Wednesday update

SHORT TERM: slightly higher open then decline, DOW -111

Overnight the Asian markets gained 0.3%. Europe opened lower but gained 0.2%. US index futures were slightly higher overnight, and the market opened two points above yesterday’s SPX 2269 close. Right after the open the market started to pullback. At 10am pending home sales were reported lower: -2.5% v +0.1%. The pullback continued into the afternoon, with just small 3 point bounces along the way, until the SPX hit 2249. Then a slight nudge up into the close ended the day at SPX 2250.

For the day the SPX/DOW lost 0.70%, and the NDX/NAZ lost 0.85%. Bonds gained 13 ticks, Crude was flat, Gold added $3, and the USD was higher. Medium term support remains at the 2212 and 2177 pivots, with resistance at the 2270 and 2286 pivots. Tomorrow: weekly jobless claims and the trade deficit at 8:30.

The market opened slightly higher today, then immediately reversed and headed lower. The pullback from today’s SPX 2271 high was quite steady to the downside. Yesterday we had noted the larger waves since the FED FOMC day SPX 2248 low. Today the two most recent lows, 2256 and 2254, were both exceeded to the downside. This suggests the market has been in a complex flat, or complex zigzag, since the SPX 2278 uptrend high, with three significant waves: 2248-2274-2249 thus far. If a complex flat this pullback should bottom around SPX 2248. If a complex zigzag then there are three potential areas SPX: 2243, 2233 and 2221. For now we continue to count the SPX 2278 uptrend high as wave 1, and this pullback wave 2, of Minute iii. However, we can no longer rule out that this pullback might be Minute wave iv. Short term support is at SPX 2243 and SPX 2248 with resistance at the 2270 and 2286 pivots. Short term momentum ended the day extremely oversold. Trade what is in front you!

MEDIUM TERM: uptrend

LONG TERM: uptrend

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

About tony caldaro

Investor
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53 Responses to Wednesday update

  1. Fantastic finish to GdX –up 7.75% today.Up 2% the last 3 minutes.Shortcovering.Great to see.

  2. micky says:

    es within spitting distance of my 1st likely target of 2238 as mentioned a while ago

    • Seeing the same in the cash. Been watching a slow motion impulse down on a 2 min chart since just after the open this morning which should finish up the entire correction. My cash target is 2242-43 which is in line with your ES target.

  3. phil1247 says:

    $DXY

    extension long still hanging tough

    expecting dollar to blast up over 104 as long as it holds

    if gold can hold longs from lows
    .. it will be a ” tell”

  4. scottycj1 says:

    It was just reported by the SEC there are only 8 people trading the market today. 🙂

  5. kingfrogcash says:

    Doug Kass was running the idea that to expect a year end selloff Friday and run in TLT as funds rebalance. TLT has been running the last 3 days.

    • fionamargaret says:

      TMF if you want cheaper crazier….

      • cosmos77 says:

        Thanks, this is my first time to look at TMF. If caught right it could be an exciting ride. It made a nice bounce over the 20 dma and rounding bottom. But be wary of the upper BB at 18.40. The three previous similar moves on 7/29, 9/7 and 9/28 did not turn out well. There are also two trendlines to offer resistance in that same area. TMF is a great one to add to my watch list.

  6. Here’s a count from early November that’s looking better and better to me as it develops. Haven’t seen it here and am not real knowledgeable about wave rules. See what you think…

    Minute wave i from 2084 – 2182.
    Minute wave iii starts at 2152.
    Wave 1 of iii 2152 – 2214.
    Wave 3 of iii 2187 – 2278.
    Wave 4 of iii is just ending around 2248-9.
    Wave 5 of iii should go to 2300 or so.
    Then Minute waves 4 and 5 to follow.

  7. prakashbkc says:

    How we know this minute iv ?

  8. Now THERE’S a breakout.Above 1142 finally–all the way to 1148.The possibilities are endless.

  9. Tarun Varma says:

    Tony, re: your comment “For now we continue to count the SPX 2278 uptrend high as wave 1, and this pullback wave 2, of Minute iii. However, we can no longer rule out that this pullback might be Minute wave iv.” What would confirm for you that this indeed is a wave iv pullback?

