Wednesday update

SHORT TERM: lower open: lower close, DOW -80

Overnight the Asian markets lost 0.1%. Europe opened higher and gained 0.1%. US index futures were lower overnight, and the market opened five points below yesterday’s SPX 2050 close. At 10am New home sales were reported higher: 512K v 494K. Just before noon the market hit SPX 2038, and then tried to rally. Just past 2pm the rally topped at SPX 2047, and the market started another pullback. A lower low followed around 3:30 at SPX 2035. Then the market bounced to close at SPX 2037.

For the day the SPX/DOW lost 0.55%, and the NDX/NAZ lost 0.95%. Bonds gained 16 ticks, Crude lost $1.65, Gold dropped $27, and the USD was higher. Medium term support drops to the 2019 and 1973 pivots, with resistance at the 2043 and 2070 pivots. Tomorrow: weekly Jobless claims and Durable goods at 8:30.

The market opened lower today, traded down to SPX 2038 (it’s lowest level since Thursday), rallied to SPX 2045, then broke the 2043 pivot range when hitting SPX 2035 around 3:30. The first sign of a potential uptrend top has occurred. While the 2043 pivot was broken, and then recaptured, the lower trend line of the rising channel was not broken. That needs to occur next to add confidence to a downtrend underway. After that the market needs to drop to SPX 2009, and then SPX 1969, to keep the downside momentum going. Short term support drops to the 2019 and 1973 pivots, with resistance at the 2043 and 2070 pivots. Short term momentum dropped to oversold today, ending with a slight positive divergence. Best to your trading!

MEDIUM TERM: uptrend may have topped

LONG TERM: bear market


About tony caldaro

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314 Responses to Wednesday update

  1. vivelaamo says:

    Still short but didn’t like the close

  2. captbara says:

    8 ema stick save!

  3. ajaysinghi says:

    Failed 5th on S&P, target seems to be 2050.

  4. manunidhi21 says:

    Is Friday and Monday off for Markets ?

  5. kvilia says:

    Cant break through 2044 IMO if it’s the beginning of C.

  6. Dex T says:

    It’s been 10 months since the old S&P highs back in May.

    I recall reading on here that the previous length of time between highs was 9 months or so. Have we achieved a new record?

  7. llerias7 says:

    WTI and RUT about to close in green? That is something…

  8. 123 abc says:

    Tony, I gather we’re expecting five Intermediate waves for Major-c wave. Under the rules of OEW, can these five Intermediate waves consist of three corrective a-b-c Minor waves, or must they consist of 1-2-3-4-5 impulsive waves? Futhermore, zooming deeper, can the Minute waves develop as a-b-c waves or must they too comply with 1-2-3-4-5 waves? Just trying to understand what level of fractals are accepted under OEW theory.

  9. vedana2016 says:

    ‘Been watching for several months . . . my ego tells me I might have a perspective or two to add, but the tone of discourse (highly emotional, extraneous and not on point, and name calling) have made me a bit reluctant to jump into the fray. Nevertheless, here goes:

    Rise since 1810 has been relentless . . . smacks of short-covering. That aside, market breadth has been very impressive, similar to bull market lift-offs. However, as someone else noted here, the oil and biotech sectors had experienced so much damage that any bounce that included them was bound to look better than it would otherwise.

    Market is clearly stretched thin at this juncture and a pullback due any day. The nature of that pullback should help resolve uncertainty whether this is a B wave bounce or the start of P5. Until then, given uncertainties, best to play if conservative and wait for resolution. They should be plenty of time to establish positions once trend is clear.

    • simpleiam says:

      Yes, thank you, vedana! Nicely said. Welcome, and keep your head down.

    • vedana2016 says:

      Given the amount of comments covering the Fed and their actions those readers might appreciate this research piece from GMO on the Fed’s impact on market returns over the past 50 years. . . their conclusion doesn’t match the received wisdom and thus is probably not what you think it is.

      • simpleiam says:

        Problem is, the article is a little skewed. First two names mentioned are Shiller and Grantham. I think most of us know FOMC Announcements move the markets, but the rest of the article isn’t really clear in making a strong case either way, IMO.

