Tuesday update

SHORT TERM: higher open then pullback, DOW +13

Overnight the Asian markets gained 0.5%. Europe opened higher but lost 0.1%. US index futures were higher overnight. At 8:30 Durable goods were reported higher: +0.8% v -2.8%, then at 9am Case-Shiller was reported higher: +5.4% v +5.7%. The market opened 4 points above yesterday’s SPX 2088 close and then rallied to 2097. At 10am Consumer confidence was reported lower: 94.2 v 96.2. The market then pulled back to SPX 2086 by 11am. After a rally to SPX 2093 by 12:30, the market pulled back again to 2086 by 3:30. Then the market rallied into a SPX 2092 close.

For the day the SPX/DOW were +0.15%, and the NDX/NAZ were -0.30%. Bonds lost 8 ticks, Crude rose $1.40, Gold added $5, and the USD was lower. Medium term support remains at the 2085 and 2070 pivots, with resistance at the 2131 pivot. Tomorrow: Pending home sales at 10am, then the FED’s rate decision at 2pm.

The marker opened higher today, rallied to SPX 2097, pulled back to 2086, and ended the day at 2092. From the recent SPX 2111 high it looks choppy thus far: 2081-2093-2078-2097. Possibly an extension to the uptrend if the market moves higher. Or a resumption of the pullback if the market drops below 2078. The Nasdaq closed lower for the fourth day in a row. Short term support is at the 2085 and 2070 pivots, with resistance at SPX 2104 and SPX 2116. Short term momentum hit overbought this morning, then ended the day just above neutral. FOMC days are often quite volatile!

MEDIUM TERM: uptrend

LONG TERM: bear market rally

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

About tony caldaro

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339 Responses to Tuesday update

  1. bud67 says:

    My View. The SP500 is now sufficiently, overbought.
    Resistance lies at 2110 and again at 2118. Support,
    lies at 2036, also at 2023. My AGET wave count is
    at a W3 up in progress, a reversal down into a W4 low,
    is now due to form. IMO……

  2. kvilia says:

    One thing is certain – Obama will not win this election 😉

  3. Dex T says:

    Now that the Fed is behind us summer is fast approaching, so already low volume is set to drift even lower. Any huge moves will be sparse the next few months.

    Also, mercury goes retrograde tomorrow. The last massive drop Jan occurred during it and I’m curious to see if it happens again. I went short at 2098 as a gamble-( Stop at 2011)

    • mjtplayer says:

      We got the post Fed announcement S&P ramp and VIX smash. If the Fed meeting pattern holds true, we could make a HH tomorrow (above today’s high) and that should be it. Also, SPY hourly chart sporting a bear flag:


      BOJ meeting tonight, the markets actually expect the BOJ to move further into NIRP – crazy. NIRP has been an utter failure thus far in Japan and Europe, so why not double-down!

      • Dex T says:

        We could, but bullish seasonality is over and no big news expected in the U.S. My gamble is solely based on the retrograde. If there’s no movement by end of Friday I’ll exit.

        Japan is beyond central bank hope.

        I have the feeling that the Central bankers are playing a giant game of “chicken” and keep pushing themselves hoping to see how far they can go before someone stops them.

  4. timmy321 says:

    yeah right this is bear market action!!

  5. vivelaamo says:

    Are the bears finally giving in to the inevitable?

  6. gasman88 says:

    Obama met with Yellen 2 weeks ago, I’m sure the topic of rate hike was discussed and he probably wanted to makes sure there would be no hikes before the election. China created $4T of new credit in Q1 (40% of its GDP) that should stop the talk about China collapsing etc… I hate to say it, but I don’t see any catalyst short term that could make the market do down right now 😦
    Probably new ath soon

  7. micky says:

    yes sir, support at 77 seems to be quite strong indeed

  8. vivelaamo says:

    As I said over and over again. ATH by end of the week. Hope you all been paying attention.

  9. bud67 says:

    The SP500 BoYu, moved back to a Buy signal.
    The upper range is 2111-2116….have a great evening.

  10. phil1247 says:

    shorts from high are broken

    extension long target 2120 ES……..2127 SPX

    back into upro

  11. Now, up and over the green (d) wave of the triangle. ‘Should’ target the high in five waves. Patience and flexibility still needed.

    ES 06-16 (240 Min)  4_27_2016c


    • Sorry for the several labels, but I am trying to say, that if the second triangle is a B wave, then also consider that it is only B of (i) of a diagonal. Still several ways to count. That is ‘the’ reason to be flexible.

    • captbara says:

      Any reason you decided to count ES instead of SP?

