Tuesday update

SHORT TERM: Int. wave iv pullback underway, DOW -91

Overnight the Asian markets lost 0.5%. Europe opened lower and lost 1.4%. US index futures were lower overnight as well. At 8:30 personal income (+0.2% v +0.2%)/spending (+0.4% v +0.4%) were reported higher, and PCE prices were reported higher: +0.1% v +0.2%. The market opened five points below yesterday’s SPX 2171 close, bounced to 2170 in the opening minutes, then started to decline. At 11am the SPX hit 2151, bounced to 2156 by 11:30, and then headed even lower. At 1pm the SPX hit 2148, the low for the day, rallied to 2159 in the last hour of trading, then closed at 2157.

For the day the SPX/DOW lost 0.55%, and the NDX/NAZ lost 0.85%. Bonds dropped 10 ticks, Crude slid 40 cents, Gold rallied $11, and the USD was lower. Medium term support remains at the 2131 and 2085 pivots, with resistance at the 2177 and 2212 pivots. Tomorrow: the ADP index at 8:15, then ISM services at 10am.

The market opened lower today, bounced, and then broke below the SPX 2159 level confirming Intermediate wave iv was underway. Minor wave 5 of Int. iii was quite short, ending within the 2 point range of the 2180 level. Since Int. ii began on the first day of July, was a 2-day 35 point decline, and found support near the 2070 pivot with a positive divergence. We would expect Int. iv to have a similar decline, having started on the first day of August, and find support near the 2131 pivot with possibly a positive divergence as well. Short term support is at the 2131 and 2085 pivots, with resistance at the 2177 and 2212 pivots. Short term momentum hit extremely oversold at today’s low then bounced. Trade what is in front of you!

MEDIUM TERM: uptrend

LONG TERM: uptrend

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

About tony caldaro

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96 Responses to Tuesday update

  1. zvyezda says:

    Question for anyone:

    A few months back, the CBOE instituted weekly Wednesday close expiration equity options on the SPX cash index. Has anyone noticed a tendency, i.e. is there enough volume in the product, for stocks to tend to pin to a strike on Wednesdays as well? I saw RDLeo make a comment on his morning posting that lately Wednesdays have tended to be a pause in the weekly directional trend.

    If so, Monday close SPX expiration options will be coming online in the near future and we could see more of a fit and start to the market as a result: a stasis level and then a quantum leap to the next level and more stasis.

    Ever since noon today it seems that 2160 has been the target pin.

  2. Nice battle going on here. Not sure who is going to win, But Any time there is a bear path or a bull path, usually results in Bulls winning. Im short will cover with a close over 2160

  3. scottycj1 says:

    Above 2163-4 SPX should find a firmer bid

  4. Page says:

    Shorts have not given up on Oil yet BUT they will soon ….

  5. phil1247 says:



    took profits on all SCO bought before july 4th

    the next extension short entry is up at 42

    will just watch from the sidelines now

  6. Just for entertainment purposes,I read about an analyst who supposedly uses a timing system and self proclaims,picking market corrections in Aug 2015 and Jan 2016 along with the housing bubble (and the superfecta at Aqueduct yesterday,lol). His next dates for HUGE corrections are:
    Between August 26 and August 30, 2016.

    2. September 26, 2016.

    3. October 20, 2016.
    Mark em down in your calendar.

  7. stmro says:

    Shorting here. Stop on close above 2060.

    I would also add that momentum indicators are useless right now. After a 3 week consolidation any 20pt move in any direction is going to swing things like RSI into overbought/oversold territory. Whichever way this breaks, there’s a good 3-4% in in before it stops i think.

  8. SPX 2160 should be major resistance today. if it breaches we have to wait for the correction.
    I suspect we drop based on OIL’s inability to rally over 40. Might add more Puts if we break yesterdays lows.

    • Longer term the picture is pretty darn clear. Manufacturing services jobs housing income car sales consumer spending all doing very well. Even the dismal headline GDP number of 1.2 showed a huge rise in consumer spending of 4.2 percent.