      • cosmos77 says:

        Interesting article Vedana. My take is that the author’s conclusion is that the very fact that the Fed is meeting has caused a drift up in the markets, without explaining what the Fed was doing at the meetings. He shows a graph of the stock market, where prior to 1983 the Fed had little effect on the market. However, after 1983 he concludes that the Fed meetings are what caused a steady increase in stock prices, which is like saying every time I look outside and see wet sidewalks, it rains; therefore wet sidewalks are the cause of rain. Tony’s Tutorial Lesson 27 provides a better explanation, in that in 1975, congress gave the Fed additional powers to enact a dual mandate to control unemployment and inflation. Paul Volker was installed as the Fed Chairman to enforce the mandate. After a rocky start in the late 70,s, it became apparent by 1983 that the Whitehouse’s hands off policy was working; inflation came down, unemployment was controlled, bull markets were lasting longer and bear markets were shorter. However, the author attributes the steady increase in stock prices to the Fed having FOMC meetings rather than the autonomous Fed enacting monetary policies independent from political pressures. The sharp spike in the graph shown in the article is more to do with the money infused into the banks through three QE’s and two OT’s after the market meltdown in 2008. Lesson 28 of Tony’s tutorial quantifies the effect of the cash infusion on the stock market in a much more understandable way than does the article. Please don’t take this as a criticism. I’m just pointing out that the article seems to fall short of a plausible explanation of the great market expansion since 1983 when compared to Tony’s Tutorial. Thanks Tony.

  10. chairman67 says:

    FWIW, Daneric’s squiggle count yesterday on Whilshire 5k. Probably a copy of Hochburger’s count at EWI. Hopefully URL link below works.

    • blackjak100 says:

      all fine and dandy, but this was yesterday’s chart. Wave iv now overlaps wave i today so it’s invalid just as Natey Kautz S&P count was invalidated. Easily fixable by moving the degree of labeling up however.

    • chairman67 says:

      Today though, the [4] now overlaps [1].. after market close we’ll see how its labeled when published later… carry on.

    • simpleiam says:

      If EWI (Hochberger, ?) has turned bullish, then, this market is done. They’ve been wrong for over 6 years, and missed out on the big part of the rally. Now, like the average person, is coming in at the end of the party. No thanks!

      • chairman67 says:

        “If EWI (Hochberger, ?) has turned bullish, then, this market is done”. I agree, to right lol.. I would guess the perpetual bears at EWI, Hochburger and his counterpart Prechter remained short since 2010-2011, rode the rest of the rally up underwater taking their entire novice subscriber base down the Khaze with them. EWI are clueless, if not dangerous.

  11. Peter Sliney says:

    Keep in mind all bad news is good news. The worse things get the friendlier the fed. Until the bubble bursts higher prices to come.

  12. simpleiam says:

    Don’t know why, but forgot Bullard is a voting Member of Fed. Think this article is the least of our worries.

    • blackjak100 says:

      The video title is a little misleading as David Bianco towards the end says he thinks the S&P goes to 2500 before next bear market. I bet you didn’t know he was an Elliottician?

      • simpleiam says:

        I don’t know who the guy is, and really don’t care, BJ.

        • blackjak100 says:

          no need to get snarky as you posted the link. David Bianco is one of the guys in the video link you just posted!!!! did you watch the video or just post it?

          • simpleiam says:

            If I’m snarky, then, you’re much worse; at the point of virtually harassing posters who don’t agree with you. I do not care one iota about what anyone at EWI says. Please just stay away from me and I will do the same for you. Go take a Cuban vacation with Johnny.

            • blackjak100 says:

              fair enough…but it’s obvious you didn’t watch the video because he’s not affiliated with EWI. Why would I care who agrees with me and who doesn’t? It doesn’t make any of my trades more or less profitable. Please use common sense as I’ve done or said nothing wrong replying to your video link post.

          • simpleiam says:

            “but forgot Bullard is a voting Member of Fed.”
            The sole extent of my interest.

