Wednesday update

SHORT TERM: higher open then pullback, DOW +52

Overnight the Asian markets gained 0.2%. Europe opened higher but lost 0.4%. US index futures were higher overnight, and at 8:15 the ADP was reported lower. The market opened at SPX 2480 and immediately began to pullback. The pullback continued until 11am when the SPX hit 2465. After that it started to rebound. The rally lasted in the last hour of trading when the SPX hot 2478 and closed there.

For the day the SPX/DOW gained 0.15%, and the NDX/NAZ gained 0.15%. Bonds lost 5 ticks, Crude roseย 30 cents, Gold slipped $2, and the USD was lower. Medium term support remains at the 2456 and 2444 pivots, with resistance at the 2479 and 2525 pivots. Tomorrow: jobless claims at 8:30, then ISM services and factory orders at 10am.

The market opened higher today for the 5th time in the past 6 days. And each of those 5 times that was the high for the day, and the market pulled back soon after the open. Even though the SPX traded within the OEW 2479 pivot range for the 11th day in a row, and the DOW made all-time new highs for the 6th day in a row, it happened yet again. Recently one of the SPX sectors we track, the XLI has confirmed a downtrend. Since this is the SPX’s industrial sector it may suggest the DOW, despite the new highs, is loosing upside momentum. If the DOW tops the entire market is likely to head lower in a C wave, of Int. iv,ย downtrend. Should this come to pass all four major indices will then be realigned, and a retest of SPX 2400+ is likely. Short term support is at the 2456 and 2444 pivots, with resistance at the 2479 and 2525 pivots. Short term momentum hit oversold during today’s pullback, then rebounded above neutral. Best to your trading this choppy market.

MEDIUM TERM: uptrend

LONG TERM: uptrend

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

About tony caldaro

Investor
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99 Responses to Wednesday update

  1. H D says:

    WSJ- Mueller gets a grand jury. Indictment on deck? POTUS- 17 day vacation. Surrounded by the best people. Markets -5 points on the news.

  2. Bud Fox says:

    TWTR, rather like the stock 16-14 range. Waiting for a clear pic of the broad market
    tonight from Tony C….

  3. SPYtrader says:

    I am sticking with Harry Dent’s 2011, 2012, 2013, 2014, 2015, 2016 for 3000 on the Dow or maybe I will go with his 2007, 2008 call for 36,000 on the Dow. I can’t decide. Hey, but I am covered either way.

  4. Page says:

    We will have nice rally tomorrow, SPX to zoom thru 2500.

  5. JK1987 says:

    According to the cycle, tomorrow will be a big down day, and kicks off the down cycle.
    APPLE already topped at 160, gave back 50% of yesterday’s one day wonder.
    FB nearly gave back all the earning pop.
    Not to mention AMZN.
    The only thing shining is TLT.

    • aahmichael says:

      RE: According to the cycle…

      According to what cycle? It seems as if every poster on this blog has their own personal magical cycle, yet, no one ever explains what their cycle is based on or how it’s calculated. So, how is that supposed to mean anything?

      For the record, my girlfriend’s cycle is due tomorrow as well…

  6. vivelaamo says:

    Sorry double post โ˜บ๏ธ

  7. vivelaamo says:

    Guys even though I’m not trading anymore I’m still watching and reading so will add my voice here and there. RUT is dropping while DOW is rising. It doesn’t take a genius to work out where the money is going with this rotation. Also you don’t need to be a genius to work out why.

    All the best.

  8. vivelaamo says:

    Guys even know I’m not trading anymore I’m still watching and reading so will add my voice here and there. RUT is dropping while DOW is rising. It doesn’t take a genius to work out where the money is going with this rotation. Also you don’t need to be a genius to work out why.

    All the best.

  9. Bud Fox says:

    after a hard day of trading, and taking financial risks — there
    comes a need to relax, and pause — I suggest here… http://visitstlucie.com/places/united-states/florida/fort-pierce-1/beaches-2/surfside-park

  10. anyone up for pick the close. I say 2475

  11. stcoleridge says:

    R2K anyone? It’s underperformed the DOW by about 4.7% over the last 10 trading sessions.

