Wednesday update

SHORT TERM: another decline underway, DOW -217

Overnight the Asian markets lost 0.4%. Europe opened lower and lost 0.4% as well. US index futures were lower overnight, and the market opened 4 points below yesterday’s SPX 2084 close. By 10am the SPX had dipped down to 2075. Then after a rally to SPX 2083 by 10:30 the market headed even lower. At 2pm the Treasury reported another surplus: $106.5B v $156.7B. Heading into the close the SPX hit 2064, and closed there.

For the day the SPX/DOW lost 1.10%, and the NDX/NAZ lost 1.10%. Bonds gained 5 ticks, Crude rallied $1.40, Gold rose $11, and the USD was lower. Medium term support drops back to the 2043 and 2019 pivots, with resistance at the 2070 and 2085 pivots. Tomorrow: weekly Jobless claims and Export/Import prices at 8:30.

The market opened lower after yesterday’s gap up rally, pulled back to SPX 2075, bounced to 2083, then dropped to 2064 in the afternoon. While we can not rule out another rally to the 2085 pivot range, today’s decline is sufficient to start what we will be labeling Int. iii/c of the downtrend. Int. i/a completing at SPX 2039 and Int. ii/b completing at SPX 2085. Short term support drops back to the 2043 and 2019 pivots, with resistance at the 2070 and 2085 pivots. Short term momentum dropped from quite overbought yesterday to oversold today. Trade what’s in front of you!

MEDIUM TERM: downtrend probable

LONG TERM: bear market


About tony caldaro

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267 Responses to Wednesday update

  1. Jimmy Porter says:

    What an amazing day for day trading. A total of 45 points the market traveled today. Cha Ching

  2. Here is my count on the ES 30-min futures about 10-minutes before the close. I know you guys are tired of seeing diagonals. But in order to reach the conclusion there was a diagonal, I had to clearly count the impulses inside. This is a 5:3:5:3:5 Expanding Leading Diagonal minute wave a (circle a) which may be inside of a triangle. There is a ‘similar’ but slightly different count on cash.

    ESM16 - Half-Hourly - May-12 1550 PM (30 min)


    • Here is the related count on cash .. five waves down in a channel, to minute a, (circle a) then an expanded flat (a), (b), (c) for minute b (circle b) where (c) is an expanding ending diagonal. At least .. that’s the way it appears now, and the way cash and futures would be in-sync.

      SPX - Five Minute - May-12 1609 PM (5 min)


  3. captbara says:

    AAPL looks like almost 5 waves down completed. One more stab lower to mid 80s would do it.

  4. beginner101 says:

    if 2070 is exceeded, then there’ll be 5 waves up from 2053? if not, will try a short with 2071 stop…

  5. Tony Jordan says:

    Going back to Tuesday’s highs (17935 & 2085) both INDU & SPX have come down to today’s lows in 5 waves with no overlaps cash market basis. The move up this afternoon has retraced a bit more than 50% in both indices. This is not rocket science. Although the 5 down waves can be construed to be something else other than an impulse best be warned the potential is there for a 3rd wave down. Good luck.

  6. Dex T says:

    NYSE Margin Debt as % of GDP Signaling Ugliness for Equities

    “For the past 25 years, peaks in margin debt to GDP have coincided almost perfectly with major, cyclical peaks in the S&P 500. This is relevant today because margin debt to GDP peaked in April 2015 at 2.83% and it has been trending lower ever since. And do you know when the S&P put in its most recent cyclical high: May 2015. Yikes. I think the graph below speaks for itself.”

  7. avkanoi says:

    Keep buying dips for intra and daily till 2034 breaks….. No point shorting…. Bounces are way too large and quicker!

  8. rd3777 says:

    Just a topping process and when all the buyers are all hung…lol the market will collapse down…only a matter of time because the chart shows…it’s extremely tited here.

  9. rigged09 says:

    Bots are running the show against the Bears. Impressive markets!

  10. kvilia says:

    Great – stopped out of the UVXY. Impossible to trade more than a few ticks. One day this will resolve in quite a move.