            • tony caldaro says:

              the only FED people that matter are Yellen and Dudley
              the rest play musical chairs and just make noise =)

              • simpleiam says:

                Works for me, Tony. The fewer of them, the better…Until it isn’t better. As you’ve surmised a few years ago, deflation is coming in heavier now. Soon that 4.9 Unemployment rate will start to turn up, probably after election. I know O&G down here will be pretty much a dead zone.

              • tony caldaro says:

                but traders respond to every one of them like they mattered
                Crude rebounded $1.30 today off its low, and the SPX followed like a puppy dog

              • EL MATADOR says:

                Tony, it’s a tailgate party

              • simpleiam says:

                Agree. For now, crude and spx are correlated; and unfortunately, I think I know where crude’s going. Big Boss issued orders yesterday, re: What NOT to spend money on. Pretty much cut to the bone.

  13. johnnymagicmoney says:

    Ok enough of my furious mutha f-ing posting. Ill spare you the rest of the afternoon. Happy Bunny Day to all!!!!!! Peace

  14. johnnymagicmoney says:

    1) Oil inventories up huge. Oil down 3% plus in the morning. Back below the key 40 level

    2) China devalues Yuan. European markets weak. Dollar strong. Durable Goods down 3%

    3) Nike misses yesterday. Wells Fargo downgraded today. UBS yesterday says to sell ASAP.

    4) VIX at lows not seen since previous tops.

    Market moves almost 14% in 5 weeks. and yet market now struggles with selling off 1% over 3 trading days and oversold conditions on the hourly and daily loving to oversold conditions very quickly after taking six weeks and 345 handles to get them overbought.

    5) And there still is no volume, most shorts have been covered, and dips are bought

    6) Buybacks are now over and into blackout

    hmmmm yeah the central bankers are definitely not buying futures, indices, and commodities. That’s definitely not happening.

  15. NINJA SHADE says:

    Good afternoon, looks like many called it a day early and SPY wasting the whole afternoon in a triangle. A LL before EOD or Monday will be 5 waves down and will decisively break below the trendline IMO.

  16. EL MATADOR says:

    It’s still and oily market and spx will continue to tailgate oil until it’s ready to diverge ….

    • johnnymagicmoney says:

      it took 39 trading days for the markets to really accelerate to the downside from 2116. I think as a lot of people have said………………how this rebound moves after this first move down from 2057 will provide more clarity. If we keep hitting higher highs I throw my hands up. If we keep hitting lower highs and lower lows then great. Where this sells off to is irrelevant to me. New highs is what I am concerned with. If it takes 2 months it takes two months but if it is going to be like the previous two drops it needs to establish a top and some failed rebounds. Otherwise something different is taking place in my mind. I do not like how much the RSI’s have dropped on the hourlys and dailys relative to the drop in the averages. That is very concerning to me as a bear. Took forever to get those overbought and poof in 3 crappy little down days they plummet? Not good for bears. UG!!!!

      • EL MATADOR says:

        They need time for distribution phases to play out which cause the TI’s to get all distorted thereby making it difficult to decipher at times….but yeah i hear ya and feel ya Magic tuff market she is. sometimes we have to take a leap of faith and get some skin in the game a bit early.

      • Jimmy Porter says:

        Here I thought you were short from around 1993, now I am thinking you are short around 1963. ouch

    • simpleiam says:

      I agree Mat. Not indefinitely linked to Crude, but with the worlds biggest commodity taking it on the chin, traders think it reflects lack of growth, and Yellen mentioned it in her last Speech.

  17. llerias7 says:

    Today just a correction to the 200DMA! Oil recovered and the indices with it. I.e. do not fight the FED, the ECB, BOJ, BOC, BOE also JPM, MS, and so on…something big was cooked in the G-20 a month ago that should sen this to new ATH´s b4 “the end”!

    • fionamargaret says:


    • Dex T says:

      What did the G-20 cook?? It would have entered the mainstream news by now. And how could it be more effective than the Central bank funding?

      There’s been strength in the DOW and S&P – but why aren’t many other indices confirming?

