Tuesday update

SHORT TERM: gap down opening, DOW -134

Overnight the Asian markets lost 2.0%. Europe opened lower and lost 2.0% as well. US index futures were lower overnight, and the market gapped down to SPX 2055 at the open. The SPX had closed at 2066 yesterday. In the opening minutes the market dropped to SPX 2045, and then started to work its way higher. At 10am ISM services was reported higher: 54.5 v 53.4. The market then hit SPX 2055 and began to pullback again. At 1pm the market retested SPX 2045, then rallied to 2054 by 3pm. Then the market pulled back to SPX 2043 before ending the day at SPX 2045.

For the day the SPX/DOW lost 0.90%, and the NDX/NAZ lost 0.95%. Bonds gained 14 ticks, Crude added 25 cents, Gold rallied $14, and the USD was higher. Medium term support remains at the 2043 and 2019 pivots, with resistance at the 2070 and 2085 pivots. Tomorrow: FOMC minutes at 2pm.

The market gapped down following selling in Asia and Europe to start the day. After several rallies back to the opening level at SPX 2055, the market ended the day at 2045. Thus far the 2043 pivot continues to act as support, as it has been doing for about a week. With today’s decline below SPX 2060, and then to 2043, the five wave rally from SPX 2022 appears complete. As for the uptrend. We do have a potentially completed pattern. But the market will need to break to the 2043 pivot range, and then the 2019 pivot range, to get momentum going to the downside. Currently 30% of the world’s markets are in confirmed downtrends, Bonds are in an uptrend, and some of the commodities are also confirming downtrends. This is just the opposite of what was occurring during the two month SPX uptrend. Short term support is at the 2043 and 2019 pivots, with resistance at the 2070 and 2085 pivots. Short term momentum ended the day at oversold. Best to your trading!

MEDIUM TERM: uptrend weakening

LONG TERM: bear market

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

About tony caldaro

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246 Responses to Tuesday update

  1. manunidhi21 says:

    Namaste Tony.
    Is it a Trump magnet at 2043 🙂

  2. With an SPX close of 2066.66, we had a devil of a good up day today! Market participation was broad and inclusive, with the notable exception of the Transport and Utilities sectors. My guess is that they are being negatively impacted by higher oil prices at this time. However, they did perform well earlier this year during the upward phase of the oil price action. So far, the overall market still appears to need a rising oil price in order to resume it’s uptrend. I am still thinking that dynamic may change soon, but, even if it doesn’t, I believe the bull will stil continue intact.

  3. kvilia says:

    Really confused about crude direction.

  4. fotis2 says:

    HD 55-34-88?

  5. fotis2 says:

    Crude daily 3BR today gave long on yesterday CCI daily see what happens at downtrend line

  6. captbara says:

    North Korea invasion of US tomorrow for wave 3 down?

  7. phil1247 says:

    jonny magic

    this is not crazier than dot com…..

    ndx was overvalued in oct 1999 at 2500

    that did not stop it from doubling in 5 MONTHS

    • johnnymagicmoney says:

      from a price standpoint yes that was more insane but for a while sales and earnings kept exploding and there really was no financial crisis or massive levels of debt. You just had an overvaluation of a big sector. How this is worse is the absolute denial of the global risks and the ineffectiveness of the FED and other central bankers and how markets are bought on words that even if acted upon would be ineffective and would not remove the debt or the problems or anything. They are just words, words mind you that come from an organization that has time and time again mismanaged things and yet there is this sky high faith in them as if they walk on water. Risks are denied, debt is denied, deflation, growth, earnings and denied because FED members who have a proven record of creating and popping bubbles in the recent future jawbone with nothing??? To me that delusion is greater than dotcom because the risks when they materialize fully are greater than an unwinding of an overvalued sector.

      • phil1247 says:

        L I S

        do you want to be right

        or do you want to make money???

        selling my upro here
        in case casino participants wake up to reality overnite…… 🙂

  8. phil1247 says:

    es short from highs is kaput

    nothing in the way of new highs now

  9. frommi2 says:

    Todays action looks like a perfect bull trap. Wave 2 up as ABC, at least if we don`t break the highs from monday. Wave 3 down should follow now/tomorrow.

