Tuesday update

SHORT TERM: gap down opening, DOW -109

Overnight the Asian markets lost 0.9%. Europe opened lower and lost 1.3%. US index futures were lower overnight, and the market gapped down to SPX 2092 at the open. It had closed at SPX 2103 on Friday. At 10am Factory orders were reported lower: -1.0% v +1.9%, as the market continued to decline. Just before 11am the SPX hit 2083, rallied to 2090 by 11:30, then hit 2081 at 2pm. After a bounce to SPX 2087 by 2:30, the market hit 2081 again and started to rally. This market loves double bottoms. At 3:30 the SPX hit 2091, then dipped to close at 2089.

For the day the SPX/DOW lost 0.65%, and the NDX/NAZ lost 0.70%. Bonds gained 24 ticks, hitting a record low in the 10YR yield and a seventy year low in the 30YR. Crude lost $2.20, Gold rose $10, and the USD was higher. Medium term support remains at the 2085 and 2070 pivots, with resistance at the 2131 pivot. Tomorrow: Trade deficit at 8:30, a speech from FED governor Tarullo at 9am, ISM services at 10am, then the FOMC minutes at 2pm.

The market gapped down at the open for the first time since the beginning of last week. Then the market put in a double bottom by 3pm and rallied into the close. Today the market also put in a double bottom by 3pm and rallied into the close. We can now count four waves, with a fifth possibly underway, from last Monday’s SPX 1992 low: 2027-2016-2109-2081-2091 so far. An impulsive advance if it hits 2109+ or corrective if not. Short term support is at the 2085 and 2070 pivots, with resistance at SPX 2111 and SPX 2121. Short term momentum hit oversold today after last week’s extreme overbought condition. Best to your trading!

MEDIUM TERM: uptrend probably underway

LONG TERM: neutral

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

About tony caldaro

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287 Responses to Tuesday update

  1. R D. says:

    Short AZO,FB,AMZN @Yesterdays highs I consider Tops in on all indices also .Charts & Technical analysis & Gut feeling trump everything else.

  2. Most likely we will not see new highs or new lows in the coming days or weeks.
    We are still range bound, and I believe the SPX will bounce between the top resistance and lower resistance for some time to come…

    Fro a fundamental point of view, it seems inconceivable that we will see new highs. But you never know.

  3. fotis2 says:

    close of 7th 2101.17 days high 2100.90 did gap close?I make it not

  4. vivelaamo says:

    Happy to see gaps filled before we drop.

  5. johnnymagicmoney says:

    what banking issues?

    the delusion continues

    • mjtplayer says:

      Fresh lows today in DB, CS, UBS & RBS. The Italian banks are trading like Greek banks – worthless

    • US market is not about banking or UK or Greece or negative rates. It’s all, 100 percent, purely about domestic economy. How are we doing? Some sift thru these hundreds of reports and see a weak consumer, falling service sector, manufacturing contracting, loss jobs and wages, not to mention zero spending.

      Me, call me the obtuse optimist but I see the US economy as the ONLY GAME IN TOWN.
      In fact now that the others are falling by the waist side where would YOU park YOUR money? SP500 dividends greater than 10 year note. Fancy that!

      No brainer for immediate action.

      • And yet you ignore dozens of other classic indicators that would show we’re ripe for a turn down, the most fundamental being 5 consecutive quarters of earnings contractions and expansion of PE multiples.

        You’re the one saying fundamentals matter, and when it comes to this bear-market-like earnings contraction, you conveniently ignore it. It’s the business cycle, it’s econ 101 stuff. So…who’s ignoring reality in favor of their bias here?

        But you’re not alone. The market has also ignored it, and will continue to do so, until it doesn’t….these valuations will not last forever, and if earnings recover from this contraction without a more substantial correction than we’ve seen…then that will be some kind of record-setting, never-seen-before kind of event, “the bear market that wasn’t”. Not saying it won’t happen, but in this game of probabilities, a down cycle is not only likely, it’s inevitable.

      • Oh, and we are indeed a part of the global interconnected economy. It is most certainly NOT 100% about domestic economy. My company’s earnings are global. The profits (or losses) are centralized in the US. And while the US is still the biggest part of our earnings, it is most certainly married to global economic performance.

        It used to be that investing in foreign stocks and other instruments was a way to diversify. This is becoming less and less true as multiple economies become ever more deeply intertwined.

  6. mjtplayer says:

    Looks like the SPX wants to close the open gap from Friday’s close. On the SPY, that gap lies at 209.92

  7. marks the 34th consecutive time the jackpot has rolled over without a winner. Mega millions $508 million jackpot!

