Wednesday update

SHORT TERM: gap up opening, DOW +113

Overnight the Asia markets gained 0.2%. Europe opened lower and lost 0.4%. US index futures were higher overnight. At 8:15 the ADP was reported lower: 154K v 177K, and at 8:30 the trade deficit was reported larger: -$40.7B v -$39.5B. The market gapped up at the open to SPX 2158, then hit 2162 just before 10am. The market had closed at SPX 2150 yesterday. At 10am factory orders were reported higher: +0.2% v +1.9%, and ISM services was reported higher: 57.1 v 51.4. After a pullback to SPX 2157 just before 11am the market turned higher. At 3pm the SPX hit 2164, then dipped to close at 2160.

For the day the SPX/DOW gained 0.50%, and the NDX/NAZ gained 0.45%. Bonds lost 9 ticks, Crude rallied $1.05, Gold slipped $1, and the USD was higher. Medium term support remains at the 2131 and 2116 pivots, with resistance at the 2177 and 2212 pivots. Tomorrow: weekly jobless claims at 8:30.

The market gapped up at the open today, rallied to SPX 2164 by 3pm, then pulled back in the last hour. This looks somewhat similar to Friday’s gap up opening action. The market declined for two days into Tuesday’s low afterwards. Still observing an obvious choppy pattern since the SPX 2119 low. Looks like the market needs to reset back to that level, or a bit lower, before it can start impulsing again. Short term support remains at SPX 2142 and the 2131 pivot, with resistance at the 2177 pivot and SPX 2194. Short term momentum nearly hit overbought during today’s rally and ended at neutral. Trade what’s in front of you!

MEDIUM TERM: choppy downtrend continues

LONG TERM: uptrend


About tony caldaro

This entry was posted in Updates and tagged , , , . Bookmark the permalink.

93 Responses to Wednesday update

  1. johnnymagicmoney says:

    curious to see what people think of my comments

    Indices hanging in there but if the following stocks are falling over or falling hard so how can the markets advance much further on such narrow breadth with the big cappies?? Just seems like it needs a nice selloff first. Here are some of the biggest names in the S&P and DOW

    already broke down – NKE, GE, WFC, T, VZ, PFE, KO, MCD, MMM, TRV
    broke down today AXP, WMT
    double tops possibly – BRKB, GOOG, HD
    downtrend still XOM

    a bunch of other stuff may be rolling over or running into big resistance leaving PG, CAT, V, AAPL, MSFT, FB, JPM, AMZN as looking strong or hitting new highs

    to me if you take out the FANG stocks coupled with a few banks this market sucks. I admit this market is f-ing resilient but it seems similar to some of the last tops before the big drops.

    • johnnymagicmoney says:

      not to mention when I start hearing 1,000 price targets on AMZN

      • CB says:

        haven’t seen the latest polls, but the resilient market and bios down means that HRC must be up in the polls….. (?)
        in the futs, 2150 held… that’s positive… let’s see where it goes from here..

    • Not likely we drop hard here. In fact the next 2 weeks should be the bottoming process setup for one more rally to all-time highs. Hard to imagine the directions of bonds, dollar, and gold all being wrong. Street needs to see the FED raise rates and domestic data points expand. Is the breadth of the major indices broken?

      The churn continues with a bias on the downside.

  2. phil1247 says:


    are acting like NFP will be 500 K

    target is 3 points lower from here


    have i bought enough TBT??????????????

  3. short squeeze to 2175 today? Make tomorrow even more interesting

  4. H D says:

    Interesting, this sequence will also pick up 34 TD’s on Yom Kippur. Slow cooked

  5. vivelaamo says:

    The drop in the pound is a joke.

    • mcgcapital says:

      Looks really overdone. Considering May/Hammond/Carney have all commented on the disadvantages of QE today that should be sterling positive (if it dropped originally because hard brexit means more stimulus).

    • CB says:

      It sure looks that way. What is not a joke, however, is that Americans are buying a lot of Burberry coats in the UK these days😉
      As a matter of fact, the American consumer seems to be indicating that shopping is great again

  6. phil1247 says:


    next targets 50.80 and 50.90

    yes ……i try to get out

    but they pull me back in
    in at 50.21 with tight leash

  7. mtu MTU says:

    [130pm] SPX/INDU update –
    See charts for an update on short term scenarios.

  8. captbara says:

    Like I said yesterday, no failure allowed. Market is listening so far🙂

  9. vivelaamo says:

    Boy this is frustrating unless your a day trader. I might have a break until after the election.

  10. locanbbs says:

    UPDATE: Buy-signal after cyclic market bottom. Ndx hourly futures –

  11. The Astra says:

    Watch for an hourly close above 18300 – If it happens, then the next target for DJI is 18700 quickly.

    Hourly close below 18120 will lead the markets to test 17800.

    Symmetrical triangle in play with upper trendline being very well respected.

