Tuesday update

SHORT TERM: market pulls back again, DOW -49

Overnight the Asian markets gained 0.8%. Europe opened higher and gained 0.5%. US index futures were flat overnight, and at 9am Case-Shiller was reported higher: 5.1% v 5.2%. The market opened at the high of the day, SPX 2182, 2 points above yesterday’s close, and immediately began to pullback. At 10am consumer confidence was reported higher: 101.1 v 97.3. Around 10:30 the SPX hit 2173, bounced to 2177 by 12:30, then headed lower again. At 2:30 the SPX hit 2170, then bounced to close at 2176.

For the day the SPX/DOW lost 0.20%, and the NDX/NAZ lost 0.25%. Bonds lost 3 ticks, Crude slid 55 cents, Gold dropped $12, and the USD was higher. Medium term support drops again to the 2131 and 2085 pivots, with resistance at the 2177 and 2212 pivots. Tomorrow: the ADP index at 8:15, the Chicago PMI at 9:45, then pending home sales at 10am.

After Monday’s rally to SPX 2183, from Friday’s 2160 low, the market pulled back today remaining in the 2160-2194 range for yet another day. While we have been expecting a downtrend to be underway, the market has done nothing but trade within a 1.5% range for weeks. Several possible short term counts in play, but nothing worth mentioning until the range is broken one way or the other. The weekend update downtrend targets still apply while we await the outcome of this sideways activity. Short term support is at the 2131 and 2085 pivots, with resistance at the 2177 and 2212 pivots. Short term momentum dropped to oversold after hitting overbought on yesterdays rally, then bounced. Trade what is in front of you!

MEDIUM TERM: uptrend stuck in a trading range

LONG TERM: uptrend

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

About tony caldaro

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90 Responses to Tuesday update

  1. vivelaamo says:

    Chop fest. Expect more downside yet.

  2. end of month window dressing? Can they close this thing green and be like today never even happened

  3. phil1247 says:

    took profits on SCO

    have a great afternoon all !

  4. lcd00 says:

    For Page, who says that election year September is “always up”. Come on man, I know you love making pronouncements with no charts, but 2008 September SPX was -9.08%, and September 2000 SPX was -5.35%.

  5. Fundamentals still show improvement with discretionary income at decent levels. The best bear scenario is continued consumer spending and forcing the hand of the FED to raise rates. Not much competition without the mindset switched to accelerated yield prices. Very good economic news will be treated negatively by the street going forward.

    • Small 5 wave drop here. Should not go below 2161. If it does we could be seeing a much deeper move down. Odds however do not favor the strong move yet.

    • johnnymagicmoney says:

      A + B + C + D = E
      A = Productivity B = Sales C = Cost (most notably labor) D = Profits
      Up until a year and a half ago Productivity was either increasing or maintaining themselves at historical levels. Sales were materially higher. The labor market had a lot of slack in it. Now wage pressure are increasing, productivity is declining and reverting to their historical mean. Sales are immaterial higher and not enough to make up for wage costs and productivity issues

      It is pure math Holly/Gary ………………………..

      this is not about fundamentals. Why on earth cant you get it through your thick head that inevitably the market assigns valuations to profits. Yes you can vary those valuations based on inflation and interest rates. I get that. But no way in earth should valuations be at these levels on negative earnings and flat earnings at best. The trend for earnings by the way is not going to change anytime soon contrary to the unethical wire houses that have their analysts ump overly optimistic earnings guidance only to quietly lower them along the way after their BS reports. At the very least the analysts are dumb if not crooks. They have to be either. The market is up on liquidity, jawboning, and sentiment that is delusional. That is it. Until I see earnings really materially increase this is based on fluff plain and simple even with low inflation and interest rates which by the way they are trying to increase. Any way you look at it if they stay dovish you will have inflation or deflation. if they raise rates risk trades have to be unwound, currencies diverge sharply, spreads widen all over the place, oil gets crushed again and costs go up not to mention the buybacks it will have an effect on. The higher the borrowing cost the less buybacks that will occur. This is unavoidable and buybacks exceed cash flow by the way. And incidentally we haven’t even discussed the European banking system, shadow banking in Europe, or the silliness in Japan. IM merely talking about the cleanest house!!!!!!!!

