Tuesday update

SHORT TERM: pullback continues. DOW -200

Overnight the Asian markets lost 0.1%. Europe opened higher but lost 0.5%. US index futures were lower overnight, and the market opened 5 points below yesterday’s SPX 2164 close. Right after the open the market continued to decline until it hit SPX 2139 at 11:30. Then after a bounce to SPX 2146 by 12:30 the market headed even lower. Around 2:30 the SPX hit 2129, then bounced into a 2137 close.

For the day the SPX/DOW lost 1.15%, and the NDX/NAZ lost 1.50%. Bonds gained 1 tick, Crude slipped 55 cents, Gold slid $6, and the USD was higher. Medium term support remains at the 2131 and 2116 pivots, with resistance at the 2177 and 2212 pivots. Tomorrow: the FOMC minutes at 2pm.

After hitting SPX 2170 right after yesterday’s open the market started to pullback. The market then opened lower today and resumed that pullback. At the low of the day the SPX hit 2129, right within the 2131 pivot range. With yesterday’s rally to SPX 2170 we adjusted our very short term support levels 4 points higher to SPX 2108 and SPX 2120. Both are just about within the OEW 2116 pivot range. We continue to look for support, to end this downtrend, between SPX 2100+ and the 2116 pivot range. Possibly with some positive divergences. Also, a 55 point decline from Monday’s ES 2163.50 high is about SPX 2116 cash. Short term support drops to the 2131 and 2116 pivots, with resistance at the 2177 pivot and SPX 2194. Short term momentum was extremely oversold at the low. Trade what’s in front of you!

MEDIUM TERM: choppy downtrend continues

LONG TERM: uptrend

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

About tony caldaro

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118 Responses to Tuesday update

  1. abchart says:

    Don’t be long from here. The target is too small and the risk is a drop of 3%+

  2. pooch77 says:

    Does anyone have an opinion of SnP having 2 back to back inside weeks

  3. phil1247 says:

    WAS extension short
    front run at 2140 /es ?

    if so… target is 2114

  4. would not be surprised if bulls take this to 2164

  5. mjtplayer says:

    Fed minutes due out at 2pm, market just drifting until then on light volume

    So far it’s a good day for the bears, burning-off the oversold conditions without a lot of upside gains

  6. GDX still bouncing off the 3 BB closes.I mentioned the 2100 level as the area where the market decides whether Trump or Clinton wins.Above 2100 is Clinton…below is Trump.This encompasses May 31st to Nov 1st.So if Clinton is supposed to be factored in as the winner,SPX should not breach that area.Good luck all

    • phil1247 says:

      sorry learned

      GDX and GOLD both look grim

      so weak they cant even rally
      up to extension short level
      so i can get short again

    • I’m guessing any rebound would be contained by 25.35 in the 20d sma for GDX.Higher than that for more than a day or so would be more bullish.

    • Election has never been seen as close on the electoral stage. Election is a non-factor when the odds are this big. Only a big reversal in fortune for TRUMP would change this landscape. I would concentrate on earnings and the dollar exclusively. Gold has limited upside right now.

      • I don’t make the stats on incumbant vs challenger and the stock market.Just report them.Whether it works or not this year…we’ll find out.

        • I agree that incumbents usually lose election especially after 8 years but the actual polling has been saying otherwise with these 2 candidates. Had the Republicans put up anybody else against Hillary and the outcome would be completely opposite. Does anyone seriously thing TRUMP has a shot? Perhaps if he refused to be seen or talk till election time his numbers will come back. He is his own worse enemy.

          I go with the flow and not try to slant my bullish or bearish position to fit my assumptions.
          I was only one of a handful of people that saw the early part of 2016 as a great opportunity to catch the next wave up. Consumer health was gaining steam. If you want to look at stats to explain the markets behavior look at the historic data when interest rates were this low. All about competition for your investment dollar.

          I have been waiting for the next wave down to be a nasty one where all the bears start making a lot of noise. If it occurs in an environment that does not cause consumer deterioration but does so in an earnings squeeze I would stick with my Macro Trend suggesting yet another big wave up to new all time highs in the future.

          I always temper my emotional swings with analytical thinking. People get caught up in a doomsday scenario and latch onto selective reasoning to continue to support that view. The fact that the consumer was in relatively great shape leading out of the long sideways market move suggested to me the pattern was corrective in nature. Most ONLY saw an opportunity to bet the short and long dated OTM puts as an easy kill.

          My long winded optimistic response does have in it a nasty drop that could start any time with my odds on favorite time in January of 2017.