      When s that correction to test this gap up move going to take place? I had thought this week. Oil is not holding above 40. is that the catalyst for the drop?

  9. CampFreddie says:

    Following on from my previous post, Chicago Wheat has now left the station, all aboard for a nice long ride – Aimho GL.

  10. I think the bears just lost there chance. Will see

  11. scottycj1 says:

    We are in the process of what I call a “Scissor” . A Scissor is when the market cuts both bulls and bears ahead of a fairly good sized move. There is a move that hits both bear and bull stops.
    Yesterday was the bull stops hit. Next….since a scissor always hits both sides the bear stops are due to get hit next. That will likely last into next week….the result of the Jobs Report ? The the leading Scissor’s indication takes over and we get a larger sell off. See December of 2015 …the last scissor. GLA

  12. phil1247 says:



    extension long at 2151 has failed
    we are trying to regain it
    the trend is down
    bearish below 2155 with target of 2136 for latest measured move
    breakout level is 2134 ( coincidentally ?)

    HWB from 2141 to 2178 .618 resistance is 2164 which must hold or new highs are then possible

    the pattern looks like ed or running triangle with post triangle thrust
    ..ie completion pattern for this wave

  13. mcgcapital says:

    FTSE shorts covered at 6625 this morning. Looking to remove covers after the Bank of England meeting tomorrow with ultimate target around 6440.

  14. magnus1234 says:

    DAX30: In P5 but in a lower degree W4 at the moment. My target is around 9970/9930 (gaps). W3 ended in a DT with the convergence displayed only on the daily chart. I think the market will wait for BOE, Thursday, employment, Friday, and some additional numbers from European Banks like HSBC and Credit Agricole today.

    DAX30 1h: http://www.screencast.com/t/0KvtvIINbOeg
    DAX30 daily: http://www.screencast.com/t/n5fAqS9XyC8A

  15. stormchaser80 says:

    My Technicals Model had its first negative day since Brexit

  16. 123 abc says:

    Thank you Tony et al, great OEW analysis.

    Q: In regards to the DOW, did Minor-5 end at 18622, or was there a failed-fifth?

    • tony caldaro says:

      kind of a sloppy ending for Int. iii in the DOW and NYSE

    • thomos1 says:

      Good stab, 123abc. Mess of different ways to count that extended consolidation. In your scenario I’d be concerned that Int. iv could be a flat to alternate with sharp Int. ii, which of course would mean more whiplash and marginal ath just ahead.

      We popped to grab stops above the range, then dipped below it to grab stops, a hallmark of this market before continuing on prior path (uptrend). Considering this entire push is a larger squeeze anyway, that makes sense to me.

      Another viable alt count has flat Int. iv having completed today, which would mean final push is next. My only condition there is that we stop short of the target for that garbage Brexit inverse HS, which aligns well with the upper boundary of TC’s 2212 pivot.

      Very tricky here. Came across an article citing the WarGames quote about
      the only correct play being not to play at all. Entertaining, as I had mused on the same exact analogy just prior.

  17. bouraq says:

    Chart of the day is #ES by https://www.tradingchannels.uk

  18. chicotheman says:

    Thanks Tony.

    31 pt decline from one day into the next, with small hourly RSI div at the low and consistent look to int ii. Significant shift in short term sentiment. Possible setup for the old switcheroo.

  19. Point of clarification….I’ve had this question in my head for quite some time and I’m sure other traders have as well….

    1. If equities are in major c of Primary B, when complete, equities will start primary C down. Primary C down could be a ballpark 540 point decline (2134 – 1810 X 1.68 = 540) or a 1100 point decline assuming SPX tops at 2200 (2200 x.5 =1100)?

    2. When this 5 wave pattern for the SPX completes at lets say 2200, of unknown degree it could be wave 1 and only a 50% – 61.8% retracement would be expected. This could be a ballpark 195 point decline (2200 -1810 X .5 = 195) for a 50% retracement or larger for a 61.8% retrace?

