Tuesday update

SHORT TERM: pullback Tuesday, DOW -54

Overnight the Asian markets gained 0.1%. Europe opened higher and gained 0.1%. US index futures were higher, then lower, overnight. At 9am Case-Shiller was reported higher: 5.1% v 5.0%, and the FHFA index was reported higher: 0.7% v 0.5%. The market opened 3 points lower than yesterday’s SPX 2151 close, dipped to 2146, then rallied to unchanged by 10am. At 10am consumer confidence was reported lower: 98.6 v 104.1. By 12:30 the market had pulled back to SPX 2142, and tried to rally. The rally fizzled out at SPX 2147 by 2pm, then the market drifted into a 2143 close.

For the day the SPX/DOW lost 0.35%, and the NDX/NAZ lost 0.45%. Bonds lost 1 tick, Crude dropped 70 cents, Gold gained $9, and the USD was lower. Medium term support remains at the 2131 and 2216 pivots, with resistance at the 2177 and 2212 pivots. Tomorrow: new home sales at 10am.

The market opened lower today, bounced to unchanged, and then headed even lower. We now observe another series of 5 overlapping waves, this time from the SPX 2115 low: 2149-2124-2148-2130-2155-2142. Still awaiting that elusive third wave. Quite an odd market with the NDX/NAZ near/at all time highs, and the SPX/DOW remaining in a 4% range below their all time highs. Growth is being bought, but the cyclicals are not. Short term support is at the 2131 and 2116 pivots, with resistance at the mid-2140’s and the low-2150’s. Short term momentum declined to oversold from yesterday’s quite overbought condition. Trade what’s in front of you!

MEDIUM TERM: downtrend may have bottomed

LONG TERM: uptrend

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

About tony caldaro

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88 Responses to Tuesday update

  1. NINJA SHADE says:

    Close looking bearish here, tagging the VPOC ES2135 and stalling. 15pt rally from Crude looks like fast short squeeze before a bigger drop. Rising channel also broke down today at open.

  2. Page says:

    When WTI goes down $1 people start predicting oil going down to $35-$40 or some go as far as $14 AND when WTI goes up $1 people start predicting oil going up $65-$70 😀

    I say Oil is going towards $60.

    • cosmos77 says:

      I’m sure the OPEC members would like to see the price firm up and are trying to talk the price up, but Iraq and Iran are dragging their feet about freezing out put, which is what is putting the downward pressure on price. I spent the last two weeks in the UAE and saw first hand the effects of lower prices. According to the censored news, they are cutting back on spending in all areas and some belt tightening going on. I expect to hear a lot of talk to try to drive up the price. Maybe it will work, but no one wants to cut production because they need the money, especially Russia, which is already in recession due to sanctions. It seems maybe the Saudis are doing okay compared to the rest and could stand a production freeze better than others.

  3. H D says:

    GM all, 2131P – 2(144) fib – 21(34) fib? Just handling out money these days…. Still following the sequence. 8 days for pattern to prove it’s P3. News get’s sold either way if not. JMO.

    • H D says:

      Some symmetry in the 2 hits ~24 points. There were 2 hits w symmetry after the Sept low ~42 before a 34 point failed rally. 2131P kinda a big deal at this stage.

  4. Doesn’t look like much downside(SPX)with hourly +div a “lock”Maybe 10 more pts down?

  5. pooch77 says:

    Lets try this…Go long after Nov 8th,the weekly charts on rut and spx should bottom in that time frame.Then I will sell the farm and go long TNA in the $60-65 range

  6. captbara says:

    GDOW looks the cleanest today. Not that much drama in Dax and Nikkei either. The bear tell will be when those 2 start to become manic like US indicies are.

  7. pooch77 says:

    Go long after election!wharmtch charts on rut!spx to follow

  8. blackjak100 says:

    Market conditions seem to be deteriorating fast. It’s hard to see any kind of elusive third wave which is what OEW is calling for. Price still hanging there despite the conditions however.

  9. Impressive moves in September and October considering they are the bull killers. Tony’s version seems most likely since the moves are very controlled and corrective in nature. All those newsletters and die-hard bears that want to see an ending of this trend might be disappointed.

    The dollar is what I have fixated on since it seems critical for earnings here to accelerate as expected. Do not expect to see anything in the fundamental side (domestic economy) that would cause a major reversal of trend. Whether we drop hard soon or not there should be a strong move leading into year end. Even if we are nearing a major terminal point it seems most unlikely we don’t revisit near the highs again. Opportunity is there for capturing fast moves. I personally see November onward with shallow dips before the ultimate highs in December. Had thought we could have a nice play on both sides this month but time is running out.