    • valunvstr says:

      Brilliant. Don’t fight a central bank pumping liquidity. Can’t wait until the bulls get their heads handed to them with that line. The ECD is printing and their indexes are down 20%. Japan has been printing for 20 years and they’ve gone nowhere for two decades+. GL. You’re going to need it.

  18. Dex T says:

    Credit Suisse’s CEO says his traders racked up bad positions without telling anyone

    “Credit Suisse CEO Tidjane Thiam says his bank will report a bad first quarter, in part because of poor decisions his traders made without consulting senior leaders. ”

    “The firm said it expected first-quarter markets revenues to decline 40% to 45%. It expects write-downs of $258 million for the first quarter because of positions in securitized products, distressed credit, and leveraged finance underwriting.

    Credit Suisse also announced that it was cutting an additional 2,000 jobs in the global markets business.”

    • learnedmylesson25 says:

      I ll bet the senior leaders WERE consulted…that s why the trades were bad.

    • ABchart says:

      They probably plan to replace humans traders by robots 👽

    • Tony Jordan says:

      More banking woes in Australia. ANZ, one of the “Big 4” Aussie banks, noted a 10% increase in impaired loans today. ANZ was down in Sydney today 5.2% on heavy volume. The other major Aussie banks also were sold down on volume. The banking sub-index in Sydney is down 23% from the ATH achieved in March 2015.

  19. So, just using the gaps as the indication of where the wave three’s are, the decline is not taking on much impulsive character (yet). In the first place, the upward retrace fell well short of 50 – 62% retrace, and so, it is likely a B wave, ‘rather’ than a wave 2. (I’d be happy to count it as a 2 IF it were a deeper wave). Next, the second downward wave is not yet 1.618 the first downward wave.

    And now – most downward momentum has come out of the market, and a triangle or flat may be forming.

    SP500 (15 Min)  3_24_2016b

    IF the move starts as a-b-c; then bears would likely have to hope for a downward diagonal to be forming. While bulls would likely think it is wave 4, only.

    • jobjas says:

      I see you more as a theoretical EW professor than a practical trader.

      • Why? Is it because a person can’t do both (count waves and trade?) Or does the fact that someone is a trader mean the market always goes in their predicted direction? Or, is it because markets only and always go “up or down”, and they never, ever, go sideways?

        According to what I’ve read this is an EW blog, and not supposed to be a ‘trade journal’. And, as I have said before, if you are more interested in trading, there is a complete paraphrase of Ira Epstein’s Rules for Trading (specific levels & targets) on my blog at the following link.

        Can a person chose to sit out some of the overnight – if they wish to reduce stress? Or must they always ‘be in the market’ to ride through every gap – even the ones that go against them – until they are more sure of longer term direction? And. by-the-way do you ‘know’ the Elliott Wave Trading scheme (I’m not sure many on here do)? Just a question, nothing else.

        • jobjas says:

          First of all I want to commend you for putting up charts based on what you think is going on , unlike others who use claim to use EW but refuse to put up charts.
          Secondly the best way to learn anything and improve on it is to go back and see whether your projection panned out or not and then to improve on the short coming .
          Thirdly after 2 days of SPX putting up a top at 2057 if you are still debating whether it is a correction or an impulse wave then EWT offers no advantage over traditional TA – one can use a simple trend line to trade.
          And lastly No, I do not know Elliot wave trading scheme .

          I believe this forum is to encourage and challenge traders using EW to become better traders AND so my commend was in no way to offend you.

      • Igor says:

        Personally, I don’t care whether TJ is a theoretician or a practical trader. More important, he provides very consistent and based on well defined rules analysis in real time. One may not like it or find it unsuitable, but it’s a good example of the method of evaluating probabilities. That’s all you need for trading, measure risk and place a trade.

    • cosmos77 says:

      Good work Trader. I appreciate your thorough analysis and perspective and pointing out things I don’t usually see myself until you point them out. It looks like a stop short at 2045 or at the trend line across the 2057 and 2045 tops might be prudent to allow the shorts to run while stopping out on a strong rally. I am also thinking that this initial down draft of Major C could just be minor a of int.c. Time will tell. Also, Thanks Tony. I’m looking forward to tonight’s comment and the WE updates, always are a good read.