    Is my understanding of your wave count correct and my analysis basically correct?

    • tony caldaro says:

      1. The SPX is either in its third wave up of P B, or it fifth wave up with seventh to come for P B. It can not be five waves.
      2. Referencing #1, there is no completed five wave structure when this uptrend ends.
      Suggest you review the last few weekend updates for clarification

      • 123 abc says:

        Believe the following is correct, Tony shall correct if incorrect…

        1. The maximum upside OEW is expecting is for the current ongoing Primary-b wave is 2335. Primary-c wave is then expected to retrace 45%-50% (1300-1170).

        2. Under OEW, the SPX has already completed a five wave pattern from 666 to 2134. If 2335 is exceeded, a new five wave pattern would be underway starting from the 1810 low.

          • rigged09 says:

            Tony, In option # 2 of 123abc, what level will be seen in the SPX? and what would happen after those 5 waves from 1810 ends? Sorry if you have already answered this q previously. Just confused as to how high can SPX go on ultra-bullish count and how much will SPX retrace from there?

        • 123abc…Thanks but I must be missing something, maybe I am simply having a senior moment. Staying with SPX chart, I understand the SPX is Primary B, and major waves a and b are complete. Further intermediate waves i, ii,iii are complete and the SPX is in wave iv. Is that correct? If yes what other waves are left to complete…not sure how you and Tony come up with these lofty levels for a top. I thought wave iii can’t be the smallest, therefore wave v can’t exceed wave iii. I would appreciate your thoughts.

          • alexh110 says:

            That’s what I was thinking too: the maximum target for Int v is now 2250.
            So 2335 cannot be reached by this uptrend, which seems to rule out the Dow count.
            Maybe you could get there with a Primary B triangle made from 5 major waves; but wouldn’t a triangle also rule out the Dow count?

            • tony caldaro says:

              DOW can do a 1-2-i-ii so no problem

              • alexh110 says:

                Thanks Tony.
                Where would that leave the SPX count? Would 2178 become minor 1 of Int iii?

              • tony caldaro says:

                The Primary B count in the SPX has been underway since the Primary wave A February low. Thus far we have observed a Major wave A uptrend, then an irregular Major wave B decline, and currently Major wave C underway from the June SPX 1992 low. Primary B should consist of three Major waves, and oddly enough the SPX has already made all time new highs.

                There is also the possibility of counting the three wave advance to SPX 2121 as Major A, the decline to SPX 1992 as Major B, and now another three wave advance for Major C. These last three waves could coincide with Majors 3, 4 and 5 in the NYSE. Should this occur these two indices would be back in sync, and the bifurcation will have ended as both decline in bear markets. However, should SPX 2335 be exceeded before all of this unfolds, then the Primary B count will be abandoned in favor of the alternate DOW count. Lots of possibilities in the months to come, while the indices work their way higher.

              • alexh110 says:

                Ok I think I get you.
                So above SPX 2335, Primary B becomes Primary III to match the Dow count.
                But if Primary B tops between c.2250 and 2335 it remains Primary B; but the internal count needs adjusting somehow to avoid Int iii becoming the smallest motive wave.
                Am guessing the adjustment required is not yet clear until we see more of the uptrend.

          • tony caldaro says:

            keep in mind, the NYSE still needs to make new highs

        • fionamargaret says:

          Really good synopsis 123….and you certainly set the scene for interesting discourse…

  20. Thanks Mr C.In normal times,breaking 2159 would lead to 2130,a break of that–even lower.But now this market could just as easily take off to the upside,not for no reason,but because our stocks are being bought by worldwide CBs.Makes it kind of tough to think,just because support is broken–down we go.Not that simple anymore.Good luck all. (Hoping DXY continues lower,though right on cue Lockhart said “rate hike not off the table for Septrmber”.Lol.)