  12. blackjak100 says:

    One more rally to 2175-2185 before final plunge below 2119

    • johnnymagicmoney says:

      BJ……you had been touting breadth

      Do you see it starting to roll over?

      • blackjak100 says:

        Breadth looks fine still, just need to finish this int correction before moving higher. If 2100ish holds, I’m still inclined to think it would be int ii of major 3.

        • bfquant says:

          Breadth not good. Look at Consumer Staples, Telecoms, Utilities, REITs, low volatility names. They have basically crashed (relative to their normal moves). Have stabilized today though.

  13. stmro says:

    Yawn. I’m heading into hibernation until we close above 2180 or close below 2140. This is ridiculous – no participation whatsoever.

  14. phil1247 says:


    /cl monthly extension short has traded

    first traditional 15 min short completed

    toying with buying SCO .
    ..just watching for now

    • purplember says:

      i’m thinking oil surge has been due to hurricane andrew – taking out tankers / oil supply but reality is there are many suppliers to fill in any gaps. OPEC countries are at all time highs in production – they’re cuts they discussed are peanuts to big picture

      • phil1247 says:

        trading fundamental stuff like that will bankrupt you purple

        i never listen to the news unless my trading is done

        what about the glut when oil was 100 dollars….

        it didnt collapse till the COT was so overloaded long

        that the large traders were begging to be slaughtered by the commercials

        and they were

        • hkloon says:

          Phil, may I know how one can check this data? Meaning the COT data… large traders position vs commercial position? and how to interpret them accordingly? thx

    • fotis2 says:

      Am out Phil good run feeling dizzy here sidelines and wait for next oppurtunity

      • fionamargaret says:

        Fotis…are you well….don’t konk out on me

        • fotis2 says:

          Fiona thanks for asking definetely not konking figure of speech…. dizzy at the highs just feel CL is ripe for a pullback at these levels.

      • fionamargaret says:

        Fotis, are you ok…….

        • fionamargaret says:

          …talk about the blind leading the blind…I wanted to know if Fotis was ok, with two rather exuberant dogs in tow….rewrote the question….then the dogs sent one too (I think theirs is the poorly spelled one)…

          …remember DB, even a bad settlement is better than…..

          Thanks Tony……and everyone..xx

  15. GDX gap at 22.97 filled.That was a huge one(from June)of over a point wide.They do get filled eventually.Many above 28 up til 31 that are unfilled.When is the question?

    • phil1247 says:

      as mentioned last week

      GOLD and GDX

      are bottomless pits without any support

      until the extension shorts break

      • Understood…thanks Phil.I saw this possibillity weeks ago.Listed all the open gaps when GDX was at 28.Lightened up considerably.Wish I had done a little more,of course…but I’m fine.Next gap was around 20.Wouldn’t be surprised if numerous gaps from 28 -31 are filled later this year.

        • phil1247 says:


          i know you are longer term
          so you should look for the daily extension short to break before buying
          currently 1285 /gcz6

          dont look at “support” levels .
 is made to be broken
          i want to see buying interest to tell me where the support is
          and when extension shorts break
          you will know where the support truly is..

          otherwise you will be looking at support levels breaking
          and then you are sitting at 1050 hoping it will hold

  16. captbara says:

    USD next leg up begins. Gold bulls, don’t try to fight it. The trend has changed.

  17. cj32 says:

    OIL, PCLN, Cr. to CBZ

  18. Just want to print a section of a MW article about why gold dropped yesterday.I brought up the possibillity of CB’s and,ahem–Deutsche Bank.Here’s more.They’re talking about 2008 as it’s picked up:
    “The big banks were desperate for cash, but couldn’t sell their troubled paper other than for big losses, if at all. They leased gold at very cheap rates from the central banks and then sold this borrowed gold on the market. This consequently pushed the price of gold down. They then bought back the gold at a lower price and pocketed the difference. Essentially, it was free money for the big banks provided by the central bank through a back door. This would work just as well today and the lower the price gold goes (silver goes down with it and so do the miners because they trade together) the more money the banks would make by leasing and selling borrowed gold.

    There is, of course, a simmering banking crisis in Europe and the UK as I discussed in articles here on 04/06/16, here on 06/18/16, here on 07/07/16 and here on 08/23/16. At the epicenter of the crisis is Deutsche Bank (NYSE:DB), which is trading below its Credit Crisis low. The bank is facing massive regulatory fines and has 7,000 legal complaints filed against it.”
    So I guess we should all beware.

    • In otherwards, it’s manipulation…winked at,approved by and backed by the CBs to prop up EU banks . Unbelievable.From this kind of analysis,until DB settles with the US (at the minimum),gold is vulnerable.Makes sense.

      • Last comment on this subject.Gold got up to 1375ish this year and was roundly sold.Crawled back up to 1350 and was sold again decisively.I mentioned at those times,”someone” was drawing a line in the sand at these levels.Now it appears 1320 was another selling zone.I knew gold went south with stocks in 2008,but didn’t know why.In a financial crisis,gold is easy to use to prop up your financial institution.Good luck all.