  12. Bud Fox says:

    at 12:50 pm eastern — the DJIA up, and SP500 down. Is a very concerning pattern.
    One, we all know can lead to a reversal prior to the close. Just, something to be aware of….

  13. captbara says:

    Surprisingly NAMO has made it back under the BB with the chop over the last week. Now below for the 2nd day. Last 2 times: Mid May and 1st week of Jul.

    Quiz time, what should we expect next?

    • scottycj1 says:

      Last time it was in this position was the May17-18 low…..that lead to a one month rally.
      Think the payroll numbers will launch us higher

    • mcgcapital says:

      Dow is up about 8 days in a row and S&P has barely moved in the same time period so it doesn’t look very bottom like. That being said, I’m very skeptical it will go down on payrolls as it never does, so guess we’ll see next week. Plus if we can’t break through 2480 when earnings have been great what’s the catalyst once earnings season finishes

  14. mcgcapital says:

    Anyone else thinking payrolls could disappoint tomorrow? US data seems to mostly be coming out on the soft side. I make it June 2016 the last time stocks reacted negatively to the data so betting against the trend if shorting into the data

  15. UPDATE 2: Da Boyz smash markets down again at open, sorry! (That’s life at the stockmarket.) I got out with a small loss (see arrows on chart), but had no time to update here immediately.
    The market cycle bottom for today (& those for Sunday and Tuesday of next week) are obviously still active. Bottom for correction should be reached on Tuesday at latest.
    ndx hourly futures –
    http://imgur.com/a/3rar7

    • Should be: “Temporary bottom for correction…” (We still have to get throught August & September of the “weak” months.)
      P.S. – These kobolds are regularly playing such “jokes” at the opening. My mistake was to think that I could wait till shortly before. Next time I’ll get out at the full hour!

      • Why at the opening of regular trading? – Answer: They can’t get enough volume in futures trading to make it worth their while. So they are letting traders in futures drive up the market beforehand, so they can short and drive it down again in regular trading.

    • johnnymagicmoney says:

      I find it hysterical that anyone involved in the markets, investor, writer, analysts whatever that uses the word “smash” when the market drops like 4 or 5 handles. That’s the market we have………………..a .3% drop in the S&P is a HUGE buying opportunity and yet people are so acclimated to the absurdity of this action that they don’t realize how absurd it is

      • I couldn’t think of a better word than “smash”, when they’ve done almost the same procedure the last 7 days! Look at the Dow. It’s being constantly smashed down from its hourly highs. Somebody (big) cannot afford to let it get away and lead the other markets up with it!

      • It’s exactly 30 minutes to regular close and “they” are suddenly putting heavy downward pressure on. Let’s see how deep “they” have programmed the Bots to drive the markets!

    • micky says:

      entertaining stuff, thanks.

  16. phil1247 says:

    EURO

    extensions of extensions continue euro melt up like dow

    next target 119.40

    Fotis ….

    still could accelerate up to 126 ……
    just say no to chop !

  17. scottycj1 says:

    Looking at the astro….next cit Friday 8-4
    Moon cycles kick in positive next week

  18. ISM non manufacturing (or services)down to 53.4 from 57.Employment also lagged.Still above 50 for all you optimists out there.Gold caught a bid on it.Later.

    • Bud Fox says:

      No disrespect, but. I am not seeing that positive pattern/signal your seeing.
      Do appreciate the comment, though….best to you…

  19. Lee C Wilson says:

    anyone keeping tabs on biotech (BTK, XBI) … each have corrected > 5% since late-July.

  20. ombak kaki says:

    TC,
    thanks for your daily updates.
    would like to find out how to get your OEW SPX 2479 pivot.
    thanks

  21. pooch77 says:

    So is it time for Dow to lead whole market down

  22. mjtplayer says:

    VIX, weekly candles,2yr ED pattern is running out of time. Upside resistance now just 14 and will be 13 by Labor Day weekend. This is a huge coiled spring and it’s getting ready to break, fueled by short covering from record futures short interest…

    https://www.tradingview.com/x/t79di5qn/

    • fionamargaret says:

      Thanks MJT…another great chart.
      Oil up to 55…UWT to 18.5…
      UGAZ up….DBC up.

