Wednesday update

SHORT TERM: gap up opening, DOW +84

Overnight the Asian markets gained 0.9%. Europe opened higher and gained 1.7%. US index futures were higher overnight, and at 8:15 the ADP index was reported lower: 200K v 214K. The market gapped up at the open to SPX 2066 and continued to rise. The market had closed at SPX 2055 yesterday. Around 11am the SPX hit 2072, was extremely overbought, and started to pullback. The pullback lasted until 1:30 when the SPX hit 2060. Then after a bounce to SPX 2069 by 3:30, the market pulled back to close at 2064.

For the day the SPX/DOW gained 0.45%, and the NDX/NAZ gained 0.50%. Bonds gained 2 ticks, Crude was flat, Gold dropped $17, and the USD was lower. Medium term support remains at the 2043 and 2019 pivots, with resistance and the 2070 and 2085 pivots. Tomorrow: weekly Jobless claims at 8:30, then the Chicago PMI at 9:45.

The market gapped up at the open adding to yesterday afternoon’s Yellen speech rally. It opened within the 2070 pivot range, traded around the range until 1pm. Dipped to SPX 2060, and then moved higher again in the afternoon. With today’s activity the market has posted a new uptrend high at SPX 2072. This clearly eliminated the potential uptrend high at SPX 2057, and eliminated the rising channel as well. Hard to even guesstimate where this uptrend is going to end at this point. Maybe Friday will give us the answer. Short term support remains at the 2043 and 2019 pivots, with resistance at the 2070 and 2085 pivots. Short term momentum backed off from extremely overbought this morning. Best to your trading!

MEDIUM TERM: uptrend

LONG TERM: bear market


About tony caldaro

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302 Responses to Wednesday update

  1. rd3777 says:

    My take so far…most all of the market leaders are topping….todays action also was a topping pattern as stocks double topped from yesterdays highs. I would think the employment report will come in @ 200K+ maybe 250K….leaving the Fed up against the wall.

    The stochasics are all bearish except the 60 minute,but if the trend is down that could stay down for a while,as the daily,weekly,and monthly turn lower. In other words this market could get nasty quickly. Candlesticks show 2 spinning tops or a pair of pregnant women. A gap down tomorrow would create a island reversal. Good luck

  2. EL MATADOR says:

    SPX say i want higher but CL says come on down and follow the Leader

  3. kvilia says:

    ABchart – April 4th overnight.

  4. sloop says:

    I have Spy 206 as a minute/micro ? w3 and 203 as a w2, if correct then it has just made a 50% w4 at 205…anything lower I will doubt this count

  5. TMF says:

    Setting up for a HUGE start to 2Q ! We could see a test of ATH by early next week.

    Since everyone is looking for a top before the ATH that means it won’t happen and we will go to new highs so the Bears can capitulate.

    2400-2500 by 2018….

  6. blackjak100 says:

  7. johnnymagicmoney says:

    It took like 25 to 30 handles to being the hourly RSI from 90 to 30 last time 2052 to 2020’s. Now it took only 15 handles (2072 to 2058 or so) to bring the hourly RSI from 90 range back down to 30

    Markets will probably end in the green today and at neutral levels lol

  8. captbara says:

    WLSH shows potential ABC down.

  9. Dex T says:

    TSLA stock up over 4%. As more competitive electric cars come out cutting into demand oil is going to be going under $20!

    Huge lines are forming around the world to order a Tesla Model 3, sight unseen

    “Tesla dealerships around the world are taking $1,000 deposits for the car from customers, sight unseen — it’s even more impressive considering Tesla isn’t expected to begin deliveries of the car until late next year.”

  10. Tony you think major wave B topped out at 2070 pivot ?

    Possible top here looks like ?

    Thank you

  11. Peter Sliney says:

    Something has gone terribly wrong. The Dow is now down almost 28pts. Where’s the Fed? Where’s Janet!

  12. allen1929 says:

    There will be no selling @ eoq .That will be the spin. just profit taking lol
    Better hope there is someone to sell too lol

  13. fishonhook says:

    We are down 3 points . C has started!!

    • EL MATADOR says:

      relax let them finish their distribution process 😉

    • rabbittrader1 says:

      Some of the newbies on this site may not know that I played guitar and sang with Elvis over sixty years ago. (We were both born in 1935) You all may also not know that Elvis has been on the moon since 1977 . Anyway he has decided to come back on April ist .(his is no joke ) to play guitar again with me in Mississippi. This will probably coincide with the start of the C wave down in the SPX. IMHO Rabbit.

