Wednesday update

SHORT TERM: quiet open then rally, DOW +113

Overnight the Asian markets gained 0.1%. Europe opened higher and gained 0.9%. US index futures were higher overnight, and the market opened three points above yesterday’s SPX 2045 close. In the first hour of trading the market pulled back to the 2043 pivot again, and then started to rally. At 1:30 the SPX hit 2063 ahead of the FED’s FOMC minutes: After the minutes were released the market had pulled back to SPX 2053 by 2:30, reversed, and moved even higher. In the last hour of trading the market hit SPX 2067 and closed there.

For the day the SPX/DOW gained 0.85%, and the NDX/NAZ gained 1.60%. Bonds lost 5 ticks, Crude rose $1.95, Gold dropped $7, and the USD was lower. Medium term support remains at the 2043 and 2019 pivots, with resistance at the 2070 and 2085 pivots. Tomorrow: weekly Jobless claims at 8:30.

The market opened slightly higher today, pulled back to exactly the 2043 pivot, and then rallied for the rest of the day. Again the 2043 pivot provided support, and is becoming an important pivot for this uptrend. In the mean time, early signs of risk-off continue to appear. Thirty percent of foreign markets have confirmed downtrends, sixty percent of the commodity sectors have confirmed downtrends, and Bonds are uptrending. Short term support remains at the 2043 and 2019 pivots, with resistance at the 2070 and 2085 pivots. Short term momentum hit overbought during today’s rally. Trade what’s in front of you, but invest on what you believe is ahead.

MEDIUM TERM: uptrend

LONG TERM: bear market


About tony caldaro

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322 Responses to Wednesday update

  1. torehund says:

    …holdable, wearable, implantable…

  2. ST Ng says:

    Fed To Hold Closed, Unexpected Meeting Under “Expedited Procedures” On Monday To Discuss Rates

  3. torehund says:

    Yup gov + corporate is ONE, and the public pays up.
    Panel discussion in Norwegian television downplaying the corruption scandals, its like a malignant tumor; you avoid taking notice until its unmanageable because its uncomfortable to confront it. Debate is also heating up against the privileged minorities, thus the labor party wants to remove the expensive monarchy and go republic…And the king is getting vocal himself saying we can’t accommodate the whole of Africa into this little nation; sure if more of them come here, we can simply not afford him any longer 🙂
    Everyone talks for their sick mother in times of strain; and out goes decency, law, respect, and all of the good virtues that we built up in the times of plenty…

  4. sixpack says:

    M1 – What are your thoughts here? Do you think we are in Major 2 yet?

  5. ajaysinghi says:


    Can a triangle in wave 4 breach the high of wave 1? If yes, what margin is acceptable?

  6. simpleiam says:

    Not sure this close is so good for the Bears. Think we get more rollercoaster in the coming week(s), esp. with Earnings coming up.

    • EL MATADOR says:

      what’s not to like?
      1. Friday’s and Monday’s candle pattern is a dark cloud trend reversal
      2. we just witness the first daily LHs and LLs on an intraday and closing basis from start of uptrend.
      3. IMO the decline from 2075 is subdividing impulsively

  7. Stephen Tang says:

    Since the Feb 11 retest bottom the current rally has broken below no less than five uptrend lines “fanned” out. If the pattern persists what has been occurring is a minor selloff typically no more than 30-40 points over 3TD upon breaking below the trendline (creating a bottom for a new “fanned” trendline). Then an incredible upward surge in the next 2TD to establish a higher high and also retesting from below the previous trendline.

    The last trendliine was broken to downside on Apr 5, so in theory, the low should occur today Apr 7 and a potential huge surge in the neighbourhood of 50+ points from today’s low could happen in these next two TD’s ending Apr 11 (i.e. SPY 208.5 SPX 2088). Another 15-20 point consolidation dip happens early to mid next week (pattern based) and then one more final marginal push to a slightly higher high by Apr 15 (i.e. SPY 209.2 SPX 2095).

    If no rally happens by next week then the fractal pattern has ended.

  8. kvilia says:

    Sold my shorts here. The bounce looks impulsive. As Tony said, trade what you see. I would like to get UVXY under 20 again.

  9. So, a=c relationship of the waves down in the corrective channel, the 0.764 Fibonacci relationship, and now the clear upward overlap spell the possibility of just a slightly larger triangle. The last potential triangle had a 0.618 relationship, this one has a 0.764 relationship possible, and is making more sense in terms of taking more time. This likely means than (d) will exceed the old high slightly if a symmetrical triangle is to be made. (That will adjust the tilt of that trend line upward and make the ‘look’ better .. if it plays out).


    As always, triangles must ‘prove’ themselves. Yes, a deeper correction could occur if the waves start making 1-2-i-ii lower.

    Cheers and enjoy the chart.

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