Wednesday update

SHORT TERM: another trendless day, DOW -12

Overnight the Asian markets lost 0.3%. Europe opened lower but gained 0.5%. US index futures were lower overnight, and the market opened three points below yesterday’s SPX 2186 close. Right after the open the market started to move higher, and by 10:30 hit SPX 2188. After that the market pulled back to SPX 2179 by 12:30. As the market started drifting higher again the FED’s beige book was released at 2pm: In the last hour of trading the SPX hit 2186 and closed there.

For the day the SPX/DOW lost 0.05%, and the NDX/NAZ gained 0.10%. Bonds ended flat, Crude gained 60 cents, Gold slipped $4, and the USD was higher. Medium term support remains at the 2177 and 2131 pivots, with resistance at the 2212 and 2252 pivots. Today investor sentiment was reported higher: 56.6% v 54.1%. Tomorrow: the ECB concludes its meeting, weekly jobless claims at 8:30, then consumer credit at 3pm.

The market opened lower, bounced to SPX 2188, dropped to 2179, then remained in that range for the rest of the day. While the market did make a higher high than yesterday, which is a higher high than all of last week, and it is less than 10 points from the all time high, it just doesn’t act like it is going to do anything special any time soon. Pundits have returned from summer holiday, and the market has still not changed its range bound character. In the meantime, while the US has been going sideways, foreign markets have been making gains. Beige book a non-event. ECB meeting tomorrow. Best to your trading!

MEDIUM TERM: uptrend still range bound

LONG TERM: uptrend


About tony caldaro

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144 Responses to Wednesday update

  1. SPYtrader says:

    Would you please ask all your friends in the Hamptons to come back to work.. lol

  2. .

    “Gold’s repeated failure to break past this year’s high of $1,377 has “resulted in mild accumulation of net short positions,” said Chintan Karnani, chief market analyst at Insignia Consultants. And on a technical level, if gold does not break $1,371 by Tuesday, then chances of a fall to $1,319 and below will be very high.”
    –Something to watch.A gap up tomorrow would be welcome.Good luck all.

  3. fotis2 says:

    Corn… got stopped out first entry blue area back in long on 3BR daily yellow looks like its trying for a IHS lets see how this one goes Cotton looks nice too nice 3BR UP note:the 3BR DOWN has played out on weekly we all wear T-shirts right?

  4. 206 new highs 95 new lows on the Nasdaq..I’m waiting for this index to start leading to the downside.Today the start?

  5. phil1247 says:

    out of uco

    aggressive extension broke


  6. vivelaamo says:

    Mario keeping the juice as is for now and this is we get as a pb? Bubble or bull market. Who cares if it’s not going to burst for months!?

  7. kvilia says:

    Just one question as I’m not an economist. So the rates are almost at zero, stocks are going up because of lower rates, gold is going up because of lower rates and weak dollar, fed is not able to raise rates on weak economy, and how long is it for this status quo? Isn’t it locking in the corner with no way out? If that’s not definition of a growing bubble, I don’t know what is. With that I’m asking how that is going to defy laws of supply and demand and cyclical nature of markets and launch a multi year bull?
    Can anyone answer that?

    • johnnymagicmoney says:

      yes it is a bubble but it remains a bubble until the bubble pops. Then it is no longer a bubble. It is still a bubble hence market pricing =)

  8. phil1247 says:

    bonds /// tlt

    in extension shorts

    added more TBT

    have sold 85% of all my treasury bonds at this point

  9. phil1247 says:


    extension long has failed
    now in extension shorts (15 min)
    bearish below /gc1343
    which ( by chance? ) is also the broken .618 support of the extension long

  10. For anyone wanting to learn more about the Schiller P/E ratio, which currently shows the S&P500 is 62.9% overvalued: (there are also many other websites)

    “Prof. Robert Shiller of Yale University invented the Schiller P/E [for which he won a Nobel prize] to measure the market’s valuation. The Schiller P/E is a more reasonable market valuation indicator than the P/E ratio because it eliminates fluctuation of the ratio caused by the variation of profit margins during business cycles. This is similar to market valuation based on the ratio of total market cap over GDP, where the variation of profit margins does not play a role either.”

