Wednesday update

SHORT TERM: pullback continues, DOW -37

Overnight the Asian markets lost 0.4%. Europe opened lower and lost 0.2%. US index futures were higher overnight, and the market opened one point above yesterday’s SPX 2182 close. Right after the opening minutes the market started to pullback. The pullback continued throughout the day with nothing more than 2-4 point bounces. At 2pm the Budget deficit was reported lower: -$112.8B v -$149.2B. At 2:30 the SPX hit 2172, bounced to 2177 by 3:30, then closed at 2175.

For the day the SPX/DOW lost 0.25%, and the NDX/NAZ lost 0.35%. Bonds gained 12 ticks, Crude dropped $1.30, Gold rose $6, and the USD was lower. Medium term support drops to the 2131 and 2085 pivots, with resistance at the 2177 and 2212 pivots. Tomorrow: weekly jobless claims and export/import prices at 8:30.

Interesting juncture. The market opened slightly higher today then immediately resumed yesterday’s pullback. At the SPX 2172 low the market had declined 16 points from yesterday morning’s all time high at 2188. So far this is a normal pullback for a Minor wave during this uptrend. However, with negative divergences on the hourly/daily charts and a potential five Int. waves up in 4 of the 5 indices, this pullback could turn into a correction. The only index that has not made a new high during this last rally is the DOW. It suggests this pullback is only Minor wave 2 of Int. v. These two options were posted earlier on the SPX hourly chart. Time to choose which scenario you prefer, or just hedge longs and watch Crude which led the market lower today, and wait to see what unfolds. Short term support is the at 2131 and 2085 pivots, with resistance at the 2177 and 2212 pivots. Short term momentum is displaying a slight positive divergence at today’s low. Trade what’s in front of you!

MEDIUM TERM: uptrend

LONG TERM: uptrend


About tony caldaro

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144 Responses to Wednesday update

  1. John Arella says:

    Went 5 waves up with a running correction so market going higher tomorrow😉

  2. blackjak100 says:

    TC, any reason you see why drop to 2172 couldn’t be minor 4 of Int v?

  3. Tony, I know you give 50/50 odds on your two primary counts, but are you leaning towards one over the other.

  4. vivelaamo says:

    Ajay Christine and any others expecting a drop. I say this with the upmost respect but Ajay on Monday you advise it’s good to go short in a day or 2. When I questioned this you said I always go bull at the top. I have been Bull since all time highs and then mega bull when BOE cut rates and launched QE. Even TC is keeping to a bullish view as it’s very dangerous trying to pick tops in the climate. Do you see why?

    • ajaysinghi says:

      I said be ready to short in a day or two and I am still saying the same.

      And you will soon see why it’s not a BTFD MKT. I am not a perma bear. I did tell you at 1900 that we will go up and make a new high and you did not want to catch a falling knife back then.

      We.are at 2187 and I am going to short this MKT when the time comes and that time is coming soon.

      Rally will last only a few more days.

      • vivelaamo says:

        Good luck. I hope you’re shorts come good. I just can’t see it in this climate.

        • Viv, the Fed is no longer actively supporting the market (at least publicly) and central banks are not invincible. As evidence, look at Japan. The government there has been trying to stimulate the economy and stock market there for decades, with minimal results. And, you do have to ask yourself why all this stimulus is needed. Perhaps it’s not working and they’re fighting a losing battle? There are major negative trends all over the world — demographics, debt, etc. that can not be easily fixed with CB manipulations.

          • vivelaamo says:

            I agree the reason for the stimulus is because economies are not growing. But the stock market is completely out of sync with the economy. BOE are printing money by the billions to purchase bonds from pension funds which in turn is going in to stocks. It will create a bubble which will burst eventually but we could go much higher yet. They have only just started.

  5. phil1247 says:


    extension long targets about to be hit at 2186

  6. pooch77 says:

    Just a thought Bradley turn was Aug 8th +-4 days,next one late Sept

  7. pooch77 says:

    Could new dow high be top

    • stmro says:

      2195 to 2220. If it closes up here i think we get a top in OPEX in that range.

      • just curious what everyone is looking at. Tonys count as of late seems right on. 2172 ended minor 2 minor 3 should take it up to 2220 minor 4 to 2200 then minor 4 up to 2230-2240. So shorting now seeps premature, unless 2180 is broken in the short term. No?

  8. pooch77 says:

    Could new dow high be top

    • vivelaamo says:

      No. Top won’t come until QE is done. By then if we again hit the numbers we are at now it will be a crash. That’s how far we will need to fall.

  9. Lee X says:

    Nice call on CL this a.m John Arellano !

