Wednesday update

SHORT TERM: gap up opening DOW 20K+, DOW +156

Overnight the Asian markets gained 1.1%. Europe opened higher and gained 1.0%. US index futures were much higher overnight, and at 9am the FHFA housing index was reported higher: 0.5% v 0.4%. The market gapped up at the open to SPX 2291 and continued to rally. The DOW opened over 20K and continued to rally as well. The rally continued throughout the day, with two 4 point pullbacks, until the SPX hit 2300. Then a dip into the close ended the day at SPX 2298.

For the day the SPX/DOW gained 0.80%, and the NDX/NAZ gained 1.00%. Bonds lost 13 ticks, Crude slid 35 cents, Gold dropped $9, and the USD was lower too. Medium term support now rises to the 2286 and 2270 pivots, with resistance at the 2321 pivot. Tomorrow: weekly jobless claims at 8:30, then leading indicators and new home sales at 10am.

The market gapped up at the open for the first time this week. We had a gap up opening on Friday that was sold within the opening minutes. After the opening the market continued to rally, with only two 4 point pullbacks, and hit SPX 2300 just before the close. New all-time highs today, and closing highs, in all four major indices. This is the first time both of these events have occurred together since mid-December. The uptrend may be extending after a period of sideways choppy consolidation. We are still holding to the possibility that this rally is a B wave that started at SPX 2234 (see SPX charts). The upside limit remains SPX 2305 for this scenario. Should the market exceed that level, then it is possible that Minute iii is underway (see DOW charts). Either way, it remains a bull market. Short term support is now at the OEW 2286 and 2270 pivots, with resistance at the 2321 pivot. Short term momentum remained pegged at extremely overbought all day, and now displays a slight negative divergence. Best to your trading!

MEDIUM TERM: uptrend

LONG TERM: uptrend

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

About tony caldaro

Investor
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114 Responses to Wednesday update

  1. market has to close green, buy the close in anticipation of Microsoft and google. close at 2301. Im short, but market is crazy, wish for it to go up when I want it to go down. stuck all day in a 5 point range

    • Dex T says:

      I shouldn’t bite but…

      Why does it have to close green? And why are you hoping it does if you are short???

      trying to MAKE a buck or LOSE a buck?

      • I wasn’t sure of my position being short into Friday. If it went up to 2301 I would of been stopped out. Market not doing anything but me in a situation I didn’t like. Go up so I can be stopped out or go down so I can make money. Now I’m at the will of after hours market with no control until the morning.

  2. phil1247 says:

    out of all longs at 2298

    hasta la vista

    bay bee

  3. “The final GDPNow model forecast for real GDP growth (seasonally adjusted annual rate) in the fourth quarter of 2016 is 2.9 percent on January 26, up from 2.8 percent on January 19. After this morning’s advance economic indicators release from the U.S. Census Bureau, the forecast of the contribution of inventory investment to fourth-quarter growth increased from 0.74 percentage points to 0.94 percentage points and the forecast of the contribution of net exports to growth decreased from -0.55 percentage points to -0.64 percentage points.”
    LML25:But a 10% drop in new houses doesn’t matter to GDP.Strange.
    Anyways,there was a slight +div on GDX that gave us this slight bounce.Nothing like the one on Jan 19th.TLT is driving it all right now.TLT has to hold above 118.80 or we probably nosedive again on both.A break of 22.50 on GDX kills the 20d and would be a lower low.Probably signal the end of the + weekly div rally.Good luck all.

  4. phil1247 says:

    /ES

    first 15 min short from high hit target

    now dipping into ext long

    bearish below 2296

    looking to exit remaining longs

  5. ISINCODE says:

    Ok. I don’t have to be a market technician to understand that our new President will provide more support for the economy and the markets then the Fed did over the last 8 years. This article should provide any insight to what his focus will be and how he will continue to prop up this market throughout his entire term.

    http://www.nbcnews.com/business/markets/president-trump-dow-20k-i-m-very-proud-n712436

    I don’t need to count the squiggles because we are in for a long term ride and Tony’s main count (in a new BULL market) is the correct count. Go all in, Go to sleep and wake up in a couple of years and retire.

    Ok…some will say he cant control the markets? My bet he will.

    Best of luck to everyone !

    Thanks Tony for a great guide to the markets!

    • wildmarkets says:

      I hope all those steel and coal workers who are broke are investing in the markets as their boss says up up and up lol

      • wildmarkets says:

        Those coal jobs are not coming back. So if the market is up into next election, same people who voted for their hope will vote for someone else coz of their same old empty pocket complaints. Typical human behavior who relies on others for their success. Same thing applies for us. We should not sleep and retire. Price action is the key and Fed policy is much more important than any President!