  11. johnnymagicmoney says:

    best line in the article about Apple’s new phone ……………

    “The only courage in this announcement (since Apple proclaimed their change as “courage”) was the price tag. $159 for a pair of earbuds with mediocre talk time and potentially limited compatibility is not a breakthrough”

    Everyone talks about how Steve Jobs not being at the helm will be their downfall. My take is that the IPhone has been everything in the stock’s ascension to sporting the world’s largest market cap at one point. That was built on a huge margin product outstripping all other competitors at a time period that no matter how many IPhone users there were the new units sold still showed until growth because they had so much more market to eat up. But inevitably every technology product has margin erosion. It is amazing Apple has hung on so long to its huge margin but that will decline rapidly at some point. Competitors are producing great phones and eventually (especially with disposable income not going anywhere) people will say why the hell am I buying this expensive thing when I can buy just as good of a phone that is produced by someone else. They simply charge too much and their brand will only be so strong for so long. They struck lightening with the IPhone and even with Jobs at the helm I doubt they would have come out with anything else that would have surpassed the success of the IPHONE. It truly was revolutionary but it was their apex. Every great rock band has their best album. For instance Zeppelin’s Physical Graffiti was by far their best and only one thing can be their best, so even with Jobs Apple wasn’t going to surpass the IPhone greatness. I just think that Cook will bring them down sooner rather than later. Jobs is probably thinking in his grave why did I put him at the helm to replace me? He has no new ideas!!!!!!! Inevitably Cook will take it in the butt and get fired. Pun intended

  12. phil1247 says:

    ok lets try again

    gold is breaking its 15 min extension long now

    usual drill is……….you know….

    when the UN usual happens
    is when you get a violent reaction as in /cl today

  13. johnnymagicmoney says:

    economic data good – higher prices
    economic data bad – higher prices
    rates unchanged – higher prices
    rates higher – higher prices
    ECB doing nothing – higher prices
    ECB doing a lot – higher prices
    Japan more stimulus – higher prices
    Japan not doing more stimulus – higher rpices
    Better earnings – higher prices
    Bad earnings – higher prices
    No Brexit – higher prices
    Brexit – higher prices

    see a pattern? this whole thing cracks me up

    • shauryagh says:

      Which one of these following statements rings more true?

      a) The market does not want to go up
      b) The market does not want to go down

      • johnnymagicmoney says:

        B ……………………….there have been a lot more moves down bid up than down moves extending themselves or gains completely evaporating for that matter. Just look at the ticks…………….down up down up down up for the most part ……………algos

    • phil1247 says:

      this is the pattern in a bull market

      all news is good news

      so it doesnt matter what the actual news is

      in a bull market good news is celebrated and bad news is ignored

      • It’s the pattern in a bubble. The market is purely sentiment driven at this point, i.e., irrational.. I’ve been studying and trading the stock market since 1996. Even through that raging bull market (which was based on actual STRONG economic conditions) when a company reported earnings misses, they were punished severely, with the stock dropping 20-30% in one day. And, the stock market didn’t just go up. The market declined between 5-10% a month and then continued upward, which was great for buy the dip swing traders. It was when the market got irrational in November of 1999 that it went parabolic with no reason to do so, and that was shortlived, because the bubble burst in the spring of 2000. The market going up on any news is the sign of a bubble due to Fed manipulation.

        • A historical chart of the Nasdaq, provides the best representation of my above comment.

          • phil1247 says:


            thats exactly what i want to see …like nasdaq 5000 spike in 1999

            you can make tremendous amounts of money quickly with parabolic moves

            who cares about the fundamentals when you can rake it in quickly??

            do you want to be right?

            or do you want to make money?

            • Good point, Phil, but you can lose tremendous amounts of money when the parabolic move is over, sometimes before the market is even open. I prefer longer term trades, so fundamentals, valuations, and technical analysis matter to me.

              • phil1247 says:

                thats why i just try to catch intraday moves on speculations

                my only real investment for last 20 -30 years was treasury bonds
                which have been a

                better performer than stocks ..
                .especially the zero coupons
                but that game is over

                i have cashed in 20 yr zeroes and bought 3 year notes

                hows that for ultra conservative investing ??

