Wednesday update

SHORT TERM: gap down opening, DOW +8

Overnight the Asian markets ended mixed. Europe opened lower and ended mixed as well. US index futures were lower overnight, and at 8:15 the ADP was reported lower: 177k v 255k. The market gapped down to SPX 2384 at the open after closing at 2391 yesterday. In the opening minutes the market bounced to SPX 2387, then pulled back further. At 10am ISM services was reported higher: 57.5 v 55.2. Just before 11am the SPX hit 2380, and then started to work its way higher. At 2pm the FED released its FOMC statement: https://www.federalreserve.gov/newsevents/pressreleases/monetary20170503a.htm. Just before the close the SPX hit 2390, then ended the day at 2388.

For the day the SPX/DOW were mixed, and the NDX/NAZ lost 0.35%. Bonds slid 8 ticks, Crude rose 5 cents, Gold dropped $17, and the USD was higher. Medium term support remains at the 2385 and 2336 pivots, with resistance at the 2411 and 2428 pivots. Tomorrow: weekly jobless claims and the trade deficit at 8:39, then factory orders at 10am.

The market gapped down at the open today for the first time since April 18th. Despite the gap down the market remained in the 2385 pivot range, where it has traded for the past 5 days. Today’s pullback to SPX 2380, from 2398, registered on the smaller wave timeframe. We can now count seven waves up on the smaller timeframe, and three waves up on the larger. The market will need to reach/exceed SPX 2398 to start making this uptrend look impulsive again. If the decline continues, this 2+ week rally may have been just a B wave. Short term support is at the 2385 pivot and SPX 2369, with resistance at SPX 2401 and the 2411 pivot. Short term momentum hit oversold at today’s low, then bounced to above neutral. 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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108 Responses to Wednesday update

  1. purplember says:

    Phil, you replied to my earlier comment FED has nothing to do with it. are you referring to the market or GDP growth?

    i agree GDP growth but imho FED has had a HUGE HUGE impact on stocks in past 8 years. to the point i think we’re in uncharted territory and unsure what happens with next downturn.

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  2. kingfrogcash says:

    Facebook Sinks After Guidng Ad Growth Down “Meaningfully”

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  3. asaraniti says:

    Hi Tony

    Looking at your 60 minute count for the SPX. Are you suggesting that wave 1 and 2 are minute level waves, or just waves 1 and 2 at unknown level at this time? Since they are labelled in green looks to me that your current thinking, is that they are of minute level. If they are minute level, could SPX 2411 – 2428 be the print top for minute 5 of Intermediate iii ?

    That would make minute 5 less than 50% of minute 1….seems too small in magnitude and time….NASDAQ looks kind of weak lately, may be the NASDAQ are tying to get back in sync with minor wave 4.

    I like the way you ended tonight’s update with levels to watch for a “b” wave versus wave 5.

    Thank you for sharing your expertise with all.

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  4. 123 abc says:

    Great update, thank you Tony. Personally still preferring the b-wave scenario.


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  5. phil1247 says:

    http://tos.mx/gp2QwJ?image

    /GC
    GOLD has potential support at 1234 but cannot be validated
    until the extension short …currently at 1253…..is traded above

    as discussed many months ago…
    gold has probably seen its bear market lows

    silver and gdx probably have not

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    • kvilia says:

      Phil, miners have been acting pretty resistant compare to this gold decline, perhaps anticipating the support in gold and tracking silver oversold conditions. I certainly see the grounds for a trend change, the question is whether this is going to be a dead cat bounce.

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      • phil1247 says:

        kvilia…i agree ..
        21.34 gdx is still holding which is the retest of failed long from dec lows.
        ..its almost as if there is divine intervention holding it up.
        .?conspiracy of central banks buying gold stocks ???
        unless gold and silver can break extension shorts..
        there is no hope for either

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  6. kvilia says:

    Tony,
    On the daily gold chart, what would be the prerequisite to update April gold high as a C wave?
    Thank you,

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  7. kvilia says:

    Thank you, Tony.
    What do you think, Learned? Is gold trend line going to hold? It dipped through, however 61% has not been violated yet, which is around 1235. Tomorrow will be a telling, however I like less and less how gold behaves and especially how silver behaves. Hopefully there is going to be a bounce here.

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    • mjtplayer says:

      No bounce, sorry. Gold hasn’t broken yet, but it’s teetering as we speak.

      Miners and silver have already broken and have been melting down, only makes sense for gold to join

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      • kvilia says:

        I will agree with you if/when gold breaks 1235. But even shortly after there will be a bounce exceeding today’s levels. Its all about timing, surely would not want to see gold breaking support tonight.

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        • learnedmylesson25 says:

          I added 10% GDX today.Either we go to 23.50 in short order or completely crash.If employment #s come in as ISM suggests,gold should rally Friday.I’m assuming a lot though,with ISM equating to the monthly jobs report.Kathy Lien wrote about that correlation last month and was 100% correct.

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          • learnedmylesson25 says:

            A month ago,GDX led gold down…now,hopefully the opposite with a +div.At least there was a +-div last I checked.

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        • mjtplayer says:

          If the PM complex continues to meltdown over the next couple days then I would expect a temp low next week and a sizable bounce/rally

          Make no mistake though, the trend is down – period. Just wait until the Dollar starts rallying again….

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          • learnedmylesson25 says:

            Avi Gilburt made the point that he thinks the dollar is not going to go up–and if it does,he doesn’t think there’s a correlation to a gold/GDX decline,since the dollar and GDX both sold off since dollar 103.Not that I agree with him,just stating his theory.

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          • mjtplayer says:

            I think it shows inherent weakness in commodities. If oil, gold, etc can’t rally while the Dollar is pulling back and consolidating, then that doesn’t paint a bullish picture overall for commodities

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  8. STEPHEN BARTLETT says:

    Dollar yen looks like a decent short here. Stop 113.48. Target below 1.10 for a wave c

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  9. Sorry my ignorance Tony, but how do you count a lower low, still a wave up? Cant figure this out..!

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  10. phil1247 says:

    http://tos.mx/ozHoM6?image

    /SI
    SILVER failed test of december lows
    14.35 next major target

    then 10 . 80 eventually

    is it a DOOZIE yet ?

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