          • johnnymagicmoney says:

            well I recall Brexit. It was close until that legislator got murdered by a Pro Leaver and then the numbers leading up to it favored the Remain camp by a lead that seemed unlikely to evaporate. Then the results started coming out in pivotal areas and they were drastically different than thought. The Trump movement is global and people are pissed. I think the numbers are pretty wide now so I hear ya but if Trump can close it to 2 or 3 points there could be a surprise. No one wants to vote for Hillary and she is bringing no message like Obama did on his first go around. her own party dislikes her. Ground game you would think favors Hillary as well but you never know. I don’t care what the polls said – Trump clearly won that last debate. The Lincoln line and You’d be in jail line were extremely effective contrary to what the biased media said. CNN poll said 57% Clinton after the debate? Oh did we say that 60% of our respondents were democrat? LOL – so crooked. I think Megan Kelly needs to join them or MSNBC since she is a wolf in sheep’s clothing as it is.

            • Well said JMM.The Fed,FBI and media are all in the corruption club with Obama/Clinton.All for one and one for all (of them).It’s not just the anchors–this pro globalist Clinton cronyism starts at the top.NBC and CNN CEOs have to be publicly questioned about why they think they should be allowed to show the 95% biased stories pro Clinton–and not have to answer for it.Cable is niche programming area,so I’m a little more forgiving,but NBC is in her corner full blast–and shouldn’t be.They’re like Tass in Russia–a mouthpiece for HRC.
              Nadeem had an update.Less optimistic about Trump,unless he closes the gap to within the margin of error by Halloween.But still not a done deal,in his view.

              • The 2 parties went out of their way to pick the least likable person. The BREXIT was a bookie mistake. Rare event. I looked at the electoral vote possibilities months ago when TRUMP had a fighting chance. Even then the numbers were lopsided in favor of Clinton. I am not talking about who you would like to win, only using analytical probabilities.

                Just like sticking with crash scenarios, it just doesn’t jive with reality. Unemotional analysis without personal bias thrown in. Going with the long shot gives you a slim probability of winning.

                I didn’t just GUESS 12 months ago that the consumer was anything but in trouble. I used real multiple verifiable reports. No one wanted to listen because of their bias taking over the analysis. If you can’t understand why the market did so well over the years you will have a small chance of guessing the actual demise. I base my view on the assumption that the market is correct and try to determine if it is telegraphing a major reversal. I don’t fight the market behavior by insisting its all smoke and mirrors. That’s why technical analysis SHOULD be siding with the pure analytics without emotional bias, YET that also can be manipulated according to a strong predetermined bias.

                The superstars of long term investors are the ones that don’t get emotionally involved. It is also the ones that look at historical events and never get entrenched with the emotional highs and lows. The Soros type investor has a predilection for seeing the dire events unfold but never the opposite. They take advantage of the euphoric situations but could never understand the bottoming process. Buffett on the other hand has made money in “ALL” trading environments simply because he has an even temper and treats his work as purely analytical. He describes his fame as just a person that loves his work and does it well. He doesn’t philosophize over moral issues or try to force the market to behave in fashion. I wish I could be as emotionally detached as he is.

                In the end it’s the even tempered individual that has a fighting chance of understanding the market consistently. A prerequisite for being a superstar. I am actually biased toward pessimism and fight that bias every day.

  7. kvilia says:

    Markets having hard time to bounce. It could be bloody Red October😉

  8. zvyezda says:

    First yellow flag regarding military escalation in Syria. Russian diplomatic corps told to repatriate all relatives abroad, ostensibly for “appearances sake”.


  9. Don’t expect much action from the announcement since there already is a 70 percent chance of rate hike in December. This would be the same month last year we saw a rate hike. Doing it during the strongest seasonal stock market up moves. Smart.


    Never before had the FED disappointed when the 70 percent mark was reached. Done deal unless some external event takes place. The election now has the widest margin of victory for Clinton and even with the WikiLeaks attempt to counter this spread the outcome seems a lock.

    If the market looks 6 months ahead what does the current churn indicate?

    I will tell you this. On a contrarian view the way the market holds up in next 2 weeks against the backdrop of earning announcements and rate hike expectations should dictate whether we have yet another seasonal rally late in year.

    The drop so far is very muted and indicative of positive momentum so far. I still view any weakness as a buy anytime after October 20th or so. Depends on how well the market hold up.

  10. wanderer says:

    “wanderer says:
    October 11, 2016 at 1:40 pm
    Got long at 2123.00 ESZ6. We are in the 24-hour period before the FOMC decision announcement, and based on historical evidence, there is 80% chance that we move up from here on. I will close this long position tomorrow before the announcement.”

    I’ve just sold this long position at 2136.00. The order flow is well balanced now, so I have no particular positional preference (short or long) anymore. Gained 13 ES points per contract on this trade, which is a decent gain for me. Totally flat now.