    • Well,that didn’t article on Seeking alpha about the dollar breaking its 100 week moving average(Aug 18th)–which,as the chart I wanted to show indicated,especially after the amount of time we just spent above the 100 week(108 weeks),is a TRENDCHANGE for the dollar.
      Previous similar breaks showed an average decline of 1-6% for the dollar.In fact,the author said a drop to 90 by November would not be unexpected.He correlated gold to 1700.Goldfingers crossed.

    • Sounds like something Anthony Weiner would say…lol.

  14. 14m barrel drawdown?Seriously?Either the most amazing statistical anomoly or Yellen has her tentacles in EIA now…or both.

  15. Peter Sliney says:

    Another day just drifting with no wind to carry this market in any sustainable direction. Just a few fits here and there.

  16. phil1247 says:

    broke 15 min ext long
    usual procedure is immediate plunge or bounce then plunge

  17. micky says:

    Only below 58, without new highs , would mean it was a B wave up imo

  18. Anyone know what’s moving the futures downward this morning? Most definitive move premarket in weeks.

  19. mtu MTU says:

    [848am] ES update- potential diagonal triangles. see charts.

  20. blackjak100 says:

    3 waves up, 3 waves down has been the pattern. If it continues today, there should be a move to 2175ish to complete another 3 waves down. Maybe just maybe that will complete a long winded triangle.

  21. micky says:

    futures on a buy ,will have to see with plenty resistance ahead

  22. vivelaamo says:

    This could be one hell of a bull flag. RUT has smashed through its range although still has higher to go to make new ATH. If it’s leading the way to top first like 2015 we have more upside yet. All the best.

    • NEWBIE says:

      You are gonna be saying this until the market crashes and all your money is gone.

      • vivelaamo says:

        The way things are going I’ll probably be able to retire by then. But on a serious note I’m actually waiting for a pb before adding longs but it just doesn’t seem like it’s going to happen. This action is as frustrating for bulls as bears. After this recent range bound action there was a chance we could drop but now technically we starting to look bullish again with bull flags all over the place. Especially in Europe.

        Anyway if and when we do crash in 2017/18 I would like to think all my money will not be gone thanks to stop losses.

    • pete8675309 says:

      Hard to ignore the very bullish internals as measured by RUT (up .61% on a down day), NYAD, internal sector rotation, etc. Market refuses a simple retrace to Tony’s 2131 pivot…

    • pooch77 says:

      Looks to me like 1&2 hour charts need to reset before a leg higher

  23. Jack Sparrow says:

    ajay and christine arguing whether the market would go down to 1500 or 1100. Hello, I’ll take a 100 point drop right now and be happy….learn to enjoy the finer and smaller things…

  24. chicotheman says:

    Ajay, if I can ask for your update/take on things here – probably around wave b of 4? I know you were looking for a long 2-month 4. Thank you, and Tony and all.

    • ajaysinghi says:

      target is still 2100 by October, path unknown. May make one more high next week but unlikely to go above 2000 now.

      • ajaysinghi says:

        typo 2200, instead of 2000. Please note the following as I may stop writing here:

        SPX below 2075 not possible this year. This month will be a difficult month to trade. Just use levels above 2080 to build shorts for next month. Don’t worry even if 2200 is crossed in the 2nd half of the month.

        After retest of 2100 next month, one more high will come, which will be low next month+ (high this month-1990)*.618. My guess, the next high will be around 2300.

        From there, short for a minimum tgt of 1800, max tgt of 1450.

        SPX below 1400 not possible under any circumstance now.

  25. stmro says:

    This is beyond frustrating. Doesn’t matter which direction the early move is in, the afternoon session always reverts to the mean.

    • That’s cause the market is trading in a small ascending wedge on the hourly charts. Narrowing range, and two trendlines that are fairly close together to bounce off of in the opposite direction intraday as soon as they’re hit.

  26. Here’s one man’s opinion about gold.He says there’s a mostly downward outlook for gold based on a H&S or triangle pattern.Interesting to keep an eye on,though these projected future squiggles never work out,do they?