        • Dex T says:

          It DOES matter when U.S. policies and regulations make certain industries so cost prohibitive and cumbersome that they are unable to compete . Many of the changes had zero do to with technological innovation but with political and corporate greed.

          The vast majority of people do not have the intelligence/skill set/financial means to make such easy shifts especially as they get older.

          The Fed has nothing to do with this.

          • wildmarkets says:

            On one side you are telling Fed has pumped Trillions and on the other had you say FED has nothing to do. Go figure….. Regarding the Job market, humans need to evolve or get left behind. It has nothing to do with Regulations or Policies otherwise, we would be living in the stone ages! This is my last post for the day and no more economy/politics talks going forward.

            • Dex T says:

              I meant the Fed has nothing to do with government regulations or policies like taxation, etc…

              The Fed has nothing to do with jobs being shipped overseas, or job creation. Of course regulations and policies matter! They play a huge part in decision making as to where to create jobs, invest in growth etc…

              People do evolve, but it’s a very slow and steady process.

    • captbara says:

      I watched the Trump interview last night. He calling for Tony’s count 🙂

    • Dex T says:

      The Fed dumped trillions via QE into the U.S. economy.

      Although I am a fan of Trump it will be really difficult for him to replicate that amount of savings anytime soon. There is A LOT of uncertainty in terms of costs and numbers.

    • vivelaamo says:

      The action since election suggest this is not far fetched as it sounds. Pbs will be very shallow for a very long time. In a few years we will look back at 20000 they way we now look back at 14000 area. Do I understand how this will happen? No. Do I really care? No. All a matter is I make money from it.

      Newbie remember this post to quote back to me a few years from now when your still calling for 1600.

      • Dex T says:

        I doubt it will be that simple. Even in past few years we have had some strong drops. The market recovered but it has never gone straight up.

        Rising U.S. interest rates are going to be hitting the real estate markets pretty hard-at least in the bubble areas- NY, CA, FL, etc…

        • vivelaamo says:

          True but before the larger drops of 2015 and 16 we had plenty of choppiness before hand so enough warning. It’s not like it went straight up and then straight back down like bears seems to constantly suggest will happen.

  6. phil1247 says:

    /es

    short target and .50 support of 15 min ext long both at 2291

    if there is not a big bounce from there

    red flags are waving

  7. purplember says:

    Tony, if SP breaks down thru 2286, SP count is likely. if SP breaks thru 2305, Dow count likely. is that correct ??

  8. phil1247 says:

    /ZB TLT

    bonds hit downside target

    out of all TBT …. for now

  9. lcd00 says:

    In reference to tommyboys “Love” for the “Perfect!” recent AAII Sentiment drop in bullishness, one can also consider this — a peak reading not seen in the last year with serious negative divergences:

  10. No +divs on 30 min for TLT or GDX.22.50 on GDX looks problematic.Looks like it may not hold at this point.Check back later.

  11. phil1247 says:

    dollar /yen in extension longs

    probably not good for gold

  12. fbqueen3 says:

    Tony, with making new highs, how can this possibly be a “B” wave?

  13. phil1247 says:

    spx

    2302.68 next target

    2300.74 hit perfectly!

  14. kvilia says:

    Back into miners, let’s see if GC 1185 holds. If it does, NUGT could double from here.

  15. phil1247 says:

    /es

    bearish below 2297

    would not short till extension long fails at 2288

  16. phil1247 says:

    stops moved way up on SSO

    its rally or die now

  17. tommyboys says:

    AAII Sentiment. Love this – no one buying this rally. AAII bullishness dropped 5 more pts this week after several last week. Overall very neutral. This combined with a surprisingly strong AD line suggesting much higher.

    http://www.aaii.com/sentimentsurvey

  18. Ajney says:

    Jan 26,27 are energy dates with Jan 25/26 having a longer term effect till 2020. So trends are likely being established here. Trendline from Feb-Brexit was respected recently in DIA. Gold selling started in conjunction with long term energy date so caution is advised and light positions may be the way to go till early next week. Details at https://astroanalytics.wordpress.com

  19. Back in nowhere land for gold/GdX.TLT had a big breakdown.Not sure if GDX can shrug off a run of 10 year interest rates to 3%.That’s the key point imho.DXY is the odd performer now–at 99.88.What does gold do when the dollar falls,but interest rates rise?DXY and UUP look bearish to me with gaps down quite a ways on UUP.Since gold couldn’t break 1220,short term the direction seems to be down or sideways.Hoping to see a +div on the daily soon.Later.

