Tuesday update

SHORT TERM: pullback continues, DOW -107

Overnight the Asian markets lost 0.8%. European markets opened lower and lost 0.6%. US index futures were lower overnight, and at 9am Case-Shiller was reported higher: 5.3% v 5.1%. The market opened 7 points below yesterday’s SPX 2281 close and continued to decline. At 9:45 the Chicago PMI was reported lower: 50.3 v 54.6, then at 10am consumer confidence was reported lower: 111.8 v 113.7. The market continued lower until 11:30 when the SPX hit 2267. Then it tried to rally. The rally continued into the afternoon, and in the last hour SPX hit 2279 and closed there.

For the day the SPX/DOW lost 0.30%, and the NDX/NAZ were mixed. Bonds rose 8 ticks, Crude added 20 cents, Gold rallied $16, and the USD was lower. Medium term support remains at the 2270 and 2212 pivots, with resistance at the 2286 and 2321 pivots. Tomorrow: the ADP and auto sales at 8:15, ISM and construction spending at 10am, then the FED concludes their meeting at 2pm.

The market opened lower again today. Declined until late morning, like yesterday, then rose into the close, like yesterday. Today’s low (SPX 2267) was 1 point lower than yesterday’s low, setting up a short term positive divergence. Overall, nothing has changed as of yet. SPX 2257 remains a key level for a potential downtrend scenario. Market remains in an uptrend unless that level is broken. Short term support remains at the 2270 pivot and SPX 2257, with resistance at the 2286 pivot and SPX 2301. Best to your trading!

MEDIUM TERM: uptrend

LONG TERM: uptrend

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

About tony caldaro

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74 Responses to Tuesday update

  1. Seems like unless infrastructure and/or tax cuts are passed,Fed doesn’t raise rates.They need to see some reason to infer the much anticipated 4% GDP is in the future.Without that,they might raise once in June,but that’s iffy as well.Good luck all.

  2. aahmichael says:

    Question in regards to trading in SDS and SPXU:
    I always use the futures to short the market, but I have had someone ask me about using inverse leveraged ETFs. If any of you use these vehicles, can you give me any insight into how they track the market? I was told that they should only be used in daytrading, because there is always a daily adjustment of some sort, and the tracking can be way off from from one day to another. I’m not interested in daytrading them, though. I would want to use them to mirror my futures’ positions, which could last weeks to months. Thanks.

    • kvilia says:

      Not answering your question but 2 times leveraged ETFs are quite accurate and although loose some value over time provide a good leveraging instrument and quite safe – just keep an eye on any statements related to their solvency, etc.

      • aahmichael says:

        Thanks. I looked at how they tracked the decline in the summer of 2015 and also the January 2016 decline, and it seems to be close enough.

      • Another thing to watch out for, stick with ETFs and not ETNs. Exchange Traded Notes can be de-listed without liquidation, and you can be left holding the bag, trying to unload them OTC at a deep discount to your purchase price. This recently happened with Credit Suisse’s oil ETNs, DWTI and UWTI.

        • aahmichael says:

          Thanks. The 2 symbols I mentioned are ETFs.

          • Jack Sparrow says:

            not a good play for long term or if there is lot of fluctuation in the market..they track the percentage so for example if market goes down by 5 percent and comes back…the etf will not come back to its original value…if it keeps going in one direction then its ok.

            • aahmichael says:

              Thanks Jack. I initially looked at SH, because I assumed that the non-leveraged play would track more consistently, but there isn’t enough liquidity in SH for me to use it. SDS and SPXU have more than double the liquidity that SH has.

  3. very nice job this morning picking 2285-2294 high before rolling over, most were on board with that. Now the second part of the puzzle, which i have no idea. Its the first of the month its fed day I tend to lean bullish into Friday. I have no position as of now. best of luck both bulls and bears.

