Wednesday update

SHORT TERM: another gap up opening, DOW +60

Overnight the Asian markets were mixed, but Japan rose 2.5%. Europe opened higher and gained 0.1%. US index futures were higher overnight, and before the open monthly auto sales were reported higher. The market gapped up at the open to SPX 2266, ticked up to 2268, then pulled back to 2263 by 10:30. Then the market started to drift higher. At 2pm: https://www.federalreserve.gov/newsevents/press/monetary/20170104a.htm. Heading into the close the SPX hit 2273, then closed at 2271.

For the day the SPX/DOW gained 0.45%, and the NDX/NAZ gained 0.70%. Bonds added 4 ticks, Crude rose 80 cents, Gold gained $4, and the USD was lower. Medium term support now rises to the 2270 and 2212 pivots, with resistance at the 2286 and 2321 pivots. Tomorrow: the ADP at 8:15, weekly jobless claims at 8:30, then ISM services at 10am.

The beginning of 2017 looks quite the opposite of the first few days of 2016. The market opened with a gap up today for the second day in a row. This has not occurred in three months. The market opened at SPX 2266, dipped, and then hit 2273. This two day rally certainly looks like Minute wave v is underway, and is now labeled accordingly. Keep in mind, however, that the count on the hourly chart is the most conservative one. As there are several other possible counts that suggests much higher prices for this uptrend. Conservatively the Minute v count suggests a potential topping range between SPX: 2290 and 2325. Let’s see what this uptrend looks like when/if the market gets there. Short term support is at the 2270 pivot and SPX 2245, with resistance at the 2286 and 2321 pivots. Short term momentum ended the day quite overbought. Best to your 2017 trading!

MEDIUM TERM: uptrend

LONG TERM: uptrend

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

About tony caldaro

Investor
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91 Responses to Wednesday update

  1. Dex T says:

    Will higher interest rates dampen cash for unicorns?

    From 2009 to 2015, private tech firms raised more than $200 billion in capital, according to a recent report by SharesPost, a San Francisco company that offers a platform for investors to buy and sell shares in non-public companies. Since 2014, $1 billion-plus mega-funds accounted for 60 percent of all venture capital raised.

    In addition to venture capitalists, newer players like hedge funds, mutual funds, corporations, pension funds and endowments have joined the fray. As a result, 150 or so companies now boast valuations of $1 billion or more.

    But to what end? Initial public offerings for tech firms were scarce last year. And CB Insights data suggests that these unicorns have not found buyers either.

    http://www.sfchronicle.com/business/article/Will-higher-interest-rates-dampen-cash-for-10833254.php

    • Dex T says:

      It’s difficult to get financials on most of these companies but it’s clear that almost none of them are profitable, are going to become profitable or have any business plans or clue on what to do anytime soon(and most have been around a long time). This is another bubble that is going to burst.

  2. Page says:

    SPX pullback is over for now, 2300 next.
    Gold/miners run is about to end, a sharp reversal next.
    Oil $60 next.

  3. EL MATADOR says:

    NYA made new ATH FWIW to you

  4. H D says:

    Tony, what would come after a pico 1-2?

  5. phil1247 says:

    /GC

    1184 target hit.
    ..now at upper daily boll band
    . short entry for daily extension short is at 1183.6
    15 min extension long under pressure
    sold all GLD bot yest at 2pm dip

  6. kingfrogcash says:

    Saudi Arabia has cut oil output by at least 486,000 b/d 10.058 million b/d, fully implementing OPEC cut pledge: Source @WSJ

    • Linda West says:

      SOX index monitor, QCOM Head & Shoulder Pattern that targets $57.07 levels. BKX index & XBD index moved higher but SOX index didn’t. Often, red flag of correction coming!

  7. -div on daily GDX.Setting up for a pullback.Mr C ,would the move in GDX qualify for a WROC signal?

  8. captbara says:

    Gap retest and IHS potential.

  9. lunker1 says:

    2257 gap fill then close above 2262/3?

  10. vivelaamo says:

    R2K short initial target is Gandalf at 1352. I have a feeling the old wizard may be defeated this time.

  11. gary61b says:

    SP, best to have a gap then overlap.