  20. chicotheman says:

    Looks to me like it may be topping right here at 2300 with an exhaustion gap. Tony’s 2305 stop seems about right. Could be a top of significance.

  21. stormchaser80 says:

    Yesterday I opined: “I can not fathom a scenario so bullish that the strong negative divergences seen on SPX Daily and my Technicals Model can be wiped out. That continues to support the notion that the top is upcoming, yet will likely be nominal.” This is still my feeling. Everybody is elated at DOW 20,000 and SPX 2300. But these are just numbers and are meaningless, its all physiological. What is not meaningless are the strong negative divergences that have been forming for the past month, and these only strengthened today.

    I continue to not see a likely scenario that these negative divergences will get wiped out. $SPX hourly will likely pullback and $VIX is about to start a new uptrend. I still see another new high, whether there is a quick run-up tomorrow morning, or a pullback and one final new high.

    Also, check out the performance of my real-time technicals model this afternoon at the 1-hr timeframe. These charts are in testing, and I will continue to tweak them. They are not yet live on my site.

    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.

  22. I admit to being confused. But with all this uncertainty, and VIX so low, isn’t this the right time to buy Straddles or Strangles?

  23. Sudden ramp in futures, interesting

  24. gtoptions says:

    Thanks Tony
    Weekly 13rsi > 60 remains strong. If the Weekly breakout holds, SPX 2400 up next?
    GL All

    https://www.tradingview.com/x/wBcYp8yg/

  25. Here we are approaching 2300

    The Russell completed a 1-2-3-4-5 ending diagonal where each number was an a-b-c zig zag. We alerted a Buy right at the optimal point.

    http://www.lifestyletrading101.com/2017/01/25/wed-125-this-is-the-rally-we-expected-2700-on-track-2290-es/

  26. phil1247 says:

    http://tos.mx/wdVRD1?image

    SPX

    bullish above 2289..
    ..the extension long .618 support

  27. bouraq says:

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

  28. torehund says:

    Tony your count getting into minuscule territory…these 2s are really being scaled down, lets all hold our breath, only pico and nano remains 🙂

  29. Wow, congratulations bulls. Minor inflection point here I suppose. Over 2305 eliminates a lot of bear counts over 2235 pretty much eliminates them all. So I guess that’s good.
    Possible counts

    1. Waiting for b to finish for minute 2 and C to start 2305 or higher eliminates that
    2. Minute 3 is under way. My opinion we should continue higher for that. 2234-2300 is 66 points. Minute 1 was 199 points, so this first leg should be another 24 points before a pull back.
    3. Int 3 ended today. 2303 should not be reached.
    If minute 3 under way, minimum target 2434. So if and when 2235 approaches, we all should be on the long bus.

    Good luck everyone.

    • One more option. Waiting for C to finish to end the bull market. 2335 ish excludes this count as well.

    • 123 abc says:

      Another tricky scenario…

      A decline from current levels (or from 2305) would assume the end of the irregular b-wave with Minute-ii underway, and the bears would expect a 3% to 5% decline. However, the market could bounce from the 2286 pivot range and then head to new all-time highs yielding the below count.

      In summary it appears: wait until 2305 is taken out for the bulls; or, wait until 2257 is taken out for the bears.

  30. Will cover Shorts tmrw if we stay above 20k.. If a Gap Down, I will keep shorts. If you think about it, its actually a good thing we finally crossed 20k (for the bears)

  31. Thanks Tony. The price that was reached today does not surprise me but the pace of the advance does. The 1.618 extension of the decline from 2282 to 2254 is almost 2299….couple of pennies short of today’s high. Two questions if you will: how did you derive 2305? I come up with 2300 if using the length of A. And if this is not a B, what was the correction in EW terms. Thanks.
    https://www.tradingview.com/x/RUBE8Yqk/

  32. mtu MTU says:

    [EOD] Stocks-
    New new high in SPX. See charts for tracking counts (daily, weekly, and since the 2009 bottom).
    http://market-timing-update.blogspot.com/2017/01/market-timing-update-12517_25.html

  33. uas2014 says:

    Hi tony. Tks again
    If 2305 hold, what is next?
    Tks

  34. Dex T says:

    So Tony…

    Any guess timewise as to how long this P5 lasts? weeks? months?

  35. Thanks Tony. Fly like an eagle. That’s the theme song for this rally.

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