Wednesday update

SHORT TERM: higher open then pullback, DOW -21

Overnight the Asian markets lost 0.1%. Europe opened higher but lost 0.1%. US index futures were higher overnight and the market opened 3 points above yesterday’s SPX 2413 close. Right after the open the market started to pullback. At 9:45 the Chicago PMI was reported lower, and at 10am pending home sales were reported lower. At 10am the SPX hit 2404, and then rebounded to 2411 by 11am. For the next few hours the market stayed in a trading range between 2404-2411 until 2pm, when the FED released the beige book: Then after hitting SPX 2405 just past 2pm, the market rallied to 2412 and closed there.

For the day the SPX/DOW lost 0.10%, and the NDX/NAZ lost 0.10%. Bonds gained 1 tick, Crude dropped $1.45, Gold rose $5, and the USD was lower. Medium term support remains at the 2411 and 2385 pivots, with resistance at the 2428 and 2444 pivots. Tomorrow: the ADP at 8:15; weekly jobless claims at 8:30; then ISM, construction spending and auto sales at 10am.

The market opened within 3 points of the all-time high today, AMZN and GOOG hit $1000, and then the market started to pullback. Profit taking trigger? At today’s low the SPX hit 2404, for a 15-point decline from the 2419 all-time high. And this is the first quantifiable pullback, on our shortest timeframe, since this rally began at SPX 2353. Pullbacks during the first rally of this uptrend, SPX 2329-2406, ranged from 14-22 points. The current 15-point pullback, thus far, fits right into this range. Should the market drop to the OEW 2385 pivot, then we will have a pattern that could be more significant than just a normal pullback. Whether it is a minor pullback or major pullback the market still appears to be heading to higher highs before this uptrend concludes. Should the SPX drop all the way back to 2353, however, then the uptrend probably topped at 2419. Until something more dramatic than a 14-22 point pullback occurs, the short term count remains unchanged. Short term support is at the 2411 and 2385 pivots, with resistance at the 2428 and 2444 pivots. Short term momentum dropped from a negative divergence to quite oversold at today’s lows, then bounced above neutral in the afternoon. Trade what’s in front of you!

MEDIUM TERM: uptrend

LONG TERM: uptrend


About tony caldaro

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116 Responses to Wednesday update

  1. stockop says:

    could not pull the trigger…. they hit the bottom of my YM target legitimately right at the close. Not going to surprise me in the least if they run it down overnight after trapping the little guys. Will be so mad at myself. ES just ran through my targets and made me hesitate. looks like the 4:01 reversal is in full effect. dang it

    • vivelaamo says:

      You mean to short? Don’t worry you’ll have another chance to tomorrow as it continues higher on NFP.

      • stockop says:

        got a strict system. cant go much higher from here or it would be a quick in and out for a small loss. very, very good risk/return at these levels imo. i’ve been watching this rise biding my time until now and than i cant do it. i hope ur right and the markets give me another shot in the morning, or they gap it up overnight and make me thankful i didnt place the trade.

  2. torehund says:

    6 months or Rut chop, its now or never🐞🐞🐞

  3. tommyboys says:

    New high in the A/D – real strong today at almost 4/1 positive!

  4. micky says:

    apple looks promising

  5. johnnymagicmoney says:

    good thing tons of new waiters and bartenders help the market focus on every job report instead of poor auto sales, inflation data, productivity, home sales, GDP, and China data

    thank god!!!! market is hysterical

    • tommyboys says:

      Auto sales and Home sales busting. Dunno where you live but we just had a rcord auto year and likely tie it this year or better. My home is up like 35% the past two years and no one is selling where I live in the Detroit area. Auto suppliers are flush. Ford just handed out annual bonus of like $13-20k+ to EVERY line worker!

      • Dex T says:

        Detroit?? Are you kidding me???

        35% in 2 years according to what metric???? What kind of “home” are you living in?

        Explain how this can be happening when that area is suffering a population decline?

        • tommyboys says:

          Suburb of Detroit. Downtown Detroit is booming as well however, New Red Wings/Pistons stadium, restaurants, Condos, new technology companies migrating for what was cheap rent. Huge Art scene now in the old Russell complex. Actually a shortage of housing downtown since GM bought the Ren Cen and moved its headquarters there. Big investments by local billionaiires – Illitch, Suave & Gilbert etc… I think Dan Gilbert has bought and renovated half the buildings in Detroit. Think he fancies himself as the next Trumpster. Look him up. This ain’t ’08 anymore.

    • fotis2 says:

      You forgot pizza delivery and entertainment park employees!Now that gives extra spine to the economy.

    • vivelaamo says:

      Good job we have this blog for the usual suspects to remind us the market is a bubble and we can continue to buy dips.

  6. Don’t forget first of the month pension buying on all this…which I know nobody has.Avi by the way,says over 2428–straight line to 2500,then correction to 2300 then 2600.Next year,a big correction.Adios all for the day. (Hey,even GDX is hanging in there somehow.)

    • kvilia says:

      Really? Not so sure. BTW, courtesy of DH: This is specifically for scotty and mjt. BTW, dh is also saying that gold is extremely undervalued compared to debased dollar. At some point this year GDX will explode.

