Tuesday update

SHORT TERM: lower open then market rallies, DOW +151

Overnight the Asian markets gained 0.8%. Europe opened higher and gained 0.9%. US index futures were relatively flat overnight, and at 9am Case-Shiller was reported higher: 5.9% v 5.6%. The market opened 3 points below yesterday’s SPX 2342 close, bounced to 2344 in the opening minutes, hit 2338 by 10am, then started to move higher. At 10am consumer confidence was reported at a 16-year high: 125.6 v 114.8. The rally continued into the afternoon with a couple of small pullbacks along the way. At 1pm FED chair Yellen: https://www.federalreserve.gov/newsevents/speech/yellen20170328a.htm. Around 2:30 the SPX hit 2364, then pulled back to close at 2359.

For the day the SPX/DOW gained 0.70%, and the NDX/NAZ gained 0.60%. Bonds lost 11 ticks, Crude rose 60 cents, Gold dropped $5, and the USD was higher. Medium term support remains at the 2336 and 2321 pivots, with resistance at the 2385 and 2411 pivots. Tomorrow: pending home sales at 10am.

The market opened slightly lower today, bounced, hit SPX 2338, and then started to rally. Just before 2pm the SPX hit 2358, for a 36-point rally from yesterday’s 2322 low. This is the best rally since this decline began from SPX 2401 earlier in the month. The tentative green Micro 4 was upgraded to orange at that point. This rally now presents the best opportunity for a Micro 5 advance to new highs. Short term support is in the SPX 2350’s and the 2336 pivot, with resistance at the 2385 pivot and SPX 2401. Short term momentum hit quite overbought during today’s rally. Best to your trading!

MEDIUM TERM: uptrend rebounding

LONG TERM: uptrend

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

About tony caldaro

Investor
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111 Responses to Tuesday update

  1. tommyboys says:

    A/D strong today. New high may not be far off.

  2. setting up for a interesting close

  3. torehund says:

    I have heard there is a migration from big cities towards the periphery across the US, is this the real estate crash lurking ?

    • johnnymagicmoney says:

      I think residential is fine because supply got reduced so much after the crisis. Commercial depends on what type of commercial. I think a lot of the retailers are in trouble and that’s due to the migration to online shopping. The boomers will buy less and venture out less and the millennial shopping patterns are ingrained in the internet. They are value shoppers and you can only do that efficiently online. Higher interest rates, demographics, and the internet coupled with the next down turn will be a perfect storm for a lot of commercial real estate.

      • Dex T says:

        Quite probable.

        Many retailers cannot compete with the tax free online environment. They either will have to shut down leading to huge job and commercial real estate losses or online companies will have to be taxed in the future.

    • Dex T says:

      Entirely possible. Have been reading many articles about struggling malls and commercial real estate developments throughout the U.S.

      A commercial real estate broker in Manhattan recently told me that the vacancy rates are over 50% in many of the higher prices locations like 5th Avenue and Madison, etc… Many buildings filled with empty floors and impossible to attract any types of subletters.

      The rent/locations and taxes are much too high and debts levels held by banks and funds out of control.

  4. johnnymagicmoney says:

    (from Dan) Phil is much more of an asset to this club than Johnny, imo . Johnny must have been trolling Phil. Why else would Phils posts disturb him??

    Too many of you are like a bunch of girls. If I bust on Phil about fifty million posts big deal. I would do the same thing to a friend of mine. It doesn’t mean I don’t appreciate the posts I am just busting on the fifty million posts (I did say that I appreciate them at the same time). You throw the slightest challenge out there and people get all sensitive. Same thing with challenging Tony’s very poor count record over the last few years but few of you choose to ignore that

    • johnnymagicmoney says:

      most of you choose to ignore that

    • vivelaamo says:

      “Too many of you are like a bunch of girls”

      Lol I agree

    • jhjoyner says:

      Is your count perfect?

    • Valid point. I took the original post as a friendly “jab” compared to another comment directed at Phil’s post count. Phil seemed to have gotten it so no harm, no foul.