    • NEWBIE says:

      I’m sure if the guy from the article you posted earlier was to win, he would buy big gold bars and put them— well you know where. LOL

  8. On the SP500 5-min, the higher high is likely (i) of iii (circle iii). Likely still in 5, on the SP500 30-min chart.

    SPX - Intraday - Jul-06 1514 PM (5 min)


  9. phil1247 says:


    short has broken

    let the squeeeeeeeze begin

  10. phil1247 says:


    silver traded its extension short again today at 2 am

    i am not shorting silver
    but it remains weak below 20.62

  11. Think if silver can break up over 20.23 again and hold–another leg up.Gold 1373 same thing.Would get to 1388.

    • phil1247 says:


      no mans land between 19.27 support ( extension long)
      and …………………………. 20.62 resistance ( traditional short )

      wait for break of one or the other

  12. EL MATADOR says:

    WOW!!!!! What a insane setup!!!!

  13. Once in a blue moon event: I am going right!!
    ..and once in a lifetime event: I had/have taken positions accordingly..

    Shrihas (@Shrihas1) says:
    July 3, 2016 at 12:55 pm
    If SPX falls to 2080ish and then recovers, then will definitely have ATH. However, it will turn back from 2140ish sharply. In short, SPX 2080 ish then sharply to ATH, then fall to 2040ish that is all ST pattern

  14. mtu MTU says:

    [1pm] SPX update-
    Squiggles, potential expanded flat. See chart.

  15. Here on the five-minute chart are the makings of a “five wave up” structure, complete with alternation. Wave (2) is a short sharp (zigzag), wave (4) is a longer FLAT. Wave (5) is in progress. The five-up likely indicates we are in the fifth up on the SP500 30-minute chart : Wave 5, and this would be sub-wave i. In this count wave (5) should not be longer than (3), or else wave (3) is still extending.

    SPX - Intraday - Jul-06 1301 PM (5 min)

    P.S. The only bearish scenario I would see would be if all upward movement stops at 2102 which would be 2.62 x a three-wave ‘a’ wave up, added to a three-wave ‘b’ down to this morning’s low. But this seems less likely now that price is past 1.62 x a.

    • Now down to prior wave (4), with wave (5), done, and shorter than wave (3). Now price is “deep enough” for wave ii of 5, but certainly can go lower if it wants. Reminder: FED minutes at the top of the hour.

  16. phil1247 says:


    golds ext long is under pressure

    not immediate doom but a warning

    • Phil,do you see GDX starting a climb of the upper BB?

      • Gold usually sells off before payrolls.Gold would sell if bonds sell off.On the other side is Europe.Where’s my Costanza/Seinfeld coin?

        • Try looking no further than our DOLLAR. Is that not a common theme? Look at absurdly low 10 year note. BELOW SP500 dividend yield for the FIRST TIME. Where do YOU suppose money is finding a home? KISS

      • phil1247 says:

        actually its been outside the upper band for 4 days

        so it probably is going to go back in before long

        ira epstein said the most he has ever seen is 7 days but that was with futures

    • phil1247 says:


      remember ..i am talking about the most aggressive ext long under pressure

      for you purposes the ext long above 1302 has a target of 1388

    • rabbittrader1 says:

      Gold on its way to 1500″s .no chance for latecomers to get in cheap. , Afterb that ,a small correction then much higher to match 1920 level the break out to new ATH’s Margin requirements on Comex contracts alresdy double for those not in early (like Moi) at 1100 and 1210 and adding more at 1310. Pyramiding on the houses money as in 1974 to 1980 in this stealth BULL gold <and silver run to ATH's over next few years. When will SPX fall ? SOON! " Rabbit is rich" (John Updike ) Ciao

  17. bud67 says:

    FY Interest – there are several simple paths to use here, that
    best defines a Bull, or Bear market — I am ref the NY Advance/Decline
    has historically been used as a technical guide. What I know,
    the Daily NY A/D line made a high on 4/27/16 – now was it intersting
    is that there was a 2nd high, about equal that of 4/27, on 7/1. Thus,
    we have the NY A/D line at highs, for this cycle – and the potential
    double top, OR. The A/D line continues higher, in the near term.

    Point being a Bear might see the A/D doublle top, as potentially Bearish.