  10. sixpack says:

    Ya ok, the numbers I provided are operating earnings….which are more reflective of actual operations. That’s what I follow. Based on these, the DJIA earnings are estimated at $1299.5 for 2015. That’s a whopping 13.6 trailing PE for the DJIA. The sky is falling. Ha,ha,ha,. Wow Johnny…you are something else. I gotta admit, you do make me laugh.

  11. blackjak100 says:

    If JP’s count from last night is correct, then I believe minor 5 of int iii is targeting 2087ish which is .618*minor 1 of int iii. Also, 1.618*int 1 = 2086ish. In other words, shorting the 2085 pivot might be the next best shorting opportunity with a tight stop. The likelihood of this being a B wave has dropped considerably because it has crossed the 61.8% retrace with no reaction.

    GL and Cheers!

  12. NINJA SHADE says:

    This uptrend is not done yet. NDX already a HH, could be an ED in the making with w1 2022-2075, w2 2075-2043 with w3 up starting..

  13. Dex T says:

    There’s a super New Moon tomorrow. Directional change is likely afterwards

  14. phil1247 says:

    2042 spx was .618 retrace to the tick from 2022

    target 2087

  15. trondack says:

    From the Fed– “Some participants saw the increase as consistent with a firming trend in inflation. Some others, however, expressed the view that the increase was unlikely to be sustained, in part because it appeared to reflect, to an appreciable degree, increases in prices that had been relatively volatile in the past.”

    There you have it; inflation is firm, but unlikely to sustain. Erection??

    • johnnymagicmoney says:

      I just put that sentence into the Fed speak to English translation and its quite fascinating as to what it returned…………………

      “Some of us members are clueless about how to navigate these waters and some of us are big pussies. These members are afraid to raise rates. Some of us however know exactly what we are doing and realize we are destroying our markets but we are overpowered by the participants who have no balls and no brains”

      this online translation stuff is such a great tool

    • Dex T says:

      I find it surprising that they were even debating a rate hike for April. It’s clear that a number of them want to do it and I expect another hike in the coming months.

      The market also has another rate hike price by years end.

  16. EL MATADOR says:

    time for bull-tards to

  17. “Short term support is at the 2043 and 2019 pivots, with resistance at the 2070 and 2085 pivots.”
    -Tony Caldaro

    That really is all anyone needs to know – all the posturing, conjecturing, chest pounding, fist pumping, gnashing of teeth and pulling of hair are unnecessary. Forget the trend, folks – the Pivots are your friend!

    Thanks Tony

    • simpleiam says:

      That’s just too SIMPLE! LOL! Everyone’s just lonesome; awaiting this market to do something larger than life, so they’re chatting/speculating.

      • fionamargaret says:

        …..joy, enthusiasm, belief, magic dust added to carefully worked out targets gets the ear of the market…..

        • johnnymagicmoney says:

          lack of intelligence, lack of intelligence, mandated in my prospectus to stay long, desperation to meet my pension fund number, lack of intelligence, manipulation, pixie dust, lack of intelligence, and pixie dust more like it Fiona but sure buy on that

      • trondack says:

        We expected a 2043 pivot, not a 2043 trompoline.

      • simpleiam says:

        tron, it’s been almost a habit that every time stocks have pierced the pivot below, then popped back up for the close, the following day has been up. Not sure why this was not expected, but I understand your concern.

        Have a great evening!

  18. sixpack says:

    Johnny – So where is the big disconnect? 2014 actual S&P earnings were 118.64. 2015 is expected to come in at 119.71. And 2016 is expected to be 122.35. Not a ton of growth, but still positive. Now, what if they start to bump 2016 estimates?