  12. Crude inventory drops 7 million barrels but distillates RISE 10 m barrels.Take your pick,but seems like the last few months,traders sided with distillates (if it was bullish).
    HUI above 200,GDX above 50 d.The 200d is at 24.50ish.My target was a 40% rise from the bottom at 18.68.That’s been the rally on most weekly GDX positive divergence moves.Tomorrow might be a selloff,based on payrolls.Perfect spot for it–IF payrolls exceed 200,000.
    This was the rally I was waiting for.

  13. cj32 says:

    Cr, to CBZ

  14. 3 up yesterday, now on wave 4 that means when don wave 5 can only be 29 points max. uptrend coming to an end

    • Agree…so far it’s still an impulse until 2,263 is violated, at which point iv overlaps i.

      2,234 to 2,263 = i (29 points)
      2,263 to 2,246 = ii (.58 retrace)
      2,246 to 2,273 = iii (27 points)
      2,273 to 2,263 (so far) = iv (.37 retrace)

      iii can’t be the shortest wave, so v would be limited to <27 points, or 2,290 max.

      All of this is irrelevant if this is still part of 4 though, i.e. if 5 hasn't started yet.

      • What I meant by my last statement was that most assume that wave 4 of this uptrend ended at 2,234, and that we’re now in wave 5 of the uptrend that began at 2,085 on Nov 4.

  15. EL MATADOR says:

    The Fake and Distorted News Epidemic and Bridgewater’s Recent Experience With The Wall Street Journal
    https://www.linkedin.com/pulse/fake-distorted-news-epidemic-bridgewaters-recent-experience-ray-dalio

  16. captbara says:

    Watching H1 8 ema. Maybe support if it wants to take out this quadruple top.

  17. So far,weekly +div on GDX,22.50 resistance(broken to upside) and 6 month gold trend all look tremendous.Couldn’t ask for much more.Dollar doesn’t react to ISM services,gold doesn’t sell on it.Goldfingers crossed,it all holds the rest of the day.GDX looks like its bumping upper BB.Later.

  18. bud67 says:

    Ref…the US Stock Market, a quote…from Mark Twain.

    “It’s not what you don’t know, that kills you,
    it’s what you know for sure, that ain’t true.

    The question is. Is the stock market setting up,
    for another collapse? This year….

  19. Ajay Singhi says:

    Posted 2 days ago:

    Buy SPX at 2212, tgt 2289.

    This will be my last post here.

    GL Everyone !!

  20. stormchaser80llc says:

    I really wanted to short the market before work today. However, a quick analysis of the SPX hourly chart quickly changed my thought. We had yet to put in negative divergences. This is still the case at this writing with a new high, consolidating at the 2270 pivot. SPX Daily has been screaming we need a new high, and gosh darnit, here it comes! Oil already saw another high so it is free to lag the market here if it chooses. A nominal new high on SPX and new low on $VIX is all that is needed to cement negative (positive) divergences on the chart technicals and with my proprietary Technicals Model. SPX long holders should be quite careful here, while those looking to take short positions should wait for a new SPX high on negative divergences.

    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.

  21. bouraq says:

    Chart of the day is $GOLD at http://www.tradingchannels.uk

    • cosmos77 says:

      Great charts. Thanks bouraq and Fiona for the two perspectives on gold. medium term and long term. Both charts are telling me it would be prudent to sell my UGLD here and watch for either a pullback or breakout before venturing back in.

      • cosmos77 says:

        Another point. I see five small waves in the orange chart, which adds credence to selling now, just in case. Can always buy back in if it breaks out. That’s four posts for me today. Good luck all.

    • blubrd67 says:

      Bouraq, does it have a space to run to 1,180 before pulback? I had in mind for a while it will retrace to around 1,180 before turns down again. We are not far from it anyway.

    • vivelaamo says:

      Hi Bouraq, what’s your take on the RUT. You got it testing the yearly upper trendline again in the next day or so?


  22. By popular demand,Trader Moe says,an inverse H&S is going to take gold to 1250–minimum.Nice move in gold over 1172 overnight.If that can hold and add a little,a challenge of 1200 beckons.(I’ll get the whiskey out for that one…lol).

  23. mcgcapital says:

    Shorted FTSE at the US close today around 7200 with stop at 7215. Fifth test in 2 days and a decent sized down day is overdue. Looking for a test of the breakout area around 7130 initially, with secondary target around 7000.