      • scottycj1 says:

        That chart is the ratio of GC to ES…..has nothing to do with the dollar. ES and GC
        As you can see there is a long way to go to reach the 99-2000 level. Plenty of room for gold to fall and the ES to rise. Its obvious you dont understand what your looking at.
        And I love the pinpoint accuracy of your GDX forecast. ” At some point this year GDX will explode”

        • tommyboys says:

          Agree Gold going no where. Not sure the chronic obsession with it on here. Gold to $700 sometime in 2018 or sooner.

        • kvilia says:

          scotty, you are clearly not following. It has everything to do with a dollar because ES is priced in dollars. Did you know that? To break it down further for you, ES gain in dollars over the past 17 years is over 60%, however if priced in gold, ES actually lost over 60% in value. And this is what is called massive devaluation of a dollar. So gold clearly has not gone anywhere in the past 17 years.
          Regarding accuracy, you were calling for gold to fall under 1000 since the beginning of the year. If someone can show me how to search for specific posts, I’d refresh your memory.

  7. kvilia says:

    Let selling begin now when bulls are picking peanuts – everything is perfectly lined up now. Newbie – prepare to smile.

  8. phil1247 says:

    i have to leave but have some sell orders in at the 2426 target
    if things go totally bonkers…
    orders to sell are also at 2435 /es…..the next target

  9. vivelaamo says:

    I love these B waves that becomes 3 waves. It’s where the money is. should have known a strong bounce was due when Newbie appeared.

  10. vivelaamo says:

    Told you all RUT was good for going long yesterday. Need to take these opportunities when presented to you instead or worrying about C waves that don’t exist.

  11. phil1247 says:


    2419 target hit !

    2426 is next

  12. captbara says:

    Nice breadth today. Looks like B wave will be toast soon.

  13. Bud Fox says:

    FLR…looks like a great trade right here. Short Term PO is 54, on the chart….

  14. gtoptions says:

    Thanks Tony
    SPY ~ Testing D/W/M R Confluence @ 242.09 ~ 242.19
    Bots searching for a catalyst to push higher. GL All

  15. Mr C:Four scenarios–what’s most likely over the next 3 months.
    1)SPX up,gold up
    2)SPX up,gold down
    3)SPX down,gold down
    4 SPX down,gold up
    Thanks,if you feel like making an educated guess.

  16. Another mess of a day.Transports seem to have given the all clear for SPX.Dollar up slightly,so gold down $8 and Russell up (IWM likes a higher dollar).DXY could rally into June 17th,like the last two rate hikes–but you can’t count on a threepeat.DXY embedded for many days now–must escape that to rally.Lots of IFs,along with -divs everywhere.Too bad gold gets played with at key levels instead of being allowed to trade freely–like BitCon.

    • ISM employment #s beat by a little,ADP big beat…sooo what happens if payrolls hit over 220,000 tomorrow?Dollar up,IWM up,my best bets.Of course many a jobs day has had 200 point DOW up days on big beats(expecting 175,000).Rates should rise,gold should sell.But we’ll see how today plays out.Looks like a treading water kind of day.

    • tommyboys says:

      Trannies – to me – look overbought on daily potentially near a ST top while RUT actually looks ready to launch (daily) – look at the MACD & RS…CwH has formed on both here.

  17. phil1247 says:


    silver was the canary…. saw this rising wedge at short entry yesterday and sold all silver
    could not post pic yest cuz TOS had update that screwed things up again
    but mentioned it

    • phil1247 says:

      still bullish above 16.60 /si .. the .618 support of long from lows
      could be leading diagonal

  18. gary61b says:

    The dips are being bought or the dips are still buying?

  19. stockop says:

    now this is the gap I’ve been waiting for. really need the Dow to start outperforming… needs another 120 points or pulling the trigger to go short is going to be near impossible

    • stockop says:

      YM how you gonna let the ES do this to ya? hitting its PT and u just sitting there lagging. fifty points to go. afternoon high volume reversal? havent seen one of those up or down in months, price and online sentiment seems to indicate today is an opportune time for one to occur, should price targets be hit

  20. tommyboys says:

    AAII bullishness down with bearishness higher. Looking ripe for more up really – barring quick sharp scary drops…

    • stockop says:

      imo thats really not ripe for more up, tho it could definitely happen. only 1% higher bearishness than historical average? I want to see a bunch of those neutrals turn to bearish. they are the only true outlier

      • tommyboys says:

        Net net its bull market sentiment. Most indices are looking toppy here but this tells me another ST pullback likely. Bullish sentiment at 26% needs to get far higher prior to any lasting top. This said super strong jobs report this morning 253k vs 185k expected. Strongest in 3 years…

        • stockop says:

          sounds like we’re on the same page. i’m still in the b wave camp and would absolutely love for a bunch of those neutrals to go bearish and give us a reading similar to pre-election

  21. phil1247 says:

    TLT .. top?
    time and price meet now ( target 124.5 hit )
    cycle turn now ( vertical lines)
    at extension short entry again
    waiting for market to tip its hand
    no shorts yet

  22. Here are two ominous looking charts.Somehow,gold is going to have to pull an SPX Feb 2016 and not break down.As Rosanne Rossannadanna used to say,”It’s always sumpthin’ ”
    G’night all.

