Tuesday update

SHORT TERM: gap down opening then rebound, DOW -13

Overnight the Asian markets lost 2.2%. Europe opened higher but lost 1.2%. US index futures were lower overnight and the market gapped down to SPX 1837 at the open. The market had closed at SPX 1853 yesterday. In the opening minutes the market ticked down to SPX 1835, then began to rally. At 10am Wholesale inventories were reported lower: -0.1% v -0.3%. The rally continued until just past 10am when the SPX hit 1862. Then the market headed back down again. At 11am the SPX hit 1840, bounced to 1857 by 11:30, then hit the low again at 1835 by 1:30. After that another rally was underway. This rally made a new high for the day at SPX 1868 by 3pm. Then again the market pulled back. Just before the close the SPX hit 1850, then bounced to close at 1852.

For the day the SPX/DOW were -0.05%, and the NDX/NAZ were -0.35%. Bonds slipped 1 tick, Crude lost $1.15, Gold dipped $2, and the USD continued lower. Medium term support remains at the 1841 and 1828 pivots, with resistance at the 1869 and 1901 pivots. Tomorrow: FED chair Yellen testifies before Congress at 10am, then the Budget deficit at 2pm.

Another volatile day. The market opened with a gap down (1835), quickly reversed to turn positive on the day (1862), sold off again to retest the lows (1835), then rallied to break through the highs of the day (1868). Pivot (1828 ad 1869) ping pong? This afternoon’s action looked similar to yesterday afternoon’s action: low of the day, then ramp up 30+ SPX points. Yesterday we updated the SPX daily chart with a potential, unfinished, five Intermediate waves down for a Major A downtrend. The hourly chart we have left unchanged since the SPX has not broken the downtrends range SPX: 1812-2116. Under the daily count, today’s action would be considered part of a Minor wave 4 of Int. v. Short term support remains at the 1841 and 1828 pivots, with resistance at the 1869 and 1901 pivots. Short term momentum nearly hit overbought during this afternoon’s rally. FED chair Yellen testifies before an economically challenged Congress tomorrow in an election year. Sets up to be quite a circus. Best to your trading!

MEDIUM TERM: downtrend

LONG TERM: bear market

CHARTS: http://stockcharts.com/public/1269446/tenpp

About tony caldaro

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269 Responses to Tuesday update

  1. fotis2 says:

    Tested neckline and reversed..

  2. rc1269 says:

    looking like we’re setting up some shooting star/gravestone doji price-rejection candles on the dailies today

  3. gtoptions says:

    What a ride! 😉

  4. kvilia says:

    Extremely bearish action in the afternoon – sold all longs including DUST,looks like 1812 will be taken out.

  5. stmro says:

    Please don’t tell me it’s closing flat again. Please.

  6. aahmichael says:

    Carly Fiorina has aborted her campaign. Karma.

  7. tomasso60 says:

    well I cannot get the picture I wanted for you all.

  8. 123 abc says:

    Tony, given the overlap of Minor-4 with Minor-1, does OEW nomenclature now re-label to Minor-d and Minor-a instead? Or, is the decline from 1927 considered as a subdividing Minor-c wave?

  9. johnnymagicmoney says:

    All I know is the S&P has been moving sideways and the whole time utilities and bonds have been moving up. Money into these areas all day long doesn’t say to me the market is ready to move impulsively to the upside

  10. rc1269 says:

    well perhaps the market is indeed ready for an extended rally, a la march-may 2008. might need to pull back in some more people before the next downdraft. because after 1812 breaks there’s a lot of open space down there, and the mkt would hate to not have more people miss (getting hurt by) it

    • simpleiam says:

      Think WTI/Brent will have to rally to help get stocks into upward mode. WTI at 27.49 right now will probably prevent that.

      • rc1269 says:

        the last 2.5 days upward in spx sure doesn’t look very impulsive. of course that could always change. but for now prob best to stick with TC and assume lower before much higher. just a hunch

      • nsteve24 says:

        could be a double bottom in WTI 1/20 & 2/10

        • simpleiam says:

          The only bounce I can see would be when refineries change over for Summer. Don’t think it will last too long. Don’t get me wrong, $40ish dollar crude would suit us just fine, but if that pie sticks to the wall, I’d be surprised.

          • Lee X says:

            Hey M

            In Houston unleaded gas was more expensive or at par with the Chicagoland area but its also 17 f here today. The bounce thats 100% sure to come is the taxes from the fed/county/city on the “dirty fuels”

          • simpleiam says:

            Hey Lee,
            I hear ya. You’d think O&Gland would have really cheap gas, but noooo. Agree about that tax bounce. One thing about being here right now is it’s a beautiful day. No snoooooow.

          • Lee X says:

            No snow and no chance which is even better for you !
            It was so nice this past week there and I had a chance to head down to Galveston for the Mardi Gras last Friday night, some very nice people Ive met so far down in your area.

          • simpleiam says:

            Glad to hear you’re enjoying yourself. So you met my fishing buddies (bums) at Galveston, eh? Great place, except during hurricanes. If you want really good Gulf seafood, buy it fresh in Kemah, or if you’re into oysters on half shell, those are good at Gaido’s or other oyster bars. Knock some of those back with beer. YUM!