    • Linda West says:

      BKX & XBD are making new highs, BUT with KEY Red Flag is SOX is NOT! 909.77 close up only 2.30 which is 0.25% gain today. Inside SOX index Qualcomm Inc. closed at $65.47 Daily Head & Shoulder Pattern which projects price target of $57.07 if it plays out. looking to enter short Qualcomm at break of $64.60 level. All three indexes BKX, XBD & SOX must move together higher in order for uptrend to last. SOX index is KEY in my opinion to monitor for first sign of correction in general market.

      • mcgcapital says:

        The key point is we don’t need to know whether the market is going to go up or down next. But when price is showing an area to be support or resistance it doesn’t cost much to trade against it with a tight stop. Wouldn’t be long Dow or SPX either until 20k/2277 is taken out as it makes more sense to use as a reference point to sell against.

        • cosmos77 says:

          I think Tony is laying out a very clear case in the hourly and daily counts. If the hourly count is correct then this minute wave v is limited to 2325 because minute I was 130, minute iii is 91 and since wave iii cannot be the shortest wave, minute v must be less than 91 pts, hence <=2325. However, if this wave surpasses 2325 then the hourly count is invalid and one of the alternate counts would come into play, probably the daily count, which would mean minute iii is extending and can be any length (very bullish). This scenario gives specific parameters, i.e., bullish until either it turns down at or before 2325 then sell and sit out or short the pullback. However, it goes above 2325 before a meaningful /correction buy back in for a good rally. 2325 maybe tricky because it is sure to pause there and trade sideways before tipping its hand, so best to sell if S&P gets to 2300, then buy back in when the smoke clears. Thanks Tony for laying it all out.

          • mcgcapital says:

            SPX could easily go higher as per Tony’s count. However, my point is when price approaches resistance it makes sense to sell. I’d be out of shorts at 2280 here and reassess

            • fionamargaret says:

              The numbers suggest UVXY as a buy at 6.6, and as S&P is usually inverse, I was thinking a correction of some sort now…..maybe that makes no sense with the waves….?

            • vivelaamo says:

              I agree with this and have now gone short RUT with stops above the yearly resistance. Will probably blow through it but the RnR is good from here.

  24. Tarun Varma says:

    Tony, quick question. Obviously the hourly chart has your most likely count at the moment. what is your next two most likely counts that are on the table? I feel like there are a number of alternatives on the table, just wana sort out the top 2 or 3 if it easy for you to share?

  25. torehund says:

    Tony, I think patience is the key here. All time-frame macd`s are soon pointing upwards, daily could very well attempt to bottom out.
    And send the surf-bums out of here….

    Kick me all the way to Peru 🙂

  26. Tony outside of the Trump effect, US economic data is coming through very strong PMI new orders and prices plus Europe economic data is picking up. the market may have to play catch-up as people were mildly short S&P 500 futures but bullish in investor surveys prior to this data, suggesting they missed the December rally and maybe forced to buy due to under performance pressure.

  27. cosmos77 says:

    If Trump does actually show up for the news conference, he will try to control it by limiting questions from reporters or he might not allow any questions. If he takes questions and anyone asks a tough question or says something negative, he might just storm out without answering and go home and tweet that the press is biased against him and should apologize to him. He is setting them up for future news conferences by letting the press know he is only going to call on those who say nice things about him. Trump will try to manipulate the media just like he manipulates people who he deals with. Where Reagan was called the great communicator, Trump is the great manipulator.
    Thanks Tony for sharing your insights and to all contributors. Don’t know what I would do without this great blog. Oh I do know, I would lose money and not have as much fun as I do now.

  28. I’d definitely go with what’s behind Door #2.
    Minor 3 extending.

    Great blog Tony
    GLTA

  29. There was an excellent article on stockcharts that made the observation,the dollar likes to do reversals in January.Possibly to 97 before a monster rally.It’s probably still viewable from a couple days ago.

  30. mtu MTU says:

    [EOD] Stocks-
    ES broken the first overhead trend line resistance but stalled at the second trend line resistance. (Chart 1). See tracking counts on the post-election rally in Chart 2.
    http://market-timing-update.blogspot.com/2017/01/market-timing-update-1417.html

  31. 123 abc says:

    Tony, have you ruled out that 2277 could be all of Minute-i wave ?


  32. llerias7 says:

    Tony, do you know why the usd was hurt so much?

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