Wednesday update

SHORT TERM: gap down open again, DOW -100

Overnight the Asian markets lost 0.4%. Europe opened lower and lost 1.1%. US index futures were lower overnight as well. At 8:15 the ADP was reported lower: 156K v 200K, and at 8:30 the Trade deficit reportedly narrowed: -$40.4B v -$47.1B. The market gapped down at the opening to SPX 2053. The market had closed at SPX 2063 yesterday. In the opening minutes of trading the market dropped to SPX 2048, and then began to rally. At 10am Factory orders were reported higher: +1.1% v -1.7%, and ISM services was higher: 55.7 v 54.5. Just after 10am the SPX hit 2059, again failing to close the gap, and then began to pullback again. At 2pm the SPX hit 2046, rallied to 2054 by 3:30, then closed at 2051.

For the day the SPX/DOW lost 0.55%, and the NDX/NAZ lost 0.75%. Bonds gained 7 ticks, Crude added 25 cents, Gold dropped $7, and the USD was higher. Medium term support remains at the 2043 and 2019 pivots, with resistance at the 2070 and 2085 pivots. Today: Q2 GDP was lowered to +1.7% v +1.8%. Tomorrow: weekly Jobless claims at 8:30.

The market gapped down at the open for the second day in a row. It has not done this since early March. Just after the open the SPX took out Friday’s 2052 low by 4 points. Then after a rally to SPX 2059, the market made a lower low at 2046. After that the market bounced into the close. Techs continue to lead to the downside. Short term support is at the 2043 and 2019 pivots, with resistance at the 2070 and 2085 pivots. Short term momentum was quite oversold at today’s lows, then bounced. Trade what’s in front of you!

MEDIUM TERM: downtrend should be underway

LONG TERM: bear market


About tony caldaro

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293 Responses to Wednesday update

  1. phil1247 says:


    SPX close 2048

    how bout u?????????????

  2. Holly Silver says:

    Is it possible to chart EW in the following manner.

    July 15 high to February low we had 3 wave move down. Could this have been the corrective wave? I suppose the 4th wave? I have no idea on rules of length and duration. Just wondering because I would love for there to be possibility that we didn’t break the major wave rules and interpretations.

    I am not asking if anyone thinks that is the correct interpretation only of it is possible. I do love symmetry and am a strong believer in Fibonacci ratios.

  3. NEWBIE says:

    LOL, guess who? and no its not me.

  4. fotis2 says:

    An interesting day tmrw.

  5. mike7x says:

    Thanks Tony. FWIW:

  6. phil1247 says:


    taking 40% off the table now as ext short has broken

    keep powder dry for tomorrow

  7. instead of everyone bickering, jump on the short wagon with me and have some tequila in Cinco de Mayo memory.

  8. Stall speed, no afterburners. Too late for flaps, Janet.

  9. bud67 says:

    AB and BJ – okay, looks like I am the only one here taking the heat,
    why – gotta think you just don’t like me. Since, not getting paid to stay,
    I am gone, and share those comments with TC,next….the end…

    • ABchart says:

      Nothing against you personnally. But you realize that you post 50/100 messages per day to say everything and its opposite minutes later? Someone who wants to help others don’t do that.

      • bud67 says:

        50/100 messages a day?
        I am sick an tired of your bold lies.
        I do take that personal, fighting words.
        I cannot locate Tony’s email address, so
        I’ll go public –

        It is personal, when you use false – self created facts.
        Is personal , when you and BJ hone in on only
        my comments.

        It is personal, when make false statements, that
        you cannot back up.

        Not SPEAKING for all OEW. Just for myself,
        when the easy way is to – walk away.

        But – keep in mind. Where ever I go. I will remember
        the harsh treatment, and bold faced lies, you 2 make.

        What – the SP500, is not complicated enough for you
        to farts to analyze?

        I am not Tony – if I were 2 misfits would be blocked,
        out – gone, and never to return.