  10. bouraq says:

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

  11. stormchaser80llc says:

    Market slammed lower today. I had said that the 12/14 low of 2247.9 had to be taken out even for a bullish scenario. This occurred by 1 SPX point today, so the market is again free to either extend the post election momentum or develop into a deeper downdraft. Analysis of the SPX hourly chart shows new lows need to be put it in, in order to put in positive divergences on the technical indicators.

    Bearish items include a new $VIX uptrend, and recent negative divergences in both McClellan Oscillator and New Highs. The number of stocks above their 20/50 day moving average could be starting a significant deterioration, My proprietary Technicals Model has put in a large negative divergence vs. SPX seen since mid December. The McClellan Oscillator had a bad day.

    On the bullish side, My proprietary Technicals Model could be putting in a positive divergence when compared to the SPX price action since late last week. SPX Daily analysis showed no negative divergences at recent highs, which most often means a new high is expected. HYG:IEF is still very near 2016 highs. While my legacy swing trading signals are neutral, all 999 members of my new ensemble are currently bullish.

    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.

  12. torehund says:

    Interesting times Tony.
    Interesting with crude rising alongside a strong relentless USD. It has been looking like a W-3 from bottom and if its nasty maybe 120 will be tested and if USD stays firm there will be a massive stagflationary pressure ex-USA. Merkel better make friends with Putin as the Nat Gas pipe through Syria now is a long shot away. Good piece from Armstrong evaluating bad time politics right and left.
    https://www.armstrongeconomics.com/armstrongeconomics101/when-left-meet-right/

    • 5.5 earthquake in Lake Tahoe area today,Tore.California has had them on either side in the last month.

      • torehund says:

        Its picking up, alongside volcanoes. The real climate gas is Sulfur.
        Truth is in a bull-market and alternative media too, you just need more mentally strong individuals like Dutchsinse to drive through the paradigm shifts. The Trump effect powerizes them and the crapola-media and subsidized sciences will be caught with pants down.
        “Having high worth and being worthless” is finally in a bear-market. And the say nothing, do nothing and be nothing will all soon leave Washington too, lets hope.

  13. ragnar5 says:

    Hi Tony,
    tony caldaro says:
    December 28, 2016 at 4:47 pm
    “2248 was obvious support, luckily I mentioned it yesterday =)”

    I salute you for using your objective EW system to arrive at your resistance and support levels!
    Do you back test the accuracy of those levels over the course of market behavior? (Probably a rhetorical question.)
    We who follow you will learn if your support level of SPX 2248 will hold tomorrow. If it does not, and price drops further, no rational person can blame you, because the market is influenced by news, big money accumulation/distribution patterns, and the Fed. I have learned over 10 years of following your site, that you will adjust those levels and your count deliberately if support fails.
    I have made an average of 12% per year for 6 years by trading 1-2 day patterns long and short with your helpful analyses, and those of other smart traders such as those on StockCharts.
    Thanks!

  14. Tony here’s some great trader/investor quotes for everyone to enjoy:

    “Be pragmatic about everything and dogmatic about nothing” this is more of a pure fundamental analysts mental challenge.

    “Trade the market you see, not the one you want” this is close to your trade whats in front of you quote.

    “We send people to jail on circumstantial evidence; shouldn’t we be able to invest on it to?” i.e. price starts to move before the facts are known.

  15. locanbbs says:

    Looks like a general year-end sell-off, which I read rumors of some days ago. Any news of that here?

  16. Yesterday you mentioned that “Short term support is at SPX 2254 and SPX 2248”. This turned out to be the most valuable information to understand today’s activity. First, I was waiting for indices to close yesterday’s opening gap and then bounce, which they did until traders found themselves with no where to go. The Dow will probably not break through 20,000 until most market participants return in January so indices had nothing else to to but to head south again and test their support levels. They went sideways for a while fluctuating tightly around your SPX 2250 support, then went down again to test your SPX 2248 support which was almost reached.

  17. blackjak100 says:

    Since minute ii was a sharp ZZ, general rule of thumb suggests this is minute iv as a complex flat which will bottom tomorrow AM around 2243-2248.

  18. mtu MTU says:

    [EOD] Stocks- Squiggles and tracking counts. Decisive break of the near term dominate trend line on daily (Chart 3) and Weekly (Chart 4). A close below the line on the weekly would be interesting. See charts.
    http://market-timing-update.blogspot.com/2016/12/market-timing-update-122816.html

  19. 123 abc says:

    Tony, any chance that 2083 to 2277 is all of Minute-i wave?


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