Wednesday update

SHORT TERM: choppy activity continues, DOW +99

Overnight the Asian markets gained 0.7%. Europe opened lower but gained 0.3%. US index futures were relatively flat overnight and the SPX opened 1 point below yesterday’s 2269 close. Right after the open the market rose to SPX 2275 just before 11am. Then the market started to selloff when Trump made some negative comments on drug prices during his press conference. By 11:30 the SPX hit 2261. Then after a rebound to SPX 2273 around noon, a retest of 2261 occurred at 1:30. Then the market rallied into a SPX 2275 close.

For the day the SPX/DOW gained 0.40%, and the NDX/NAZ gained 0.25%. Bonds added 2 ticks, Crude rose $1.45, Gold added $4, and the USD was lower. Medium term support rises to the 2270 and 2212 pivots, with resistance at the 2286 and 2321 pivots. Tomorrow: export/import prices and weekly jobless claims at 8:30, then the budget deficit at 2pm.

The market opened flat today, bounced, dropped to SPX 2261, bounced, and then retested 2261 before rising in the afternoon. As noted yesterday’s the price action in the market has remained choppy for some time now, as the DOW has struggled with 20K and the SPX with the 2270/2286 pivots. Yesterday looked like it could have been a pivotal day, with the sudden SPX reversal after hitting 2279. Today the choppiness started displaying a negative slant, as the highs/lows are becoming lower and lower. From last week’s SPX 2282 all-time high the waves have slanted downward: 2265-2279-2261-2273-2261-2275. Today we updated the hourly/daily charts to display a possible uptrend high at SPX 2282, and noted a negative divergence in the daily MACD which is similar to previous uptrend highs. Unless the market can manage to clear the 2286 pivot, a downtrend could be underway. Short term support is now at the 2270 pivot and SPX 2261, with resistance still at the 2286 and 2321 pivots. Short term momentum hit oversold at today’s low then bounced to nearly overbought. Trade what’s in front of you!

MEDIUM TERM: uptrend

LONG TERM: uptrend

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

About tony caldaro

Investor
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132 Responses to Wednesday update

  1. vivelaamo says:

    Gandalf won 😡

  2. blackjak100 says:

    Technically, there is a valid EW expanding diagonal from 2282 but barely as wave 4 is .49 pts greater than wave 2. They are very uncommon, but it would be the bears only hope. I would expect a retrace towards 2171-2276 if that’s the case. I have no $SPX trading positions at the moment.

  3. tomorrow should tell the short term direction. over 2275 probably means we are in wave 3 of minor or minute 5 otherwise the ending diagonal occurred at 2282 and this is currently just a bounce.
    my personnel opinion, Im looking for new highs next week and my perfect short is 2309

    Thanks all and good luck

  4. cj32 says:

    DXY cr. CBZ

  5. purplember says:

    does anyone know why Oil proshares went wild today? UCO long went from $10 to 22 today. USO short oil went from $68 to 32

  6. johnnymagicmoney says:

    wow almost 1% down today

    that’s a market crash!!!!!

    no wonder why buyers came in

    man buy of the century! NO RISK!!!!!! S&P 5000 coming this year!!!!! Trump will make GDP 12% and Yellen will keep rates low and inflation will stay stable and wages will be in check and the dollar will be in check and my aunt has balls

  7. phil1247 says:

    /ZB …. TLT

    sold bonds this am around 123 TLT

    /ZB has traded the extension short .50 level this am

    not too anxious to short bonds here yet….. but it was a great place to exit longs

    it will be the short of a lifetime
    … but not yet

  8. purplember says:

    tony at what point do you lock in minute V ? or what drop point ?

  9. Are we about ready for one of those 1 months selloffs?

  10. vivelaamo says:

    Approx target for the 123 high breakout on the RUT is 1313. Very reliable signal.

  11. H D says:

    the ii-iv TL, HWB right around 22(55) just a coincidence I’m sure.

    • H D says:

      22(55) a little early, my apologies. Free trade now but I’d lock in 8 on most of them. HAGWE all, GO SEAHAWKS.

      • johnnymagicmoney says:

        you mean GO PEDHAWKS?

        or do you mean GO CARROLLISANAHOLEHAWKS?

        or do you mean GO SHERMANISAPUNKHAWKS?

