.

  12. 123 abc says:

    Looks to be forming a ‘head & shoulders’ here…?:

  13. rd3777 says:

    Wave E finished? If so should thrust down…

  14. uncle10 says:

    Thanks Tony. maybe we won’t get a 50 point range today? save the fireworks for tomorrow…

  15. Tony i think tomorrow job report will be very good and could push the financials much higher and gold sector way down .(very overbought ) what you think friend?

  16. frommi2 says:

    Am i the only one that sees an imulsive wave from yesterdays bottom to todays top and currently a correction of that, that will be followed by at least one additional impulse up? Maybe to 1960/2000?

    • aahmichael says:

      You’re making a common mistake that I see so many people constantly make in their posts on this blog. The move from 1872-1898 can not be counted as wave 1 of a larger impulse wave, because it did not subdivide by 5. It was a simple zig-zag. Furthermore, even if it had subdivided by 5, then there was no alternation between the supposed waves 2 and 4 in the larger so-called impulse wave. Finally, even though this morning’s rally from 1901-1927 was equal in length to the 1872 -1898 wave, it can not be called a wave 5, because there never was a wave 1,2,3 or 4.

      • frommi2 says:

        I am sure its possible to count that first wave as an LDT. I have seen this unfold more often than i like because i often think, now that was a correction, so it should turn down now again. But then the market rallys on and on and you have revisit that particular wave and realize it was countable as an LDT:

        • aahmichael says:

          If you take a look at NAZ/NDX, you’ll see yet another reason why it’s impossible to count the move from yesterday’s low to today’s high as an impulse wave. In both of those indexes, your wave 4 had a massive overlap of the end of wave 1, and in NDX, your wave 2 took out the beginning of wave 1.

    • xuwu992000 says:

      Totally agree with you here: a leading diagonal for w-1, very clean and clear. Today’s session walks out a beautiful triangle W-B. Tomorrow would see a huge gap up to kick off the W-C to at least 1965 in two-days’ time.

  17. rd3777 says:

    Looks like the final remnants of the bull here….exhaustion playing out. When finished we should thrust down out of this wave 2 of 3 triangle. IMHO

  18. mjtplayer says:

    Tony – my comment is awaiting moderation?

  19. mjtplayer says:

    Another rally today being lead by all the garbage, unfortunately the credit markets are not as optimistic as yields haven’t budged for oil & gas, mining or the materials names. Names like FCX & X are still high probability bankruptcy cases. The rally in oil, gold and copper have helped to trigger short covering in the equities, but remember that the eventual likely outcome will be these stocks going to zero.

    In fact, it looks like minor b might have just ended at today’s high and we’re now falling in minor c below 1,872. Whether this is minor c of int B (of major B higher) – or – minor c of int E below 1,812 to complete major A remains to be seen.

    • johnnymagicmoney says:

      mjt – so in your opinion …………..what would be your targets under both scenarios

      Intermediate C of Major B would equate to?

      And then lets say its Major A still…………….what would be your target of Major A?, and then correspondingly Major B thereafter?

  20. Lee X says:

    Thanks Tony
    The rest of ya’s
    “Enough already” haha

  21. 123 abc says:

    Tony et al, time to label a tentative Minor-b yet ?:

    Anything higher, another leg higher, then the DOW takes out the Major-b top.

  22. pbnj123 says:

    Hello and good morning
    One question that I have been pondering and finally have a moment to ask so here it goes;
    after the upcoming cycle 2 low – companies like AAPL TSLA FB AMZN GOOG NFLX all the high growth names that have had a great run from the SC2 low – are they done or will there be new “bigger” waves for each in the next multi decade cycle 3 up?
    Thank you

  23. bud67 says:

    A Inexpensive – Trading Stock….
    If you like crude oil. Look at UWTI.
    last Low was 1.69(roughly) to 2.36…
    Your comments?

    • Bob Sagget says:

      UWTI and DWTI are good day trading instruments. Let’s face it, for now, the $S&P 500 *IS* Oil. I have been day trading XIV/TVIX but think I will switch to UWTI/DWTI. What is the point of staring at the $SPX chart all day waiting for a turn when oil (UWTI/DWTI) is the dog wagging the $SPX tail.

  24. gary61b says:

    Looking for TF to reverse near 1015 level, previous resistance level 60min.

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