Wednesday update

SHORT TERM: gap up and go opening, DOW +303

Overnight the Asian markets gained 0.8%. Europe opened higher and gained 1.9%. US index futures were much higher overnight. At 8:30 personal income (0.4% v 0.3%) / spending (0.2% v 0.5%) were reported higher, and the PCE was reported higher: 0.3% v 0.1%. The market gapped up at the open to SPX 2383 and continued to rally. The SPX had closed at 2364 yesterday. At 10am construction spending was reported lower: -1.0% v -0.2%, and the ISM was reported higher: 57.7 v 56.0. At 2pm the FED released: https://www.federalreserve.gov/monetarypolicy/beigebook/beigebook201703.htm. Around 2:30 the SPX hit 2401, then backed off to close at 2396.

For the day the SPX/DOW gained 1.40%, and the NDX/NAZ gained 1.25%. Bonds dropped 26 ticks, Crude slipped 25 cents, Gold dipped $2, and the USD was higher. Medium term support jumps to the 2385 and 2336 pivots, with resistance at the 2411 and 2428 pivots. Tomorrow: weekly jobless claims at 2pm.

The market gapped up at the open for the first time since February 13th. That gap up opening took the market to all-time new highs, and this one did too. During today’s advance the SPX went right through the 2385 pivot range, with only a 3 point pullback along the way. Our early November target of the SPX 2380’s for this uptrend has been met. The SPX is up 15.2% during this uptrend alone, as it has now extended into its fourth month. Quite an uptrend! We believe the market has now generated enough clues to hone in on the short term count. We can now count 9 waves up from the Nano wave ii low at SPX 2267: 2289-2272-2299-2285-2368-2353-2372-2359-2401 thus far. Yes, we just divided Micro 3 into five nano waves. It’s a long uptrend. This suggests Nano iii can end at anytime, although it would be ideal with a short term negative divergence, and a 30+ point pullback could follow for Nano iv. Still plenty of time, however, for this uptrend to go higher before entering a correction. Short term support is now at the 2385 pivot and SPX 2353, with resistance at the 2411 and 2428 pivots. Short term momentum ended the day overbought. Best to your trading!

MEDIUM TERM: uptrend

LONG TERM: uptrend

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

About tony caldaro

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100 Responses to Wednesday update

  1. phil1247 says:

    http://tos.mx/zEeJU1?image

    /ES update

    bailed out of longs when 2397 was violated

    still there is only POTENTIAL support as mentioned yesterday at 2383

    the extension long was nicked there but has supported so far
    no dip buying yet
    because support can only be validated by breaking the short at 2394
    ie there is NO support
    until a pullback holds .618 retrace
    AFTER the short breaks

    • vivelaamo says:

      So dip buying if back above 2394?

    • fionamargaret says:

      Phil, Interesting sequences on TLT, and if they are right, we go to 165 or so….then we start fighting again…..how can that be with rate increases….

        • fionamargaret says:

          Purple, look at the waves for me, and see what you see….actually 165 is conservative……..TMF is cheaper and crazier if you decide to buy…..MJT is a TLT man too.

          • fionamargaret says:

            The number sequences were showing a bullish turn…does not seem to make sense…but this is all about what has preceded, and probabilities….we shall see…

  2. tommyboys says:

    AAII pretty neutral again this week even while bearishness UP a few points. Generally in line with long term averages…

    http://www.aaii.com/sentimentsurvey

    • Mary773 says:

      Neutral sentiment among investors. Meanwhile, letter writers are more bullish than they have been in a decade with 63% bulls.

  3. just 1 little push and we can start lower

    • blackjak100 says:

      TJ had an interesting DOW chart suggesting an ABC nearing completion for first wave of P5 ED. If it completes this month, it took a fib 13 months. This suggests a major top is at least 18 months away IMO. with no NYAD divergence, there’s still plenty of time for that to build. His reasonings for this scenario make sense. Need to see a min 62% retrace of 1810-2410ish for wave 2 which is about 370pts or 2040ish minimum for me to be a believer however.

    • johnnymagicmoney says:

      seems about right

      when the whole rationalization for a further push is that he consumer is strong and GDP is accelerating and the data keeps point a consumer that is weak and a economy that is mediocre at best you know you are near the end. After stretching valuations considerably waiting for earnings to catch up yet they continue to be flat at best you have to worry more. When the FED is behind the curve, inflation is surging and yet the mantra is still full of optimism you shake your head. Then when GDP is lowered from 3.2 to 2.5% by the FED and the market makes new highs you laugh. Then when real income (income minus inflation) declines and the market makes additional new highs you laugh more. Then when the FED lowers the GDP again from 2.5 to 1.6 (and BAC is at 1.3, Goldman at 1.5, and even Morgan Stanley at .8 for gods sake) and the market again rages higher and makes new highs, you almost feel sorry for the people who will be caught just as they were caught in 08 and 00. When negative fundamentals which contrast hope are trumped by sentiment to such a massive extent for such a long period you know you are in the later innings. Earnings will not catch up…………….for 3 years they have stunk and the market continually says they will improve and each year they dont materially improve and definitely not to the extent that justifies the valuation expansion in the year in which the earnings are reported. Don’t know why people think its different this time. Recessions start at full employment, when rates tighten, when wage pressures occur, and sometimes when currencies get too strong. An exhaustion valuation expansion during a mediocre at best fundamental backdrop is nothing more than a bubble. Bubble Bubble Bubble. Contrary to Tony’s new bull market this is a bubble and the market’s in trouble and the more it goes without a pullback the more trouble its in.