  23. stormchaser80llc says:

    Today I practiced self restraint. I was going to buy SPY PUTS at the open but a few things stopped me. First, the market was already in freefall from its pre-market highs. Also, both my trading signals are BULLISH. And finally despite a quick dump at the open, VIX while remaining in an uptrend was very muted. There are a host of things piling up in the BEARS favor, including negatively diverging technicals and breadth, along with seasonality, after a nice run up since election day. My proprietary Technicals Model has made 4 negative divergences vs. SPX since mid April, I don’t remember seeing such a thing before. My proprietary measure of volatility using statistics shows overall the market is more volatile than only 1.1% of the time since 1990 as of today. I saved the best for last…today marked what I call a pseudo Hindenburg Omen. Look at the Breadth chart where the number of new highs and lows today both reached my horizontal lines. For a true HO, the McClellan should be negative. But in my extensive research this is the weakest of all the tests for a HO. A Hindenburg Omen is based on technical analysis, showing through New Highs and Lows that there is a lot of cross current of selling and buying going on. They often occur near major bottoms, or cluster ahead of major tops. Lets keep track of these closely in the future!

    Much more FREE analysis at my site ( 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. On my site, be sure to check out the real-time Trading Platform (look for it on the top menu). I am taking feedback!

  24. soulsurfer says:

    monthly chart of the DOW, one of the weaker indices of late, still looks mighty strong IMHO:

    trade safe folks!

  25. cj32 says:

    Cr. to CBZ

  26. “On May 16th, we wrote an article that explored the question: do precious metal miners lead the price of gold? Based upon price action since early 2016, we found that gold led and/or sustained the two major uptrends and the miners tended to lead the price corrections. There is no guarantee of course that these patterns will continue to hold.”

    –A couple items from Viking Traders.

  27. Actually SPX embedded today.Ira thought it was only going to be a 3rd day tomorrow.GLD embedded,bonds are embedded and NasDaq is embedded.The only one left is IWM.So all clear…lol.Nothing could happen here except,what’s Gartman doing?Haven’t heard much lately.If anyone knows,drop a line.

  28. Thanks Tony. Interesting and uncertain times but I like your suggestion that the count remain unchanged. The last two rate hikes were followed by pullbacks of 3% and 2%, respectively. In
    looking at the March increase, the market reached an ATH, pulled back and rallied 20 points into the rate increase announced on March 15th but fell short of its ATH of 2401 at that time. Maybe the market, again, will rally into June’s widely expected increase and pullback 2% to 3% as part of Minute iv. Alternatively, it simply grinds higher until the rate increase is announced and then pulls back as it did last December. Importantly, though, in both cases the market was increasing into the rate decision, making me think the bias is up barring tail risk. Bloomberg’s calendar of seasonality shows June to be highly unfavorable but not as bad as August. A rate increase may be the perfect catalyst for weakness in June. Following this same line of thought, we might see Intermediate III conclude in July/August followed by Intermediate IV and then a succession of advances in the last months of the year.

  29. bouraq says:

    Chart of the day is #FTSE at

  30. mjtplayer says:

    GLD rallied above Friday’s high today, but failed to make a higher closing high. The reversal today also printed a daily inverted hammer candle in the GLD. Since the gap-up rally on 5/17, gold is up just $8 over the past 9 trading days. Given the view of many on various trading & technical sites (like this one), you’d think gold was up $40 or $50 during that time.

    Meanwhile, GDX continues to trade heavy and under-performing gold yet again. GDX is just $0.49 away from making LL’s below the 5/24 spike low. The miners lead gold, which is a problem for the gold bulls.

    Now that month-end is behind us, let’s see how gold trades and acts in June, with the Fed raising rates in 2 weeks and a turn window for gold in late June.

    • phil1247 says:


      sometimes miners lead.. sometimes the other way around

      • mjtplayer says:

        I know, nothing is 100%

        The poor price action is a concern for gold bulls – period.

        • phil1247 says:

          i am not concerned …gold continues to act well
          bullish above 1238…
          target remains 1339
          trading near the downtrend line is tricky .
          .so i am very short term until above there
          again…. i dont like miners…only the metal

    • fotis2 says:

      Hammer candlesticks need confirmation candlesticks by themselves they mean little.

  31. fenster6 says:

    Would love some direction form others who come here as to how they use EW to help their trading.

    A count that seems seems clearly obvious and tradeable, gets changed the next day. to something quite different.

  32. Thanks Mr C.Well here’s the plan.SPX doesn’t sell off tomorrow and embeds for the 3rd day…I’m going to go 100% in.Fair warning.GDX settled right between the 10 and 20d Ema,a fitting spot,since it really doesn’t have anything going on.Whipsaw city.Good luck all–and especially me.

  33. kvilia says:

    Thanks, Tony. Agree on the pullbacks, has to show some strength.
    And I finally got it – Scotty is Golden Newbie!

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