    • vivelaamo says:

      I like the cut of your jib. Spot on post. Tomorrows BOE announcement could spell the end of the retrace. Or is that too obvious? NFP on Friday too. Could be a big couple of days to define where we head from here. Poor numbers no rate increase up we go. Good numbers economy is great up we go. Crazy times

      Still hoping for 2130 region to go long.

      • I don’t think CBs even care about obvious anymore.ECB said before Brexit that they’d goose the market.Bankers and Fed meet and cut deals for stock buybacks in return for market manipulation…and it’s ANNOUNCED!In fact,I think they WANT it known that they’re buying the market.
        But also want to say that $XJY hit resistance at 99ish,which has caused gold to sell.Might be a little early to start filing the 96 gap on XJY,but my guess is that will be done soon (within a week).Gold pulls back on its C&H,as $XJY fills 96, and then goes for a breakout and the XJY as well should break 100.Higher highs until it doesn’t.Good luck all.

  21. torehund says:

    Flattish correction on the Rut broke down a bit, looking for an abc down before the rally resumes.

  22. Jim Miklos says:

    Today was the start of a multi-decade Super Cycle Bear Market. No new highs above SPX 2178. 2131 will break this week.

    • SPYtrader says:

      Jim, you are now NEWBIE’s best friend. 🙂

        • That is an appropriate comment about Newbie…lol.I enjoyed it SPY.Good line.Can’t be serious all the time imho.
          Anyways,on gold–I see ANOTHER C&H on the daily.Probably handle(pullback) from here then…looks like a possible 1432,which would be approximately $200-225 over the 200d.A fine spot for another pullback.Good luck all.

          • SPYtrader says:

            Thanks learned, I thought my comment was done respectfully referring to newbie’s bearishness. No offense newbie.
            Tony, my apologies for the humor. My intent was not to clutter the board or cause any distractions. I guess Chad is just more serious than I am. I do appreciate you cleansing the board of the mean spiritedness.
            p.s. I always enjoyed newbie’s dancing bears.

      • Jim Miklos says:

        I LIKE MAKING NEW FRIENDS! Thanks for the welcome. Look out below boys it’s going to be a fall for the record books. Watch out on the 9th!

    • chadhurley says:

      Jim. I’m not biased on either side. Curious though if you have any additional thesis on your count? Or your arrival to that conclusion..?
      To be clear I respect all opinions on OEW.

      • chadhurley says:

        Focus more on the technicals and less on the comedy relief; then this board can function well. Speak less, listen more SPY.
        My point being I also saw a divergence today which was making me inclined to feel we may have reached a point of more significant control. Further there is more significance to the bifurcation than I think is being illustrated by the charts.
        Curious how others may perceive this as well.
        Again appreciate and respect all views; further how they arrive at them.

        • locanbbs says:

          Agree with Chad. Humor is ok, but disciplined, otherwise the concentration is disturbed and nonsense evolves!

      • Jim Miklos says:

        Chad, My system is proprietary and includes more than just Elliott Wave theory and/or OEW. Cycles are extremely more important in my system. Especially long term cycles as opposed to very, very short ones. For instance I enjoy reading other comments regarding how OVERSOLD the market is after one day down from all time highs since 2009 and actually much, much further back in history than that. My focus is on the forest not a single cherry blossom on a single tree. In my opinion the forest is on fire and is going to be consumed and the fire is going to last a very long time. Good luck to all.

    • Amit Kumar says:

      Yes, I agree with you.Wave 5 Done.

  23. Ajney says:

    Thanks Tony. The energy wave magic was evident in US stocks today and was impacting European indices since the predicted date of August 1. Expect the weekly closing to be on the negative sans a big minor energy wave reversal later in week (usually unlikely). In IWM 115 level may be tested in this short term downtrend. Gold closing above important trend line, however, its parter in action, Silver is yet to do so, so short term bullish only.
    Details at http://www.astroanalytics.wordpress.com

  24. fotis2 says:

    Tx Tony missed a DT confirm on daily by a whole 20 cents 😉

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