  11. Bear’ s steak for dinner. Every day the same dish….. start to tired up a little.

  12. fishonhook says:

    Nice call AB on the bounce to 2068

  13. Dex T says:

    Hillary Clinton’s Son-In-Law Lost Big on His Greek Hedge Fund Bet

    “The son-in-law of presumptive Democratic presidential nominee Hillary Clinton is reportedly closing a hedge fund he started that bet on a Greek economic revival but lost around 90% of its value.”

    • purplember says:

      only $25 million. clinton foundation raised $500 million from foreigners to cover this. I wonder why a foreigner would give millions to clinton…. I’m sure it was a donation and no kickback.

      • Dex T says:

        True, it wasn’t much, but I found it funny. Was also curious to see who was buying Greek debt/banks. I wonder what their argument was for a “rebound”??

        Foreigners give money to Clinton for the prestige and influence they hope/expect it will buy them.

        That’s the main reason so many are whining about Trump when they had no problems with him in the past. They are afraid he will end their personal gravy trains

  14. stan502 says:

    Anyone else note that Thursday’s generally tend to cover or retrace the entire week range and prior to opex direction tends to be reversed opex week? Or am I just out in left field…

  15. fishonhook says:

    per Tony’s short term chart.
    This could be the start of the iii, little blip up and now we should get the real down . Lets see.

  16. S&P 500….30 min pitch with up/downside extension…..

  17. Choppiness rules the day thus far. But always a good sign for bears when RUT underperforms SPX so decisively.

    • mjtplayer says:

      Perhaps the 2 most cyclical sectors of the economy are leading us lower: trannies & semi’s. SOX & DJT are trading below the April lows, not good for the bulls.

      Nice bounce for the DOW intra-day, but the NAZ is barely off the lows

  18. So the results of two voting Fed heads was…one cautious and non commital on rate hikes …the other,thinking 160,000 jobs is NOT a disappointment and June should be a hike.Dollar moved up,,but gold did not collapse(yet).Jobless claims starting to show the oil employment cutbacks?If gold can hold here….Remember gold can rally with rate increases.Getting it out of the way in June might be an all clear for a while.Lots of possibillities as usual,but the trend is up right now.Good luck all.

  19. Here’s an update as of noon. Price as now retraced down to the 61.8% retrace level, and a little beyond, actually. So, ‘theoretically’ from this point, if there was to be a ‘huge surprise”, the B wave up could now make a double-zigzag, up, and not break the high by measurement. BUT .. there is no sign at this point of a change in momentum from lower to higher. The slow stochastic is still headed lower, and the EWO has not gone to zero yet.

    So far, the odds favor taking out the prior minute b (circle b) low from May 9, and likely entering the triangle minor B wave, or a 1-2-i-ii, lower, of C. Depends how whippy it gets. But there would be nothing wrong with a larger B wave triangle to consume more time (..and make it harder to trade).

    ESM16 - Four-Hour - May-12 1207 PM (4 hour)


    • phil1247 says:

      could you check out my 10:05 question?

    • ABchart says:

      ES 30 minutes: positive divergence right now. Bounce to SPX 2068 will be nice.

    • Jimmy Porter says:

      I think your triangle is going to be the right call even though it is still early to know for sure. The main reason I agree with that idea is because of the triangle that you called in April. Since the market likes to stay as symmetrical as possible this would be ideal for a triangle to form hear because of the price area of the previous triangle. Keep it up Triangle Joe.

  20. ewmarkets says:

    Not a H&S until the neckline is broken, of course. But there is the potential.

  21. ABchart says:

    ES 30 minutes: probably a bounce of about 15/20 points from 2048/SPX 2053

  22. EL MATADOR says:

    Short amzn and fb as of today …. shorting stock for the long haul down from Mt Everest

  23. johnnymagicmoney says:

    Adam & Steve

    There once was a man named Steve
    He was asked by a John to leave
    And although he lacked tact
    He was asked to come back
    Chuck full of ideas up his sleeve

    The invention was an every day thing
    You held it and it went ring a ling
    But this was quite new
    A big tech breakthrough
    It brought the fruit firm lots of bling

    But all good things come to end
    Cause a liver just couldn’t quite mend
    Now the think tank is bare
    And their phone everywhere
    And Carl is no longer a friend

    So goodbye to a great that was great
    We all took their fruit and we ate
    Delicious indeed
    But the phone was no seed
    ‘Twas their swan song and now it’s check mate

    One of my better ones I think (as I type from my fruit)

  24. phil1247 says:

    11: 30 reversal period has arrived

  25. Holly Silver says:

    Way too sloppy for me. Held off betting yesterday because the drop was way larger than expected.
    While it was orderly the odds of a terminal move soon has greatly improved. The big retailers announcements with future guidance caused the drop yesterday. Some have suggested the consumer will not open their pocketbooks even with the increase in discretionary income. With this latest news they might just be right. the other bad trend is unemployment claims jumped 2 weeks in a row.