      Speaking in general to all who participate in the comments, I suggest further inquiry on the details of the perceived issue before making allegations against the OP. We’ve all seen how these blatant “name-calling”/”finger-pointing” discussions turn out, assuming we’re all adults here :]

      Best,
      Tom

  5. micky says:

    Surely looks and acts like a triangle, its buggering up my drawing now. If it breaks up like I think, there should be one last wave of this degree..

  6. lunker1 says:

    Hi Tony, how many waves do you count so far from 2322? Thanks

  7. phil1247 says:

    http://tos.mx/TXJ5iQ?image

    DAYTRADERS wednesday DOLLAR special report

    even daytraders need to know the long term trends

    • H D says:

      Looks like a big cup n handle on the chart, similar to the 1990’s price action

      • phil1247 says:

        my read on this HD
        is that if 102 cannot be surpassed .
        .. the extension short has defended
        from 121 in 2002

        target would be 59…

        fits in nicely with gold explosion and rampant inflation

        bonds will be crushed
        notwithstanding a squeeze short term
        before all out bond collapse

  8. phil1247 says:

    $DXY

    preparing to squeeeeze up near 102

    then we will see about dollar cycle peak as expected in FEB + or – 2 months

  9. gtoptions says:

    Thanks Tony
    SPX ~ Some Fibonacci @ 2466 😉

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

  10. Mary773 says:

    Tony,
    After reviewing the weekend update, I am trying to determine intermediate term risk/reward here. Is your tentative preferred scenario a rally to the 2428 pivot, a pullback not to exceed 2277, and then a powerful new upwave? If so, what would be your minimum expectation for the pullback? Thank you.

  11. TLT supporting GDX this morning.I’m focused on Transports–9169 is the 20d.Break above goes to upper bb,but if it”s turned back…or we lose 100 today on DJT,watch out for the rest of the equity market.More on gold later.Good luck all.

  12. gary61b says:

    ES at 2353.25 will probably have to tag 2351.75 before proceeding higher

  13. For what it’s worth… My count is a bit different than Tony’s, where I have the current waves as one degree higher…we align on minute i at 2,278, but my minute ii is where he has a micro 2…thus by my count, we’re in minute iii, not micro 3.

    That said, minute i was 194 points (2,084 to 2,278), while the recently-completed minute iii (Tony’s micro 3) was only 144 points (2,257 to 2,401).

    By this count, iii is shorter than i, thus v cannot be > iii, e.g. v cannot exceed 144 points. From the 2,322 low, that puts v at a max of 2,466.

    • Similarly, by Tony’s count, his micro 5 will end minute iii…and for his minute iii has to exceed 194 points ( minute i, which means his micro 5 needs to go from 2,234 to at least 2,428.

      If we don’t make it at least that far, we’ll have a iii < i scenario by Tony's count as well.

  14. Phil, Thanks for posting again. Many of us appreciate your posts. please ignore trolls.

    Thx again

  15. enough to finish wave 2 down, wave 3 up to new highs by friday

  16. This rally is already starting to look crumbly. It has going to have to do a lot better than this to stay classified as an impulse wave. Otherwise, B upward corrective wave.

  17. Not many tells this AM. Keep an eye on price behavior around ES 2362.25 as its a monster and its very, very close to the .618 at 2361.50 derived from the span from 2318 to 2388. Some are looking at downward sloping trend line starting at 2401 and extending through 2390. Lastly, the market is either becoming more patient with Trump or has decoupled either of which would undercut, not eliminate, the bear case.

  18. Jimbo says:

    FTSE looks to have made a 5 wave down from ATH followed by a near perfect 61% retracement for a wave 2…. Anyone else see this?

  19. mcgcapital says:

    Back short again on the failure to hold 7340. Looks weak again now and everybody has turned bullish again. The reason we were selling off before is the uncertainty around the trump agenda and improved consumer confidence hasn’t made that go away.

  20. vivelaamo says:

    Back in the channel! 😉

  21. vivelaamo says:

    Bullish hammer and follow through suggests more upside to me.

