Tuesday update

SHORT TERM: gap down opening, DOW -140

Overnight the Asian markets lost 0.9%. Europe opened lower and lost 1.1%. US index futures were lower overnight, and the market gapped down to SPX 2070 at the open. The SPX had closed at 2081 yesterday. The market continued to decline until about 11:30, when the SPX hit 2055. Then it rallied back to SPX 2069 by 2pm before heading back down again. In the last hour of trading the SPX hit 2059 by 3:30, then bounced to close at 2063.

For the day the SPX/DOW lost 0.90%, and the NDX/NAZ lost 1.00%. Bonds gained 19 ticks, Crude lost $1.10, Gold slipped $3, and the USD was higher. Medium term support drops back to the 2043 and 2019 pivots, with resistance at the 2070 and 2085 pivots. Tomorrow: the ADP at 8:15, Trade deficit at 8:30, then ISM services and Factory orders at 10am.

The market gapped down at the open for the first time since early April. The decline came within three points of Friday’s SPX 2052 low before the market rebounded. The rebound fell one point shy of the SPX 2070 gap down opening level. This kind of action did not usually occur during the two month uptrend. As noted in the weekend update, the NDX/NAZ are currently probably the least noisiest indices due to their limited exposure to energy and commodities. They are both suggesting a general market downtrend is underway. As a result we are posting a tentative green Major wave B label at the SPX 2111 high. Short term support is back to the 2043 and 2019 pivots, with resistance at the 2070 and 2085 pivots. Short term momentum hit oversold during today’s initial decline, bounced to neutral during the rally, and ended the day just below neutral. Trade what’s in front of you!

MEDIUM TERM: downtrend may be underway

LONG TERM: bear market

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

About tony caldaro

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268 Responses to Tuesday update

  1. simpleiam says:

    2060 area is ~50% retrace of yesterdays high to todays low, so watching this carefully.
    GL All!

  2. Holly Silver says:

    Waiting for GODOT. The bears and emotional biased investors will never see it coming. The test was today and while not definitive I am seeing a clear 5 mini-wave action and strong support every time it starts gapping. The energy needed to stop the drops are not showing in my analysis as being strong. this means momentum is still with this current uptrend. This despite most peoples interpretation of events and earnings. How long or how high can we go and still assume we are in a secular bear cycle? Does new all time highs negate this count or not? I think I was told it doesn’t negate the bear scenario. Not a technician so I ask simple questions on EW 101.

  3. Terrible close for the bears. When’s the last time we had a bearish day that closed on the lows?

  4. ajaysinghi says:

    Spx should touch 2070/tomorrow.

  5. Gap filled at 23.29…lets see what happens. (GdX)

  6. kvilia says:

    fionamargaret says:
    May 4, 2016 at 12:59 pm
    …meanwhile sharp turnaround for market around 2040/43ish, so oil is down to 30, while market is up…..
    fionamargaret says:
    May 3, 2016 at 11:13 am
    If anybody needs a number ….just ask.
    SPXL has a target of 108…..UVXY is a buy going to 27…

    I’m not sure how you calculated UVXY price target.

    • P&F chart default

    • fionamargaret says:

      What are you asking Kvilia?

      • kvilia says:

        How SPX and UVXY move in one direction? Or I misunderstood?

        • fionamargaret says:

          ..not necessarily together Kvilia….think 15/16 for UVXY is a good price for protection…
          Consider if SPX just stays around here, but oil does its thing going to 30, that would make UVXY sit up…..if SPX does indeed scream higher at 2040/43, your UVXY will lose some, but UVXY’s chart is no longer suggesting lows under 10.
          I just want oil to get below 40, to prove the band correct…..

          • kvilia says:

            Understood. Unless we are in the downtrend, UVXY always looses its value. The only time you make money, is like Jan of this year. Otherwise it goes down more than it goes up.

  7. 123 abc says:

    The lows of the day have held for 10 hours, starting to think that this is end of Minor-a wave…

  8. phil1247 says:

    bot GLD 121.75

    may be a front run of target

  9. captbara says:

    Now NYMO below BB, and NAMO below for 2nd day. This move is mostly done.