      • simpleiam says:

        HAHAHAHA! The best laugh I’ve had all week. Thanks wabbit!

      • reddragonleo says:

        I take it you mean “on the dark side of the moon” where the alien bases are?

        • rabbittrader1 says:

          Where he could remain unobserved, yes. Dont know what he was doing .I wiil ask him when he comes back on April 1st. Rabbit

          • reddragonleo says:

            Most people can’t believe all that Rabbit… or even want to believe it. While I can’t prove it I did personally speak to a retired Army Lieutenant Colonel once at his home for about a hour who’s clearance level was one of 2,000 in America and he clearly told me about that subject and a lot more I don’t want to clutter up the board with… but I do think there’s bases there… and on Mars too.

            As for the market, I’m still waiting for a little more on the upside… maybe we hit it next week? But I do think we’ll see a very important top early April and another nasty wave down into a mid-June low… which should easily take out that 1800 area.

            If you’d like to tell some more of you wild stories I’d love to hear them. I’m only 51 now but I have several guys in their 70’s in my chatroom that love to hear stuff like that. If you want in just email me at: red (at) reddragonleo (dot) com and I’ll manually set you up so you can tell us more stories.

  14. johnnymagicmoney says:

    The S&P takes 4 handles down to bring the hourly RSI from overbought to over sold conditions …..until I see the market stop making new highs and going from over sold to overbought on small moves this market is going higher. It’s sad but it’s true. Plus the RSI won’t go into oversold conditions in the daily. This is classic higher highs on BS

  15. The positive news for the bears is that Gartman has thrown in the bear towel..
    As of this morning…….

  16. congrats everyone sp down by two points. enjoy the moment

  17. The market turn came when quarterly candle was printed Hanging Man in 2000/2008.

    When SPX was 1810 on Feb 11, it looked almost foregone conclusion that quarterly candlestick will be hanging man. But, now it is Hammer. Jan 31 close was 2043 and march 31 close is 2063. That is what is power of FOMC chairman (woman sorry!!)

  18. I am wondering if the action the past couple of days ends up as an island reversal.

  19. Dex T says:

    Go to the link for the list. I read that Sandridge is already preparing for bankruptcy.

    These Energy Companies Are Most At Risk From The “Spring Redetermination”

    “Finally, courtesy of Haynes and Boone, here is a less impartial perspective thanks to a poll of banks, PE firms, and oil service companies who were asked to share their thoughts on the upcoming spring redetermination. Among the key findings:
    •Overall respondents expect 79% of the borrowers to see a decrease in their borrowing base in spring 2016
    •Overall respondents, on average, expect to see borrowing bases to decrease by 38% compared to what they were in fall 2015
    •As to the most likely path to be taken by lenders and borrowers who face a borrowing base deficiency this spring: 36% of respondents said the would negotiate an amendment or extension with the lender; 31% said they would sell non-core assets; 15% said they would seek capital from a hedge fund or private equity fund; 4% said sell the company; 13% said restructure or declare bankruptcy

  20. NINJA SHADE says:

    Pathetic 5pt range… does look like a final HH coming up after that 4th wave of some sort at 2060. At this point personally I dont care if this is Major B or P5 or whatever – just waiting for THE pullback to see what is in store next.

  21. DXY made new lows for the move–which is good.
    Gold(and GDX)not moving up like it should–which is bad.
    Silver moving up nicely–which is good.
    Silver needs to break 16.10–which would be very good.
    Looking for a down April in equities as I noted “election year Aprils and Mays are poor”.As opposed to non election year Aprils which are huuge up.
    Good luck all.

  22. ibra76ig says:

    DJIA 4 hour chart

    S&P 500 4 hour chart

  23. TMF says:

    EEM is setting up a beautiful bottoming pattern….not much left in the short term but after a pullback to build the R shoulder it should breakout and be a BIG performer in 2016+

  24. kvilia says:

    Francesca – this is for you:
    “The “smart money” have been net sellers of US stocks for the ninth consecutive week. This is the longest selling streak in five years. “Clients may doubt the sustainability of this rally, given the lack of fundamental support: S&P 500 profits remain in a recession and revision trends remain negative.”
    Investors are positioning for a market reversal based on leveraged positions in volatility funds. As the WSJ noted yesterday citing Morningstar data, assets in the ProShares Trust Ultra VIX Short-Term Futures ETF, and the VelocityShares Daily 2x VIX Short-Term ETN, have both more than doubled to almost $1.5B from the beginning of March through Thursday, something we highlighted as well.
    Oil bulls never jumped on board the latest rally. As crude has soared more than 50 percent since Feb. 11, the number of bets on increased prices has barely budged. Instead, the upward pressure on prices came from traders covering bearish positions at a record pace. The liquidation of short positions during the last seven weeks covered by data from the U.S. Commodity Futures Trading Commission was the largest on record.?
    Read the full article here:

    • maximus says:

      I saw that also, Kvilia. I think that the above provides the context. But as it has been discussed before, the markets are broken and no longer fulfill their purpose – price discovery.

