Tuesday update

SHORT TERM: 4th straight gap down opening, DOW +567

Overnight the Asian markets lost 3.8%. Europe opened lower and lost 2.0%. US index futures were sharply lower overnight, in volatile trade, and the market gapped down at the open for the low of the day at SPX 2593. The SPX had closed at 2649 yesterday, after dropping 113 SPX points on Monday. The market then started to rally and hit SPX 2682 in only a 1/2 hours time. Quite a volatile market. After that it dropped to SPX 2620 by 10:30, hit 2669 by 12:30, then dropped to 2628 by 2:30. Another rally followed to SPX 2701 by 3:30. Then the market backed off to SPX 2695 at the close. This market is moving in one hour, what normally takes one week.

For the day the SPX/DOW gained 2.05% and the NDX/NAZ gained 2.65%. Bonds were flat, Crude dropped 70 cents, Gold slid $13, and the USD was higher. Medium term support is at the 2656 and 2632 pivots, with resistance at the 2731 and 2780 pivots. Tomorrow: consumer credit at 3pm.

Yesterday market volatility went into overdrive, as the DOW traded in a 1600 point range. Today the range was a bit less than 1200 points. Both days were more than the entire range of the previous week. This market is sometimes moving about 3% in one hour. This is insane activity, especially with hardly any fundamental news to drive it. Nevertheless, it only took one day after the weekend update for the SPX/DOW to confirm an Int. iv downtrend. Normally the market is close to a bottom when that occurs. While 4th waves have been fairly mild since 2016. This one has been quite violent. This is normally sign that the next run to new highs will end the bull market. In example: 1987, 2007 and 2014. For those trading this market, you are a better trader than most. Good luck!

MEDIUM TERM: downtrend

LONG TERM: uptrend

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

About tony caldaro

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369 Responses to Tuesday update

  1. wanderer says:

    Thought of the day: can Elliott Wave theory be applied to the Elliott Wave theory itself? That is to say, the validity of EW changes in … waves, over time.

    • LOL that’s a comment to have a great laugh during drinks at the bar. Using something that doesn’t work to predict something that doesn’t work.

      Actually on second thought it’s a double negative that actually might work…. not!

  2. Dumb question. is this 5 waves down, which means we are in a downtrend? in a uptrend corrections are 3 waves. If so we should see a bounce of 146 points and then another 292 down so those bearish targets of 2435 are for real no?

  3. kvilia says:

    OK, so I’m going skiing tomorrow so I closed short SPX and UVXY. My portfolio grew 8% during these days, and I was sloppy to say the least.
    So next week, line in the sand is 2400smth, after that there is no return to bull market. Either long to 3000 or bear market. Amazing to see Elliott Wave knife catchers. Still complacency.
    Enjoy your weekend.

  4. Page says:

    Margin calls in progress … get your shopping list ready … climax time.

  5. phil1247 says:

    loaded with sand but had to see the close

    taking profits on half left from 77es this am
    now just 25% short
    wow ! …… biggest trade ever

    • phil1247 says:

      2604 is failing but you never know what da boyze will do overnite
      will check it in the am
      good luck to all

  6. wildmarkets says:

    NDX made new lows. They are crashing it hard. Tough market for me at least.

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