        • joecthetruthteller says:

          Jason Hamlin of Gold Stock Bull says, “The next key technical support level for gold is $1,255, a level that was both support and resistance in the past. Furthermore, this price support coincides with the 200-day moving average, so it is likely to offer very strong support for the gold price.”

          • Gold should hit 1200 or so before any decent rebound. While not saying it isn’t in a bull trend, it will not find traction for many more months to come. If it does fall in the 1100 range I would be a buyer but it just doesn’t have the impetus needed to breakout yet.

            Domestic economy is doing just fine and the world stage is not showing signs of deceleration. China is the wild card and so is cumulative quarterly earnings and future earnings expectations. have not heard any major revisions yet on those numbers. Still expecting the bottom of this correction to be the springboard for next leg up.

  19. So today was either a up, with a drop to 2150 then back up to 2175 to finish b or b ended with c down to 2100. Interesting.

    Thanks all

  20. stormchaser80 says:

    The Technicals Model was lower today, which is bearish versus the market which was higher today. SPX Daily looks like its struggling to stay afloat, but SPX Hourly is back in the sideways triangle. HYG:IEF set another high meaning Risk is on still.

    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.

    • Martin A. Armstrong
      From Wikipedia, the free encyclopedia
      Martin A. Armstrong
      Born Martin Arthur Armstrong
      November 1, 1949 (age 66)
      New Jersey
      Nationality United States
      Occupation Chairman
      Employer Princeton Economics International Ltd
      Known for Creator of the Economic Confidence Model
      Martin Arthur Armstrong (born November 1, 1949 in New Jersey) is the former chairman of Princeton Economics International Ltd. He is best known for his economic predictions based on the Economic Confidence Model, which he developed.

      In September 1999, Armstrong faced prosecution by the Securities and Exchange Commission and the Commodity Futures Trading Commission for fraud. During the trial, Armstrong was imprisoned for over seven years for civil contempt of court, one of the longest-running cases of civil contempt in American legal history.[1] In August 2006, Armstrong pleaded guilty to one count of conspiracy to commit fraud, and began a five-year sentence.[2]

  21. bouraq says:

    Chart of the day is #SILVER at

  22. captbara says:

    The BBands have moved inside the Keltner channel. I believe this means a big trending move is about to happen.

  23. US services and manufacturing new orders PMI’s = sales growth (strong correlation with performance of the S&P500) over the last 2 days point to a reacceleration of the US economy.

    • vivelaamo says:

      Which could suggest a rate hike and subsequent correction?

      • equity market won’t care if GDP growth is strong enough, FED will be seen to be behind the curve.

        • The market rarely views the FED as behind the curve especially in this 7 year zero rate policy. We seem to forget that we are in an unusually low rate environment and any rate hike from here only tries to normalize the situation. It will spur bank investments and increase credit borrowing as the mindset moves away from the free money stance. Housing should actually see a stronger showing going forward when rates start rising. People want to capture the low rates. It is clear now that the last 2 years has helped greatly the consumers ability to spend and save. Perfect scenario for the consumer that couldn’t have been done any better. Sets stage up nicely for an economic expansion in near future. This however does not necessarily translate to a higher stock market. In fact it should cause a squeeze on profits initially. My very long standing MACRO view has been for a final transitional stage where consumers gain the upper hand while companies struggle to hold costs down and profits up. I think many will be surprised when the stock market has a deep drawn out correction as the domestic economy seems as healthy as ever. The bears however will not dispute this discrepancy as they have when the situation was reverse. Manipulations seems to occur to the person that has a one-sided view of the world. The last 2 years was crystal clear on the improvements to the consumers health. I analyze and re-analyze my assumptions to death and adjust accordingly.

          A long musing so I apologize in advance of any criticism. I never learnt the art of condensing my thoughts into a short concise paragraph or two.

  24. Peter Sliney says:

    The market is getting ready for a massive move. I think down. It’s seems to be trying to shake even largest hands out. This action goes under the heading “The market can stay irrational longer than you can stay solvent. John Maynard Keynes.

  25. phil1247 says:


    just for you

    this is why im not too anxious to trade oil right now

  26. bfquant says:

    Lastly, if Gold and Treasuries can swoon 2% + on days that equities are down, where is the hedge for large institutional investors? If this trend continues, it could cause forced selling to equalize risk in the portfolio.

  27. bfquant says:

    Thank you TC. My observations in this reply are not EW or OEW. What I will say is that there has been an incredible amount of mean-reversion post-Brexit between the cyclical and defensive macro sectors. This has seemed to accelerate in the last month with a sizeable swoon in Treasuries, and Precious Metals. I think this is quite a precarious time in the market as about 40% of the S&P 500 market cap are in low beta sectors. And even among the higher beta sectors, there is probably another 20% of market cap that is “lower beta”.

Comments are closed.