      • mjtplayer says:

        I’m short oil, but would like to see the high of Monday/Tuesday hold, above that and I might bail.

        On the downside, if oil breaks below the mid $47’s I would bail on your longs.

        • fionamargaret says:

          Thanks MJT.
          Once UWT gets over 16,50, then we go to 18.50 and then consider if that indeed was an IHS on oil going to 70….I have Tony’s number etched in my brain…

  23. vipulm555 says:

    Overnight ES should break through 2480 resistance.
    Jobs report tomrrow (Friday) will take 2500.
    Nasdaq should make new high next week

    Rotation rotation rotation life blood

  24. gary61b says:

    ES, I am leaning with this count…https://gyazo.com/1f2b189c7a2d2eda743b4c5ca61f59d0

  25. My perfect scenario is a blow off top today over 2494. Alt scenario chop chop for another week or two up to the 2500 range sometime between 8-13 and 8-20. That all I got. Since 2480 was hit, appears 2500 is the likely target or there about. Big number and I see no catalyst to break thru and with seasonality a great place to retreat from. I covered my short yesterday and hold no position.
    Just for disclosure, I only trade sp 3 times long or short. My strategy is simply to try and make 250 sp points a year in either direction, so all I need is 5 points a week on avg, so a lot of times I have no position. Pick your spots and be patient.
    Good luck all

  26. phil1247 says:

    http://tos.mx/tosmx/item?id=O80jLl&image

    / ESU7

    2500 or 2440 ?
    shorts and longs have been both breaking since last thursday
    implying a triangle is forming
    thats why i have been trading EURO and DOW

    they are in extensions … i e…. quick and easy money ..with .little chop
    but triangle break should get things moving soon on ES

    is it …. POP the top before we flop ??
    or straight to flop ?

  27. UPDATE: Aufschwung geht jetzt weiter!
    ndx futures hourly –
    http://imgur.com/a/la0gt

  28. captbara says:

    I fear some event will happen soon, according to some math based on 3 past event dates. Really hope I’m wrong, but the numbers behind it are kind of shocking at how well they fit together. Coincidentally, we have the lunar eclipse coming up…

    If something does happen on the day, I’ll reveal the numbers behind it.

    • fionamargaret says:

      market related or other

    • fotis2 says:

      So you will let us know after the fact that you were short/long and provide us with the magic numbers as proof to your position….pleeeeease!!!

    • Jordi G says:

      May be, the trigger is the full moon before the eclipse? I think so, also I think there is no merit if you reveal the numbers once “the event” is done. This is what analysts and economists do, explain the things once have happened, we as traders, we need to know before, not after.

      • captbara says:

        I said it may happen soon. I have an exact date, but I’m not sure I should share it. I’ll say within a week from now. And yes it’s not unusual to see weird and crazy stuff happen during full moons.

        If it does happen, the math will blow your mind. Fingers crossed it doesn’t.

    • Lee C Wilson says:

      thus the etymology of “lunatic” … what’s your metric for defining an event how do you control for confirmation bias? If we’re already primed for a news headline or event, my worry would be fitting it to a predetermined outcome.

      • captbara says:

        Some sort of attack, or event where many die. I’ll share more if it happens. Pray this is the last you hear of it from me ๐Ÿ˜

  29. Richard Glackin says:

    S&P fooled me again…I thought we were in wave 3 with that last big drop but this son-of-a-gun bounced all the way back up with a 92% retrace ‘abc’ to make what appears to be a second wave 1-2. Wow! Sooner or later we’ll make it to the bottom of this wave ‘C’ but the bulls are fighting this drop tooth and nail. That says a great deal about the strength of this bull market.

    This should be a very minor correction. My target is 2452ES. This could turn out to be an ‘abc’ rather than the classic 5 wave ‘c’ wave. Time will tell.

    Yes, I’m short, but only in a small way. You don’t want to be short when this thing turns back up. Good luck to all.

    • fionamargaret says:

      The RUT has the most upside, if it actually moves…I was so frustrated by it today, and then received a note from John Murphy to say small caps are not working….
      I have VXX as my short until there is more real trend….