    • Jimmy Porter says:

      I think you are right my friend. I know I have given you crap for all the triangles you insert into your graphs. However, the one at the beginning to middle of month was spot on. I really thought this would be a ending diag but looks like you are right again. Way to go. However, this 5th wave of this smaller degree won’t be even close to the last one. Keep on keeping out with your bad ass self.

      • Jimmy Porter says:

        In fact, I think this 5th wave will end around the same as last week which will give the bears a little hope and push it back down to where it needs to go 2040 area so then get a fresh set of bulls to drive it to new ath We should get some nice moves over the next few weeks where we can make a very substantial profits playing both sides

  12. Page says:

    Expecting UVXY go below $10 and TVIX below $2 by end of this week.

  13. NINJA SHADE says:

    Good afternoon, waited for FOMC to see if it would kick off w3 of this first wave down from 2111… Looks like still working on w2 – I see Monday LOD 2077-2097 as a of w2, 2097-2082 today LOD as b, and now working on c. This right now should be c of c, as we spent today up and down chopping around in ab of c. Looking for a high EOD or early tomorrow morning, Limit 2104. Above that will start questioning this first wave down scenario. GL

    • Holly Silver says:

      Wait no longer. As expected the “TELL”. Market was by far more concerned with rate hikes than any other variable. Is this still a secular bear? me, I vote no so far but that’s my bias and Macro view that has lasted over 5 years now. the acceleration phase might surprise everyone soon. Financials, oil, the dollar, some metals, are showing strength that could be interpreted as a bullish reversal. China news is front and center. 3 days ago I came across this article from Bloomberg.


      Why the market is so misunderstood is because we look at the road in front of us instead of around the bend.

      • sixpack says:

        Yep…..Agreed. Skate to where the puck will be.

        Also, it’s only a secular bear as defined in OEW terms, and that is based entirely on the annual reversal. Tony will have to answer that question should the market keep rallying.

      • johnnymagicmoney says:

        Holly no offense but you really are drinking kool aid if you think things are better. People like to point to an occasional manipulated piece of data put out by the Chinies who cant be trusted when all the other data continues to show oversupply and deterioration. Want to know why their imports went up and credit went up? because the Chiniese gov pumped a ridiculous amount of money into the system this past quarter which fed more supply that is already built up and not being used. They are stockpiling again. The last time they did this their numbers contracted sharply because their was nothing more they could stock. They have a choice reform or grow. Growth means they add to the industries that need to be reformed because they don’t have the consumer engine we have yet (and wont for a while). Growth for China at this point is gov stimulus and more money into unregulated financial products, more steel, more cement, more construction, more housing (the very same things they have too much of and are chuck full of bad debt). reform and their growth numbers contract more. They cant have their growth objective and reform at the same time. IT IS NOT POSSIBLE. Because they are so concerned with showing the world 6 to 7% numbers they will ignore the reform side until the whole thing completely is out of their control (if it isn’t already). Nothing in China is solved and it wont be any time soon. Its already a bust fundamentally. It just hasn’t shown up in price yet because they lie with the data. The bad data is even worse than anyone thinks.

        • Holly Silver says:

          Your assessment of manipulation can be said for the last 7 years. no one sees the reasons why corporations can make money. High productivity is just a word that no one bothered to understand. if consumer is suffering profits have to. As for China, I am afraid you have it wrong. they can and will grow for decades to come simply based on demographics. their policy has switched from exporting to internalizing growth. that’s will hurt during the transition but most countries have anticipated this change and are finding other cheap sources of labor. Their lack of natural resources will keep those commodities high. Why you ignore the data points that don’t suit you is something that frankly most do. Predetermine a position and stick with it regardless?

          Do you really think China is about to implode from debt and overproduction? if so do yourself a favor and evaluate a time frame and what we should expect to see in the form of verifiable data. in other words make your stand but abandon it if it proves to be false. most people NEVER write down assumptions and reevaluate them. Treat it like a technical chart. If it deviates your method must be adjusted. I do This All The Time.

          • Dex T says:

            Chinese long term demographics are declining. They will reach their peak by 2030 and then head downward.

            The population is aging and it will take decades to reverse. It’s too late now to do anything.