    • 123 abc says:

      @twtraderjoe: Always a great education, please continue with your updates, your posts are the very essence of this blog.

    • Here’s a further update. The bears could not even keep prices fully in the channel to make a lower fifth wave lower. Instead, prices now have clear upward overlap. The down move is still seen as A-B-C, but with a slight fifth wave truncation. Where have we seen that before? (Hint: It is typically a sign of a stronger upward market to come).

      SP500 (15 Min)  3_24_2016d

      The upward wave can now also be counted as a small degree ‘five wave sequence’ from the truncation low. Best guess? In a larger fourth wave triangle, as truncations can often be found inside triangles.

      • simpleiam says:

        Half of gap closed, good enough, or not? That is the question.

      • blackjak100 says:

        TJ, truncation looks too severe and forced to me. I like C ending where you have iii as an extended fifth. Looks like 5-3-5 to possibly complete (W). 34ish down, 13ish up, 34 down next to complete DZZ?

        • ..heard the same comments before the FED meeting .. when I counted the truncated zigzag for you practically in real time. This is when most were looking to be bearish, but look at the upward wave that resulted. My count results from gap theory, and channel theory, not ‘looks’.

          • blackjak100 says:

            The truncation within a truncation ZZ that led to a wave 1 LD and then wave 2 retraced only 40% when they usually retrace at least 61.8%? Many ways to count and was just offering another possibility since the move off the actual low does not look impulsive. Yes, I may be wrong but TBD Mon. Cheers!

  20. valunvstr says:

    Only chance bears have is that the market closes the 2034.5 gap and then rolls over. Otherwise they are going to go into the long weekend VERY disappointed.

    • NEWBIE says:

      The time for this chatter was at 1810 not at 2030 after a 220 point run up.

      • valunvstr says:

        I actually shouldn’t have suggested the market needs to fill the gap today. If it play out live Nov – Dec with a chop then we can go to the 1900’s and then get a strong bounce to close the gap, really frustrate the bears looking for a waterfall. etc etc

        Not sure what you mean the time for this “chatter”? I was on record as a bull for most of the move up and am on record short at 2022 and 2040, Can add more if we get good prices into the close during this choppy topping process.

    • Hi everyone. Long term follower of TC for about 10 years. Not an expert on wave theory but prefer to use a simple strategy as possible.
      However, regarding a possible B wave completed I noticed this today:

      Low so far today is 34pts down from 2056. Good location for a rally but the problem is the low was made first for the last 8 days so we’re due a high made first which means the open today. Suggests a weak rally closing in the red today with next target 55pts down from high at 2001.

    • Don’t like the label. Don’t tike the assumption that the bear is already here. Remember this possible “domed” chart pattern was a result of a dramatic slowdown in China and EU while domestically we were actually accelerating. Even if our own economy is NOW showing signs of a possible contraction the China/EU stimulus measures will eventually work. hard to believe we get a crash scenario as opposed to a “normal” corrective phase in this long bull run. I believe the market is more concerned of a trend reversal in rates rather than a soft patch in economic activity and earnings. We have managed to see corporate profits do well in a slow environment. they seem to cut back on spending but have not shown any sign of employment drops.

      So is this a secular bear or corrective phase? I was adamant that we would form a double bottom, “W” formation. I am not sure if we already started a new secular bear. If this has legs we will know by the earnings season coming up in 4 weeks time. How the market behaves during these announcements is crucial.

      A fence sitter.

      • simpleiam says:

        This would not be a new secular bear, but the finish of an old one that started in 2000.