  10. phil1247 says:

    oh mamma

    /CL trend up now

    44.54 target validated ……….

  11. Amazingly inaccurate and disrespectful attitude on the part of some people who post on this blog demonstrated over and over and over again.

    • vivelaamo says:

      With all due respect is that people who disagree with your bearish view? Technical there is nothing bearish about this move. Fundementals are irrelevant.

      • No, Viv, if you read the comments left today you’ll see one in particular directed at Tony that stands out. And, Viv with all due respect, your thesis seems to be the market is going higher because it has gone higher. You said recently “there is no top.” Markets correct, that’s a fact.

        • vivelaamo says:

          ‘your thesis seems to be the market is going higher because it has gone higher’ Sounds so simplistic but its true! Markets do correct and that is exactly what happened in both 2015 and 2016. The correction is done.

      • Also, I don’t trade on fundamentals at all, I trade purely on technicals analysis. Moves that are a suprise with respect to fundamentals are easily explained by technicals. I often laugh at the media when they attribute a large move upward to an irrelevant news event, when it was clearly because the indicators were showing the market was oversold.

  12. H D says:

    Tony got them all in sync again. DJI HH, mission accomplished?

  13. floyd drummer says:


    i see the updated 60 min chart, ….nice call.

  14. blackjak100 says:

    Dow made new ATH so my gut read is $SPX completed minor 4 of int 5 yesterday. int 5 should complete 2195ish now.

  15. phil1247 says:


    this is what i was looking for yesterday….but must CLOSE over 18 d

    note beautiful test of support of long from lows at 41.37

    still could not buy until extension short .618 broke…. which it did at 41.87

    bought SCO just above there and we never looked back

    selling 1/2 SCO now for obvious reasons but
    -23% target is valid at 44.55

  16. There have been many posts noting the constriciton of the Bollinger Bands on the long term charts. This excerpt from Stockcharts explains how to determine which direction the market will break. Many of the indicators they recommend using have peaked, are about to peak, or are declining:

    “Because the Bollinger Band Squeeze does not provide any directional clues, chartists must use other aspects of technical analysis to anticipate or confirm a directional break. In addition, to basic chart analysis, chartists can also apply complimentary indicators to look for signs of buying or selling pressure within the consolidation. Momentum oscillators and moving averages are of little value during a consolidation because these indicators simply flatten along with price action. Instead, chartists should consider using volume-based indicators, such as the Accumulation Distribution Line, Chaikin Money Flow, the Money Flow Index (MFI) or On Balance Volume (OBV). Signs of accumulation increase the chances of an upside breakout, while signs of distribution increase the chances of a downside break.”

  17. Page says:

    Looks oil bears are going to be squeezed badly. WTI may hit 46. I have no position.

  18. The dollar should strengthen and hit or break above 100 before year is out. Gold has very limited upside IMO. Inflation numbers already popping up. Big surge in import prices excluding petroleum’s slide. .5 percent not seen in 5 years. I believe the big surprise that shakes this market will be inflation. Retail Sales tomorrow will set the stage. In recent past latter half of year was sluggish. if sales hold up at or above .3 percent we could be witnessing a confluence of events that form a surge in inflation not seen this whole bull cycle.

    Any technical chart on Gold explaining any trigger points for a reversal?

  19. Scott C says:

    Banks are starting to hire and start new projects to go after hanging fruit… both dev and business side… is that a sign f a top or a sign or a new leg? I had heard in the past that banks grow/expand at tops. thoughts?

    • Banks are at absurdly low levels of spending and has been for a long while. I believe a lot has to do with staying competitive and anticipation of rate hikes. It is not a latter stage development and I believe it will (NOT) result in a surge of spending on their part UNTIL earnings catches up. The pathetic GDP numbers were from contraction in business spending. Even if they start to spend again it will not be at high levels. Fiduciary responsibility to shareholders to squeeze profits any way they can. Spending only jumps when real inflation and sustained spending by consumers happens. Watch the consumer for clues.

  20. John Arella says:

    Alternate count where minor 3 = minor 5 puts ceiling at 2197 so watch this number, if it passes 2197 then very bullish. This is the real thing😉

  21. Big day tomorrow. Retail Sales will give a great clue to whether the spending surge was temporary. Excluding Gas and Autos it better hit the .3 percent rise or greater. I am pretty darn sure the street is focused on spending. The import prices excluding the big drop in petroleum was up .5 percent. not seen since 2011. Food and non-petroleum industrial supplies caused most of the gains. Pressure is clearly mounting for inflation to show. Once it does show the FED will be behind the curve and will have some catching up to do. I know most are skeptical they will raise rates anytime soon and perhaps the election plays into that notion. I however believe if the data keeps showing inflation pressure they will raise earlier than December.