      The CB’s have created this monster that we now call the markets and the primary mandate is to keep them artificially inflated to 1. Create an “artificial” wealth effect, 2. Provide the cash required for corporations to buy back their stock to keep the share price elevated.

      If indeed, and I believe this to be the case, the smart money has been net sellers into this rally, this explains a lot of what we’re seeing. Namely, that this is an opportunity for them to distribute to the “uninformed money” at or near the market top. It always happens this way.

      Now, we know – or should know – that moves possess momentum, and that this momentum can take prices higher as the fuel that caused rising prices – volume – dissipates. If you look at this rally from SP 1891, it has been on below average & ever decreasing volume. This in itself is a warning. Bear Market rallies exist to entice and delude the greatest number of investors that “happy days” are here again and that the bull market has resumed, so get on board and buy, buy, buy. At this point, the party ends and the crash ensues, trapping those suckered in at the false top. Hell, I’ve even seen Bear Market rallies take out previous “all time highs” by just a but “confirming” that a bull market has resumed, only to roll over, crash and burn to new lows.

      The thing that’s different this tim around is the coordinated “attack patterns” exhibited by the CB’s to inject cash, confuse and jawbone the markets higher. The canary in the mine thous has been the exodus of the “smart money” from the rally. Now you know, as well as I, that with the vast financial fire power that the CB’s possess, they can keep the markets elevated for a long, long time. At some point though, it will all come to a cataclysmic end. The problem is that we just can’t say when.

      I think that this new variable, the actions of the CB’s, is confounding not only EW analysts, but technical analysts too. Throw in the fact that fundamentals don’t work either and you get even more confusion. Finally, add to this the “Rise of the Machines”, and you get a situation where what used to work doesn’t any more, or at least it doesn’t work as well as it used to.

      The CB’s, particularly the FED have lost their way and only a violent reset will get us back on course to health markets again. In the mean time, stay flexible/nimble and trade what you see.

  25. rd3777 says:

    This is a LDT in the DAX….it will collapse down out of it.

  26. fionamargaret says:


  27. allen1929 says:

    Forgot end of Q and first of month inflows lent support to bulls
    That’s why lod close is a bears dream

  28. allen1929 says:

    Es needs to close near the lod ,a chance for the bears to score big
    A break of yesterdays h’s would lend support to bulls into the future

  29. denmo83 says:

    Hi Tony, as always, thanks for sharing your work. About five or six weeks ago, I asked at what SPX price level you would consider, if broken to the upside, would you reconsider and re-label your count. Although the brave board bulldogs jumped in to protect your honor, the question wasn’t answered.

    Can you answer this time? Would it be a new ATH caused by QE 5-6-7, Eurozone, Central Planners, NIRP, 161.8%, 261.8% and 423.6% extensions…etc or really whatever.

    Thx Tony.

    • tony caldaro says:

      Sure, have no plans to re-label the count, unless the market is impulsing higher.
      If QE 4 is initiated before a recession, then I would know the FED/Yellen have lost their minds.

      • denmo83 says:

        Thanks for the reply. Really appreciate all you do.

        • tony caldaro says:

          Hey Lee
          wacky weather here today
          kind of like the FED
          GDP is 20% higher than its ever been, and Janet has rates at 0.50%

          • va89blog says:

            I’m not sure those GDP numbers are valid given the incredibly low deflator number they use vis a vis rising costs (rents, college, utilities, etc.). The Fed lost their minds when Greenspan “saved” the system after the ’87 crash.

          • Lee X says:

            I flew over Oklahoma last night, quite the light show !
            Janet feels shame , I can see it in her eyes…she knows better

          • trondack says:

            We all knew the Fed were doves, but we didn’t know they have feathers too! I bet that Microsoft could reprogram Tay as a Fed head.