        • H D says:

          hey johnny, did you come up with those all by yourself? You’re making so much progress – keep it up.

          • johnnymagicmoney says:

            black and yellow black and yellow

            its easy to hate the SeaHags because they take so many PEDS. lead the league in PEDS since Carroll took over. That’s why their low round draft picks are so goo. They shoot each othe rin the butt. Carrol is such a slimeball too

  12. cj32 says:

    Cr. CBZ

  13. lunker1 says:

    still a slight +D
    2 abc’s done?

  14. Gold and GDX gave it a half hearted try to get over 1205 and previous GDX high of 23.35.Watch those levels for further upside confirmation.The way the dollar fell should have done the trick.Less aggressive types might want to take money off the table and wait for those breakthroughs.Good luck.

  15. captbara says:

    Rare to see most on the same trade (short) working. Kudos bears. Last line of defense here at EMA 20

  16. vivelaamo says:

    Boom!!! You shall pass!!!!

    Target 1309

  17. Bud Fox says:

    From the Feb low, this decline really not a surprise….

  18. vivelaamo says:

    Hoping for another bash at rut 1352 today. Aka Gandalf!!!

  19. mjtplayer says:

    Almost 4 weeks of drifting sideways, certainly has the “feel” of a wave 4 after the post election wave 3, with last weeks intra-day HH being a wave 5 and now we drop in a retracement. Using the SPY from the pre-election low on 11/04, a 50% retrace would be 218.36, a .382 retrace would be 220.72

    DOW closing high of 19.974 on 12/20 has yet to be topped on a closing basis, so the closing high thus far is still in 2016 – interesting tidbit

  20. Pingback: Thursday reads; GILD Presentation; Market Thoughts | Cathedral Group Capital

  21. Bud Fox says:

    NYSE pattern, apears to be a double top…

    • Bud Fox says:

      Further. COST (Costco). Is starting to present a major price top.
      With 167 as resistance. Been a great run, and a great company.
      Thus, watching for further weakness. No, not interested in going
      short. As I said – very strong company….

  22. alexhartley1 says:

    Morning Tony. If the DXY falls much further (say 100-99) doesn’t it look more like a Triple Top with a failed breakout? Thanks in advance.

  23. Interesting,that at this hour AGAIN,dollar is diving toward 101.28 for the third time,but gold/silver not following.Gold has a monster resistance level to break.I’m guessing PMs are going to wait and see if dollar support gives way before a bullish reaction.They say there’s no such thing as a triple bottom.We’ll find out soon enough.

  24. njlin says:

    Tony,

    Since I am not an American, I am not familiar with the trading hours of the bond markets in USA. It would be much appreciated if you can tell me the trading hours of various bond markets (including government bonds, corporate bonds, emerging market bonds, mortgage-backed bonds, etc.). I wonder the trading hours of all these bond markets are the same. Many thanks!

  25. stormchaser80llc says:

    Its worth noting that my proprietary Volatility Model (which has nothing to do with $VIX) is near the lowest since 1990. And with near historical narrow Bollinger Bands on SPX Daily and HYG:IEF, it sure looks like a top is forming. $VIX started an uptrend Monday, which is meeting its first challenge as it closed below its very narrow Bollinger Bands today. SPX Hourly indicates room to run higher in the very short term. Even if we hit a new ATH, I still think it will be a nominal high and the best chance to go short. My proprietary Technicals Model continues to lag the market, a sign that most stocks are breaking down.

    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.

  26. Lee X says:

    Thanks Tony

  27. Trump market. ignore his daily Tweets at your own risk. market movers. Round one: Ethanol based grain from USA just got slapped a 2 billion dollar tariff from …. Please fill in the blanks. I already stated a while ago this would happen. kind of early but what the hey. Watch trump’s TWEET to CHINA. Listen carefully tomorrow for it should be the start of a great relationship.

    Ending pattern and TOP very soon. Trump’s World will be in chaos first 6 months. if he can’t be reigned in its all over folks! But hey people actually believe my posts on trump has nothing to do with markets. how silly is that! Maybe we should be betting the Russian Markets. To Russia With Love.

    How’s my promise that Trump news will affect the market? Still doubt it? I stated China Trade is first on list. Check. Wait till North Korea launches their intercontinental ballistic test.

