Tuesday update

SHORT TERM: market opens lower, DOW -84

Overnight the Asian markets lost 0.7%. Europe opened lower and lost 0.7% too. US index futures were lower overnight as well. At 8:30 the CPI was reported unchanged: 0.0% v 0.2%, housing starts were reported higher: 1211K v 1189K, and building permits were reported lower: 1152K v 1153K. At 9:15 industrial production was reported higher: 0.7% v 0.6%, and capacity utilization was reported higher: 75.9% v 75.4%. The market opened six points below yesterday’s SPX 2190 close, reached 2180 in the opening minutes, then bounced to 2185 by 11:30. After that the market drifted lower to end the day at the low, SPX 2178.

For the day the SPX/DOW lost 0.50%, and the NDX/NAZ lost 0.65%. Bonds lost 8 ticks, Crude rose 85 cents, Gold gained $7, and the USD was lower. Medium term support remains at the 2177 and 2131 pivots, with resistance at the 2212 and 2252 pivots. Today the Q3 GDP estimate was raised: 3.6% v 3.5%. Tomorrow: FOMC minutes at 2pm.

The market opened lower today, after yesterday’s new high at SPX 2194, and continued to decline to 2178 at the close. This activity was unexpected, as we thought SPX 2200 to 2212 would be next. We now have four overlapping waves from the Int. wave iv SPX 2148 low. This suggest possibly an ending diagonal triangle is forming for Int. wave v: 2188-2172-2194-2178-…. There are also a couple of other short term possibilities. But for now we will go with the diagonal scenario, suggesting an uptrend high around SPX 2200. Keep in mind, any drop below SPX 2148 suggests the uptrend could have already ended. Short term support is at the 2177 and 2131 pivots, with resistance at the 2212 and 2252 pivots. Short term momentum is displaying a positive divergence at todays lows. Trade what is in front of you!

MEDIUM TERM: uptrend weakening

LONG TERM: uptrend

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

About tony caldaro

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88 Responses to Tuesday update

  1. johnnymagicmoney says:

    I doubt very much that when this thing peaks that most people on here will be thinking anything else than this is going much higher. I also have seen many many people who were “bears” on here now have become bulls. There are those that have been bullish all along and kudos to them but man o man its getting lopsided on the bull side again

    • vivelaamo says:

      It may seem that way but there are still a lot of bears out there. Way too soon to call a top in my opinion.

    • mcgcapital says:

      Johnny I agree with all of your sentiments but the way price tends to work when the market has been trending up like it has is to consolidate. We need to see some of the intervals weaken before we can drop 100+ handles in my view. Feels like a pullback is coming and selling here gives a limited risk set up which is what it’s all about as we’re only 12 points from the high. It’s unlikely we’re going to go from 2200 to 1800 now without a drop to 2100 then printing a lower high for example. The algos are in buy the dip mode so that sentiment has to reverse which takes time. However, the long term picture hasn’t changed (expensive valuations, late in the business cycle, limited central bank policy tools left) so it’s not an investors market. Just got to be patient as this may take months before something changes.

  2. John Arella says:

    My count, still bullish😉

  3. phil1247 says:

    / CL

    targets at 47.02 and 47.17 about to be hit

    going to take off 1/2 UCO on pop up

  4. vivelaamo says:

    Why do images come out so large. All I did was post a link from my phone. Sorry Tony.

  5. vivelaamo says:

    I think we will consolidate for the next 2 months until we reach support and the trendline from Feb low’s. That will be a very good place to go Long for the continuation of the new bull market.

  6. Fed–say very little and do less than that.Still in a range in most categories.Good luck all.

  7. Peter Sliney says:

    This kind of sudden action seems to happen at a time when the market wants to stop out early shorts. We’ll see.

  8. Page says:

    SPX and Gold, expecting very sharp move to upside right after the minutes.

  9. Dropped below the 20d SMA for only the 3rd time this year on GdX.lower bb at 28.Very favorable chances we get down there.Fed surprise dovish minutes would save the day?

  10. micky says:

    looks like abc is done ?, question then was it a bigger A or new highs . Also looking like Lee,s ditd pattern ?