          • johnnymagicmoney says:

            1) what is relevant is that after that 7 years their is a ton more nonperforming debt and adding to it doesn’t do anything but make the situation worse. People who buy China focus on the stimulus. Stimulus to more oversupply? Keep focusing on that
            2)High productivity you say? Productivity is declining not increasing. It was at max for years. Now it is declining. Why do you think earnings keep going down with flat sales? If they got more productivity they’d have positive earnings. Their productivity is their stock buybacks and that still doesn’t do it.
            3) China growing is not the issue. At what rate is the issue?
            4) Do you even understand how long it takes to make the consumer transition? Its decades. People for some reason think it can take a few years. Not the case. Wishful thinking
            5) do I think China is going to implode? Define implode first. I will say this again they can not grow and reform at the same time. THEY CAN NOT. So they keep kicking the can and make the situation worse and then their is a big price reset or they reform now you see the GDP numbers plummet and you have your reset. When will this happen? I have no idea Holly but I wasn’t arguing when it was going to happen nor will I. You just were supporting price with positive happy joy joy going on in commie land. That’s where I say you drank the kool aid. All I ever want a bull to say is I am playing musical chairs and I know everything is deteriorating and this will all end badly relatively soon but I can make money in the meantime. As soon as you start saying awww shucks its not that bad you tell me you don’t hear music is playing.

          • Holly Silver says:

            Must point out that the same argument was made about their ability to prevent a crash. how did that go? It’s called a free market and anyone doubting this need not look at the huge moves both up and down in China’s stock market. In the end they have the exactly same control or lack of we do. trillions invested on a daily basis is IMPOSSIBLE to control. Intra-day? For a week? For a month? For a year?

            I look at the financials, oil, dollar, commodities and see strength when there is no immediate sign there should be one. The known entities were a weak earnings period, and domestic economy that keeps chugging along with signs of tight labor and tight housing markets.

            If you believe everything is being manipulated then it becomes IMPOSSIBLE to figure out the future and betting should be off the table. you can’t have it both ways. When the market drops to say SPX 666, its rational, but since then its manipulated. Not rational as a programmer/analyst that built whole financial systems for a company. You need to rely on an infrastructure and test for faults. There are no ambiguities in developing a computer system. It either has proven parameters or it is faulty. I trust the hundreds of independent sources to tell if we are in a recession or not, if jobs and housing strength is real. You can’t fake the peripheral outcomes from such events. For instance a tight labor market should also show a large number of Want Ads. Higher wages and increase in discretionary income should result. I start with the premise that the data is real. if I did not I would have missed the last 5 years of anticipated growth.

            • johnnymagicmoney says:

              ok there is a lot there but here’s how I see it no offense. The Chiniese manipulate things like no other. When their markets were dropping they started locking up people in jail who shorted the market or reported in a negatively way. I don’t see the SEC showing up at the Wall Street Journal’s door asking them not to write a negative story about the market or else they end up in a ditch. You confuse price with fundamentals. As many on here have said – they do not correlate right now. You are looking at commodities going up and thinking everything is ok. Its not. Its just price going up that’s all. It may go up another 20,000 percent but the fundamentals are still bad. One may say at that point who cares about the fundamentals it went up 20,000 percent!!! Many may say that. But to argue things are good in China is another story. 666 was irrational too by the way. never said that was rational.

  14. johnnymagicmoney says:


    I realize some of you have probably been reading about this stuff as of late but rumor has it (well more than a rumor) is the Chinese have been pushing oil, steel, iron ore etc up in last couple months. Remember their market was up 70% in short order once the commies allowed the mainland to buy their own shares? Well looks like the Chinese are now buying commodities which explains a lot. Good news for bears is it could be a huge tailwind for the last hurrah. Bad news is its going to create even more of a pop than we even thought before.

  15. blackjak100 says:

    market has become unbearable to watch last 5 days…can’t even get volume on Fed days now. Can it free itself from the 2090 area?

  16. kvilia says:
    • fionamargaret says:

      Wait and buy UVXY at around 10 (actually 8 on my charts, but don’t think it will go that low)…
      McClellan is not always right…

  17. I guess Yellin huffed and puffed and blew herself out.

  18. captbara says:

    Oil impulse count up still intact, who is on this train??

    • Dex T says:

      From the article- “associations that Trump was apparently unaware of when he hired him. ”

      Trump cannot police every single person who enters his sphere. He is not an attorney or politician and cannot be expected to know everyone and everything.

      Hilary is being investigated by the FBI for corruption and has a history dating back decades. Absurd that her supporters turn a blind eye to her continuous corruption cases and spend all of their time digging over every minute details of Trump’s life.

      • fishonhook says:

        Trump is full of it. He has had undocumented workers on his projects for ever. he just says what the lowest common denominator want to hear.

        • Dex T says:

          Hilary’s main support comes from the slums and ghettos. She IS the lowest common denominator.

          Her supporters have no interest in corruption but just badmouth Trump so they can get into office and continue with it.

