Wednesday update

SHORT TERM: gap down opening on NK fears, DOW -37

Overnight the Asian markets lost 0.8%. Europe opened lower and lost 1.0%. US index futures were lower overnight, and the market gapped down to SPX 2464 at the open. The SPX had closed at 2475 yesterday. In the opening minutes the SPX ticked down to 2462, and then began to rebound. The market continued higher until hitting SPX 2473 at 12:30. Then it started to pullback again. Around 2:30 the SPX hit 2465, then rallied to close at 2474.

For the day the SPX/DOW lost 0.10%, and the NDX/NAZ lost 0.20%. Bonds gained 8 ticks, Crude rose 40 cents, Gold rallied $14, 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 and the PPI at 8:30, then the budget deficit at 2pm.

The market gapped down at the open today, following yesterday’s big “new all-time high 1% reversal” day. What the market couldn’t do in the previous 14 sessions, it managed to get done in just three hours yesterday afternoon. These quick steep declines appear to occur about every month. Look at the NDX/NAZ daily charts. Within minutes after the open the market hit the low for the day at SPX 2462. Then closed at the high for the day at SPX 2474. Was that 29-point decline, 2491-2462, all of Micro 2? Short term support is at the 2456 and 2444 pivots, with resistance at the 2479 and 2525 pivots. Short term momentum ended at neutral after being oversold. Best to your trading!

MEDIUM TERM: uptrend

LONG TERM: uptrend


About tony caldaro

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180 Responses to Wednesday update

  1. micky says:

    approaching my second support line area….usually produces a good bounce

  2. captbara says:

    Look at DAX, simple ABC down count busted. Gap filled and resuming down with nested 1-2s potential.

  3. Page says:

    Expecting final flush tomorrow and calling bottom tomorrow. When bottom occurs they will release the news ‘everything is ok now’ 😀

  4. vivelaamo says:

    I can’t stay out any longer. Added first RUT long and will continue to add ifs drop further. Massive support below which I think will hold. Expecting a very big bounce.

    Good evening all.

    • captbara says:

      Better to wait for the VIX and NYMO signals. Always reliable. But it’s exciting to bottom fish though.

    • Jimbo says:

      You keep buying those dips pal

    • aahmichael says:

      RE: “I can’t stay out any longer. Added first RUT long and will continue to add ifs drop further.”

      Not to pick on you, but that’s the same strategy you employed ever since the dead high on the Transports. How’s that working out for you? Also, wasn’t it just a couple of days ago that you said you had given up trading for good?

      “The stock market is a device that transfers money from the impatient to the patient.” Warren Buffett.

      • vivelaamo says:

        I got stopped out of transports. That was way too soon and impulsive. I didn’t think the market was ready to fall so fast in the RUT. It think it’s a gift. Line in sand is 1330 area though although I doubt very much we get that far.

        You are right though. I am impatient. I am just trading with small capital from profits made in the year I can afford to lose. The rest is all tied up now. My wife made sure of that! 😡

    • fotis2 says:

      Keep stops tight and don’t add to loss classic newb mistake been there and got my acc. blown for xmas present.

  5. cmucha68 says:

    Where is vip555 the permabull ??

  6. shauryagh says:

    LT trendline will be conclusively broken in S&P 500 on close below 2440…if S&P cash does close below that today …then short futs with 2495 stop loss on cash level and 2350 first target….R2K intermediate correction confirmed close…Any intraday rallies in R2K should be used to sell r2k futs for a target below 1300 within the next three weeks

  7. JK1987 says:

    here comes series 7, as expected.
    “BREAKING: Trump: Maybe ‘fire and fury’ statement on North Korea wasn’t tough enough”

    let’s see how tough he is.

  8. hoping for a close at 2460

  9. vivelaamo says:

    If this drop in any of the indices ends with a daily hammer. History suggests it’s time to go long. Yes you’ll miss most of that days rally. But it will be worth it. Until then time to wait.

  10. gary61b says:

    ES small IHS at resistance could put it up to 2457.5 again… hopefully down to 2439.5 for a pos.Div.

  11. alexh110 says:

    The 94 trading day cycle low is bottoming today or tomorrow (depending how you count it).
    Doesn’t look like it’s going to be the intermediate wave low I was originally expecting; but could still be a useful trading low.
    For that reason I’ve rotated all my shorts into longs today.

    • pooch77 says:

      Alex should be spot on,is that 94 trading days you count

      • alexh110 says:

        Yes, though the futures low in November occurred on a different date from the cash market low, which complicates things a little.

    • JK1987 says:

      alex, I appreciate you for sharing your proprietary 94.
      we only have a week and half for the up cycle.
      dow should and must make new high. spx maybe only test the high.
      rut, no chance. look at recent dow continue making new high while rut trended down.
      naz/ndx, no chance. Tony already labeled Major 1 top.

      then the full blown down cycle.
      you have the next low on the full. would it be probable on the new, as it also is the anniversary.
      my target for the next low is with vix up to 100. crazy, huh?

      • alexh110 says:

        Actually others spotted the cycle first. I can’t claim credit for it!
        Am a bit baffled by the Major 1 label on NAZ. Don’t understand why it can’t have an extending Int v wave?

        • JK1987 says:

          alex, you still have my appreciation because of your sharing.

          I think the soap opera should have series 7 for #45 to fight back.
          probably another dramatic reaction low tomorrow.

          share my 2c for naz:
          1. naz has negative divergences since 2014, the same multi-year type -div as naz 2000 bubble top. and current bubble could be even bigger.
          2. naz pattern fully matched 2000 bubble top. meaning 80% down from here!

      • stcoleridge says:

        JK he only labelled the NAZ major 1 top in the context of the the alternate count.

    • Mary773 says:

      The daily readings on Williams %R, RSI, and the McClellan Oscillator are approaching levels that have produced rallies during this bull market. And as you mentioned, there is some interesting cycle activity over the next two trading days:

      • JK1987 says:

        Mary, I appreciate you for sharing your proprietary 185 cycle.

        • Mary773 says:

          You are most welcome.

          Today’s AAII showed 34% bullish/34% neutral/32% bearish, At the Naz bubble top in March 2000, the reading was 66% bullish/14% bearish/20% neutral

    • aahmichael says:

      Alex, your calculation is slightly off. The 94 TD cycle for the last 2 years has hit on the following dates. There is no + or – of any days. They are all exactly 94 TD apart.

      As you can see, the last one doesn’t fall on a day of any significance. So, you have to ask yourself if it inverted and came in a day early at the high, or if it’s coming in today (a day late) as a low. It’s also possible that the cycle has left the building and disappeared for good.

  12. Avi has been saying this lately.
    “So, my main expectation is that the market will likely be topping out shortly in all of wave (3) off the February 2016 lows, and providing us with a wave (4) pullback, with an ideal target in the 2300SPX region. While it is possible it may shorten and find support as high as 2360SPX (assuming it may trace out as a triangle), I fully expect to see a multi-month consolidation begin shortly. A strong break out over 2525SPX would make me re-evaluate this immediate potential.”

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