    Sitting neutral here with no real bias on current trend. Tomorrow we get retail sales for the month. Excluding transportation and gasoline I would be looking at the numbers. Street expects a .4 percent move higher.

    I have also noticed an interesting pattern on the charts. April 20 to May 5 we had a mini 5 wave drop followed by a one day reversal just barely exceeding the last wave high of 2081. This suggest we could see a drop to around 2030 based on current symmetry. If it does hit there should be another rally. The big question I have is if it stops there or has yet another drop to perhaps 1990-2000.

    It looks corrective in nature so far and not indicative of a fast cascading drop.

    One other observation. This is the 16th say of the slide on SPX. Fibonacci number 21 will be the next fit for a low.

    • Holly, you too have you been congaed by bearishness ? Parbleu!

      • Waves 2 or ii are always scary. Thats why they are surprised after 3, iii starts

        • mcgcapital says:

          You permanently trade the same direction. At least she’s being open minded about where this might go. It doesn’t look at all bullish…

      • Holly Silver says:

        I am only talking about immediate movement, not whether we are still in a secular bull or not. Unless proven otherwise I stick with long established trend. As for reasons to fear another recession this article I just came across echoes my Macro View and current opinion to a T.

        I one word INFLATION. The next killer of markets. A slowdown in job creation AND wage pressure will extend this bull run longer than anyone can imagine. the fear of inflation is clearly showing on a daily basis with a knee jerk response when data suggests the FED will have to raise rates.

        • ewtoriginal says:

          Thats hilarious. Inflation is what made Buffett ultra wealthy. Period. The greatest inflationist of all time. He buys consumer staples “cause he understands them”. Sure. Tech -not so. Cause consumer names have pricing power over time, economies of scale and barriers to entry. Tech has patents and gets supplanted, even in short time frames. Moores Law as we all know. INFLATION has never been bad for markets.Maybe higher rates, but not inflation.

          • Holly Silver says:

            Interest rates and inflation will go hand in hand. there is nothing else that can cause interest rates to rise. we have no credit crisis and will not in a zero rate environment. We are in a deflationary period that is helping us pay off our personal debt. if wage and job pressure continue the cycle will be brief and destructive.

            The market drop on a dime when they sniff a cycle of rate hikes. I don’t yet know if wages will rise and tight labor market will force employers hand. All suppositions.

            • ewtoriginal says:

              Name 3 things that have fallen in price.Deflationary environment is a farce. The “volatile food and energy” complex? Food prices are higher and oil prices rose from 40 to 100 and the environment was still “deflationary”. Real estate? Other than bloated personal residences that came back to earth a bit and now have risen for years–especially rents? Nope. Health care ? Exploding in cost. Name 3 things.

        • simpleiam says:

          Stocks generally go UP with inflation.

          • Holly Silver says:

            OUCH! This whole run up has been on zero rates. Debt saturation is certainly here unless you believe the FED can continue to ramp up massive exponential debt. I mean its off the charts. Everyone thought that alone would cause the next great depression. Nope. The zero rate policy is making creditors and borrowers complacent. Stalling the inevitable. We either reduce the debt or we drown in it. The Fed wants ONLY to raise rates enough for banks to profit and for the speculative investments chasing higher yields to slow. Real internal inflation happens when tight labor markets force employees to raise wages. It also happens when spending signals higher profits and higher wage sharing.

            Can anyone explain why markets are willing to allow such a slow growth? For 7 years? It’s simply because higher productivity results and the lower costs involved offset the slow growth environment. Growing it is. I coined this the “sweet spot” for the stock market. Now the reverse is happening, signs of cost pressure, lower productivity and job pressure.