  10. vivelaamo says:

    That’s a sexy h&s forming in the Dow daily.

  11. simpleiam says:

    Yeah, possible that it’s Thurs or Fri before we see 2040. Not sure, but looking like it.

  12. Page says:

    I repeat it’s time to go long NOW 🙂

  13. Tony Jordan says:

    Daffy DAX has a gap at 9761. DAX cash closed today at 9828 after coming down from the recent high at 10474 so gap is likely to be on the menu soon. DAX futures implied cash currently 9825 and back again to moving in sync with Wall Street today.

  14. phil1247 says:


    initial short target near

  15. mjtplayer says:

    SPY support down at $203 once this $205 area gives-way

  16. fishonhook says:


    You just said

    Do you trade with fundamental?
    If so:
    SPX PE at 24
    Global Cap/GDP at 119 + $18/19 trillions debt
    That’s too expensive. We saw that only one time since 1929.

    But your chart yesterday shows a bounce from 2045 to new highs. So which is it ? Or do you want to make sure you can say ” as I told you all…”

    • ABchart says:

      Trading and fundamentals are different in short and medium term. We will bounce from a lower level. Stay tunned 😂

      ABchart says:
      May 4, 2016 at 9:32 am
      ES 2050: I am cash here.
      NDX: will confirm his downtrend today if close under 4400.
      Hourly positive divergence on the european indices give nothing. No buyers.
      Thats mean a lower low is possible in the coming hours/days.

  17. Anyone have a count on CAD/USD?

  18. Here is that zigzag option in a channel on the SP500 30-minute cash chart. It has a much better “look” than the expanding diagonal but starts off with the same internals. Such a count could still result in the travel down towards the lower daily Bollinger Band. It also looks more correct on the ES 4-hr futures.

    But the internal choppiness and overlaps still continue as opposed to more impulsive looking waves.

    SPX - Intraday - May-04 1200 PM (30 min)


  19. ABchart says:

    Mister Tony,
    SPX: we have an hourly positive divergence today vs 04/29 right?

  20. phil1247 says:

    /GC short target 1270.5

  21. fotis2 says:

    good R/R long to close gap with stop just bellow low

  22. phil1247 says:

    RUT not waiting for spx breakdown …

    TZA soaring

    stops in place

  23. phil1247 says:

    SPX targets

    2043 then 2038next

  24. EL MATADOR says:

    While many are spending their time arguing/debating bull vs bear market …. If your not making money it’s not my fault …..

    EL MATADOR says:
    May 3, 2016 at 1:52 pm
    oh oh, gold and U$D about to swap trends….. check out the daily candles

    I prefer to share potential profitable trades

    • phil1247 says:

      beat ya to the punch on that one yest el mat but not by much …

      only by 18 min …..maybe u didnt see my post

      good call!

    • But for how long?Using GDX there are two buy levels.23.25 and 20.If GDX plows through 23.25,most likely it’ll be 20.Not sure if it goes that low,so I’ll probably start averaging more in at 23.A weak jobs number reverses everything–or confirms the DXY rally.

      • phil1247 says:


        i am not bearish on gold
        we are above 18day sma so sell signals are ignored
        i am looking for entries to buy ….

        but i will not be using ETN s ….
        .i think default is near with deutche bank and others under duress

  25. rd3777 says:

    Wake me up when this thing crashes…..

  26. Oil inventories up 2.8 m barrels.Said it months ago,they can’t cut enough rigs to keep up with falling demand (probably in China and Japan).You’ll know China is pulling out of its economic downturn when inventories start falling consistently.

  27. Holly Silver says:

    Like I stated before, big rally stating. no matter where we close today, unless its below my major resistance zone of 2040. Anyone understand the implications of the domestic data points recently? Wages, discretionary income, labor costs, tight labor markets. Reconfirmed all this today with the government reports. Now we add factory orders that did well, and service sector once again on fire. Someone has got to explain the consumer fate to me here? I see pent up spending demand like we haven’t seen in 7 years. As we speak the SPX is down 12.5 I am pretty confident a nice rally develops for 10 trading days.

    The market is still more worried about rate hikes than anything else.

    • Agree,rising dollar not wanted now.Let’s see how the Fed heads speaketh.