        I am one of the few Old users of OEW. Sure, maybe
        there are 1, or 2 older than me. But, I was around
        when S2, was the popular kid on the block.

        The difference is – you two – can’t be polite. “WTF”
        is gutter talk. You know it, and do so I.

        Now – the way I see it is. This comments will stand,
        until it is removed by TC.

        Away – my going away. Will not change you to “WTF’s”
        to use your words. So, the OEW readers can decide.

        But – your two guy’s can kiss my lilly white rear-end.

        Gone, and Never to Return….No way, No how..


    • blackjak100 says:

      What does telling you it can’t be a W4 have anything to do with whether I like you or not? End

      • aahmichael says:

        Ut oh. Bud has left the building again. What’s the over/under for how many hours before he’s back? Oops. We better measure that in minutes, not hours.

  10. purplember says:

    buy DWTI in morning. sell in afternoon to lock in profits seems to be working.

  11. Tony Jordan says:

    I’m looking at that little rush down there from 2055 down to 2045.77 as the “3 of 3” in the most recent sequence futures basis starting about 5 hours before the cash open. So here looking for 4 of 3 to go back to the 17650/2049-50 area before heading to lower lows. A move above 17670/2052 would not be characteristic for what I’m looking for.

    • bud67 says:

      interesting. my program is pointing to a W4 low at that 2045 level.
      then a rally to 2113, or higher. ???

      • ABchart says:

        WTF again? 😂😂

        bud67 says:
        May 3, 2016 at 4:48 am
        Have 2 numbers in mind, for an SP low…..2000, or 1930.
        Hope, that move down, will not hurt your account. Don’t
        blame the messenger….

      • blackjak100 says:

        Bud, can’t be a W4 totally wrong look because of the time this correction has lasted so far. Don’t need software to see that

  12. micky says:

    Gee I just popped in to see if we got at least 80,this is disgusting, I will not get rich this week it seems

  13. fiona
    GLD broke yesterdays low. does this change your bullish bias to 163?

  14. phil1247 says:


    2047 failed

    2030 target reaffirmed

    • phil1247 says:

      failure to quickly reclaim 2046 implies extension short in force

      ie downward acceleration

    • fionamargaret says:

      ..don’t you think he just wants to embrace 2040/43 one more time…..

  15. blackjak100 says:

    How ironic SPY 50dma and lower BB sit at $203.92 and $203.85 respectively

  16. denmo83 says:

    Why does paint color darken when it dries?

    • cause the pigments get concentrated and absorb more light than in the diluted (can) form where their concentration is lower. very few colors lack black pigments.

  17. fionamargaret says:


  18. captbara says:

    Long oil again with a break of the highs only I think. Wave count here seems cloudy.

  19. simpleiam says:

    2060.23 is high print thus far. Think it might be all we get today. Could get a few more, but everyone waiting for Friday.

  20. Holly Silver says:

    Taking way too long to form a deep drop scenario. In fact it looks like the drop is about over. the 2040 SPX area is my line in the sand. Perhaps Friday will be the lows? Should not go much beyond Monday. The rebound strength is in question. I believe it will go to a minimum of 2090 and possibly hit an intra-day high over 2135. Not questioning that there is a correction due, only the major wave count. I still see the churn over last 12 plus months as corrective. if so we should never get to the double bottom lows.

    We have 2 more years of Bull run IMO. Stage is set for rate hikes, expanding spending and earnings. I find it amazing how no one has marveled at the resilience of the consumer. Jobs, tight labor market, service sector strength, increased discretionary income, while managing to reduce debt, increase savings and spend on average 2 percent higher each quarter. Combine that with the business spending reduction as well. The wild card is China/EU. if they also start picking up the combination is explosive. We should enter the latter stage of the bull run with the most profitable leg up. Still waiting for the last leg to kick in. Don’t expect it till July/August. But first we should have a one/two month correction, but not sure at what level it starts at.

    • fionamargaret says:

      Scroll down Holly for the game plan – I am trying to get a rally going here, as my numbers suggested down to 2040/43, and then up……..I think we have had the down….long, and long oil (for now) and long gold. Good stuff Holly.