  4. ragnar5 says:

    Blackjack, Please let me know where to find the Think or Swim chart you posted earlier. I use the trading platform but haven’t found your great chart in the system. Thanks in advance!

  5. Richard Glackin says:

    No one has anything to say about silver…SLV?

  6. Small caps lost their embedded reading for the 2nd time.See how they act rest of the day.Yellen being dovish would seem to be the only hope for a DXY reversal tomorrow.Read an article that the Fed wants to show Trump who’s boss.We’ll see.Many times,Yellen lets the subordinates come out and talk the dollar up,setting the stage for her to act dovish.Later all.

  7. mjtplayer says:

    Gold should be headed to the $1,190 area in short order.

    GDX is toast, minor support at $22 and then psychological support at $20 but the real “must hold” level is $18.58

    • Can’t disagree…but last June,13 crossed under the 34 for a couple days–I looked it up on stockcharts.From Mr C’s chart (on #14 panel),it looked like it never broke,but a closeup look on stockcharts website showed a clear crossunder–for 2 days–followed by a gapup to resume the uptrend.A real test of conviction…of which I don’t have much.Much safer to watch and see what happens here.A clear gap up in the next 3 days would be a good reversal sign.Good luck all.

    • phil1247 says:

      want to take profits on DUST on next pop

      GDX is within pennies of ext short target

  8. H D says:

    10 handle hit! It has been a while. Missed those BOTs. possible little 4-5 in the works on the eve of the 8 year anniversary.

  9. Bud Fox says:

    Dr. Sjuggerud says, “We are on the verge of a massive stock market panic. Just not the kind most people expect.”

    Thought, this was an interesting quote/statement given the height
    of the SP500 index….

  10. If…. GDX repeats last June,shouldn’t go below 22.27.
    ….Yellen shouldn’t be that hawkish(?)or it doesn’t matter (?)
    But I will remind everyone,these last two rates hikes led to a dollar selloff and gold rally.Dollar rallied into the Fed meetings and that was the top.
    Good luck all.

  11. Long at 2387 SPX stops at 2381 for the 3rd move

  12. torehund says:

    One point worth mentioning, as bullish as the weekly and monthly macd oscillator are right now, beware wave correction Abcs in an ascending fashion (ascending continuation patterns). Counting waves the classical way as descending abcs might get you into missing out on the fun altogether. Not a time to be the devils advocate when ascertaining waves, not now 🙂

  13. phil1247 says:

    http://finviz.com/futures_charts.ashx?t=CL&p=w1

    the commercial spread is larger than before the last collapse

    when it gets going the crude collapse should be another doozie

  14. phil1247 says:

    /ES

    still bearish below ext short 2395 level
    no dip buying till extension short breaks

  15. alexh110 says:

    Tony, am I right in thinking the weekly RSI(5) needs to fall back to neutral soon (within the next few weeks), and once it gets there the neutral reading should correspond to the Micro 4 low?

  16. Bud Fox says:

    QQQ market appears, ripe for a decline…

  17. 50 points rally for 30/40 points pullback and you guess the uptrend will not stop and not pullback more than 8 points. Investors are not silly and will keep buying like crazy until real saturation, and this will not be happening any soon.

  18. blackjak100 says:

    thanks NK! I think this is the most accepted count right now

  19. stormchaser80llc says:

    Still long 401k and May SPY calls (now up over 100%).

    My LONG signal remains a ‘NO’ for the third day in a row, signaling a neutral position is best right now. This is determined by how my proprietary Technicals Model has been losing steam of late. SPX Hourly at today’s All Time Highs did not show any negative divergences, so a new high is likely. Highest number of New Highs since late 2014, though that was near a relative high for the market.

    Another key market direction signal I look at remains bullish, and small caps did outperform today. I continue to be ready to sell out of my longs mentally, but will continue to monitor the market before pulling the trigger.

    Most Breadth indicators remain in good shape, but are negatively diverging from the end of last year. These things are natural and just something to realize if you are long that it will not go up forever.

    Oils performance (or lack there of) on a bullish day like today is analogous to ED. VIX on the other hand held up quite well.

    My site (http://navigatethemarketstorm.com/) 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.

  20. locanbbs says:

    UPDATE: Got “lucky” on Russell 2000 today ! Entry/Exit see blue and red arrows. Thanks, Tony, for the tips. Now in “Wave 4” (Method “Trader Joe”) and waiting for price to go near blue SMA-Line/EWO to reach minimum to re-enter.
    – Chart RUT hourly futures:

  21. More news that doesn’t matter:Atlanta GDP revised down to 1.6 from 2.4.Next reading March 7th.In an unrelated story,DXY rises on,on,on…

  22. mcgcapital says:

    Exiting my FTSE longs here and taking a break from trading. Think this probably has further to go but I’m very uneasy with where we’re at so probably for the best as the temptation to go against price and short is high.