    I do see odds shift greatly in January of 2017 for a bear strike. I see no reason why we would not continue to see stronger domestic economy relative to most others and upward pressure on the dollar and 10 year yield. The street has reduced January’s cumulative earnings expectation to 7 percent from 9. I actually think we might hit that target come January. I do not see however any circumstance that allows for a 13 to 15 percent rise for the quarter after that. The street has pushed back earnings but has built up expectations to a high level. They have boxed themselves into a situation that is rare. A surge of such proportions in such a small window suggests it will fail.

    If we slip/slide till November comes along I can only assume we will not have a dramatic drop.
    The buildup for such a drop however is getting stronger. Good economic news will keep putting pressure on the dollar, bond yields, and inflation expectations. Perversely while earnings will grow in immediate future it might not be enough to offset costs and strong dollar. I have a long standing Macro view that shows this post transitional phase causing problems for corporate earnings as the consumer sees the best benefits from this whole bull cycle. That translates to a stock market wave 4 drop of some 20 percent in a period of time that will be the high point for consumer strength. the exact opposite of the start of this bull run. It is holding to a pattern I talked about for years. Cycles usually have specific economic trends that almost always end with a euphoric rise in participation and economic spurt. Not there yet and believe business adjustments in 2017 will set stage for a really big move in 2018 and possibly 2019.

  10. fionamargaret says:

    GLD should be starting its move off the 200…if it does there is a good $40 to the upside..

    • fionamargaret says:

      …maybe I have to persuade the Royals they need to hoard some…even if only for the corgis sake….

      • fionamargaret says:

        ..why would we need gold asked the corgis..shiny stuff with no smell…
        well I replied, it does stuff…like magic they replied..well kind of..
        you could exchange some of your gold for protection so when Anne’s dogs come over, you don’t get roughed up..they looked at each other then asked if they could instead have a dog that roughed up Anne’s dogs….lamb chops I said..you could get lamb chops…now you’re talking, replied the corgis…so with that, the corgis agreed gold had some value…

        • fionamargaret says:

          ..I did miss out something I said..the corgis listened…if we put the gold in your basket, and didn’t get lamb chops today, you could get more lamb chops next month…so it is magic too.

        • cosmos77 says:

          Good story. LoL.
          Can you clarify your call for a move in GLD off 200. Are you thinking long or short? I’m seeing it at 120.80 with a gap to be filled at 125 and a good stop to be placed at 118 (previous st low). But the apparent bear flag formation gives me caution about going long.

    • fotis2 says:

      Can argue a CH but 1260 must hold longer term weekly CCI still bellow -100 not good for bulls looking for a gap up above +100 and close bellow 0 line on daily to enter short however a surge above 1315 and weekly close game on for Bulls, hope you well Fiona.


  11. stmro says:

    I’ve noticed in recent weeks that down gaps very rarely seem to hold, but the bears are often able to pull together a mild trend down day. Conversely gap ups often don’t get retraced on the same day, but the bulls are never able to make much progress thereafter. Not sure what any of that means from a predictive standpoint though.

  12. cj32 says:

    Cr. to CBZ

  13. NEWBIE says:

    Nobody expects swift 40 point drop from here but it’s coming. Buckle up

  14. This market is like all the holloween movies, just when you think its done. Im back. Need a new ending starting today please

  15. jeffbalin says:

    Either still in minor 2 the primary count, or 2193 was a significant top which seems very possible looking at cci or Tony’s momentum indicators, meaning still in primary 2 headed to back to 1810, or we’re in cycle 2 as before…1810 was major A, 2193 is B with C to come. Maybe minor 2 is hanging around until after the election but I have trouble thinking a big wave 3 rally is going to blast off after the results are in. Maybe if Hillary wins I guess but I also can’t believe Trump will accept a loss right away without a few more weeks of complaining and throwing out a few lawsuits, continuing the uncertainty. Maybe we will have the longest wave 2 compared to wave 1 as far as time in history considering that 80% of the time wave 2 is equal or less in time then wave 1, and we are in the 20% right now and looks like at least another week and maybe way more.

    • captbara says:

      My take. Regardless of who wins, P5 completes, but under HRC there will be no SC2 and SC1 was actually a B wave. Dow megaphone top comes to fruition.