    Any decent drop should be as a result of really bad retail sales tomorrow. if it in-line I see no external reason to expect big swings. I mentioned weeks ago that the bulk of the big moves is behind us but we should still be in an upward trajectory for a while longer.

    Sitting this out till I can see sharper and faster moves. Enjoy the slow summer months. If we do continue higher in a controlled fashion the end of the month can result in some decent trades.

    As I have stated in February, we are still in the long bull run and absolutely nothing technical or fundamental is going to derail this trend for many month (UNLESS) spending reverts back to the slow upside trickle in the past. Spending is key. I would focus exclusively on that for now. the reason is simple. Baked in 9 percent rise in earnings by year end can only happen if consumers spend at an accelerated pace. earnings do matter. No Fed controlled trillion dollar market, no omnipotent group that keeps the market from falling. Ludicrous to even think it’s possible. Certainly no hidden non-transparent FED actions.

    The amount of disbelief that this 7 year market is being manipulated on a daily basis is the same number of people that believe Donald Trump will be our savior. Staggering numbers. if it wasn’t for his attempts to sabotage his own election the vote will be very close. Just my personal observation.

    • Just to prove retail is strong,Macy’s will close 15% of its stores…

      • They have 500 stores, and cutting 100. that’s like saying look at JC Penney’s disastrous decade. Only true measure is TOTAL consumer spending. You can’t hide spending increases. we had a surge of 4 percent last quarter but brick and mortar stores didn’t see much of it. Are you suggesting there was no surge? if you believe the numbers it can only mean consumer tastes have changed. The horse and buggy industry was disastrous after auto’s were introduced. I don’t believe we had a recession because of it. In fact the recent import prices were not encouraging for slow growth low inflation. I would stop trying to prove a failed point and look at the economic data that drive markets. If Macy’s was such a dire basket case they wouldn’t have surged on the news. lean and mean should have been their theme 7 years ago.

        I’ll stick to my macro view that has been proven over the years to come true. In fact all my posts on this board regarding Macro views has already happened. I look exclusively on consumer spending going forward. A stall here would alter my immediate market view. I stick to no premise if my assumptions fail to materialize. The street needs to see spending break out beyond its slow crawl these last 7 years. Only way earnings can be achieved.

        Please use all the data available and without bias look at its headline numbers and how it breaks down. The headline number on Import prices was only .1 percent increase. Without the big drop in petroleum prices I would have shown .5 percent. A huge difference. I only report what is available and interpret trend accordingly. I never try to fit the report to conform to my assumptions. that is a prescription of losing market bets.

        • tony caldaro says:

          Tony does not like multiple paragraph posts either Gary

          • Guess Christine’s rants that usually have a 5 to every 1 post of mine is acceptable. Her notions have been wrong for as long as I frequent this blog, while mine has a pretty darn good track record. Since her position is in line with yours you do have the discretion to ban me. I have not attacked and only point out what I believe is true. If my constructive criticism is unhelpful ignoring them is the usual tactic. If you look back at my CRITICAL posts you would see I discovered consumer spending would surge way before it actually did based on bad headline numbers. I also was adamant February was a breakout. Also stated the drop in US yields post BREXIT meant inflows into out markets, not a dire warning.

            Never mind. My written word is testament to my ability to help frame markets future path.

            BTW, if you don’t want me back just say the word. I am wired to defend my position and also appreciate opposing views based on real data points or technical indicators. Have received much needed technical confirmations on trend.

            “Tony does not like…” In the third person?

            “Gary will stay away till Next Year or forever based on your response”. that way I will not confuse the single minded assumptions by placing a burden on the thought process. I guess my words are hurtful? Last of my boring long winded responses. Good Luck all.

  22. “Crude-oil prices CLU6, +0.46%  dropped 0.3% to $41.58 a barrel on Thursday after the International Energy Agency cut its forecast for global oil demand next year, citing a dimmer economic outlook. The agency also warned in its monthly report that a “massive” stock overhang is keeping a lid on oil prices.

    There are no Federal Reserve speakers this week. The next big event for the central bank will be Chairwoman Janet Yellen’s appearance at the Jackson Hole conference on Aug. 26.”
    –Marketwatch notes today.
    1)Oil down=Stocks down again?Especially after the changeover from the summer driving season.
    2)August 26th,just happens to be the first potential date of a supposed crash/big correction,I posted a week ago .Now I see the probable reason why the analyst picked that date.
    3)Gold needs a big up day soon.Charts on XJY have a huge –div staring it in the face at new highs(100).Not sure how this plays out short term,but lean back to 96 on XJY–taking gold with it.Then higher again.
    Good luck all.

