Wednesday update

SHORT TERM: pullback, then rally, DOW +111

Overnight the Asian markets lost 0.2%. Europe opened higher and gained 0.7%. US index futures were higher overnight, and at 8:30 durable goods orders were reported unchanged. The market opened four points above yesterday’s SPX 2160 close, then declined to 2152 by 11am. At 10am FED chair Yellen testified before congress: The market then continued to work its way higher. Just past 2pm it was reported OPEC had reached a limit on Oil production. The market rallied higher. Also at 2pm FED director Sullivan: Heading into the close the SPX hit 2172, then closed at 2171.

For the day the SPX/DOW gained 0.55%, and the NDX/NAZ gained 0.20%. Bonds slipped 4 ticks, Crude rallied $2.00, Gold dipped $4, and the USD was higher. Medium term support remains at the 2131 and 2116 pivots, with resistance at the 2177 and 2212 pivots. Tomorrow: Q2 GDP (est. +1.3%) and weekly jobless claims at 8:30, then pending home sales at 10am. Also at 10am there is a speech from FED governor Powell, and at 4pm a speech from FED chair Yellen. Today the Q3 GDP estimate was lowered to 2.8% v 2.9%.

The market opened higher today, pulled back to SPX 2152, then rallied into the 2177 pivot range. We can now count seven rallies since the SPX 2120 low. The first five overlapped each other, and the last two have yet to do so. None of these rallies have been fully retraced. Certainly an odd pattern for a potential uptrend, since it looks more like typical corrective activity. Still can go either way. Short term support is at SPX 2152 and the 2131 pivot, with resistance at the 2177 pivot and SPX 2194. Short term momentum was quite overbought at the close. Best to your trading!

MEDIUM TERM: 80% uptrend probability still being tested

LONG TERM: uptrend


About tony caldaro

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104 Responses to Wednesday update

  1. mtu MTU says:

    [230pm] SPX update-
    Interesting possibility (one of the scenarios) –
    If the Sep 27th low holds, today’s low may conclude a terminal bullish triangle (the 2nd green C in Chart) and thus mark the end of the pullback from the Aug high. Quite fitting on the heels of the DB news.
    If the Sep 27th low is breached but the early Sep low holds, the proposed bullish terminal triangle is then stretching in time (the 3rd green C in chart).
    See chart.

  2. kvilia says:

    Beautiful. UVXY – 16.4 bought, 19.02 sold. Looking for another entry to repeat.

  3. mjtplayer says:

    While everyone is being distracted by Wells Fargo, Presidential debates, polls and central bank speak, DB continues to melt-down. Fresh all-time lows today….

  4. lcd00 says:

    Does anyone know why Semiconductors index is breaking out while the rest of the market is tanking?

  5. johnnymagicmoney says:


    Ruh Ro!

    • johnnymagicmoney says:

      listening to those morons on CNBC right now (I know I know I might as well Gartman’s news letter)

      One commentator (after TEN separate hedge funds started pulling money out)

      “It could just be quarter end rebalancing and seasonal needs of clients so lets not jump to any conclusions”

      who knows if DB is in trouble or not but that statement just goes to show you how people are in denial. Cracks me up

  6. Amazing how GDX is following SPX lately…gold not so much.I’m out of here for the day.

  7. H D says:

    CL- very nice EW pattern IMO, looks complete with FIBcontrol™

    $xjy filled open gap this am(daily).Weekly has the most beautiful cup and handle.Long term bullish–for it and gold–theoretically.

  9. Took a long vacation and I am sure everyone missed me. Pretty darn clear now that the domestic economy is gaining steam. Doldrums of summer is over. Doom and gloom individuals will have to wait a bit longer. Also clear the next bear territory cycle will not be the big one. As I have expressed for a very long time we should see an earnings based correction but not an economic downturn.

    As for the full affect of this very long slow recovery with absurdly low inflation the latest consensus results confirm the benefits of such a process. In 2015, 3.5 million Americans were able to breach the poverty line as an economic recovery hit a tipping point. Read full report.

  10. phil1247 says:


    had outside day up yest
    if that low is taken out today or friday
    bull trap sprung

    can lead to fast decline

    target 1317 coming up for extension short

  11. captbara says:

    Waiting for Fri’s catalyst. Or maybe over the weekend.

  12. phil1247 says:


    extension long held

    target 2171

  13. gtoptions says:

    Thanks Tony
    123 abc & Lunker point out a potential LD W1.
    EW question, If the LD W1 is playing out, should the final ‘E’ wave extend beyond the ATH before the sharp W2?
    It is my understanding that is should. Thanks

  14. “Leave the conspiracy theory aside and look at the facts: Since the Fed began aggressive monetary easing in 2008, my calculations show that nearly 60% of stock market gains have come on those days, once every six weeks, that the Federal Open Market Committee announces its policy decisions.

    Put another way, the S&P 500 index has gained 699 points since January 2008, and 422 of those points came on the 70 Fed announcement days. The average gain on announcement days was 0.49%, or roughly 50 times higher than the average gain of 0.01% on other days.”
    –Morgan Stanley,talking about Trumps assertion of a bubble in stocks.

    • mjtplayer says:

      Thanks for the stats in helping to confirm what everybody has known for years and is not a secret – the central banks are manipulating markets.

      Manipulating their own currencies lower to promote trade, manipulating gov’t bond markets to compress interest rates to reduce interest expenditures and help improve gov’t budgets and by printing money and holding rates artificially low it elevates stock and real estate prices artificially high. The only markets they can’t manipulate are commodities, on the whole. Central banks cannot store food/grains or oil/energy products.