  11. herringjd1 says:

    my first purchase of uvxy has more decay than I had in my all of my teenage years

    • fionamargaret says:

      UVXY is going to go positive…number progressions (up and down) are in equilibrium….causes neg/pos whipsawing…

      • fionamargaret says:

        …meant UWTI…of course…sorry….

      • herringjd1 says:

        Thank you…I was in and out of uwti. Appreciate your posts Fi

        • fionamargaret says:

          I went long SPXL and IBB at the same time I thought the equilibrium issues in UWTI would be resolved upwards.
          UWTI had the same equilibrium issues yesterday…..seemed like we were standing still.

  12. phil1247 says:



    extension shorts in force
    bearish below 2170.5

    reached initial support 2166 …battleground area

    note how all this downside action began when ext long at 2187 failed

  13. H D says:

    GM Tony, all. SPX 2,168.50 – 2,178.10 10 HanDles. Each day this week/ 10 point range. exactly. Possible for range expansion, whipsaw Wednesday with minutes on deck. GL.
    CL- widowmaker:mrgreen:

  14. CB says:

    gap from Aug 5…

  15. The pattern for $XJY has been fill the gap within 3-4 weeks.There was a gap up at 96 late July.This gives us a timeframe around or before Jackson Hole for a move down..My thinking is Yellen comes out hawkish–dollar takes off,yen reverses to 96 gap-which is below the 50 d(where it also likes to correct to,but still a higher low),and then more rally.GDX would probably go to fill a gap or two as well.September is supposed to be the start if gold’s bullish seasonals–we’ll see if it happens this year.Good luck all.

    • The only gap below here on GDX is 25.67 from June.Heckuva drop from here if it happened.It will all depend on the dollar.A breakout on $XJY above 100(and DXY breakdown under 93.30) would be a GDX buy.Until then,I’d be careful with PMs.

    • johnnymagicmoney says:

      Janet is a wuss – she wont do squat

  16. phil1247 says:


    extension long at 45.78 held nicely

    its target is 47.17

  17. magnus1234 says:

    DAX30: In P5.3.2. As indicated some days ago the DT for 5.3.1 seems to be the correct count. Target for the first corrective wave down is 10 460/70. The target for the whole P5.3.2 is 10 350 or 10 100. It seems that DAX is a leading index for SP500.

    DAX30 10min: http://www.screencast.com/t/FfpdQP0gr4V
    DAX30 1h: http://www.screencast.com/t/FiyYTwglJBY4
    DAX30 Daily: http://www.screencast.com/t/n0qxujxqYL

  18. Lee X says:

    Good stuff guys
    Thx Tony

  19. phil1247 says:


    2172.5 target hit

    lets see if extensions get going now for downside acceleration

  20. mjtplayer says:

    Utilities are breaking down, a sign that rates are about to rise?


  21. phil1247 says:


    this wave surpassed a=c so 1.618 level is 48.15 if rally continues

    interestingly the short after the trend break
    that led to the recent collapse is at 48.03
    it never traded and could be still valid

    we are in extension longs so the power of a third wave or c wave is there

  22. fotis2 says:

    CL just noticed this setup on the weekly.Tony +1000

  23. torehund says:

    Thanks Tony.
    Staying firm and hyper-bullish near term. Destiny awaits, gut Plus techs.

    • vivelaamo says:

      Thanks Fiona. Particularly interesting to see point 3. I guess certain indicators can be interpreted both ways. A 5% pb from here would be very welcome.

  24. NEWBIE says:

    Newbie says top now drop

  25. Just one thing to mention tonight.If you believe in negative divergences,there are 2 of them in the $XJY for the daily and weekly.I can’t get bullish on gold with that hanging overhead.Maybe it’ll mean nothing–like it’s meant nothing for the S&P a few times lately.Odds are though…for THIS,it will matter.Short term strategy only.Good luck all.

  26. Here’s my best guess for next day or so – an a-b-c 5th to complete an ending diagonal.

  27. rd3777 says:

    A little early for this advance to end yet I think. Another 5 wave advance would fit better into the last week of august or the first few days of September. If we decline it should be about over…x wave and a final abc up.