  16. Personally,I think the Fed pumped the gas pedal since the Yellen/Obama meeting in February.She was told in no uncertain terms to keep stocks up…by hook or crook for HRC.After the election,Clinton wins–selloff.Trump wins–BIG selloff.Both because of Fed withdrawing liquidity(Trump more because he’ll kick Yellen out).
    Gold and GdX have a chance to make a statement today,but so far it’s just in whipsaw mode.Needs to stay over 24.35-24.40 for 2 days running (3 preferred).Good luck all.

  17. gtoptions says:

    Thanks Tony
    SPY ~ WPP in Play

    Cubs in corrective ‘a’ wave, with ‘b’ wave on tap! 😉
    Go Cubbies!!!!

  18. mtu MTU says:

    [1045am] SPX update-
    Tracing counts update. See chart.

  19. captbara says:

    Dax made new highs for the year and now retesting the bull flag breakout. Bearish if it falls back in, and its minor 3 count would be jeopardy.

    • cosmos77 says:

      Thanks Red, Great analysis as usual

      • reddragonleo says:

        I was sweating bullets there for a bit Cos as if that 2122 level broke it could have gotten quite ugly for the bulls. But so far so good… we’ve hit my 2138-2140 zone and are stalling out a bit now. Possibly some more upside later in the day.. not sure? But I’m not worried as the longs from the open should be exited now anyway and go to cash until the next opportunity shows up (at least that’s how I like to play the game… to each their own I guess).

        • cosmos77 says:

          Not enough movement in either direction to swing trade with ETFs. The S&P has been making lower tops and lower bottoms since the 2194 top this summer, not a big confidence builder to look to go long. I’m still lurking and watching for some kind of breakout (i.e., 2177 OEW pivot or at least some kind of decent bottom in the 2116 pivot range to go long with tight stops). Don’t know what it would take to turn me bearish enough to short this Fed driven market. I hope you will post an alert when you see a solid looking bottom. Thanks and keep up the good work.

  20. phil1247 says:


    there is still support at 2124….
    but we are back in the morass i thought we had left behind

    bearish below 2153

    target …. 2080

  21. phil1247 says:


    extension long violated

    you know the drill

  22. captbara says:

    Anticipation of a Trump win may send ECB and BOJ to ease big one last time before he gets into office, since they know he’s against CB intervention and currency manipulation. I wonder if he’ll take down the Fed too.

  23. phil1247 says:

    phil1247 says:
    October 25, 2016 at 3:41 pm

    looks like da boyze want crude sitting at 48.99 target
    in am for your viewing pleasure


    48.99 target hit..!

    how did i know this yesterday ??
    tuesday tea time
    with the saudi oil ministers
    and top saudi oil traders
    gives you valuable info…… 🙂

  24. vivelaamo says:

    Do thinking honestly think Trump could win?

  25. NINJA SHADE says:

    GM, ES futures hitting the lower TL of rising channel. Hoping for another trip back up to the upper TL in the next days for a short setup around ES 2152 area (old VPOC) which corresponds to SPX2158 (50d sma)

  26. jeffbalin says:

    Sort of going nowhere until election is over it seems. Then what…. Trump wins sell off, Clinton wins bullish? …..or sell off either way. We generally know more what to expect with Hillary, if Trump lots of uncertainty. Can’t imagine Trump winning will cause everyone to get back in and buy like crazy.

    • Too Frank says:

      I tend to agree with your comment, but part of me finds it astonishing that Hillary and friends having a free hand to loot the economy would be good for stocks. I won’t say any more, since political discussions are not very welcome here, if at all

    • Biff Hooper says:

      I am anticipating a knee-jerk reaction immediately after the election regardless who wins. Most likely, in my opinion with Trump – down, with Hillary – up.

    • tommyboys says:

      Prolly depends on how Congressional elections fall. If balanced – grid lock – prolly markets will have a benign response. If either party takes control in line with the Prez elect we tank. Prolly a HRC victory combined with a Repub congress would be best for grid lock and a market sigh of relief.

  27. Ajay Singhi says:

    Nifty update: For those who follow nifty, the bear mkt rally from the February low ended abruptly at 8960. So, even though S&P will make a new high above 2200, nifty wont cross 8900 now.

    Short nifty above 8680 add on all rises above 8700(We should get a few bounces above 8700 in the next few months), target 5800, timeframe 2 years.

    Short term, I am expecting breach of 8400 by November first week, CMP 8640.