    • Now Bulkowski only rates this pattern as 16 out of 23 for success.Actually,the initial breakout is usually the wrong one(which happened last week by dropping to 1305).Soooo,can I infer he’s wrong in his analysis of this chart?Very possible.The true direction should be’ll find out…lol

      • Page says:

        Only Yellen can draw the correct chart for Gold.
        I think Gold/Miners will continue to drift lower until FOMC Sept. meeting then make the move depending on the outcome.

      • phil1247 says:

        weekly and monthly trends are down

        daily has no trend

  27. rd3777 says:

    Still in the EDT….last wave up which is big wave [Z]… is very tired.

  28. phil1247 says:

    phil1247 says:
    September 7, 2016 at 1:28 pm
    crude oil

    prepare for upside explosion

    hope somebody besides FOTIS

    was paying attention………….

    taking some profits here at resistance

  29. bouraq says:

    Chart of the day is $ES by

  30. Lee X says:

    Thanks Tony and thanks CPT

  31. kvilia says:

    Thanks Tony. Too scary to hold longs, too expensive to hold shorts, and too boring not to hold anything. R2K is way oversold, futures expiration next week, and I’m holding TZA and bleeding at the same time.

  32. Article from Sept 2, regarding Price/GDP ratio, also known as the “Buffett indicator” since it’s favored by Warren Buffett. Current mean value is at 70%, current level market is trading at is 126.6%, indicating that the according to this measure, the market is close to 50% overvalued.

  33. jobjas says:

    First 5 waves completing from wave [4] at 2156

  34. The strengthening of the Transport sector and the resurgence of the A-D line are excellent omens for a bullish scenario.

  35. Ajney says:

    Our models have been forecasting increased volatility for equities in second half Sep. and Oct. for some time. With the energy date on Sep. 9 and others next week, this may get started. However, technicals are not there yet in the DOW and require atleast a daily closing below 18333. Details at

    • CampFreddie says:

      These “energy dates” are very oblique. Do they mark a high?, a low ?, increased volatility?, and if so then which asset class ?.
      Most have passed without a notable event, but “hey” there is always plenty more where they come from.
      It all sounds a bit “Hokey” for my taste.

      • Ajney says:

        Camp from past experience they mark major highs and lows, and minor turns in a trend as well. As they are turn dates, they are usually accompanied with increased volatility. We use them with technicals to judge swing highs/lows and can influence various asset classes.

        Would beg to differ that have passed without notable event/turns in market. For DOW in August, they pointed the August 1/2 swing low, 15 swing high, 25/26 swing low, 31/1 swing lows. Sometimes they start appearing a lot, that usually leads to choppy behavior, for example last month. If you track metals, would notice that Aug 1, 25,30,31 were important dates in metals as well. Hopefully its less “Hokey” for you now.

        • aahmichael says:

          I’m going to have to agree with Freddie. In real time, your energy dates offer nothing useful, because they don’t tell you what market they apply to, and they don’t tell you if a market will go up or down. It’s only after the fact, that you come back and post that, lo and behold, there was a move up or down in some market on that date.

          • Ajney says:

            It is primarily useful if a market is getting oversold or overbought technically into a turn date. Maybe more useful if one tracks multiple markets.
            For example gold last week was getting oversold. In fact, going by technicals alone it was a possible short as it went though a major trend line on month end. However, as it was an energy date, it did prevent me personally from shorting gold and actually going long on Friday which would have reaped a healthy profit in a day. These thoughts were being relayed daily on our blog as it was happening.
            In summary, these dates alone only aid technical analysis and prevent buy/sell decisions at tops/bottom. They also lend confidence to buying/selling decisions at bottom/tops.

            As per direction of market, our other models let us have an idea if the indices are going to be under stress. Currently, they point to increased stress later this month and October.

  36. 123 abc says:

    Thank you Tony et al.

    Q: Do you see a possible 5 waves up from 2157 to 2188 ?

  37. mike7x says:

    Is the $VIX ready to pop (or explode)? Maybe. Maybe not. And. Thanks Tony.

  38. Peter Sliney says:

    It seems pretty clear this market has at least on last major surge upward in it. If it was going to sell off it would of done by now. But the timing and risk management is everything.

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