  15. lunker1 says:

    Wonder if all this corrective looking stuff is an LD for wave 1 and we’re in E. Soon to end and sharp retrace to 2131p?

    • CB says:

      several rising wedges look troubling…many in high-growth sectors…

    • micky says:

      Agree Lunker, besides an ongoing correction, a ld/ed is the only wave that makes sense to me as well.

      • HW says:

        Possibly a big LD from 1810 low with ongoing E wave ending 2200+, then a sharp correction sub 2000 fooling all the bears before snapping back to ATH?
        Strength in tech stocks led me to think of this possible LD Maj1-P5 instead of ED all of P5

    • blackjak100 says:

      Certainly looks like some type of diagonal, but it could be ED or LD (wave A or wave 1). As far as wave proportions, you still can’t rule out int 2 of Major 3 is still ongoing per NK’s count below. From what I can tell, he’s projecting wave B to exceed 2194 for another expanded flat.

  16. locanbbs says:

    UPDATE: BUY Signal on Spx! : Spx broke down through the 34 sma but bounced up off the minor trend channel bottom (see chart: in red) and broke out upwards, simultaneously moving into the buy area on the BB% indicator.
    Spx futures hourly –

  17. fotis2 says:

    Bull flag formation on GOLD daily?

  18. Mr C…who bails out DB?What’s going to happen?That’s the big short term black swan–or not.

  19. stormchaser80 says:

    Big risk on day, yet the market has been trading fairly sideways in a possible triangle, which should break in the Friday-Tuesday time-frame. So its time to get ready to act on a new move ahead.

    More discussion and charts here:

    My site is 100% free. If you are visiting for the first time, be advised that I do ask new users register for a free login. This takes 15 seconds. This is to protect myself, ensuring that everyone agrees to my legal documents.

  20. vivelaamo says:

    Newbie give us a wave! Your every call does the oppoisite. You mention oil and it’s up 5%. You say spx 2100 and it rockets. Dancing bears produce massive gains. You may be solvent but come on, give those who short a break! Go bask in your gold with your sidekick who thankfully no longer posts.

  21. jobjas says:

    CL long term count

  22. abchart says:

    – Goldman Sachs says OPEC oil quotas could add 7 to 10 dollars a barrel.
    I can’t find any deal, only a rumor.
    WTI: max 47.50$/48$ before 40/41 and even lower toward 38/39. Bullish after that target 60+
    SPX: could stay near 2180 until Friday, before 2120 > 2150 > 2110/2090

  23. NEWBIE says:

    Everybody is complacent looking for another 50 -100 points higher on spx. Rug pull coming.

  24. rd3777 says:

    Everything looks complete for the Triangle….crude,NDX.SPX,DOW,DAX,and Nikkei
    Now whether that happens or not is another story……

    Thanks Tony,

  25. bouraq says:

    Chart of the day is ES by

  26. Of this probable wave 3 we should be on the Int. 1.
    We have had: a mini wave 1, Impulse. Followed by a mini 2 that was a Triangle. Now starting a mini 3, Impulse ( of this last one we have had a super mini 1 and a super mini 2 already.
    On the ES cont. contract, 15 mets chart is more readable.

    Lets see….

  27. Nasdaq 188 new highs 100 new lows.The beat goes on.McO +6.Another H.O.

  28. Thank you Tony. One of the rational things the market has done of late was to retrace about 50% from this mornings open to yesterdays low of 2142……..taking us to 2152 ish. At 2:00 I could see a ton of buying and added a few contracts. Lots of fighting around 2169 the 50DMA, but the bulls prevailed. We filled one gap and I suspect we will address gap number two tomorrow which just so happens to be 2177. My trend lines suggest problems but in the area but RSI and McClellan are offering little confirmation, suggesting the market may move closer to 2194 than originally believed. Or we might correct through time and sideways chop.

  29. 123 abc says:

    Thank you Tony et OEW team.

    Q: What are your thoughts in regards to a possible Leading Diagonal since the 2120 low as depicted in the first chart below ?:

  30. Strong eps and sales upgrades coming from the tech sector for the next quarter looks good for US market. Bulls should hold positions. Maybe look at shorting us 30yr treasuries

  31. Lee X says:

    Thanks Tony

  32. captbara says:

    Multiple points of +ve NYMO divergence with mid and late Aug, and now early Sep with today’s close.

    • CB says:

      Thanks. Very kind of you to share that info. Most of us don’t get the final NYMO readings until after the close, for some reason.

      Thanks Tony.

      • captbara says:

        On stockcharts you can see the intraday estimated NYMO value, perhaps only for paid members, not sure.

        See the Brexit lows for the last major div. And now there are 3 instances in the last 1.5 mos..

        • CB says:

          Indeed. Very interesting. how that works. Thanks for explaining it., Capt . B. Great info. as always . Appreciate your help.
          I do subscribe to s..charts, but I get an error message saying that intraday data for: $nymo is unavailable… so I need to check it out.

          • cosmos77 says:

            I got the same message CB. If you figure it out, please post how to get to it. Thanks

            • CB says:

              Hi Cosmos. They’re saying that that the symbol only updates at the end of the day after the market has closed (true for all subscription levels).

              Thanks again, Capt. B, for explaining to us how to use the indicator! A very nice technical tool.

  33. blackjak100 says:

    I shorted close with stop at 2180. 4:1 risk/reward as I see 2135ish next up.

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