      • stan502 says:

        both ++, thanks

      • Holly Silver says:

        I look at wave structure on the down leg and I see 5 waves down starting 10 days ago. very rare in the last 2 years that we see more than 10 days and in the same trend line have a steep drop afterwards. There was one such event that took 21 days to find a bottom. Most were 10 days or less. A cascading event usually develops much sooner and steeper. A low today would give me that 10 day mark. I also agree that 2040 seem most logical based only on visual lengths of waves. For me I have always used visual recognition of pattern symmetry. Not always a good test but it has worked for me most of the time.

        Odds favor a decent rally from todays close. Still not sure how high or how strong. Still on the fence whether we are still in the secular bull cycle. I stay with long established trend till I am convinced otherwise. A 12 to 18 month churn could easily be the correction phase instead of the more ominous dire fall off the cliff drop. Just doesn’t make sense in the consumer cycle. If we were to see a dramatic reversal in consumer behavior and huge job losses other than energy related than I would reassess. You would have to believe things are about to get a lot worse and earnings will not recover over next 6 months. I see the opposite scenario as more plausible.

        • Holly Silver says:

          Correction – Today is the 11th day of down turn. Suggesting today we should have higher close. If not the next time cycle that fits best is 13 days. that would place it on Monday as the low. if so I would be leaning towards a more protracted drop.

        • aahmichael says:

          You might see 5 waves down, but those aren’t 5 waves in EW terms.

          • Holly Silver says:

            Correct! I don’t understand the complex structure and believe you KISS. I would rather trust my visual understanding of possible next moves.

            I would really like to know if anyone has tracked their favorite technician to determine real world profits and losses. Any betting site will do from buy and hold ala Buffet to day trading. Why has no one done this? I know their are paid sites with day trade recommendations but I never get a concise answer on their track record short and long term.

            I have been playing the market for over 30 years, from long term stock holdings to future market. I have not found one system or individual that beats the market on a consistent basis in real time bets. I exclude the big winners that short or play long term. I am interested if there ever was a study to prove a systems worth or not. Most systems seem to back track and reevaluate their assumptions and present it as if it was there all the time.

            These systems have been around for a very long time. if anyone really found a tried and true method it is either kept in very closed mouth circles or there is no proven method (real time).

            • aahmichael says:

              Well, my favorite technician is myself. I don’t ever consider the opinions of others. I am a system trader. For more than 3 decades, I always beaten the market on an annual basis. However, my system isn’t based on assumptions. It’s based on clearly defined rules. It’s also not something I would ever make public, and I can’t imagine that anyone who has the kind of system that you speak about, and has the discipline to execute it, would ever make their system public either.

              • Holly Silver says:

                It’s called getting rich on exponential payments with zero risk. yeah I guess no one would do that. How about EGO. Most people with such a smart system would want the world to know. Humble and rich? What is a combination just too rare.

              • Holly Silver says:

                BTW, you lurk here with cryptic responses to daily action. Why bother in the first place? You do know how to spank people for not knowing the rules yet you don’t seem to commit? kind of dishonest, wouldn’t you say? You can easily give your position immediately after you placed the bet. that would not affect your outcome in any way. It would expose your winning percentages. Just a generalized indication of immediate expectation without actual bet would do. Your way seems so easy with zero risk.

                Perhaps I haven’t seen enough of your work to make this type of conclusion. I am new here.