    • Praveen Vishnu Shamain says:

      Thank you very much, Ajay. I’m one of those who track and trade $NIFTY. Thanks for your views. Two questions. (1) Can you please share your EW counts? (2) Levels above which you may need to change your views.

      Thanks in advance.

      • Ajay Singhi says:

        Will take some time. Its in a complex triangle with C wave finishing at 8960(6825-8960). D wave started just now, tgt around 7500 by March next year. C down should coincide with the C3 down on S&P. Overall tgt 5800 by mid 2018.

        Will try to publish the detailed counts over the weekend as the bulk of the work has been done by a friend of mine.

        As far as invalidation level is concerned, nothing will change my view of 6000 breaking in the next 2 years.

    • Tom Smith says:

      I just cannot agree less with this scenario.

  28. Not a political comment.
    Just historical record.
    Election of R. Reagan in 1980 ushered in surge in GDP
    Some people are comparing D. Trump to R. Reagan.
    Predicting a surge in GDP if Trump is elected.
    Point is though, first 18 months of Reagan’s 2 terms were pretty horrible for stocks.
    21 % correction.
    Of course it was much different then, extremely tight FED. under Volker, extremely loose FED now.
    If Trump is elected, any system of Tariffs would probably be seen (at least in the short term) as disruptive.
    Just saying

    Market breadth yesterday still falling ($SPX stocks above 200 DMA)
    Excluding the days after the Brexit vote, that’s the lowest in 5 months.

    Thanks Tony

  29. Ajay Singhi says:

    Mkt should be up tomorrow.

  30. Ajay Singhi says:


    You are looking for a 3rd wave! Where is the first one?


  31. bouraq says:

    The first chart is an old one. I cannot delete for some reason.
    Today’s chart of the day is $RUT at http://www.tradingchannels.uk

  32. bouraq says:

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

  33. micky says:

    still in corrective mode, nothing yet to suggest anything elseTrade the range until it breaks…

    • mjtplayer says:


      A few NAZ stocks are holding-up the entire market, otherwise it’s a continuation of the low volume sideways drift we’ve had since mid July. Those expecting a wave 3 higher, or a massive drop, prepare to be disappointed. The election is in 2 weeks, expect more sideways drift until then.

  34. pooch77 says:

    Apple beats lowered expectations by a penny but revenue misses

    • pooch77 says:

      Somewhat dissapointing considering samsungs “7” woes

      • CB says:

        Right, “somewhat” .. =) Since nobody expects too much from AAPL anymore , there isn’t that much room for disappointment, perhaps.
        Also, from what I’ve just seen, the thinking seems to be that Samsung 7 has already been “priced in” during the recent rally, so this is jut ” profit taking.”
        Right now after earnings Aapl is basically sitting right at its daily TL, so they may just decide that it’s bullish in the next few days…..wouldn’t be surprising… 😉

  35. Third attempt for the dollar to hit or break 100 in last 2 years. Will it succeed this time around? Not sure since the EU and China might be seeing stronger economic expansion also. Any technician that can give a clearer picture of future trend? I think it’s real important for sustainability of equities market.

    • mjtplayer says:

      The Euro is in a downtrend, thus the Dollar should continue rallying. The Euro is 57% of the DXY

      The Yen has found support at 100 and should weaken from here, bullish for the Dollar. The Yen is 13% of the DXY.

      In the very short-term, the DXY could pull-back to the 98 area, but the trend is higher until further notice. Major resistance is actually a range from 100 to 100.51; the Dec high. The DXY has tagged this area many times, but hasn’t been able to break through – yet.

    • DX, there is a Bearish Gartley pattern going back 12 months, should top out at 99’ish returning to this year’s low…

      • CB says:

        Thanks Richard. I like your call. Something is def. changing. on that chart – daily neg. D and look at that candle today…hmm .

  36. phil1247 says:


    looks like da boyze want crude sitting at 48.99 target
    in am for your viewing pleasure

    then if they blowout the bottom of the extension long

    support drops to 46.98

  37. CB says:

    Thanks Tony. Two markets, indeed. SPX filled the gap , while the Qs didn’t. . They’ve left some room for AAPL to move, perhaps…. Have a good evening everyone.

  38. bfquant says:

    Not just the S&P closer to the bottom end of recent range. Look at the Russell 2000. Breadth is really deteriorating.

  39. 123 abc says:

    Thank you Tony et al; personally long at the close with stop/hedge at 2135.

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