        • johnnymagicmoney says:

          Gary the crucial part of earnings season already happened…….the analysts quietly reduced the numbers dramatically and no one sneezed. magically companies will beat!! Magic again!! Ill go back to what I said before. Please don’t try and see this as being a good economy or there being a soft patch globally. Its all spin and that’s it and if spin pushes the markets to all time highs then so be it but don’t drink the kool aid in the meantime about small little soft patches. Japan has deflation and recession. Europe has been teetering on recession for years and has deflation. China lies about their data and is experiencing a very hard landing and has massive bad debt and is exporting deflation to the rest of the world. Russia is in a recession and Brazil has massive stagflation. The list goes on. The central bankers are doing desperate things so that we don’t fall apart. That’s not strength. That’s hanging on and markets are not pricing in “hanging on”. They are experiencing goldilocks. we are the cleanest dirty sheet they say? Well if we corporate profits are going to be down 9% this quarter the rest of the world must be sleeping in a sewer. I have been hearing about accelerating corporate profits for how many quarters now??? yeah eventually because the comparisons become easy we will see growth that is still recessionary from peak but if people want to buy on that spin then no one is stopping them and in fact no one is stopping them now in these last couple months. spin spin spin – that’s it.

          • learnedmylesson25 says:

            So who ‘s buying–and why?Because these guys don t make money sitting on their hands–they push a market until the rubber band snaps.Then they go the other way.That s all there is to it.

  21. captbara says:

    D 13 ema
    30m 150 sma

  22. blackjak100 says:

    2056.6-2022.5= fib 34 never fails. 2057-55=2002 = int iv????

  23. valunvstr says:

    Think about all that cash and all those that are still short that missed this huge move. They are going to buy dips. That’s why this will be a chop and not a waterfall down. That’s why they can’t even keep the Us down on a day where Europe is getting crushed.

    • fionamargaret says:


    • kvilia says:

      You are wrong. Ever since May 2015 once long extensions were broken, they produced a hefty sell-off with a counter rally. Lower lows, then lower highs. The current bull market is 7 years old (6 last year). Fed also injected liquidity after 2001 bear market – did not help in 2008-2009. And they are done now.

      • valunvstr says:

        Ok, if you say so. Until I am ACTUALLY wrong, I would reserve statement that carry such finality with them. Gary did that and look where that got him. Oh, and look at that the Comp turned a quick green and RUT is barely down. I believe it will be a choppy topping process. Maybe takes a few weeks to a monthish to play out with a downward bias. We will see. But for now I will say you MIGHT be wrong and I MIGHT be wrong.

        • kvilia says:

          Indeed. Very soon we’ll know. In the mean time closing velow 2020 will generate a 70-80 points drop without a bounce. Looks like a trading setup to me. Woul really love foro the gap to be closed first, though.

          • valunvstr says:

            Me too. But I never said otherwise. The Nov high was followed by a 100 point drop and then a recovery to a lower low around 2100. If we drop from here I don’t see why it will be all that different. Market finds a tradable bottome, bounces to say 2035ish to close the gap. Bears that got confident lose their conviction again. Bulls start blustering and and simba and clown crew come back to the board saying we are all morons. Then down we go again. It’s not all that complicated. SSDD.

            • Jimmy Porter says:

              I agree with you when it comes to buying the dips. However, I feel if this market is going to go higher it can’t handle a 100 pt drop. 60-70 pts at most, unless it can make higher highs before first.
              Plus, if you were to do ew, which it sounds like you don’t you would know that the structure of this rally is different and we aren’t in the same degree as we were in Nov.

      • stmro says:

        You are trying to time a 7 year long trend to the day. Good luck with that. Honestly why are people always so certain on this site? It’s the mark of amateur hour trading.

    • philip912 says:

      Most of the hedge fund shorts have covered. They will not re-short until the momentum to the downside gets moving.

    • Dex T says:

      What cash? The majority of the cash went into the market late February and early March.

      Those who went short did so after the majority of the upside move completed.

      I agree with you on the chop, though.

      • valunvstr says:

        What cash? Google Fred report money market fund. you can probably find it there. Money gushed into MM funds and A LOT is still sitting there. The retail clown that feels they missed the rally will start buying dips which is why this will start off a chop before the bigger downside. They all get sucked in near the top and then get crushed as they always do. I mean more money flowed into the Rydex bull funds yesterday than the bear funds. They are buying dips.

  24. llerias7 says:

    Reacting strongly at 2020´s…one more up move to go…2060?