    Anyway else miss Phil? Johnny scared him away. Phil come back and trade the ‘salami market’ with us.

  22. stormchaser80llc says:

    Decision time is coming up for the market. Is this merely a bounce within a downtrend, or did a corrective wave lower finish early Monday? Breadth indicators and my proprietary Technicals Model all indicated positive divergence with Monday’s low. On the SPX hourly chart, I show my bear count with us being in a W2 higher. Its has already retraced to the 0.618 level, which could be the end of the retrace higher. But this looks too short in duration to me, so a W2 could become a more complex wave which would be half over with a downturn and then 3 more waves higher. Remember there is an important resistance line at 2371.

    My signals from my Technicals Model switched from Bearish to Bullish today. Yet my other favorite indicator remains bearish for now. Tomorrow cant be an up day and hold its bearish signal. So either down in an X wave of 2 or starting W3 lower would satisfy my signals. It would be foolish to place new bets on this pattern right at this juncture. Finally something of interest, SPX Daily hit both its 50 dma and 20 dma today. Traders on both sides testing the waters. But not to mislead you HYG:IEF clearly indicated a risk off day Tuesday. Good luck to all!

    Much more FREE analysis at my site (http://navigatethemarketstorm.com). However be advised that I do ask folks to take a few seconds to register for a log-in, making sure you agree to my legal documents.

    • stormchaser80llc says:

      Meant to say risk ON at the end

    • Storm: What you have written is pretty similar to my proposed scenario of an a-b-c downwave with the b-wave starting now. The b-wave itself could take the form of an a-b-c. I, too will be watching closely to see if there will be a main c- leg down to complete the a-b-c or if micro 5 has taken over. That may be a challenge.

  23. High today of 2364 equals 61.8% of range between 2322 and 2390.

    In prior comments I have mentioned the market “uncoupling” from Trump; it may be happening much sooner than expected: “Economic fundamentals still remain exceedingly sound here in 2017 and you do not need Trump’s pro-growth fiscal agenda for this to be one of the best years for growth since the recovery started,” argued Tom Porcelli, chief U.S. economist at RBC Capital Markets. “We still think tax reform happens, but you are better off thinking about the timing as an end of year event at best.”

    This is coming MUCH sooner than expected, forcing me to rethink prior sentiments tending to favor a move to 2280. It has not cost me, however, as I am open to all ideas but marry none.

    • SPYtrader says:

      Go TRUMP!! Onward to DOW 50,000

    • Bullish for PMs:
      Yen did a bullish 13/34 cross.Embedded.Probably the most influencial currency for gold prices.That’s about it.
      Bearish:GDX however is 42 cents from crossing bullishly.Gold down 7.50 at this writing.Under 1250.I’ve been waiting to see how far they let this play out in the devious manner I think it is. Bearish chart patterns are getting delayed on GDX to make it look bullish.Three weeks ago there was a similar move when the 10d broke–a delayed reaction and a fakeout.Then a quick drop.
      Now I’ve called attention,for a while,to the fact that past bearish crossovers made an attempt to get near that point again– in fairly short order.What happened next,is that a huge selloff materialized–as that area was rejected.GDX has been taking its sweet time teasing,but not crossing up–and I’ve been suspicious.Tonight and tomorrow might be the big break.Goldfingers crossed that it isn’t.

    • Tax reform is a nightmare requiring years of Presidential oversight, Donald Regan serving under President Reagan quit under the pressure, hence there hasn’t been tax reform in over 30 years.
      I heard tonight that the initial $1.5 Billion Presidential request for building a southern wall is being blocked by some Republicans, apparently there’s no money…

    • It is best to remain a bachelor.

    • fionamargaret says:

      No words can really describe this masterpiece of Tchaikovsky…a personal favourite of mine. If you watch the video, you will notice the conductor of the Seoul Philharmonic – Chung Myung Whun do a brilliant job, but overcome with emotion at the end….yes, we all are emotional fools…x

  24. Tony that consumer confidence number was a cracker as was the Richmaon manufacturing number, that should increase the probability we move higher and the correction is over.

