Wednesday update

SHORT TERM: gap up opening, DOW -100

Overnight the Asian markets lost 1.1%. Europe opened higher and gained 1.3%. US index futures were higher overnight. Prior to the open FED chair Yellen’s congressional testimony was released, and then one half hour later FED vice chair Fischer’s speech:, The market gapped up at the opening to SPX 1865. The market had closed at SPX 1852 yesterday. After a dip to SPX 1860 in the opening moments the market rallied to 1882 by 10:30, after the testimony began. Then the market dropped to SPX 1858 by 11:30. The market tried to rally again and hit SPX 1875 by 1:30, but then started to pullback. At 2pm the Budget deficit was reported as a surplus: +$55.2B v -$14.4B. The decline continued into the close, when the SPX hit 1850 then ticked up to close at 1852.

For the day the SPX/DOW were -0.30%, and the NDX/NAZ were +0.40%. Bonds gained 11 ticks, Crude lost 60 cents, Gold rose $9, and the USD was lower. Medium term support remains at the 1841 and 1828 pivots, with resistance at the 1869 and 1901 pivots. Tomorrow: weekly Jobless claims at 8:30, and FED chair Yellen resumes her testimony with the Senate at 10am.

The market had its eleventh gap opening in the past twelve trading days today. This time around it was up after three straight gap down openings. The market rallied to SPX 1882 by 10:30 and that was the high of the day. The rally from Monday’s SPX 1828 low to today’s high was quite corrective SPX: 1862-1835-1882. And it looked quite similar to the recent SPX 1872-1927 rally, including the number of points gained, i.e. 55 points. After today’s high the market started stair-stepping down again SPX: 1858-1875-1850. If this counter rally is done, as it appears, an attempt to break the lows should be next. Short term support is at the 1841 and 1828 pivots, with resistance at the 1869 and 1901 pivots. Short term momentum did hit overbought during today’s rally then dropped below neutral. Best to your trading this volatile market!

MEDIUM TERM: downtrend

LONG TERM: bear market


About tony caldaro

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371 Responses to Wednesday update

  1. @TC… No Thursday Blog?? I was waiting for it all day

  2. simpleiam says:

    Right at the 1828 pivot. I am not impressed…

  3. spindoc73 says:

    Using the KISS principle, the low sloping channel on the daily looks primed to be taken out. If gap holds, look out below!

    • spindoc73 says:

      From these levels at the close, a drop to 1700 tomorrow would just trigger the level 1 circuit breakers. Interesting albeit remote possibility of a black swan event tomorrow.

  4. captbara says:

    5th wave is coming! 😉

  5. simpleiam says:

    Think crude will bounce a bit, and take stocks with it, just as long as it’s believed that OPEC might be talking about cutting production. When everyone finds out that’s not true, then, down again. Gives us all a window to set up more shorts. GL All!

  6. llerias7 says:

    It is premature to say this but a 62% retrace of Maj.A points to 2000!

  7. bud67 says:

    My “Guess” is Crude is Making an important low today.
    If guessing is an investment method, Oill rise would
    tend to support a Bullish SP, right now…

  8. lunker1 says:

    1838 is c=.62a from 1810 and prior S/R

  9. blubrd67 says:

    Tony, if i understand correctly how these things work and your count… We could not be possibly sufficiently oversold for major A yet?
    I expect more oversold on the daily, and positive divergence some see on hourly to be smashed tomorrow or Monday.

  10. Dex T says:

    Just got back from a few days in New Orleans and see that the Fed hasn’t and isn’t going to jump in.

    Oil below 30 and the S&P hitting new lows today the bullish case for P5 is nonexistent.

  11. rc1269 says:

    will the mkt make it this easy and obvious for everybody? i’m skeptical

    or will it once again get us to rally back just enough to make people feel safe, only to gap down 40 points through next support.

    dunno, this one feels too easy. GL

    • mjtplayer says:

      Hey RC, you mentioned BA earlier – reports are that the SEC is opening a regulatory probe into BA’s accounting practices. Never good news.

      Accounting issues = sell

    • blackjak100 says:

      volume fairly light all things considered. Still think we need the huge capitulating move down on heavy volume for a Major A bottom. The move clearly looks like 3 waves up, but closing green would change things. The whole timing of the headline seem suspicious.

    • stephenk1980 says:

      Easy? There are so many bear’ish positions on this board, very few of whom expect a rally back up to 2k or higher. If it does, then was it easy?

      • rc1269 says:

        the mkt is showing me some (near term) buy signals right now. i can’t speak for what you or others see. but to me, if the mkt goes up a good amount from here i’d call that pretty easy. clear signals that result in follow throw = easy. so, i’m questioning whether we will in fact get that follow throw from said signal. if we don’t, well then that’s what i would call not as easy.

        • rc1269 says:

          * “follow through”, x 2. can’t type

        • stephenk1980 says:

          I get what you are saying, but if these signals are so clear, is everyone jumping on board with both feet? It sounds to me like they are not. If fear is so great that the obvious is missed or ignored, then the trade wasn’t that easy after all.

          • rc1269 says:

            a clear sign is still a clear sign regardless of whether people on this board trade upon it. and since you mention it, fear will always make people miss the obvious. but one’s fear does not make a trade any harder, it only makes it harder for that person to be a trader. bots are emotionless, and looks to me like they did some buying today later in the day, at new lower lows with some +divs in both daily macd and rsi.

            that said it’s all a little pointless since i was saying i was skeptical of the bullish signal anyway. if a setup works 8/10 times you’re supposed to do it. that doesn’t preclude a trader from wondering if this might be one of the 2/10 times.

    • Dex T says:

      in 2008 after the January drop the market bounced around for months confusing everyone until Sept.

      I expect the same here and doubt we have a quick resolution- we have at least another year to go and this bear is going to churn back and forth.

  12. Market can’t go any lower…. Evvive La Fed ! Evvive la difference !

  13. B Seagle says:
    UVXY Update…
    MACD rolling over…

  14. ko68 says:

    Some clear +div is building up in 60 min chart.

  15. senrex says:

    Not mine. But interesting.

  16. john b says:

    Pesky 36 needs to break but so far looking promising

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