    That said, an NY A/D line advance further up, over the near term would
    suggest the Bull market is still underway….this concludes my comment
    as to the SP trend, ie. Bull, or Bear…..end

  18. Vemala Siva says:

    teo days befoe i discussed retracement to 2065,2060

  19. Jack Sparrow says:

    I am reposting a question i asked yesterday which seemed to have played out as it was the fourth yesterday….the EW oscillator that trader joe talks about – gave me that clue…TJ has good knowledge of EWs – we can all learn from it and use it

    Jack Sparrow says:
    July 5, 2016 at 7:04 pm
    are you seeing the the move up at the end as B of 4 or start of 5

  20. Vemala Siva says:

    after my level 2210 mkt will see a bigger fall

  21. Vemala Siva says:

    but i expect it to touch 2065,2060 and then move up to my final target 2210

  22. Vemala Siva says:

    retracement which i spoke twodays later may be done

  23. Europe closes and off we go…lol.Wonder why.

  24. johnnymagicmoney says:

    So get this…..IF Exxon Mobile can triple its earnings next year they still will be trading at a 20 PE

    BTW Holly The big E&Ps have historically traded at 8 to 12 PEs

    • johnny
      sounds like a short to me…but if one had been shorting this, one would have lost ones shirt. what to do to make money?

      • johnnymagicmoney says:

        I haven’t gone long or short just saying…………when Exxon was at its all time high a couple years ago Oil was at 105………….now its at 46 and Exxon is 10% off its high (and this is after oil has doubled in the last four months and rig counts are increasing again)

  25. micky says:

    cash looking done with a or 1 up

  26. torehund says:

    $Btk just cut through resistance, lifting Rut and Naz 🙂

  27. ajaysinghi says:

    Short spx between 2096-2098, sl 2110, tgt open.

  28. With the closing of today’s cash gap, and the near exact 38.2% retrace, it is still possible to see yesterday and today in an ugly wave 4, as below. Part of the rationale is look at how long wave 3 took to form. Wave 4 should have time to make up in correction what wave 3 took in impulse.

    SPX - Half Hour - Jul-06 1112 AM (30 min)


    • nsteve24 says:

      near exact 38.2% retrace? I see a 29.6% retrace

    • Clarification if you would be so kind. The chart is labeled as if 4 completed but the narrative indicates 4 may have more work to do on the downside.

    • I don’t seem to understand your comment quite well.
      Are saying ugly 4 as it can come further down? or are expecting for the market to recover.

      It goes without saying, that I am not taking your comment as an advice, its just you are very good at reading the charts and appreciate your input!

    • Jimmy Porter says:

      what he is saying is normal 4th wave retracement is 38% of wave 3. It has been ugly because it has been drawn out and the pattern isn’t very distinct. Looks to me he has wave 2 as a complex so wave 4 will be a simple zig zag. Which it hasn’t really shown. So if this retracement holds then makes a new high will be the 5th wave then expect a larger retrace back down to the lows of today or lower for wave 2 of a larger degree.

    • 123 abc says:

      TJ, thank you for the intraday charts, much appreciated.

      I fear the maximum pain scenario would be for a truncated failed-fifth which would deceive everybody in thinking that the entire rise from 1992 is corrective. This would create a deep retracement for wave-2, which everybody would think is wave-c; then followed by an unexpected surging rip upwards for wave-3 to new highs.

    • vivelaamo says:

      Joes a bull. Through all his EW Confusion he always ends up with a bullish count as his favoured one. I smell a bias.

  29. johnnymagicmoney says:

    Was watching a long manager on TV saying how markets would go higher because corporate earnings were going to shoot up 20% in the second half. He looked so uncomfortable in his presentation while another manager laughed at his thesis. It really says it all. Golly management for lack of a better word have this tunnel vision in that they look at x report or y report and use those reports as confirmation things are good to support their thesis and position but disregard all risks globally. Risk is negative return and the higher the probability of that risk being realized the higher the negative return should be. The markets have priced very little risk in and regardless of low interest rates and a supportive FED with the markets PE they are not pricing in negative earnings growth declining productivity and increasing wage pressure either. Even with a supportive FED and a low rate environment stocks are over priced period. People can squiggle all they want but this market is not pricing in risk or the earnings trajectory either. We are interconnected also why do people continue to deny the importance of say the Italian banks or the Brexit vote or China. They are all important and they trickle down to us in some way. Why the Gollys of the world continue to deny this is beyond me. Like Mikey I was long for a long time…..got short briefly in 11 and then started getting bearish in the last two years. I was a little early but I feel I am positioned appropriately given the conditions. If the market goes to new highs its the market so be it maybe I’ll make a change but it probably will be to move more to cash and then rehedge higher.

  30. If low interest rates are thought to be bad for bank profits here,what can negative rates be doing to EU banks?What is the strategy over there with all this?A race between trying to get the economy moving with NIRP (which Japan proved doesn’t work)and banks going belly up.I don’t get what the upside is to all this.Over here,I guess we’ll ignore it a while longer as the NAS is up 20.

  31. stmro says:

    US stocks continuing to dislocate from virtually every other asset class today. SPX is near unchanged and hanging around 12 month highs, whereas DAX is hanging around 12 month lows, gold exceeds Brexit reaction highs and risk currencies sell off. Are we saying that if DB collapses, the US will just shrug it off? Unlikely.

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