              • aahmichael says:

                My clients know, and they are the only people who need to know. I’m not here to prove anything to anyone. Nevertheless, I have posted every entry and exit of my S&P trades in real time since I arrived on this blog last September…not for the purpose of proving anything, rather, for the purpose of showing how I translate my EW and technical analysis into actual positions. To me, a stated opinion, or a market call, or a wave count is meaningless if it isn’t accompanied by a trading strategy. You can go back through the archives and see them all, although since I don’t daytrade, they are infrequent, so perhaps that’s why you’ve missed them. I’m a timer, not a trader, and when I finally get on the right side of the new trend, my positions will last weeks, months, or even years. I’m currently 200% short at an average of 2092. Here are the real time posts of my entries of my current position:
                aahmichael says:
                April 13, 2016 at 10:55 am
                I am now short again at 2078. While it’s still possible that it gets to 2090, I don’t see it going beyond that.

                aahmichael says:
                April 14, 2016 at 12:20 pm
                Just put the other half position on at 2086. Now short a full position at 2082 average.

                aahmichael says:
                April 20, 2016 at 8:39 am
                I doubled my short position at the open at 2102. Now short a double position at 2092 average.

              • Holly Silver says:

                aahmichael, I appreciate your response and candor. I too always post my position, but it is mainly to keep me honest. I present reasons and targets along with my bets. I have broke even all of 2015, and made only 4 bets this year with small net gains. Prior to this churn I did very well in 2010,11,12,13,14. I need a smoother trend definition instead of these sharp reversals all the time. This last 2 months I have struggled with the notion that we have been in a secular bear trend. I am stubborn and stick with the bull theme till proven otherwise.

    • johnnymagicmoney says:

      I bet you 1,000 cash the bull will not last 2 years
      I will send it to you in an envelope guaranteed

      • Holly Silver says:

        How has your last 18 month assumptions gone? I am guessing you anticipated a bear a long time ago. Just a hunch based on your adamant response. Once the emotional play takes over you will never be objective. Me, I play the way I see it. I also must obey my own long standing Macro view since it has worked all this time. How many people were able to see such a bull run in the first 6 months of the established low in 2009? I have learnt to force my emotional assumptions aside and analyze as if I am the CEO of major segments of the economy. It took me a long time to do this but am a much better player since.

        Never front run a major secular change. Always go with the long standing trend till proven otherwise. The last 12 to 18 months have the same headwinds and to suggest they are about to get worse indicates there is no faith in government intervention. I don’t see them as ineffective just yet. If we can triple our market and expand out government debt exponentially surely China and EU can do the same. I never claimed the end result wouldn’t be dire. I am just trying to play the market today and 6 months down the line. I see no break in credit or pressure from creditors. LIBOR is one barometer everyone can use.

        I am an anomaly. I use visual chart patterns inclusive of Fibonacci numbers, and fundamental data to alert me of possible changes in long term trend. I see more reasons to believe the last 12 to 18 months was a corrective pattern than not.

        • johnnymagicmoney says:

          Assumptions assumptions holly…..I did quite well since 09 but there comes a time where I realize the bull is tired and the downside is greater than the up. Do you think you can beat Soros or Drunkenmiller both billionaires from trading…..billionaires. They are short and think this market is a bubble so how do you argue with those men when they have been plenty bullish many times. They are not pessimists they are realists. So take the 1,000 bet if you think you are so right.

  21. mjtplayer says:

    Light volume oversold bounce ahead of the jobs print tomorrow

  22. fionamargaret says:

    …called in some big guns……

  23. phil1247 says:


    looks like short was front run as i expected at 1290

    target 1266

  24. Here’s an update .. the corrective hash continues .. possibly waiting on the Employment Report

    SPX - Intraday - May-05 1032 AM (30 min)


  25. phil1247 says:


    if 2047 fails

    bottom should fall out

  26. 123 abc says:

    Ought to take out yesterday’s low if the following count is correct…

    • I really don’t understand how you are counting orange wave 2? It’s a five-wave sequence the way it is labeled? But it is not the ‘c’ wave of an ‘expanded flat’? Wave 2’s are always three-wave sequences. Also, within wave 2, you have labeled wave iii as a diagonal? Wave iii’s are never, never, never diagonals in their entirety — Elliott wave ‘rule’. Only waves 1, 5, A, C are allowed to be counted as diagonals. For these reasons, even though a marginal new low is expected to be made, overall, what the count implies likely won’t work.

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