    • ABchart says:

      Do you trade with fundamental?
      If so:
      SPX PE at 24
      Global Cap/GDP at 119 + $18/19 trillions debt
      That’s too expensive. We saw that only one time since 1929.

      • Holly Silver says:

        Sorry but I use fundamentals to give me the BIG Macro picture. If you start with a premise that a certain stat is proof we are about to fall than you lost objectivity. The same was stated about the US debt. This argument is not based on real facts. Suppositions. As for PE rations history states that low rate environment means higher PE ratios. The last 12 to 18 month churn and negative earnings returns are either a cyclical event or not. The fundamentals in that same period is showing a great consumer environment. Everything is going their way. Todays data reconfirmed it. Even factor orders showed signs of life not to mention the blow out service sector readings. PE is also influenced by money flow. We are IT. the world has placed their money here, and until there is competition for that cash it remains.

        All stats will look bad at the end of a correction. based on past history such a long contraction by business and consumer spending combined with the means to reverse that trend, it has always done so in the past. The other big factor is China. They forced their citizens to reduce the population with the one child policy. they reversed that policy at end of 2015. Do people really think China will not grow it’s population again? They are still in the infancy stage for internal development and away from cheap labor exporters. this will take decades to accomplish but they will be the powerhouse of the world going forward.

        • ABchart says:

          Thanks Holly!
          I see that you live in a bourgeois environment. Right now, the world economy is bankrupt and central bankers will lose control in any time. Low rates for a long time is not good for the economy and for savers.

          • Holly Silver says:

            Great timing tool! I thought the biggest peak was right after the toxic mortgage bundles where whole nations went bankrupt, but I guess it’s just getting worse? Please look at the domestic health of the consumer and corporations and tell me that increasing savings, decreasing debt, increased discretionary income, all at a time when they actually spent 2 percent higher. Every data point confirms this. Every. I talk about the here and now, not some event that will sure to follow based on the debt saturation. Yes I agree someday we will pay for our huge imbalance. As an investor and trader I deal in current and 6 month projections. You see a collapse in a zero rate environment? I see this happening when pressure is put on that debt. Lets see which Macro View is correct. mine has been written down almost 6 years ago and believe me no one thought it will ever happen. they saw QE forever and are still ignoring the great labor reversal. I never internalize problems to include my state of affairs. Lose objectivity.

            • ABchart says:

              You are very optimistic. It must be great to wake up next to you in the morning and even have breakfast 😊😂

              • Holly Silver says:

                I was knows as a perma-bear so please don’t talk to me about optimism. I temper my emotional opinion with analytical thinking. Took decades to get there. People see a waterfall and assume any boat on that river will fall over it immediately. they never bother to analyze speed and distance. Never said it will end well. Had I kept that emotional opinion from the start I would be one of the people that declare Manipulation as the reason instead of cold logic. I believe cycles have a defined path unless something unusual breaks that cycle. I don’t see the cycle broken, not with the clear recovery we are seeing despite the China/EU dilemma.

        • EL MATADOR says:

          Holly – Do you know what the domestic and global macro view was like in 1936-37? You might want to draw some dots and see what can become from it

        • va89blog says:

          Holly, S&P500 reported earnings have CAGR of -5% from 2011-2015. The SnP ended 2011 at 1250 and ended 2015 at 2043. The market rose on speculation, not fundamentals.

        • simpleiam says:

          The Chinese are in debt up to their nose! It will be at least a decade (or more) before they can even begin to knock that down. Population isn’t the only concern. Most are NOT well educated, except in the Communist system; not in free enterprise, at all. Most are still in field or manual labor. They can’t afford to buy a condo, or apt. priced as high as a new one in The U.S. This is why all those newly built cities are empty. Find a few people you know who’ve been to China and ask them!

    • jeffbalin says:

      Holly, you’re using good common sense to determine market direction. I don’t think that works. All my tech indicators are pointing down and, like 95% chance it is significant, like back to 1810 at least. I’m not predicting. If the indicators go bullish, whenever that is, I’ll switch. But until there is some indication that the market is turning up, you should be short or neutral right now. Tony has this dead on, medium term downtrend likely in progress.