      • Richard Glackin says:

        Fiona, from my perspective the RUT has been behaving badly since the beginning of the year. Not much pattern to speak of. Just a lot of bouncing. Normally its one of my favorite trading vehicles but this year I haven’t traded it once yet. Once this correction is over that ‘might’ change. We’ll see.
        The VXX looks like it may have just finished a 1-2 to the upside. Looks good from my perspective. ๐Ÿ™‚ Good luck.

  30. fotis2 says:

    Naz bearish bellow 5950 possible next target 5700.
    https://invst.ly/4p3bh

  31. stormchaser80llc says:

    My proprietary cumulative Technicals Model made another All Time High today, with its daily reading slightly above zero. Neither SPX nor SPX A-D made a new ATH. Both my swing trade signals are bearish (7/28 and 7/31). SPX Weekly and Daily would support a major top at anytime due to long lasting negative divergences. Yet I am skeptical that the ATH on last Thursday with a Doji candle would have been THE TOP. Daily readings of my model are small but remain positive, while the SPX McClellan has been negative now 3 of the past 4 days.

    Internals, Breadth and Participation, well off of recent highs, have been pulling back. Today participation fell off across the board. VIX finished higher, though remains in a hourly MACD SELL signal. The pattern could be a bull flag, so that’s something to watch, but for that to be valid I would like to see positive divergences where there are none.

    SPX Daily had a string of 7 real and 10 total Hindenburg Omens since late May. Be careful this run-up as it may be the last before a BIG turn lower. I say this as my proprietary Technicals Model made its 8th negative divergence vs. SPX since mid-April, and the first one of its kind since 3 positive divergences since late June. Yet another higher high in SPX is still possible to once again negatively diverge with my model, but you can clearly see that the technical indicators on SPX stocks are weakening quickly.

    Been calling this Oil rally pretty well. Got the pullback that I warned about. Give it a few days, and I think a new high forms in oil to put in widespread negative divergences.

    Supporting charts and 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. On my site, be sure to check out the real-time Trading Platform (look for it on the top menu). I am taking feedback!

  32. Richard Glackin says:

    Silver has begun its southerly march as expected to complete the 5th wave of the diagonal. ‘Possible’ target is $14.20. Have to watch the internal wave count to see if it’ll likely go that low. Note well, this diagonal is the ‘C’ wave of wave 2. Once this bottoms we should see a very long and persistent march to higher and higher prices. How long is very long?…probably around two years. Good luck to all.

  33. Well tonight,gold is selling off to the tune of $10,so far.No reason except its getting too high for CB tastes.Dollar still below 93 so no comprehende.
    Ira has the Nasdaq ready to rally again.S&P is at a point where if it breaks 2461,a drop below 2440 is likely,but a rally above 2478 takes it to 2495.
    Oil is bullishly embedded yet,so is gold,but not after Thursday,I’ll bet.Gold may drop a lot here–to at least 1255.If the powers that be can push the dollar up a bit,in a benign way,gold may become heavier than Melissa McCarthy before she lost weight.
    My question of the day.Why does the idiotic media get away with saying,”Stocks are rallying now,because the dollar is weaker”,when the dollar has been rallying for years–along with stocks.How do you explain the equity rally as DXY went from 80 to 101?
    In a word–Fed.

  34. bouraq says:

    Chart of the day is #OIL at http://www.tradingchannels.uk

  35. Swing says:

    Thanks Tony!
    It is quite frustrating I have to admit.
    I do not mind to get stopped out or miss my target zones but to deal with a so called market that is only gapping up over night (DOW) without any connection to anything that is happening around it is just wrong.

    This is no market as there is no trading anymore, just a regular uppricing by 0.3% per day.

    I removed all my money from any stock market at the moment and only trade bitcoin as at least there I have volatility and till now a almost algo free environment.

    Not sure if what is happening intentional or just a byproduct that was not thought through by the FED.
    Same problem is that Amazon is now seen as the evil company destroying the retail market but it is the free flow of endless money that is forced into the company by the central banks that create that “monster”. So the FED is destroying retail business.

    Sorry for the rant!

    Thanks Tony for what you do and a shout out to all the helpful people hanging out here!

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