      • pimacanyon says:

        Hi Tony,

        You said that you have no plans to re-label the count unless the market is impulsing higher. So that implies to me that you don’t see the move off the mid-February low as an impulsive advance. It looks impulsive to me. Can you explain why you’re not considering this recent advance an impulsive move?

        Thanks in advance!

      • maximus says:

        Seriously Tony!

        You still aren’t convinced that they are insane and that their practices are insane.

        Janet Yellen’s last FOMC press conference should have left NO DOUBT in ANYONES mind about the sorry state of affairs existing at the FED.

  30. learner3078 says:

    Hi Tony, in terms of revised possible levels and time-frames given the unexpected strength and length of this current B wave, would it be feasible for this B wave to end imminently, the next C wave to head from now towards mid June and reach around the low to mid1600s, following that a Major B rise towards year-end election to the mid 1850-1900. Catalyst for the C wave down would be oil, and maybe reality with the effect of the central banks talks subsiding.

  31. almost as if the Bears are there own worst enemy. the higher the market goes, the more people short, when it doesn’t go down the cover in fear of being rolled over and market continues higher. rinse and repeat. If Major C is to start, I have no idea what will be the cause, cause everything sure looks bullish.

    • johnnymagicmoney says:

      Everything sure looked bearish and what happened

      • central bankers colluded in a full on attack to prop up markets. So with central bankers on your side it has been risk on. although none of it has worked over the past 2 years. if reality sets in and people realize this we go down, until then it is and has always been buy buy buy, fed has your back.

        • johnnymagicmoney says:

          Addiction to fed and addiction breeds delusion. They could come out and say we are doing market prayers for karma for their new stimulus measures and the algos would read stimulus, market and buy and participants like little minions would go oooooooooh and buy

          Why people try to explain its sensibility is funny. More buyers than sellers and the buyers are either dumb delusional both or like playing musical chairs in other peoples delusion
          Nothing more to it than that. Will work until it doesn’t …period

    • Dex T says:

      There are very few people actually shorting or even in the in market at all, though it may appear that way from some of the comments.

      Volume has been very low the past few weeks and today we are on track for another low volume day.

      Major C will take just about everyone by surprise- just like the August crash and January drops.

  32. allen1929 says:

    Sm is not in any bull phase,joe 6 is too broke to play mania again imo
    Health care keeps joe 6 broke
    Safety with your money is the driving force imo

  33. skmcobra says:

    Tony, That’s quite some wave c of b of A you’ve got going there. At what point will you reconsider that we aren’t in a bear market and that this is b of P4???

      • pfm225 says:

        This has something to do with the 120y……………some kind of pattern that never came up…… this it?……………….did I understand properly? thx

        • ewmarkets says:

          I’m not Tony and I don’t know if this is a bull or bear. Tony’s signal confirmed a bear market and that signal has not been disapproved because, if this is a bear market, B wave can, and has in the past, go as high as within 99.9% of the high. I’m not sure if a new ATH would disapprove the bear confirmation either.

          According to BlackJack100, Tony’s long term trend confirmation signal has never been wrong in the last 120 years (including backtesting results, obviously). It has not been proven wrong this time. Will it be proven wrong this time in the next few weeks? No one knows. At what point would the bear confirmation signal be proven wrong? I don’t know.

        • ewmarkets says:

          Don’t quote me on this, but I think initially Tony said an ATH would disapprove the bear confirmation signal. However, later, I think he said even a marginal ATH would not disapprove the bear confirmation signal.

      • Tony,as you counted wave A with 5 waves down,”in case of new highs”,this exclude a wave B hipothesis?or wave A can be adjusted to 3 ?thanks

  34. rd3777 says:

    The topping proces in the SP500 should get a 3rd wave down and it should be pretty good too.

  35. Thought I’d share this one hourly futures chart before the open. Notice the deep 61.8% to 78.6% second wave, the following upward wave that just nicks past the 1.618 Fibonacci extension, the exact 38.2% retrace in the after hours. Now we don’t know whether wave 4 is done or will form a longer triangle today (being the day before payrolls), but there is currently nothing bearish about the chart at the present time.

    ESM16 - Hourly - Mar-31 0928 AM (1 hour)

    Do measurements have any value?

  36. M1 says:

    What can i say.?

  37. mjtplayer says:

    As a beaten-up bear, I’d like to see a drop of 1%+/- today and have the SPX close in the mid 2,040’s. This would turn the quarterly candle from a potential bullish hammer to a long-legged doji – that would be a great last minute stick-save for the bears.

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