  28. willi2001 says:

    Best blog I have found on the net over the last 10 years. Great to see aahmichael posting again.
    Thanks Tony a $Million.

  29. phil1247 says:


    with the violation of 2176.5

    support now drops to 2160

    bearish below 2185

  30. Page says:

    Normal pullback before the FOMC minutes. No worries, this is election year. The rally continues after the minutes.

    Thanks Tony.

  31. bouraq says:

    Chart of the day is $ES by http://www.tradingchannels.uk

  32. locanbbs says:

    UPDATE: Spx battling with 2177 (hourly futures) –

    • locanbbs says:

      Looks like the 2177 should hold for now: Short/Middleterm bottoms from Aug. 18th (full moon) to 23rd. After that no cyclic bottoms till beginning of Sept. – Unless there’s a drastic breakdown today or tomorrow!

  33. Just want to say that this site continues to be a great resource for me. I’m sorry that trolls invaded the comment section recently. Thank you for carrying on, Mr Caldaro.

  34. aahmichael says:

    Lots of things lined up yesterday to lend credence for a top being put in.
    1. Yesterday’s high hit the trendline connecting the 4/20 high to the 7/20 high.
    2. The 1.618 extension of the Brexit decline (2113-1992) was 2191
    3. The 1st Brexit rally wave was 117 points, and yesterday’s high was 119 points from the subsequent correction low.
    4. The McClellan Oscillator went below the zero line on 7/25. The next day it closed at 0.967, but then it immediately went back below the zero line and has never been able to cross into positive territory again, despite the market’s 10 day 47 point rally.
    5. As others have mentioned, yesterday was a daily shooting star candle, which then turned into an island reversal in SPY with today’s action.
    6. Ever since SPX cleared 1200 back in October 2011, it has never gone straight through a new round number (other than 1500) without first having a sizable pull back each time it got close to the next round number. 2194 might have been close enough.

  35. mtu MTU says:

    [EOD] Stocks-
    Potential five-wave decline and island reversal.
    The immediate bullish count is a flat-[b]-zigzag pullback (Chart 1 green) or and expanded flat pullback (Chart 2 blue), which fits the larger picture as D-down of an EDT (Chart 3 red) or wave two pullback of wave 5 or 3 (Chart 3 blue or green).

  36. 123 abc says:

    Thank you Tony et al, great OEW update.

  37. kvilia says:

    Thanks Tony.
    I think Bouraq had posted a good chart yesterday. So interesting that few callers including GTO mentioned 2140 support, which is less than 2148 break point you are referring to in the update.
    I was still hesitant shorting crude today, it may move up a couple of more points. Getting super cautious with my trades now, tired of paper cuts.

  38. dan pulford says:

    Thanks Tony, your hard work is appreciated. It does appear that the salt has left the comments posted here.

  39. CB says:

    Thanks Tony.

    “Famous global macro hedge fund manager Paul Tudor Jones, the founder of Tudor Investment Corp, doubled-down on his bet against the stock market, according to his fund’s most recent 13-F filing. During the second quarter, Tudor Investment bought put options on over 5.95 million shares of the SPDR S&P 500 ETF (SPY). The fund now owns puts on 8.34 million shares of the exchange-traded fund, making it the fund’s largest position, the filing shows. Legendary hedge fund manager George Soros also doubled down on his bet against the S&P, buying put options on just over 1.9 million shares the SPDR S&P 500 ETF, making it so he owns puts on just over 4 million shares. It’s his fund’s biggest holding in the filing too.”

  40. Ajney says:

    Thanks Tony. We have broken an uptrend line on DIA on today’s energy date. The bulls will have to get it back tomorrow for bullish case’s survival. The banks seem to be holding up, atleast were in the early part of today. Usually we would expect a bounce tomorrow as there is another energy date but we have a bias that the bounce would be sold into.
    Bonds will get oversold if selling continues this week and may lead to bottoming. Gold is starting to feel “energetic” again.
    Details at https://astroanalytics.wordpress.com

  41. Tam Nguyen says:

    I was thinking that it might be an irregular correction.

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