      Good info you post, however.

      • Holly Silver says:

        I agree. I use patterns and momentum to determine critical reversal points. I must state that there is nothing in the February move that suggests trouble. During the latter period of a correction people look back and just don’t see what’s coming. The pattern is well defined and well in the trajectory of this move off the lows. If we are already in such a secular bear instead of my assumption of a corrective move we will know soon enough.

        I don’t try to defend my position only confirm it with both fundamental and technical. A breach below 2040 will give me major concern. There is an outside chance we hit intraday 2030 but that would have to be the absolute ,low and a sharp bounce off it.

        If wrong than I am late to the party. Once in the next phase of this supposedly downtrend, secular bear, we should see sharp drops continue and money can be made without calling the exact reverse point. I never front run a major long standing trend.

        Today gives me a clue on strength or weakness in the market to pull off such a rally.

        • jeffbalin says:

          You can just look at Tony’s charts and see trouble. But, what is really more important to me, is why are all the ladies here bullish? Are you having secret meetings we don’t know about? Why aren’t men invited to these meetings? And, if we do get invited eventually, will there be food?

          • Holly Silver says:

            I follow my model till proven otherwise. A recession here makes zero sense given the huge increases in consumer health. The global problem became ours but after so long it gets discounted. we are NOT seeing a contagion. I anticipated a long bull run after the huge selloff. I anticipated the slow process that would heal the consumer. I also anticipated the business environment was in a sweet spot for years because of this. I anticipated a surge in productivity on the backs of the consumer. I anticipated the FED accommodation would last years. Now you want me to abandon what I see in front of me? Nonsense. Let the market tell me I am wrong. They tries for years. I get the same arguments over many years yet my model is working. I also get the same people that are rigid in their position and refuse to accept the greatest bull run in a vey long time. Tripling off lows in 7 years and I say we have 2 more to go. The stage is set for you people to argue the exact reverse situation but claim a crash is around the corner. you see crash all the time. has your model been right all these years? have you constantly seen gremlins when there was none? In 6 months time you will argue that there are many more rate hikes needed and it will destroy the debt load.

            I refuse to allow emotions to dictate what I have mapped out using logic and historical patterns. Not one person mentioned the wage component, factory orders, service sector? Only the negatives. People point out how terrible China’s growth rate is. Well they forgot to mention it was MANDATED. Now its NOT. Gee do you suppose people will stop having babies? Silly argument that goes against human nature and common sense.

            I will switch when market tells me. Has is? Are you sure? Inflection point is here. We rally very soon or break down. that I agree.

            • simpleiam says:

              “I refuse to allow emotions to dictate what I have mapped out using logic and historical patterns.”

              Fine. Why did you come here and start raving at us? As if NONE of us knows anything? Give it a break. I always appreciate another opinion, but you make johnnymagic look mild, compared to your posts. Sheesh!

        • fionamargaret says:

          ..think there will be a sharp turnaround at 2040…..oil I still have at 50-30…..

      • Holly Silver says:

        If that’s true I switch sides. Since we are still questioning where we are 12 months after the supposed event took place I have to stick with my original long view that rate pressure will result in major debt defaults. The market drops on this concern exclusively. They are very worried that the cycle of raising rates has begun. Based on prior buildup for such an event it is warranted. Never before had a tight labor market NOT resulted in rate increases. While everyone is seeing a recession I see accelerated growth causing rate pressure on debtors. Either case scenario will cause the market to correct. One however is more terminal than the other.

    • nsteve24 says:

      Pent up Consumer spending demand? right
      Aeropostale, files Chapter 11, due to lack of traffic, no demand for apparel

      • johnnymagicmoney says:

        lots of bulls on here over the last couple months but Holly you are the only one who believes its fundamentally justified. Every other bull is just squiggle counting and saying there will be one last bubble push but even those are looking to short sometime in the not too distant future (possibly sooner even). Really don’t know why you only look at one side of the street. Yes there are positives. I would be utterly bearishly biased if I didn’t see the positives but the risks and deterioration outweighs the positives especially at these prices. Really strange to see your viewpoint. Ill stop bashing you cause I do dumb things all the time.

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