  25. NEWBIE says:

    See you at 2280 by end of week. Bears get ready to eat.

  26. I realize that yesterday I wrote that we were at the end of leg A of a possible irregular a-b-c zig-zag retrace, which means a flat, in which the large B Wave would top out near the old highs of 2401.Apparently it was incorrect to use the term zig-zag to characterize such a pattern. To be called a zig-zag, the B up wave can only retrace ? percent of the A-wave decline.
    It does appear that the NASDAQ may be losing relative strength against the DJIA and SPX, as per Bulkowski’s warning of last Tuesday. Even though it appears that both NAS AND NDX will make make new highs on any continued strength in the SPX, the situation bears close scrutiny.

    • chrisk44342 says:

      george, why call for an irregular B wave when the market is just recovering? It makes no sense to me. Trying to anticipate market direction with EW patterns is folly. This is where people go wrong with EW- perhaps you’ve only been following/practicing a while. The best traders rely on EW, trend lines, and MAs for context. They don’t make entries based on EW patterns.

      • Thanks, Chris. You are right, of course. I have had a position in QTEC ($NDX etf) for a couple of months now and it’s 50-day MA
        remains bullishly above the 200-day MA, and it appears to have made a successful test of it’s 50 day MA. Tony feels confident that micro 5 had started but I think QTEC and SPX might not be done correcting, so I set up the irregular flat scenario as a kind of alternative to the impulse scenario to watch for, ad I tend to miss chances to take profits and buy back lower. I have already commented on the fact that the RS of the $NDX against $SPX shows signs of weakening.
        I do need to make better use of trendlines, but as a free user of Stockcharts

      • As a free user of Stockcharts.com, I don’t have the capability of drawing trendlines or seeing shorter-term MA’s. My TDAmeritrade advisor has suggested that I download thinkorswim to have a better trading platform. When I bring my newer computer online, I will do that. But it does appear there is a
        shallow downtrend line on the SPX from 2401 to 2390 that will have to be decisively broken to the upside in order to confirm that this rally is truly an impulse wave. Re saw

  27. bouraq says:

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

    • Too much milk in Europe, US and NZ due to great growing conditions, I am short NZD. Plus Auckland property market is dead auction clearance around 35% over the past two critical sales months prices to drop. Expect lower GDP prints.

  28. Disgruntled invester,talking to another disgruntled investor,on a park bench:
    “Hey,I see you’re looking at a chart of the dollar.Do you remember when H&S patterns use to be bearish?Take weeks and weeks to play out and then,when it broke down,you could trade it.”
    Other irritated investor:”I remember those days.How about moving averages crossing?Remember when THAT worked?”
    DI:”Sure,those STILL work,but only with gold–not the dollar…or S&P.”
    OII:”Crude oil is excused as well from chart pattern etiquette,I think.”
    DI:”Do you know anything about embedded stochastics?”
    OII:”A little.Why,are those worthless now too?”
    DI:”We’ll find out tomorrow.That might be another one that gets torpedoed if an asset class like DXY goes the wrong way.”
    OII:”What’s left?”
    DI:”BTFD”
    OII:”You didn’t have to swear.”
    DI:”Yes I did.”

  29. mtu MTU says:

    {EOD]Stocks –
    Three waves down in SPX followed by a strong rebound today. Possibilities include an abc-down (completed, or as part of a triangle, flat), nested 1s2s down, or a still-developing five-down with its wave four an ongoing triangle. Short term and longer term bull/bear tracking. See charts.
    http://market-timing-update.blogspot.com/2017/03/market-timing-update-32817.html

  30. torehund says:

    Think this is a reversal, dollar too going strong⚡️⚡️⚡️

  31. locanbbs says:

    Thanks, Tony, for your guidance. I entered Ndx near the lows of the day and am staying in, for a change, overnight. As Jeffery Saut would say, “I don’t want to lose my position!”

  32. llerias7 says:

    Whit micro (v) ends minute iii (ATH)…meaning new ATH again at minute v top which ends minor 3!! This is a “bull fury”…any target for minor 3?

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