  23. captbara says:

    Looks like bears dropped the ball again.

  24. magnus1234 says:

    DAX30: In P5.3.1. Completed? Today DAX30 closed the “New Year Gap” (dashed yellow). With a little bit of imagination one can see a DT forming (10 min chart). Soon correction is my view.

    DAX 10min:
    DAX 1h:
    DAX Daily:

  25. Possible formation of 3 elliott wave on the daily chart of the Dow Jones, which may lead the index to a strong achievement.!graphic/c2ln

  26. John Arella says:

    My charts:

    Nasdaq with 5th wave down failure

    Where we are on spx which also had a failure yesterday

    Up Up and Away🙂

  27. vivelaamo says:

    Still can’t see any corrections. At the most we may test the previous ath breakout. Continue to scalp the dips. No point shorting.

  28. stmro says:

    Yesterdays dip erased in overnight. I give up. Call me when we start moving again.

  29. manunidhi21 says:

    Namaste Tony.
    what crude has to do wd spx count ?

  30. CB says:

    Thanks Tony.
    So after that lengthy range-bound market, 2175 finally becomes support because you used your magic green pencil today, Tony.. Nice job! 🙂

    • CB says:

      so 2190 is a conservative min target, more or less… from that trading range…GL everyone
      Thanks for that + div yesterday Tony. Nice call!

  31. chicotheman says:

    Thanks Tony.

    Still a decent chance for another quick new high with the last 2 days as minor 4 of int 5.

    • bhuggs52 says:

      Hey Fiona, thanks so much for posting RayJames. His charts and comments are extremely cogent. Does one have to be a subscriber to access him directly? Thanks again.

      • fionamargaret says:

        No bhuggs, I am not a subscriber, and have no connection to Raymond James…..totally love Jeffrey Saut and their work though.
        I get mail that seems to just appear……usually interesting and different.
        Drop a line to Jeffrey if you want mail too…x

  32. stmro says:

    Im in the correction camp provided we close below 2160. Still targetting 5% to 2080.

  33. 123 abc says:

    Thank you Tony et al for the OEW update providing the two possible scenarios.

    Q: As per the weekend update, is the third possible subdividing scenario still possible? i.e. Currently progressing in Intermediate-iii→Minor-3 wave?

    • tony caldaro says:

      a Minor 1 – 2 is a subdividing scenario
      no mention of any specific subdivding Int. iii scenario over the w/e

      • 123 abc says:

        Thank you Tony, I believe I may be referring to the same thing, so my apologies in advance.

        In regards to the following text from the Weekend Update: “…or the entire uptrend is actually subdividing into a much larger uptrend. In which case Int. waves one and two would remain the same, but Int. wave three and four would actually be Minor waves 1 and 2 of Int. iii.”

        1. Is this scenario still possible?
        2. Is this scenario best referred to as “Minor-1–2 subdividing” or “Intermediate-iii subdividing” ?

  34. EL MATADOR says:

    Last Thursday I mentioned the Sept 2014 fractal as one of 3 probable symmetry dates

    Sept 2014 hourly chart:

    Note drop from 2011 to 1978 = 33 handles
    Note rally from 1978 to 2019 = 41 handles

    today’s Hourly chart:
    Note drop from 2178 to 2148 = 30 handles
    Note rally from 2148 to 2188 = 40 handles

    Now compare the RSI, MACD and all the micro waves, IMO, they reek of the same symmetry but does not mean the potential trend change have to be of same magnitude. Could be less, equal or greater time will tell.

  35. bouraq says:

    Chart of the day is $WTI (CL) by

  36. jobjas says:

    SPX update

    Crude in wave 5 of 3-3-5 from $51.6 ,heading to $39

  37. xpto31 says:

    Thanks tony! When you say correction, how much for the wave 2, 5 / 10. % from ATH?

  38. mike7x says:

    Thanks Tony. Oils well that ends well.

  39. fotis2 says:

    Tx Tony daily 3BRs sell signals on SPX and CL.On SPX looks like it could be a good short.×45

  40. Ajney says:

    Thanks Tony. We got a red day as expected however the short covering around predicted times was very weak. This does not bode well for the market short term. Tomorrow our bias is positive. However, an energy date is hitting tomorrow in the middle of day which makes it in decisive. In fact we have a cluster developing for next week. So we prefer to stay out of equity markets. Bond yields are also moving in a way not so favorable for equity markets. Details on this, gold, and bonds on

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