    • blackjak100 says:

      Look like 5 down from 2301. At the least, should have another leg down. The bullish count suggests a third wave from 2267 and today’s trading certainly doesn’t have a ‘third wave’ feel. Still like the b wave count.

      • gary61b says:

        Yes, on ES maybe wave 2 of C down, possible one more leg up to finish this wave 2 then commence down with 3 of C. I see some unfinished business at 2282.75 and then 2258.25…. still like 2228.

  4. Hope this will work. The ED on the daily was mentioning yesterday for the potential Major 5 of Primary 3

    C:/Users/home/Documents/Interactive Data/Screenshots/Image_17-02-01_16-43-11.png

  5. I would like to post a chart, but How to ? Any help, please ?

  6. dan pulford says:

    Nice drop off 2289 SPX

  7. H D says:

    SPX (34) point hit, 22(89)

  8. First of the month bullishness,Fed day bullishness,ADP/DXY bullishness.2100 again wouldn’t surprise me…gold down at least half of what it was up yesterday,maybe all,if DXY goes wacko.

  9. torehund says:

    Just if socionomics is a valid guide: The average Joe in Norway is sleeping in a line days in a row in order to buy a 5 000 Usd wine bottle from a state driven outlet, thinking its a bargain. Reasoning; its much more expensive in Denmark.
    Tony are we entering the Zone.

  10. NEWBIE says:

    We should touch 2185 and then drop like a rock 35- 60 points right after. Volatility coming to a city near you..

  11. next short opportunity in my opinion is 2294.69.if that is exceeded headed to 2312-2335 for what appears to be an ED.
    enjoy fed day

  12. cj32 says:

    Cr. CBZ

  13. Ajay Singhi says:

    Jordi G says:
    January 31, 2017 at 3:22 pm
    Do you expect another all time high? If not, whats your target for the pullback? what about Nasdaq100? thanks Ajay

    As long as SPX stays above 2266, one more high is still possible. Do not short for another 2 days.

    I don’t know about Nasdaq.

  14. Bud Fox says:

    Shocked, that no one has written about the New Price Highs in the QQQ.
    Appears, to be ATH, to boot. It is another sign of a potential market time
    to be aware of.

  15. stormchaser80 says:

    Yesterday I saw the need for a new low on the SPX and a new high on $VIX. Both occurred today. Now I am highly confident of higher prices in the short term, with strong positive divergences on the SPX hourly and positive divergences on the $VIX hourly. I’m not calling for a new All Time High yet, as SPX Daily could have topped with the previous ATH due to strong negative divergences. If we do advance to a new ATH, it will be nominal and only strengthen the 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.

  16. Well Phil,gold got above Ira’s 1210 bear trap number.Personally,I want to see GDX stay above that 10d for the rest of the week.Looking back on other similar occasions,this one day jump over it–after falling below it means very little for tomorrow.Sustaining this is what’s important. (Plus a dollar drop would be great).Good luck all.

    • Also,your numbers say bonds go up until Feb 15th.Just happens to be when Yellen gives her Humphrey-Hawkins testimony before Congress.I’ll have to remember that somehow…lol.

  17. bouraq says:

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

  18. torehund says:

    In the backcountry, just happened to see that Btk sent big as the mdas were kissing, When I get home, i will have a further look. Key revErsal in front of P3, maybe.

  19. Bud Fox says:

    Nothing has changed from prior comments here. Top
    of a 3rd wave up still needs to be expected just above 2300.
    Next estimated Buy zone in SP500 is 2250-2265 range.
    And, that for now appears to be a good fib pullback level range.

  20. mtu MTU says:

    [EOD] Stocks-
    SPX filled a gap below and at the same time created a gap above, found support at potential w2/w4 trend line and rebounded into the close (Chart 1). The pair of gaps present a potential island reversal if there is follow-through selling (Chart 2).

  21. AAPL Lifting Market futures

  22. 123 abc says:

    Thank you Tony et al; ping-pong between the 2270 and 2286 pivots until NFP perhaps.

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