  23. blackjak100 says:

  24. Thanks Tony for today’s guidance and your always informed and sober take on the markets. Obviously, much or all of today’s gain were the result of Trump’s widely applauded speech in which he listed his accomplishments to date, laid out overarching nationalistic themes, articulated broad policies, appealed for unity, condemned anti Semitic incidents and, in a riveting moment, recognized the ultimate sacrifice made by Navy Seal Ryan Owens. Many, including the very liberal Van Jones of CNN, feel the speech was a defining moment in which it became clear Trump is our president notwithstanding deep policy divides. Many Republicans would agree as they want Trump to be the person we saw last night. I, for one, am happy for Trump as he has endured vitriol, hate and spite dished out by my most media outlets. Some criticize Trump for not offering more specifics but repeal and replace, tax and regulatory reform and infrastructure spending will require congressional approval making it virtually impossible to define the final product(s). In fact he’s nearing the end of big achievements he can enact by executive order, forcing him to rely on Congress to turn the bold promises of his campaign into actual achievements. Nothing is guaranteed but I think his current demeanor and tone will further the case for congressional approval on key programs. But who knows and it remains a risk. Unlike Obama, whose $900 billion stimulus measure contained little spending on hard assets, Trumps want to make real investments to improve our infrastructure while limiting pork. This is certain to provoke the ire of democrats.The mid March Fed meeting is looming with odds of a rate increase in the 66% range with Bloomberg calling for an 83% chance with Bill Dudley’s remark that an increase in rates has become “more compelling” being the catalyst. Assuming a rate hike, I would expect minor volatility and a resumption of the trend up depending upon the wave count. Everyone knows the odds and it would hardly be a surprise if they increase the federal funds rate to the 75 to 100 bp range. As Tony said, the next critical levels to watch are 2411 and 2428

    • tony caldaro says:

      Trump is not the best guy for the job, but his policies are what the country needs right now to enter the Growth secular cycle.

      • pooch77 says:

        was there a better choice than Trump

      • johnnymagicmoney says:

        If his policies are what we need Tony then he is the best guy for the job. Obama’s policies were exactly what we didn’t need so he in essence was the worst guy for the job. Proper policies dictate best.

      • joecthetruthteller says:

        tony, if trump is not the best guy for the job, who is?? bernie sanders? lol

    • Hmmm, no mention of the $20trillion deficit in Trump’s speech 🤔

      • tommyboys says:

        Well he did mention Obama spent more than all previous POTUSs combined and that we’ve spent “trillions” in the mideast without specifying “6” trillion and that he was left a “mess” etc… Appears the message was communicated.

      • CB says:

        ha! ..he was just testing whether the bond vigilantes would even notice it 😉
        Aaaand, they didn’t disappoint, of course..

  25. bouraq says:

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

  26. phil1247 says:

    http://tos.mx/pv0oih?image

    /ES

    in 15 min extension shorts

    bearish below 2395…
    ie no dip buying until ext short breaks

    potential support at 2383…

  27. Nano 3 this far is 134 points. Wow. Or 2.85 times nano 1. At 3 times nano 1 it’s 2408. I see a lot of resistance there. But at 3.618 x Nano 1 is 2437. So over 2408 probably headed to 2437.
    Then nano 4 if nano 3 ends at 2408 a .23 retrace is 32 points so maybe nano 4 ends at 2375 area. Then nano 5 to end micro 3 at when 1equals 5 47 points is 2422

    Unbelievable.

  28. Page says:

    Thanks Tony.

  29. Tarun Varma says:

    Tony, thank you for all the great work/share. Much appreciated. Quick question: after Nano iv is complete within expectations (30+ pt pullback), how much (distance travel) or where (end point/range) would the target for Nano v be?

  30. 123 abc says:

    Tony et al, superb update and outstanding OEW calls.

    Q: In regards to the internals of Nano-iii wave, are you suggesting the following?:
    Pico-1: 2289 / Pico-2: 2272 / Pico-3: 2372 / Pico-4: 2359

    If not, where do you see Pico-3 and Pico-4 waves?

  31. llerias7 says:

    So our next “location”: a nano iv – 2360´s (previous resistance) – micro 3 -minute 3 – minor 3 -Int. III – major 1 – P3…wow…got it right?
    It matches other good counts out there, except many are considering we are in P5.

    Thanks, Mr. C.

  32. cliffuzan says:

    Hi Tony,
    Great call a week or so ago for month end weakness and continuation of the bull to next pivots.

  33. mtu MTU says:

    [EOD] Stocks-
    1st of the Month. 8 years from the 2009 low. Squiggles (chart 1), gaps (chart 2), Shiller PE(chart 3).
    http://market-timing-update.blogspot.com/2017/03/market-timing-update-3117.html

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