  11. micky says:

    The st support on futures is still holding, one possibility if we go higher is 2122 low can be another wave a and we are busy with the b from there..

  12. captbara says:

    Dax hourly falling wedge again, within the daily bull flag.

  13. blackjak100 says:

    Hard to short here near lower BB, so I’m hoping a bounce to 2145ish is in the cards for today.

  14. phil1247 says:


    bearish below 51.18

    raised stops on SCO bought yesterday

  15. abchart says:

    Initially (my yesterday’s chart) I suggested an “a” (green) at 2120, then “b” (green) at 2145/50.
    Please note that there are two possibilities (not difficult to trade):
    1- A drop to the yesterday’s low (2129) then bounce toward 2150/55.
    2- A drop to 2120 then bounce toward 2145/50.
    This before 2100/04 > 2120 > 2081…

  16. mjtplayer says:

    The Dollar closed yesterday at 97.70 which is above the July highs and is now trading 97.87. Next area of resistance is the 98.50 – 99 area. Don’t fight the trend.


    • torehund says:

      Could be the a beginning of a lasting trend. As country after country succumb to currency withering one would think that at some point there would be a more concerted move into the USD, it has yet to manifest itself.

  17. johnnymagicmoney says:

    I know it’s only a few but Fastnal, Illumina, Alcoa Honeywell, Ericsson all realllllly bad. Earnings and revenue misses……..Ericsson said they didn’t realize things were this bad. LOL who says that on an earnings call?????

    So far so not good. Tech might be a bright spot but there is more and more deterioration in the averages. That’s not a healthy broad based economy or market but keep coming with those optimistic counts. And by the way There is one thing Golly said smart recently (yes I said that). I hear lots and lots of complacency. Me think there is more selling.

  18. xcaroline1 says:

    Thank you Tony. Yesterday was a smooth correction, not much urgency to it. The daily uptrend on the S&P is still intact. Daily support, 2116-2120, needs to hold. This is also, give or take a point, trendline support from the february lows, . A close under this would suggest a correction of a higher degree is on its way which might see 2003 or lower. But support turned resistance 2144-2145 may not be easy to take back. Let’s wait and see. For now I am 95% in cash and have been the last few weeks.

  19. stormchaser80 says:

    We have been standing by our Technicals Model which showed in early September a lower low than Brexit even though the SPX was 125 points higher. The sideways triangle we patiently waited out on both the SPX hourly and VIX hourly have broken out in the manner we expected based on the Model’s performance 1 month ago.

    The market bounced off a key level and closed right at 2015 highs, natural support. Let’s see how long that support can hold!

    More discussion and charts here: http://navigatethemarketstorm.com

    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 to see daily posts. This takes 15 seconds. This is to protect myself, ensuring that everyone agrees to my legal documents.

  20. H D says:

    Nice call Tony! My $0.02, or view, reviewing the oil, gold, and SPX set up. FWIW. Same chart?


  21. locanbbs says:

    UPDATE: “Clinton – Yellen – Trump effect”…

    … is being “out-trumped” by the “Draghi – DB effect”:

  22. johnnymagicmoney says:

    its interesting how so many people on here say “why bother picking a top. That is a futile exercise” yet when the market broke out of the wedge to the downside everyone on here is sooooooooo confident as to where it is going to end. Why don’t you use the same logic? Probably because your bias is bullish. I do see 2119 as a possible stop but I wouldn’t be shocked if it went way lower. From a “this makes sense” standpoint there is still negative earnings, the FED is closer to raising again, companies like Honeywell preannounced crappy numbers, the dollar wont help many with their future earnings, and the last two drops had foreshadowing’s on the chart just like we had before this started to break down. From April to August 15, from October to January 16, and July to today all look pretty darn familiar but I guess your counts don’t fit with this possible scenario. But no worries when this keeps dropping you can change your count and it then makes sense!!! Do I need to go on about the Italian referendum, wage pressures, declining productivity, consumers saving more, incredibly decreased cap ex, the election, the European banks, the real possibility of disappointing earnings, China’s property bubble, Japan and Europe’s waning stimulus, a continued downgrade of GDP, student debt, six quarters of negative earnings, global deflation, an oversupply of oil and a joke of an OPEC deal that will mean nothing again, the exodus of capital from China, the precipitous drop of the pound, extreme currency moves all over, Abenomics, bad debt fuled by more Ponzi debt in China, extremely high debt to GDP ratios around the world, and the yields of many safe assets rising? I have about 40 other things to list like a choice between a gridlocked Washington (Republican houses with Clinton), Trump (OMG), or increased taxes and entitlements to put a further drag on the economy than the weak one we already have (DEM houses with Clinton).