        • bud67 says:

          you want “HILARY”…..wow.
          well, if she were to get into the Pres.
          job. I may have to move to china, for
          4 years, 🙂

  19. sixpack says:

    Looks like it’s time to party!!

  20. bud67 says:

    Hey, is 2111 in the cards? Maybe………end

  21. Dex T says:

    Well, no rate surprises. No change. More empty dialogue. Until next meeting.

  22. shauryagh says:

    A close below 4850 on Nasdaq composite today will set-up a good shorting opportunity for likely target of 4600 with stop at 4975. This will likely coincide with a correction of S&P to 2020 & Dow to 17250.

    • fionamargaret says:

      …..please don’t let me have to backtrack to 2040……

      • shauryagh says:

        The long term weekly averages for Dow & S&P are decisively up trending in a mirror image of what happened in 2011. Hence its highly probable that your long term targets will be met this summer. The expected correction in the NASDAQ may actually serve to energize it so that it finally starts to catch up with the Dow & S&P. But for now a correction in all indices led by the NASDAQ is very highly probable.

        • fionamargaret says:

          In the meantime UWTI, UGLD, and HYG, JNK………..now there’s a menu – oil, gold, and junk bonds, but that is where the rally is………just count the money…..

  23. kvilia says:

    So far moving up but watch the last hour – a clue for the trend.

  24. johnnymagicmoney says:

    here comes the ridiculous spin – be prepared

  25. kvilia says:

    Hi Tony,

    Where do you see dollar longer term (1-2 years) in light of the recent sell-off?

    Thank you,

  26. captbara says:

    Looks like 5 up from lod.

  27. AAPL attorneys scrambling to register iCorpse.

  28. bud67 says:

    SP500 at open, in on ongoing sell pattern,
    that pattern has now moved to a potential
    Buy signal, or Bullish crossover. NOT completed,
    just lying there, for a push higher, in the SP to confirm.
    Bottom line, a potential Bullish reversal….end

  29. sixpack says:

    Hope you bulls are taking heed of the Nazdaq’s Major 2 wave. Or intermediate 2, however you want to count it I guess. Just went down and touched the 400 day MA. Look at the SOX chart. Incredibly bullish. Boeing is screaming higher. Might not get much more of a correction in the S&P. Suppose 1pm central will be telling, but I think the writing is on the wall.

    • aahmichael says:

      As I mentioned before the open, it’s impossible to count the rally from the 2/11 low in COMP/NDX as a 5 wave move, because of the overlaps on 3/10, 3/24, and 4/12. In addition, the NDX took out the 4/12 low this morning. It all adds up to the fact that the rally from the 2/11 low has been a corrective wave, not an impulse wave.

      • sixpack says:

        I don’t see the overlaps.

        • aahmichael says:

          The low on 3/10 overlapped the high of 2/26.
          The low on 3/24 overlapped the high of 3/14.
          The low on 4/12 overlapped the high of 3/22.

        • sixpack says:

          aah – If you use the closes, that really does not hold true. Also, I tend to watch the SPX more, and in that index it certainly does not hold true.

          • fionamargaret says:

            ..I just count money six……

          • aahmichael says:

            You count waves only using the close of the day? You ignore all price action that occurs each day other than the closing price? Seriously? You will never have an accurate count if you eliminate all of the price points that occur throughout each day.

            At any rate, I responded to the following comment that you made: “Hope you bulls are taking heed of the Nazdaq’s Major 2 wave. Or intermediate 2, however you want to count it I guess.”

            I showed you why it’s impossible to count the rally in the COMP as an impulse wave. Therefore, there can’t be a major or intermediate wave 2, since there never was a major or intermediate wave 1.

          • sixpack says:

            Yep. I understand. And that’s a fair assesment. It’s just that I do not subscribe to the idea that the market is a perfect EW fractal. EW is not perfect, and therefore nothing is impossible. Especially short term impulse vs corrective behavior. Its just not that clean. You have made this claim all the way up and I respect that. But to me it looks impulsive, and I feel p4 has bottomed and we’re off to the races. The market seems to be verifying this. Regardless of internal structure, I see bullish action in most everything I look at and therefore I’m bullish.

            I’ve studied EW for 30 years and OEW for 10 years. I use EW as a guideline, but not a law. That’s just me. Open to more dialogue anytime. Good luck aah, and I mean that!

      • CompQ for your consideration. Of course, diagonals must be proven, but within wave 5, wave (iii) is longer than wave (i); wave (iv) is longer than wave (ii), and wave (iv) overlaps wave (i) — hence an Expanding Diagonal wave 5 is possible — i.e. megaphone pattern. Note that the slow stochastic seems to like the count.

