Wednesday update

SHORT TERM: gap down opening then rebound, DOW +78

Overnight the Asian markets lost 1.0%. Europe opened lower and lost 1.6%. US index futures were lower overnight, and at 8:30 the Trade deficit was reported larger: -$41.1B v -$37.4B. The market gapped down at the open to SPX 2080, dipped to 2076, then rose to 2085 by 10am. At 10am ISM services were reported higher: 56.5 v 52.9. The market then pulled back to SPX 2074 by 10:30 and started to rally. At 2pm the FOMC minutes were released: The market rallied back to unchanged on the week, at SPX 2101, just before a 2100 close.

For the day the SPX/DOW gained 0.50%, and the NDX/NAZ gained 0.75%. Bonds lost 4 ticks, Crude gained 75 cents, Gold rose $7, and the USD was lower. Medium term support remains at the 2085 and 2070 pivots, with resistance at the 2131 and 2177 pivots. Tomorrow: the ADP at 8:15, then weekly Jobless claims at 8:30.

The market gapped down at the open today for the second day in a row. Something it hasn’t done since the Brexit vote two weeks ago. After opening below yesterday’s low the market traded down to SPX 2074 exactly when Europe closed for the day. It then rallied to 2101, its highest level of the week. The rally from SPX 1992-2109 does look impulsive after all, and the recent pullback corrective. As long as SPX 2074 holds, the next leg up is underway. Short term support is at the 2085 and 2070 pivots, with resistance at SPX 2111 and SPX 2121. Short term momentum displayed a slight positive divergence at today’s low, then rose to overbought. Best to your trading!

MEDIUM TERM: uptrend probable

LONG TERM: neutral


About tony caldaro

This entry was posted in Updates and tagged , , , . Bookmark the permalink.

437 Responses to Wednesday update

  1. stan502 says:

    Good morning. Thanks Tony and all. Nice summary post by David Larew of Opex tendencies Short side has been one hard trade, don’t really need to play in the blender. One theory making the rounds is up to the Donald, down after.

  2. locanbbs says:

    UPDATE: Buy-signal Spx with pullback; now breaking out? (hourly – futures):

      • fionamargaret says:

        Thanks Locan….and for the update yesterday of Germany.x

        • locanbbs says:

          Surely welcome! And thanks for your reply. I will update shortly.

        • locanbbs says:

          By the way, Germany is now among the weakest in BB%, while most indicies worldwide have now given buy-signals with this indicator.

      • locanbbs says:

        On the level of individual stocks the upbreak is not convincing yet. New buy-signals mostly (apparently) special situations: small banks & financials (IBKR), infrastructure (GLDD), networks (INAP), satellites (GSAT), pharmaceuticals (ARNA). (NO buy recommendations, just a more or less coincidental selection – what do you say?)

        • fionamargaret says:

          I would think random Locan, but it is always interesting what comes up….you do well.
          Did you read my take on German bunds and bunts…thought you would laugh..(yesterday).

      • locanbbs says:

        Update: Stopped out again for a small loss (not every buy signal is an immediate winner; about one in four). The market is weak, without conviction and running on “CB-gas”, especially overnight.

        • locanbbs says:

          There is also some upward drive from the 6-week cycle, which just bottomed. This looks like it’s “pooping out” already and will possibly lead to just another leg down soon. Watching closely.

  3. Got to be a bear market! OIL plunged 5 percent and the stock market followed! UK is causing massive ripple affect to our shores like nothing before it. I can see why all the shorts are licking their lips. Wait till the dismal jobs report. Based on preliminary data it will be a disaster. Minus 2.3 million is my guess.

    Correct me if I am wrong buy UK problem is sort of a known entity at this stage? market is back towards it all time high with not even a ripple affect in equities moves. All the money is pouring into our bond market for safety but not our stock market. We only have the best consumer related data of all major countries but why should that influence investors. The drop in OIL caught everyone off guard but they wake up tomorrow and realize their mistake.

    Just trying to keep it real. I have no clue what to expect but neither does anyone else. No one calling for big moves that is. Me, I doubled my money and have been on one sweet ride. I even took half my winnings and bet for 210.5 Call expiring tomorrow at an absurdly high .27 My assumption is 2 fold. In a bull secular trend forever. Two, when negative forces cause no damage to the market you assume positive pressure is causing this.

  4. R D. says:

    The Truncated bottom a hallmark of this whole structure like they say don’t fight the the Fed.Spent $25+ Trillion and the Corporate insiders fatten there wallets.

  5. vivelaamo says:

    I really hope this tanks soon so I can load up longs. Hate being a bear! Schadenfreude springs to mind from the like of Newbie and Johny whenever the market drops.

  6. mjtplayer says:

    SPY “spinning top” daily candle today

  7. Here’s an update shortly before the close. There is no good evidence that wave v is not continuing. Therefore the best count – at this point – is -i and a flat -ii set of sub-waves within wave v. There are two alternates because of the near exact v = i measurement. The first alternate is wave v at today’s high in a truncation. That makes some sense because wave iii was a 2.618 extension, and truncations predominately happen when wave three is very extended.

    The second alternate is an “Ending Contracting Diagonal”, with wave (i) of v at today’s high.

    SP500 (30 Min)  7_7_2016a

    Bottom line – a upward gap on the payroll employment report tomorrow might continue wave v,


    • EL MATADOR says:

      what if it just plunge like oil did today….why not possible

      • Didn’t say “it wasn’t possible”. Stop putting words in my mouth. There is no evidence for that at the moment. If it does plunge tomorrow for whatever reason, the V is at the high or we are getting a larger triangle. If you “guess” you can ‘speculate’ all you want. If you “measure” then you come to fewer possibilities, including a clear invalidation point, as below the origin of -i, above.

        • TJ, don’t be so defensive please. With text comments, sometimes it’s hard for a person to adequately express themselves. We respect you. Just trying to learn as we go. We’re all in this together. 🙂 OK?

        • TJ, don’t be so defensive please. With text comments, sometimes it’s hard for a person to adequately express themselves. We respect you. Just trying to learn as we go. We’re all in this together. 🙂 OK?

    • floyd drummer says:


      thanks for the elaboration on v.

  8. phil1247 says:

    this is where da boyze want the es now

    move along

    nothing to see here

    good nite all

  9. micky says:

    wow whataday!

  10. I’ve traded stocks and futures for many years and have learned not to trade the breakouts; rather wait for the “false breakout” to fail, then short…so, bottomline, it’s best to wait for a stock to clear resistance, then drop to get short. We are now in no man’s land, where you will be excited and then depressed…and wind up with less money. Turtle Soup Trades.

  11. DAX 5th starts ECB day this month.

  12. captbara says:

    Today’s action is not bearish enough for bears. Too many 3 waves.

  13. johnnymagicmoney says:

    Here come the idiots again

    Ramp ramp ramp

    • phil1247 says:

      long from wed low supported

      you could be looking at 2110 es in am

      if boyze want to run in shorts overnite

  14. LBHK says:

    Tony, do the 2108.71 and 2109.08 highs qualify for negative divergence labelling on the daily chart or is it just splitting hairs?

  15. phil1247 says:

    took profits on half of spxu

  16. 123 abc says:

    Tony et al, how are you counting the fifth wave from 2074 to 2109 thus far? Personally just see three waves 2097-2090-2109 —can fifth waves consist of just three a-b-c waves? Furthermore, the futures haven’t taken out the highs of the third wave. Is the rise from 1992 corrective after all…?

  17. Peter Sliney says:

    He will win who knows when to fight and when not to fight. Sun Tzu
    Small wisdoms can make a big difference.

Comments are closed.