    Not market movers? If you can’t connect the dots you have no right investing. Anticipate. I have.
    Still think this is the START of decades of good market action? How absurd is that! Gee, a shocker out of the blue trade war with China. I must have been psychic. Laugh my emotional and absurd remarks all you want but as sure as the Sun is the center of our little universe Trump will also be the center of our financial markets. he can no more change than the Sun can.

    Play the markets while watching the TWEETS. He is a great forward indicator for things to come. In fact he is NOW my number one go to technical marker.

  28. bouraq says:

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

  29. blackjak100 says:

    There is a ton of short term fib resistant near 2290ish. Look for a reversal there tomorrow or Friday.

    • mcgcapital says:

      What do you see as the catalyst to get it up there and then sell off? 2290 would probably mean Dow 20k being breached. The next break of the range looks significant and the internals (breadth, lower highs/lows) are suggesting it will be down

      • blackjak100 says:

        Catalyst? I’m a chartist. See my reasoning below and yes DOW 20K should happen tomorrow. 2290 could just mark 1 of 5 of larger ED

        • mcgcapital says:

          So are you in the pullback camp after that move? Just thinking if 20,000 does go there could be follow through given we’ve tested it countless times

    • fbender7 says:

      2290ish tomorrow or Friday would surprise me.

      • blackjak100 says:

        You may be right…but nothing surprises me anymore. From a wave perspective, the move down from 2282 is clearly not impulsive so I think there’s still more topping action needed.

    • EL MATADOR says:

      Connect the bottom trend line with today low and a traditional chartist will tell you that is a potential double head H&S pattern 😉

      • EL MATADOR says:

        below that 2260ish neckline “Bearish” but above 2282ish “Bullish”….i’m leaning bears have upper hand right now

        • CB says:

          Great point, matador. And I’ve noticed that you commented on it (H+S) earlier in a very timely manner. Here’s what I’m thinking about the situation after today’s session: that H+S was already there yesterday.. what’s changed today is that we’ve tested a significant fibo zone (2261-2064) and got +div. That’s new information, isn’t it? 🙂
          Now, that support zone COULD fail at any time, of course… But we already knew that, right? 🙂 So, all we can do is define our risk and decide how we want to approach the situation.
          I agree with you that the rally looks pretty tired and that a correction COULD start very soon… all we can do is define our risk and go with the probabilities that we see..

  30. Thanks Tony. At the moment it appears to be descending in a channel sloping down, of course:
    https://www.tradingview.com/x/GaXAvun4/

  31. lunker1 says:

    60min +D at 2261 and C=A
    13DEMA 2264 held twice
    4 hour candle bodies held support 2269
    so far no damage
    could 2234 -> 2282 been an LD or other irregular impulse and 2261 was wave 2?

    • blackjak100 says:

      I agree, it appears 2282 is not top of wave 5. If 2234-2282 was a wave 1 LD, there should have been a deep retrace of at least 61.8%. It did not come close. That leaves A=2282, B=2261, with C underway to complete 1 of 5 of larger ED. It would not shock me to complete 1 of 5 near 2185ish.

  32. Interesting to note the Russell concluded an A-B-C-D-E barrier triangle just yesterday and this pullback on Trump speech was likely a wave 2 drop:

    We picked up some SPY calls at 2258ES today. Let’s see if it follows through.

  33. Bud Fox says:

    Using my OBV Top Signal, produced a top 8/16/16

  34. mcgcapital says:

    Would help if the Asian and European sessions were down for once. I’m not convinced my FTSE short will hold at breakeven. Could be setting up for a repeat of early September with a big down day out of nowhere when SPX finally rolls over.

  35. 123 abc says:

    Thank you Tony, great OEW update, much appreciated.

    Q: In regards to the SPX hourly chart, which of the following three options is OEW considering as the structure of Minute-v wave?:

    a. Minute-v as a five wave Ending Diagonal: [1]:2233-2255, [2]:2255-2245, [3]:2245-2273, [4]:2273-2260, [5]:2260-2282

    b. Minute-v as a three wave affair: [1]:2233-2255, [2]:2255-2245, [3]:2245-2282 —is this even allowable under OEW theory?

    c. Minute-v as five wave affair with a failed-fifth: [1]:2233-2255, [2]:2255-2245, [3]:2245-2282, [4]:2282-2265, [5]2265-2279


  36. fotis2 says:

    Thanks Tony bit of bearish action would be welcome.

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