    • EL MATADOR says:

      GAAP will be down for 5th consecutive qtr if we include you it will complete the sixpack 😉

    • johnnymagicmoney says:

      dude what are you smoking? Seriously are you from planet Yellen or something? Maybe if you are indicative of longs who all have those same earnings numbers then I can see why you are long. If those were the earnings Id be long right now

      • johnnymagicmoney says:

        2011 earnings 96.44
        2012 earnings 96.82
        2013 earnings 107.03
        2014 earnings 113.01
        2015 earnings 106.32

        they will be negative this year so by the end of 16 no earnings growth in 3 years and less than 2% annually over 5 years. So let me ask you should the market have close to doubled over 5 years with a 5 year annual earnings growth of less than 2% ?????

        SO maybe just maybe the economy pulls a big fat rabbit out of its butt and productivity increases, wages don’t eat into profits anymore, and the market is able to withstand rate increases and earnings actually grow and then the completely bogus run up in the S&P over 5 years can be justified yes? Or are we going to push valuations higher on no earnings growth from an inflation adjusted standpoint?????? These numbers don’t even take into consideration friggin inflation. THE MARKET HAS NO BRAIN. THIS IS MUSICAL CHAIRS BUILT ON QE AND NOW AN ADDICTION TO ENDLESS AND NONEFFECTIVE JAWBONING FROM THE FED. YOU BUY ON OTHER PEOPLE IRRATIONAL EXHUBERANCE – THIS IS NO DIFFERENT THAN THE LATE NINETIES

  19. well that was fun, now lets get back to your regularly scheduled program and move this thing higher.

    • Page says:

      A lot higher … people should stop drawing lines/triangles/squares/diamonds/rectangles/circles on charts … not gonna help .. SPX 2100+, Oil mid 40s coming next …

      • simpleiam says:

        Well, you’re not gonna help either, Page. Since I already know I’m not going to help, I don’t ask those who are to stop helping.

  20. simpleiam says:

    Looks like indices didn’t even like Auntie “mulling”, much less anything else. I think we see a rate hike in May or June.


  21. johnnymagicmoney says:

    Frankly it would not shock me if nuclear bombs destroyed almost all of civilization and surviving member of the market would be trying to buy stocks because it meant the ghost of Yellen (who had died in the mushroom) would be dovish on her rate policy even though there were no longer any financial institutions anymore. Focusing on normalization allows longs to ignore bad earnings, massive amounts of debt, and deteriorating macro data. Its the biggest denial I have ever seen in my career – bigger than dot com. Total ignore button on the data and total obsession with rates. Totally sad

  22. market does not react after fed minutes…. or at least for now the market is holding odays gains…

  23. NINJA SHADE says:

    A big concern for the bears is the strength in NASDAQ, ylod comfortably above Friday lod, and relative strength today is taking this close to the Monday high, not much room left before a HH here…

  24. Thanks for your reference/pivot points, Tony and I think you are wise to wait for a “sign of weakness” to develop. Calling tops is hard when trends are ongoing. A big reversal might just be the ticket.

  25. johnnymagicmoney says:

    + for the bears ………………forget about the indices and look at the big individual stocks. So many of them are hitting major resistance areas, double tops, trend lines etc The hourly RSI is close to where it was when the S&P was at 2075 yet we are now at 2060. Not a major victory but its something.

    + for the bulls ……………….besides the obvious action today I look at things like biotech. No major resistance, still not oversold on the daily, and definitely not yet on the weekly and free sailing on the charts for a while and have formed a nice base from which they have exploded from.

  26. rd3777 says:

    I have seen a few of these compact tops made….one just like this H&S where it extended into the top….in the Dow Transportation average and crashed out of it. A real possibility.

    The Dow

  27. manunidhi21 says:

    Namaste Tony.

    Democrats or GOP for 2016 ?

  28. I’m not fond of the channel TJ or TC is posting, this is how i would put it:


    ES lower channel bounce today. If it we’re to break the channel my guess would be around 1960 area would be next (“swing-trading”) target.
    Nikkei, FTSE and DAX bounce yesterday during US opening hours but have heavy resistance close above and falling trend.

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