  25. valunvstr says:

    Now we have a small gap at 2034. That’s not good for bears who think this is the beginning of the market falling apart. Plus the market is barely down, Especially the comp, and considering Europe getting crushed it seems the us is just waiting for Europe to close to rally it.

  26. ABchart says:

    ES: probably boune to 2025 before 2000
    The low of the auction is still at 2020.

  27. johnnymagicmoney says:

    Can someone explain to me about RSI hourlys and dailys… is down less than 1.5% from its highs and last time hourlys were this low were at 1930 and 1890. And how is this along with the daily getting cut in half on a small move down anything but really bullish?

  28. kvilia says:

    Would you say that if today lows hold, it would be a good indication that e is on the way? I just don’t see this scenario as viable below 2020 close.

    • valunvstr says:

      Today’s low won’t hold. The Comp is barely down and Europe is getting crushed. That suggests that once Europe closes the us will rally.

      • kvilia says:

        ? If US markets rally, today’s low will hold. Are we speaking the same language?

        • valunvstr says:

          Nope, we are saying the same thing but interpreted what you said as if we would hold the lows meaning close near the lows. Of course, I understand now that you meant hold the lows and bounce off of them. That I agree with. Just misunderstood your original post.

  29. johnnymagicmoney says:

    I will say however and it worries me…..yesterday and today I still don’t see or feel any impulsive selling whatsoever. After a 13% move this sure is tame and that sucks. If a C is supposed to be vicious and quick this is far from that. Thinking markets not ready yet….it needs to get more stupid and set up more divergence and more of a top maybe? Just thinking out loud

    • johnnymagicmoney says:

      I also see a massive drop in the hourlys and daily sad a result of a very very small drop in the averages. Seems like working off overbought conditions. Don’t think this market is ready yet……ug!!

    • John Bell says:

      possibilities? several weeks of sideways up to earnings with a down tilt before the big drop to 1800 starting after a number of key earning are posted. And then of course buybacks blackout windows preventing massive buying support.

  30. Jonny MM, have an exit strategy handy, you never know could be a safety. Just because never known… 😉

    • johnnymagicmoney says:

      My exit strategy involves a rope

    • rabbittrader1 says:

      Top is in not too far from the 2045 gap at 2055 or so, Time for short by buying SPXS triple short. Gold in wave 2 correction ,but i think it will be shallow at 0.382 Fib. so I am currently short April gold with buy LIMIT orders from 1198 to 1188 for today. Commercials are heavily short so that would provide impetus for a short squeeze in gold as news from Tokyo on downgrading debt and the Yen hits ,possibly over this easter weekend . IMVHO Rabbit.

      • learnedmylesson25 says:

        That s what I was wondering Rabbit…shorts get their way(and have the last 3 years in gold)but if gold would rally for some reason–it would be explosive.But what s the reason?A bear market in equities caused by a renewed oil decline and bond yield declines for one.GDP being restated toward 0% growth.China economic numbers and currency sliding at a faster rate.But oil is the thermometer of it all and must lead the way down.

  31. An overlap and a downward wave longer than a prior one requires the conclusion that the last upward structure was a poorly shaped ‘five’ and not a “three”. That possibility was clearly noted at the time and communicated here. That’s why we continued to carry alt: (v) at the high.

    So, now it appears we have three waves up: 1,2,3 or A,B,C; they remain equivalent until they are not. The 20-day SMA is below the market and ‘may’ provide some support (..but that remains to be proven).

    With the longer wave down, we are ruling out a diagonal to form (upward). But, a triangle or zigzag ‘could’ form a fourth (4th) wave. The market will have to prove that case. ‘Could’ all upward movement be over? Yes, but it is ‘premature’ to make that case just yet.

    SP500 (60 Min)  3_24_2016a

    Cheers and enjoy the chart.

    • blackjak100 says:

      Completely agree which is amazing. I would also add int ii expanded flat took a fib 5 days to complete so int iv should take 3-8 days to complete. A triangle would take up more time 5-8 days while a ZZ near 3-5 days…for the bullish count anyhow

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