Wednesday update

SHORT TERM: gap down opening reversed, DOW +2

Overnight the Asian markets lost 0.6%. Europe opened lower and lost 0.6% as well. US index futures were lower overnight, and the market gapped down to SPX 2088 at the open. The SPX had closed at 2097 yesterday. A few minutes after the open the SPX hit the 2085 pivot and then started to rally. At 10am Construction spending was reported lower: -1.8% v +0.3%, and ISM manufacturing was reported higher: 51.3 v 50.8. The market continued to work its way higher into the afternoon with two 4-point pullbacks. At 2pm the: Around 3:30 the SPX hit 2101, then pulled back to close at 2099.

For the day the SPX/DOW were +0.05%, and the NDX/NAZ were mixed. Bonds lost 4 ticks, Crude added 15 cents, Gold slipped $1, and the USD was lower. Medium term support remains at the 2085 and 2070 pivots, with resistance at the 2131 pivot. Tomorrow: the ADP at 8:15, and weekly Jobless claims at 8:30.

The market gapped down at the open today, hit the 2085 pivot, then reversed, closing the gap and moved slightly higher on the day. Today’s action was just enough to confirm uptrends in two of the four major indices. As a result we are now required to update the SPX count to display Major wave B still underway. The April SPX 2111 high becomes Int. A, the May SPX 2026 low Int. B, and an Int. C uptrend is underway. This also forces us to move the Long Term status to neutral. As a subdividing Major wave B suggests new highs are possible despite this entire advance being a bear market rally. We will provide an explanation and some details probably over the weekend. Short term support remains at the 2085 and 2070 pivots, with resistance at SPX 2111 and the 2131 pivot. Short term momentum ended the day above neutral. Best to your trading!

MEDIUM TERM: uptrend

LONG TERM: neutral


About tony caldaro

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379 Responses to Wednesday update

  1. vivelaamo says:

    Been here many times before. It’s going to be a very big move up tomorrow.

  2. jacking up the last 2 minute at the close always helps manipulate the market higher for the morning

  3. phil1247 says:

    sold half upro 67.62

    in case we drop again in am

  4. Certainly a no-volume move to 2104 MUST be adequate to project 2400. ;))

  5. fotis2 says:

    Would this be valid?

  6. phil1247 says:

    next target 2105

  7. Jack Sparrow says:

    seems like the third wave is now completed or about to complete……..4th and 5 th to come,,,, this is all for the move from 2084ish.

    • fionamargaret says:

      ….is this going to be another night for me watching 48.68……?

      • Jack Sparrow says:

        hey but this time i am talking Sp going up… so far so good

        • fionamargaret says:

          ….yes Sparrow, but is there any other way… it needs to hit 2185, from my call of ..say…6 months ago…to get me praise….oh wait, everybody’s forgotten…
          were/are you doing the Nikk…..I was worried after the fact about that..well if we get up there, all boats will rise (what theory, Jack….)..speak to me later…..xx

  8. TMF says:

    TJ – you seem to be the expert on EW. What is the rule on B going to new highs ? How high can a B wave get above the highs before the count needs to change ? Thx !

    • It is very, very common for B waves to make a new high. In fact, the Elliott Wave Principle states that when the b wave is between 90 – 105%, then you are looking for a “common” flat, where the c wave will just retrace below the a wave. Between 105% – 138%m then one is looking for an “expanded flat” where c = 1.62 x a added to b. When b is greater than 138% and up to 262%, then look for a “truncated flat” or “running flat” where the c wave will not travel below the a wave (like 2010-2011). In this latter case, of a truncated flat or running flat, the market is you that “very strong” market conditions are ahead, and they were.

      Neely and Prechter are pretty much “in-sync” on this point.

  9. phil1247 says:

    Trader Joe

    we plunged down out of your 30 min spx channel
    and are now struggling to get back in

    does this have any significance to the wave structure now?

  10. Peter Sliney says:

    Looks like we’re are on the verge of a major break to the upside. With so many attempts to break the 2100 level it may not look back if it does.

  11. vivelaamo says:

    Another one for you. Both SPX and DOW made ATHs in May 2015. A month later SPX came within 5 point of May highs whereas DOW was nowhere near. Another similar pattern now?

    Just saying….

  12. rd3777 says:

    Atleast 3M has made top today. After the JPN225 and Crude finish their dead cat bounces this top will be complete…..this market is on fumes….going fast…

  13. fishonhook says:

    rising wedge per slope

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