      Please cut the crap with your fundamental analysis. This is more buyers than sellers nothing more.

      • johnnymagicmoney says:

        I meant A + B + C = D (I cant even get the math right lol)

      • I used this MACRO view for 5 years. Got me here. Expected a transition phase where the consumer gained upper hand and profits suffered. We are only talking about getting rates to the “normalized zone”. It is not going to affect costs by much unless we go another 200 basis points. Early stages and no where near a problem. Look at where we are currently and tell me a 50 basis point move will cause problems? I don’t get your concern. Spending is increasing and the consumer is still saving. There is the ability for consumer to breakout on spending but I myself don’t expect it. Next market prolonged drop should be based on earnings squeeze. I happen to think the domestic economy will do well thru this next stock drop.

        All I have said before. To think that the street will never use earnings shortfall is ludicrous. To also think that it is arbitrary is also not true. The sideways 2 year move had better show results going forward. revisions in earnings downward will play a strong role in next drop. I expect it will happen and soon. I also expect most of 2017 to be down.

        There are period when the street forgives earnings but in this context highly unlikely. they waited for the transitional phase and it is here. If corporations don’t produce there will be repercussions.

        Time will tell if my hypothesis is right.

      • With respect to sales, many companies have been meeting lowered earnings expectations but missing on revenue (i.e. sales). This shows that they are meeting earnings expectations based on financial engineering (i.e. share buybacks, etc.) rather than on demand for their products or services.

      • If fundamentals have an arbitrary play in stock prices, so does technical analysis. In that case stop playing the market. A random or rigged market can’t have any betting method that you can profit from. Perhaps a buy and hold attitude is best. Frustration because the market is not using your parameters doesn’t mean their are none.

  6. fionamargaret says:

    …oil pattern broken…if you want to short SCO for about 12….or scalp UWTI down to 19…or buy DWTI (if you don’t mind heart attacks)…not many bullish charts I am happy with …ERX is still positive…TLT is still positive….VRX is still positive….sorry…xxx

    • fionamargaret says:

      …whatever you decide….DWTI seems the easiest…..use stops….scalp if you can…holiday weekend usually means bullish….which is not fun if you are short….AAPL I have at 133, with not a sure thing pattern….

      • fionamargaret says:

        DWTI suggests over 115…..but stops (tight)….be careful….

        • Jimbo says:

          DWTI is wild.! I just don’t have the stomach to even step in to that trade.! Great stuff Fiona thank you

          • fionamargaret says:

            Jimbo, aren’t you the harmonic waves gentleman….I miss seeing your work.
            Yes, DWTI is heart attack city, but if you were in plan A, and wanted to get out, I felt I had to provide ideas…..

    • H D says:

      Widowmaker, Seen a lot of bulls throwing the towel in. oil is not a product you can throw targets very easily on. $1 moves are plenty to forecast. It is down $5 over the last 8 days with an ABC look IMO. GL

  7. phil1247 says:


    46.40 target hit

    raised stops on sco

    extension shorts continue …
    now bounce or all out collapse??

  8. phil1247 says:


    in extension shorts

    target 1304 /gcz6

    that violates the extension long .618 support if hit

    immediate collapse or bounce then collapse should ensue

    looking for short entry

  9. mtu MTU says:

    [810am] ES/NQ update-
    Corresponding potential triangles in ES and NQ. See Charts and yesterday’s EOD for details.

  10. vivelaamo says:

    Triple top on the Nikkei also near the upper BB and strong resistance. Worth a short.

  11. Guess what?We had a Hindenburg Omen on Nasdaq.220 new highs and 90 lows.Something to watch.Good luck all.

    • Interesting… Thanks for the heads up!

