Wednesday update

SHORT TERM: another gap up rally, DOW +285

Last night FED governor Powell gave a speech: Overnight the Asian markets gained 1.3%. Europe opened higher and gained 2.7%. US index futures were higher overnight. At 8:30 Personal income (+0.2% v +0.4%)/spending (+0.4% v +1.0%)were reported higher, and the PCE was reported higher: +0.2% v +0.2%. The market gapped up at the open to SPX 2055 and continued to rally. The SPX had closed at 2036 yesterday. At 10am Pending home sales were reported lower: -3.7% v +5.1%. By 12:30 the SPX had hit 2068. After a pullback to SPX 2063 just past 1pm the market moved even higher. Heading into the last hour of trading the SPX hit 2073, dipped to 2068, then closed at 2071.

For the day the SPX/DOW gained 1.65%, and the NDX/NAZ gained 1.80%. Bonds lost 15 ticks, Crude rose $1.45, Gold gained $5, and the USD was lower. Medium term support rises to the 2070 and 2043 pivots, with resistance at the 2085 and 2131 pivots. Tomorrow: weekly Jobless claims at 8:30, then the Chicago PMI at 9:45. Today the Q2 GDP est. was raised: +2.7% v +2.6%.

The market gapped up at the open today for the second day in a row, after two successive gap down openings. With the SPX opening at 2055 it jumped right over the 2043 pivot, suggesting the rally would continue to the 2070 pivot. Which it did! What we have now is a two day 121 point decline (2113-1992), followed by a two day 61.8%+ retracement (1992-2073). With short term momentum hitting extremely overbought further upside should be limited to the 2070 pivot range, if not the 2085 pivot range. Then the market should pullback at least to the 2019 pivot, if not lower. Volatility continues. Best to your trading!

MEDIUM TERM: downtrend

LONG TERM: neutral


About tony caldaro

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480 Responses to Wednesday update

  1. phil1247 says:


    despite the furious rally
    isnt it concerning that the daily macd spx
    is still on sell below the zero line ??

  2. The symmetry was pretty amazing and the close near 2100 seals it for me.
    Even with the holiday coming up I see no way we end the day tomorrow on the upside. I am expecting a retrace of today move if not a little lower. If that were to happen I place very high odds of an even bigger drop on the 5th.

    The strangest thing about this whole thing is the July 5th reversal date I saw for many weeks now.
    The action is so close to new highs today we could go either way on July 5th. this means a rally to new highs and start of a big reversal after that day, or the complete opposite. based on other factors it seem pretty clear we will have the lows around that date.

    I always bring up alternative scenarios. I weight the options and place the odds. Still see 1950 or so as the lows next week. Need this long weekend to clear my head. Playing yet another one day move SPY PUT at 207.5

    Hope my market calls hold up a little longer.

    • phil1247 says:

      holly …………

      ..good job !

      you are beating the daylights out of so called money managers

      keep up the good work…

  3. hohoho598 says:

    Man I thought I did well with the Jan volatility, this last couple of weeks has been outstanding. Time to cash in to invest in something a bit more solid. GL Bulls, Yellen loves you…

  4. 7dayyss says:

    Well, we started the month at 2097. What kind of monthly close are we going to have?!

    • 7dayyss says:

      Maybe overbought, but don’t be surprised to be green tomorrow also. Holiday weekend, 1st of the month. Maybe a good time to try a short at the close tomorrow.

  5. timmy321 says:

    Tony – “With short term momentum hitting extremely overbought further upside should be limited to the 2070 pivot range, if not the 2085 pivot range. ”

    Market just keeps doing its thing while Tony his!

  6. fotis2 says:

    Crude weekly close bellow 45.72 could be worth a few bob on the short side previous one I was watching never materialized and put in a hammer box

  7. John Arella says:

    Running out of steam but still headed higher, train kept on rolling all night long🙂

  8. phil1247 says:

    next ext long /si target

    18.92 coming up

  9. PHil and Fionna… sitting by the tree………

  10. IMO….looking out long term. The past SP pattern of major resistance
    at 2125-2134 – now, the number of price hits since mid 2015 high,
    is in the area of 5 times. Traders are really trying to bust upward
    above that 2130 ish resistance. It is my view, traders are not
    seeing the 2130-2135 price as a “major wall/ceiling”…Now, suppose
    we really bust above 2130 ish – resistance is 2190-2195.
    Cut to the chase – 2135 is a ceiling, until it is not – can’t get the
    SP to explode up, until that key 2135 is violated to the upside.
    That’s my view…have a great 4th….time to cookout….

  11. johnnymagicmoney says:

    heres my guess for a close……………..selling off now to the 2085 pivot and then rallying towards the close in the low 2090 range

  12. lcd00 says:

    Somebody needs to feed the SPX Hourly RSI a wafer thin mint.

  13. Jack Sparrow says:

    if this is C and it is suppose to be 1.6 times A… right there now

  14. OKE – nice rally to high of 47 from 20.
    Now — due for a pullback to 31.60 a normal
    retrace point….I am watching this trade.

  15. phil1247 says:


    look at tlt

    do you see how it can now make 142

    and hit the upper trendline i showed you???

  16. UWTI I can see this oil etf shares up to $44-45.
    Assuming the 6/27 low was a W4….but, I plan
    to sell my OIL at that UWTI highs, forth coming.

  17. cmucha68 says:

    All time high in spx will be challenged soon again.

  18. cmucha68 says:

    What did I say yesterday: Strong V Shape recovery. 2100 next visit ! So obvious. Don’t need a,b,c or 1,2,3 counting, no expanded or inverse flats or any diagonal or x or other stuff. A chart and Intuition is the best and enough.

  19. captbara says:

    Here comes wave 4 I guess.

  20. phil1247 says:

    cl short traded

    oil collapsed

  21. phil1247 says:


    if u bot slv when i posted

    you should be thinking of an exit strategy now

  22. vivelaamo says:

    Dow and spx seem much stronger than small caps. Anything to read in this?

  23. blackjak100 says:

    TC, no matter what you say sure has the look and feel of major 3 of P5 kickoff.

  24. kevinmick says:

    Chad Gassaway, CMT ‏@WildcatTrader 2h2 hours ago
    The past 30 years, 3 consecutive days of gains >1% on the SPX has led to an avg. drawdown over the next wk (5 trading sessions) of -2.58%.

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