            You need to catch a 30-hour Tuna trip on New Buccaneer some weekend. Go buy you a cheapy R&R that will hold 30-40# line, a few diamond jigs, and boat will furnish the bottom fishing line. Nice cool weather, Tuna should be swarming.

          • Lee X says:

            Thank you !
            I’m too much of a seasick wuss to take that tuna trip but I will certainly head back to Kemah for the seafood , I was there previously but we went to the Boardwalk and did the tourist thing and it was 96 f with 199% humidity !

          • simpleiam says:

            Oh Lee, you Wimp! Take drugs; I know I do.
            If you can’t cook the fish yourself, then, guess you’ll have to eat at one of the joints there. Gaido’s is a family owned place. All the rest belong to Tilman, or just about, just like San Antonio Riverwalk is no longer lined with locals selling goods; have to go to the back streets to get the real thing. Damned shame.

    • aahmichael says:

      RC, I think last fall’s rally was the equivalent of March-May 2008. That means we’re now in the same place as Sept 2008. A weekly close on Friday below 1850 would seal that deal, imo.

  11. kvilia says:

    I am in the same camp with gto and few others looking for a HH. Also DUST in the 9-10 area, holding my long initiated@$6.19. Bears are impatient IMO.
    Thanks Tony and all.

  12. john b says:

    A close above 1880 this thing will carry on into the 1900,s

  13. If the SPX rallies up to retest the 1929-1947 area, as some have suggested today, could 10 year Treasuries rise to yield 2.0 % or so? Any thoughts?

  14. gtoptions says:

    SPX ~ Potential Bullish scenario with a HH Daily close.


  15. GDX heckuva bounce off 200d. No change in dollar either.Hopefully all part of the process of the C&H pattern.

  16. johnnymagicmoney says:

    Listening to Janet …………………..I think everyone knows how this story ends (not well). It is just a matter of time unfortunately. Really sad for Americans who can’t profit from the impending disaster. Who the hell really knows where the swans come from and when but the FED chairs when you think about it were like hot potatoes. Greenspan (aside from being 120 years old and needing to retire before he just dropped dead in testimony) was like crap better leave now, followed by Ben who said crap I really better leave now, followed by Janet who is saying “oh look at the pretty sky up above (while a large blimp is exploding in the sky behind her). I think she will be slow to move, tentative, and unsure, all matched by a lack of political will this time around. Then if you throw Sanders or Clinton on top of that mix god only knows what institutions they allow to fail. Maybe just maybe 09 was a warm up. Maybe the real disaster is yet to come. Its very possible when you think about it conceptually. I listen to her and I just say “oh my god we are in trouble”.

    • NEWBIE says:

      Johhnny, 2009 was the warning shot. The printing of trillions by the Federal Reserve was in desperation to save the system. Ultimately it didn’t fix anything, it only prolonged the inevitable.

      • johnnymagicmoney says:

        I give them an A + for saving the system. I give them an F for the QE.

        • simpleiam says:

          Agree johnny. Fed gave everyone a chance to get out while the getting was good. Now, well, the little folks like me would have to wait a few years to see the highs again.

          • fionamargaret says:

            S, don’t think it will take us long to get down to 1573 – the next down marker I have after
            1730 – the velocity of the market in its down moves is quite something, but you have to alter your math to include that – quite quite different from the bull. Look after you – I would have loved the Tuna Trip! x

  17. rc1269 says:

    whenever i need a reminder of how stupid a large % of our politicians are, i just watch the humphrey hawkins. i have no love for the Fed’s heavy handed policies, but some of these people need to just move on.
    “would you not agree that things are better now than they were in 2008?”
    my vote for most pointless airtime thus far. it’s been 8 years. don’t we have anything a little bit more current we can discuss? idiotic.

    • johnnymagicmoney says:

      I wish the chair just said “Listen can you please go take an economics course at an institution other than your local community college and then get back to me with a much more intelligent question”

  18. NEWBIE says:

    S&P is going to 1000 spx in the next year or two, of course we might go back up to 1905- 1970 first just because the masses are all bearish right now BUT party is over. Also, gold is going back to 1900+, silver 50+.

    • johnnymagicmoney says:

      Newbie ………….stick to treasuries, shorts, and cash. Give up on the precious metals. They will plummet along with stocks and even when stocks bottom along with gold, stocks still will be the better investment going forward. Short equity and long equity will be the better investment until inflation metrics change. Ask Tony when the deflationary cycle ends and that’s when you should buy. Until then you are going down the wrong path.

  19. EL MATADOR says:

    Everyone seems to be so focus on the indexes and gold that they could be missing out on the next big oil rally set up coming very soon. I anticipating a strong rally off from the 26.50-26 zone.

  20. lunker1 says:

    1828 +(55) = 1883 = gto symmetry

    from 1882
    -21 1861
    -34 1848
    -89 1793
    -144 1738

  21. stmro says:

    Why the big divergence between dow and sp500 today? Is it Disney?

  22. The One And Only
    It only took an hour to make 1880

  23. mjtplayer says:

    So far, the rally from SPX 1,828 has completed the criteria of 3 minute waves and overall meets the criteria for a wave of minor degree. The question now:

    – is this rally minor a of int C higher to complete major B – OR –
    – is this rally minor d, with minor e of int E down to test/break SPX 1,812 upcoming?


  24. rc1269 says:

    guys hitting the better bid in credit space. not much account lifting of paper going on. fwiw

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