    • va89blog says:

      I seem to have read about a number of Hindenburg Omens the past several years. How accurate are they in predicting a sell-off? I honestly don’t know. Thanks,

      • Page says:

        No sell off. September is always up in election year. Markets will be significantly higher by election day and NO rate hikes in Sept. either.

      • The Hindenburg Omen is actually used for the NYSE index and it needs to be confirmed by a second one within 30 days. The accuracy has been stated as:

        From historical data, the probability of a move greater than 5% to the downside after a confirmed Hindenburg Omen was 77%, and usually takes place within the next forty days. The probability of a panic sellout was 41% and the probability of a major stock market crash was 24%. Though the Omen does not have a 100% success rate, every NYSE crash since 1985 has been preceded by a Hindenburg Omen. Of the previous 25 confirmed signals only two (8%) have failed to predict at least mild (2.0% to 4.9%) declines.

        This is from Wikipedia, but I read the same exact information in a different, more credible article this morning, so it seems to be from a valid source.

  12. torehund says:


    When money is stuffed at home due to negative deposit rates and the liquidity sinks in the Banks, Gov will just be printing more of it to prop up the banks. Otherwise the banks would have already had to increase rates to attract depositors.
    All this printing has diluted the value of the currencies but market hasnt responded much yet.
    When focus shifts, and currencies rapidly looses its purchasing power, closet money will all of a sudden buy stuff like never before (last escape route)…If all currencies fall simultaneously what you will see is not currency fluctuations (if they print evenly) but markets all over will go sky high. With unequal printing I am more inclined to think the Euro would suffer.
    If the trend of today isnt opposed, you may see increasing stagflation and further tumults. before worker strikes eventually win through.

  13. chicotheman says:

    So far so good – similar to how the last rally started 8 weeks ago. Short term sentiment and indicators look good.

  14. Interesting, comprehensive article from Fortune about all the headwinds facing stocks. Everything from high P/E, to increased borrowing costs, to interest rate hikes, to pro-worker political climate:


  15. phil1247 says:


    in extension shorts

    bearish below ominous 4666

    next target 45.40

    eventually 14 dollars

  16. jobjas says:

    Post close CL completes wave 4 ; next target $52

  17. bouraq says:

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

  18. torehund says:

    Thanks Tony. Extremely resistant market, too big to fail ?

  19. Gartman controls everything.He said buy gold–sell bonds.I’ll have to check and see when he says –sell gold.Should be soon…and a bottom.

  20. rd3777 says:

    Crude looks like it might head back to 39….I really didn’t like todays action as it seemed like a lot more big money sellers came in. I think the market has to rally stat or else we get a down draft down to 2100. These 3 waves are tuff. The seasonality is running out fast for the bulls.

  21. mcgcapital says:

    Will be happy when this breaks either way. So exhausting watching something not moving for weeks

  22. alexhartley1 says:

    Maybe it’s big energy up day tomorrow. To be honest I had us down from the 18th but the short term cycle was up and seemed to keep us from moving down. I had all the trend cycles pointing down from the 26th into today/tomorrow and the market only reached 2160 on the downside. Makes me think we’re up from here into Sep where I expect a more significant move down into Oct.

  23. Ajney says:

    Todays date seems to have generated most momentum in Gold. It closed below another trendline opening gateway to 1280 approx and very important channel support. As it is falling into an cluster of Aug 30/31, there is hope that it bounces soon. Any sustained downside in Dow still requires 18333 and Aug.2 low to be taken out on daily closing basis. Details at https://astroanalytics.wordpress.com

  24. mtu MTU says:

    [EOD] Stocks-
    Chart 1 updates tracking counts. There is an interesting potential triangle in NDX (Chart 2), as well as in SPX (Chart 3). Those are consistent with the choppiness. Let’s see what happens.

  25. pooch77 says:

    I thought today was big energy down day???

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