        COMP (120 Min)  4_27_2016a


        • .. both AMZN and FB up in the after hours on earnings.

        • aahmichael says:

          TJ, let’s forget for the moment that I count the move from the 2/11 low to the 2/17 high as a 3 wave move, and just focus on the move from the 2/24 low to the 3/04 high. You have that labeled as an impulse wave, however, imo, it’s very clearly a 3 wave move. While many 5 wave moves can also be counted as 3 wave moves, you can never never count a 3 wave move as a 5 wave move. (Of course, you are well aware of that fact.) I think you also know that 2/24 to 3/04 consisted of only 3 waves, because that’s how you have your SPX and DOW charts labeled. You have forced it to be a 5 wave this instance, simply to to make it fit your bias. Needless to say, this count doesn’t work for me.

  30. captbara says:

    Check out 30m 155 MA. Been good support since 1891.

  31. I would be remiss not to point this possibility out .. numerous ways to count right now .. but another already validated “running triangle” may have formed. Another way to count is a A,B,C of wave (i) of a potential ending contracting diagonal. Let me say in advance I don’t like this situation any more than anyone else which is why patience and flexibility are still needed.

    ES 06-16 (240 Min)  4_27_2016a


  32. There’s your propping by the ESF et al. I suspect they’l make a small pop as they always do on the announcement, and then it will head south. My small scalping is done.

  33. I ve said it before…the market cannot handle too much deviation from its comfort zone.The dollar in a certain zone,bonds,oil as well.The markets would love a weaker dollar.Fed has been quiet the last 2 weeks–we’ll see if quiet was a setup for rate increase threats or means nothing.(noting this for future Fed days).It would be in the Feds character to decide to pump the dollar up today with rate increase babble,buy S&P to save equities and let gold get hammered.Everything technically points to more upside for GDX and downside for DXY.Good luck all.

  34. learner3078 says:

    Any guesses how the market will react to the Fed today? Maybe a sharp spike higher to 2100 before a reversal down to end flat..

    • johnnymagicmoney says:

      you know one day and who the hell knows when it will be whatever the FED says (dovish or hawkish) it will be taken badly and those who think the FED is omnipotent and will be like “O-M-G” and hopefully on that day Newbie will post dancing bears

  35. AAPL’s pattern is a double island reversal. Those are rare and about as bearish as possible.

  36. Tony, do you ever look at the A/D lines on the NYSE and the SPX?
    Have they not been confirming the strength of this rally?
    Making new highs?

  37. ibra76ig says:

    UNH – yearly

    UNH – quarterly #1

    UNH – quarterly #2

    UNH – monthly

    UNH – weekly

    UNH – daily

  38. So many people here talking about “rigged” markets because AAPL’s decline isn’t causing a collapse in the broader market averages…. Never mind the fact that energy, basic materials, and the industrial sectors have been leading this rally over the last week and month. Tech is the worst performer, next to utilities!

  39. nsteve24 says:

    Fiona, you’r2 going to need to revise one of your CL band to 45 to 25
    Cushing will be full by July

  40. Such disparity between sectors this morning. Tech can’t catch a bid because of Apple, so they ramped the crap out of energy, materials, etc. I’m hoping it’s the final stages of this rally where they are squeezing the last of the shorts in those sectors. All the heavily shorted junk is flying, so it’s possible- ETE, WMB, KMI, etc. On the bullish side, there’s now a ton of room to run in big cap tech like AAPL and GOOG. I have no confidence in a sell off until we break recent lows.

    • Ummmm…. never mind that Crude is pushing $45 a barrel and the XOI is making new highs again. Technology has been the worst performing sector over the last month, next to Utilities.

    • johnnymagicmoney says:

      trust me if the financial earnings and energy earnings were bad and the tech earnings good the opposite would be happening

      oh crap wait they were bad too. =)

  41. phil1247 says:

    / ZB …..TLT

    finally counter trend rally getting going

    look for 163 /zb to start to rebuild short positions

  42. Jimmy Porter says:

    Trader Joe must be sick or computer broke. Maybe willy is his alter ego because he hasn’t been on much since willy started posting…lol

  43. purplember says:

    SP futures down 8. 3 minutes into trading down 1

  44. alexhartley1 says:

    Hi Tony – I remember a while back you made some comments on the USD and something along the lines of when in a bull market the DXY shouldn’t fall more than something like 7 big figures? Or it hasn’t doesn’t that before. Could you clarify again for me kindly.

    Seems like we’re possibly at an inflection point on the DXY and short-medium term action is likely to be decided by what the Fed says today.

    Clearly we’re at support but I get the feeling it could easily slip to 92.5.


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