    But wait we have more bartenders, maids, waiters, and nurses so this economy is great (aside from the fact that recessions start at full employment mind you).

    =) have a nice night – Johnny did well today

  23. abchart says:

    SPX: I will post an update tomorrow morning. For now we bounce to 2155/56, but I think that we will have more spike in volatility especially next week. Nothing yet to suggest that the correction will end at 2100+. We may even drop to 2050 in 2 or 3 sessions.
    Good night all.

    • stmro says:

      Agreed. Theres too many people looking for a bottom in the same place. A break out of such a large consolidation range and below the top of the previous 2 year range should produce a bigger move.

    • vivelaamo says:

      Ab it’s good to see you posting on a regular basis again. I find your charts very helpful. Thanks.

  24. kvilia says:

    Thanks, Tony. Bounce, then another flush, and finally we’ll see if the bull has the guts or bear has the balls.

  25. blackjak100 says:

    If this was a triangle which completed yesterday at 2170, moves out of them are fast and swift. Don’t be surprised to see the bottom tomorrow/thurs if the Int count is correct. Everyone speculating about bounces on here and it should continue lower tomorrow pending its a true EW triangle.

    • locanbbs says:

      What do you mean by “pending it(‘)s a true EW triangle”? …”if” (it’s a true…)?

      • blackjak100 says:

        Triangles are not common EW structures. Often times when it looks like a triangle, it’s actually a double three or a diagonal. The most important characteristic of a triangle is it precedes the final movement of the trend. If TC’s int count is correct and we are approaching a ‘third of a third’, then it is a true triangle which should bottom in 1-2 days. Hope that helps!

  26. bouraq says:

    Chart of the day is $DJIA at https://www.tradingchannels.uk

  27. Thanks Tony
    Pivot at 18k would confirms the wedge
    Support in this case is in 17,4k area

  28. Minute a of minor c was 37 31 69. If minute b ended at 2175. a of minute c if ended at 2129 was 46 points. So if an abc down, b up should be as high as 2167 which would be .83 percent of a like minute a then down just below 2100 to finish.

  29. After such a drop we usually get a vicious bear blog attack? I would love to see the crash and trash talk. Way too much complacency here.

  30. pooch77 says:

    Should bounce tomorrow and go down into the weekend bottom between 16th-19th

    • alexhartley1 says:

      I have a bottom 14-17th Pooch.

      • pooch77 says:

        Fits nice my days are – or + 2-3 days,usually watch daily charts for confirmation

        • abchart says:

          Is that astrology from the Miriman blog?

          • CB says:

            oct 19 is a Bradley date, I think..

            • pooch77 says:

              Very important full moon on 16th. When sun is in libra moons are very effective,otherwise not so much

              • captbara says:

                Sun also joining Spica on the 16th, will bring immense wealth🙂

              • CB says:

                Oh my, that should be intense.. Thanks pooch.
                So let me guess: he’s just gonna keep dousing himself with gasoline until they build a wall around him and make him pay for it….? The guy is literally on fire and it’s only Tuesday…..
                Hmm.. Spika? …Capt. Nymo, curb your enthusiasm, please !…LOL

              • locanbbs says:

                You mean because the sun is debihilitated in Libra, the moon is more effective? That may be true. But I think stronger impulses are at work here. Looks now like the “final” bottom won’t be till perhaps January-March (big cyclic bottoms). Certainly there’ll be a lot of volatility in between. If you’re not so nimble, better to wait till the market calms down for a while..

          • pooch77 says:

            Yes some

  31. Richard Glackin says:

    Count the waves friends…this isn’t finished…wave 5 still to go. A 1.618 wave 5 takes us to 2115ES.

  32. fotis2 says:

    Tx Tony daily 3BR to 2121


  33. dan pulford says:

    SPX wave c ends the correction at 2128.84. Wanderer called it on the mark at 2129.79, but he was a week early.

  34. 123 abc says:

    “sell Rosh Hashanah, buy Yom Kippur” —working out well thus far.
    SPX futures: expecting bounce towards ~2150, followed by final drop towards ~2100.

  35. ko68 says:

    Nice call Tony, thanks!

  36. mtu MTU says:

    [EOD] Stocks –
    Today’s low in SPX is likely the blue & pink B, black [b] or gray C (Chart 1), barring extension selloff. The red (C) and the green C(C) will track a continued selloff, which is likely to fill the gap at 2099. For now, an upswing is in progress.

    Price action at a larger degree is revealing (Chart 2). SPX retested the lower blue line support today. The current rebound is likely to challenge the overhead resistance at the green line, and potentially more (gap, red line and the upper blue line). Furthermore, the decline from the 2179.99 counts well as a zigzag so far (Chart 3).


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