            As for stocks going up with inflation that only happens when debt can be serviced. We are in uncharted waters here. When and where the demarcation is for this debt structure to collapse is anyone’s guess. I am not concerned with a 50 basis point move up. If it goes beyond that I would not be a long term stock investor.

            I can say with absolute 100 percent confidence that inflation will kill this market.

            • simpleiam says:

              “I can say with absolute 100 percent confidence that inflation will kill this market.”

              No it won’t… Lack of real growth and debt will turn the market, and when all that’s done, back up into a Secular Bull, just like 1982.

  26. I know Board you are Bear. But this is simply wave 2 of 1 of 3 of 5. So Long until the 2030 is taken

  27. mjtplayer says:

    The Trannies and NAZ leading us lower. The Trannies have taken-out last week’s low and the April monthly low, now trading at mid March levels – 2 month lows.

  28. ABchart says:

    This session made me very humble! lol

  29. stmro says:

    Massive rejection of the gap higher – buyers are weak. Think we break 2040 today or early morning tomorrow.

  30. phil1247 says:


    now that you have 5 waves up from the lows in feb

    is that set in stone as a completed impulse wave
    or could subsequent action cause you to change those labels ?

    • Set in stone as an impulsive wave. The fourth wave triangle did it. It could be Intermediate (1) if we are making Intermediate (2) down of Primary V, right now, OR it could be all of Primary V, as a truncation. I have no preference, and will be patient and flexible until the market tips it’s hand.

  31. fishonhook says:

    There goes AAPL. Now lets see where it closes. If oil joined the bear party too, we could see some big downage (and my puts would be resurrected from the dead)

  32. phil1247 says:


    2055 is .50 level long from lows

    lets see if anybody is home there….ie buyers

    if not look out below

  33. captbara says:

    No market bottoming until AAPL tags weekly 233 MA.

  34. Technically, there is now nothing wrong with a ‘five-count’ on cash (not so on futures). But, if the lows keep getting taken out, then it is just a further extension of the potential triangle lower or a 1-2-i-ii lower of C .. difficult to tell at this stage. But, the ‘five waves down’ to minor A imply another five-waves down (minimum) to follow lower. The wave has “good form and balance” with each larger numbered wave on an opposite side of the EMA-34 .. but ..

    Some things ‘not’ to like about a ‘five-count’ lower are that wave (v) did not stop near the mid-line of the channel, and the very deep fourth wave, with upward overlap in the futures. So, I remain open an flexible at this point in time.

    SPX - Five Minute - May-12 1032 AM (5 min)


  35. vivelaamo says:

    I’m all in short S&P500 with stops above all time highs and targets at February lows. No money management on this one, its all or nothing. Pure gamble. Enjoy the chat and expertise on here. Will continue to read and learn from all you great folk and the odd sensitive loser. One last time for old times sake CHOP CHOP CHOP DROP!🙂

  36. phil1247 says:


    gold short traded 1282

    do or die now for gold

  37. vivelaamo says:

    Last year it was choppy for around 6 months before it dropped. Could we see the same?

  38. phil1247 says:

    /ES .
    .as discussed longs and shorts violated
    giving credence to triangle scenario

  39. mjtplayer says:

    VIX daily BB width now just 361bps – that is super tight!

    The coiled spring continues to coil tighter, when will it finally pop??

  40. aahmichael says:

    Despite the overnight rally in futures, AAPL could be the story here, as it broke 92. If it can’t get back above that level, I think it will pull the entire market down.

    • fishonhook says:

      Agree, been posting for a while that I have been watching AAPL and that 91-92 level. Lets see where it closes.

      • aahmichael says:

        They saved it at 92 last Friday, which then caused SPX to bottom at 2039 and rally for a couple of days. This time looks different, though.

        • fishonhook says:

          Just looked at the charts again and there was a spike down to 90.56 in Sept, so has to break that too and hold below to really get some bear action going IMO
          a look at the weekly chart sure looks like a picture perfect topping pattern lasting two years

          • aahmichael says:

            My data shows the low on 8/24 at 92. I see nothing lower that. I posted at the beginning of November, when it was above 120, that it looked like a right shoulder was being put it, and if that’s correct, then it measures down to 75.

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