Tuesday update

SHORT TERM: gap down opening then reversal, DOW +39

Overnight the Asian markets gained 0.2%. Europe opened lower and lost 0.5%. US index futures were lower overnight and the market opened at SPX 2640. The SPX had closed at 2656 on Monday, after a big rally. In the opening minutes the SPX hit 2637, and then started to reverse and work its way higher. Just before 2pm the SPX hit 2668, dipped to 2659 by 2:30, bounced to 2668 in the last hour of trading, and ended the day at 2663.

For the day the SPX/DOW gained 0.20%, and the NDX/NAZ gained 0.45%. Bonds rose 6 ticks, Crude slipped 10 cents, Gold gained $7, and the USD was lower. Medium term support remains at the 2656 and 2632 pivots, with resistance at the 2731 and 2780 pivots. Tomorrow: the CPI and retail sales at 8:30, then business inventories at 10am.

The market gapped down at the open today as the volatility continued. A few minutes after the open, however, the market started to work its way back up instead of declining further. Short term sentiment changing, or just on pause? In the afternoon the market had closed the gap and turned positive on the day. Recent trading appears to be more balanced with larger lots and narrower daily price ranges. Should the market clear SPX 2673, in the coming days, Int. v may be underway. Short term support is at the 2656 and 2632 pivots, with resistance at the 2731 and 2780 pivots. Short term momentum ended the day just below overbought. Best to your trading!

MEDIUM TERM: downtrend

LONG TERM: uptrend

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

About tony caldaro

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259 Responses to Tuesday update

  1. elmer510 says:

    This uptrend looks rather impulsive to me. 5 days of rising indexes and now SPX has gone higher than wave B of the IM4 correction. I think Tony’s is right about his comment – above 2693 could be the start of IM5.

    Whay are so many talking about new decline – that can’t be OEW.

  2. Bud Fox says:

    3:57 pm edt Looking to me like the SP500 is now setup to take a big fall
    in price. that said. Be careful…..

  3. mcgcapital says:

    I’m short now.. seen enough to think there’s not too much more in it. Price is still quite jumpy. If you bought at these levels first week in jan, saw it go up 5% then down 12% are you buying or selling here? Just think there’s some sellers to come in to the market as that’s what corrections do to sentiment. Not expecting it to roll over hard any time soon, but wouldn’t be surprised to see a retest of 25XX at some point in the next 2-3 weeks

  4. cyanus66 says:

    This week’s market summary should really include a comment on the perils of over-analysis.
    This is a bull market.
    The second dip should have been bought and held, stops raised until re-evaluation at the .618% retrace at SPX 2740.
    I hope some made $$ since the 2620s.

  5. vivelaamo says:

    S&P got to resistance quicker than I expected but has held on cue. Worth a scalp short. Should eventually blast through though maybe tomorrow or Monday.

    Love this bull market. Good evening all.

  6. phil1247 says:

    fotis………… extension dipsticked but 31 is going to be hit anyway ……………..

  7. vivelaamo says:

    Looks like the B wave long trade is back in business for 2018.

    • fionamargaret says:

      Vive, you know I gave you the numbers higher from 1100 or so, but the market tenor has changed.
      Remember folks are sitting on profits and there is very little space to get out once others notice.
      All the numbers now point down…and remember, for the folks caught, everything is sold…

      • vivelaamo says:

        What would change the numbers?

        I’m just going with what I see Fiona. If it turns back down I will react accordingly. Always value your advice and take note at all times. But I’m with RJ on thinking this bull has a lot more upside.

  8. “According to strategists at Goldman Sachs (NYSE:GS), 10-year yields will rise to as high as 3.5% in the next six months, which many consider the “pain threshold” for equities as it makes them less attractive than fixed-income assets.”

  9. becoming less and less likely we will make new lows or retest the lows. Markets are back to V shape recovery mode. we all know the .618 of the 340 point decline is the line in the sand, but keeps blowing by all my resistance targets. up almost 200 points in 4.5 days 8 percent

  10. drwarmington says:

    Inverted head and shoulder pattern forming that targets the 2740 area. Should be a good short there.

  11. The nasdaq tested the combination of 13/34 day moving averages earlier this morning and made a higher high.

  12. Bud Fox says:

    ON-BALANCE VOL. chart. depicts 2 OBV highs in 2018. The last of which is
    formed more recently this month. That said. The OBV pattern implies a severe
    price/up non-confirmation. Or, a very Bearish pattern right now at 2872 (SP).
    I have been a fan of JG, from years long past. While, Joe has passed on. His
    market indicators live on. For a short period of time, I shall share (here)
    what I see in the SP500 OBV charts. Maybe, need only a week, so. By 2/25
    my thoughts on OBV for SP, shall end. Thank you TC for allowing me to share
    my comments on this indicator.

    • Bud Fox says:

      2/15 SP500 OBV is making a double top pattern.
      While the cash index is failing on a 2nd rally effort.
      So, the pattern suggesting a price top now….

      • Bud Fox says:

        But, the question that is unanswered is…the OBV is back up to it’s recent high
        on a 2nd swing up. With the SP currently lower, what does that imply ?
        My Conclusion: a lot of traders who maybe missed the recent price highs
        in late Feb – are now trying to support a higher price – problem is. Price
        is not cooperating. And, that is Bearish. Making 2872, a significant price crest.

        • Bud Fox says:

          SP500 OBV is very near it’s recent price/obv high. That said.
          I view is, I am going to watch for selling in the SP500. Feel,
          it is a matter of time, before we see a critical price/OBV top.
          2/15 2:37 pm

    • tradeanimal says:

      Appreciate your input. Nice to see you back.

  13. vivelaamo says:

    Since the pb the action has been even healthier than the melt up in my opinion. Reminds me of the move from Feb 2016.

    I’ve slowly started buying dips. Just wish wasn’t so busy at work!

  14. not exact numbers, but close. From 2637 i can count 5 waves
    2639-2717 todays high
    2689 – 5 = 1 at 2719

    So 82 point up. if the next set of waves breaks .618 51 points 2668 then int 4 isnt done. if drops and bounces above.2668 then Int 4 is done my 2 cents and anything over 2742 and Int 4 is done.
    See what happens

  15. What I’ve noticed about GDX,after previous big one day up moves,near the lower bb,the next day has been similar to this,but then a multi-day uptrend.If no move higher tomorrow–a big red flag.Gold should be up another $20 today with DXY/JPY dropping like it is,plus bonds rallying.Gold/GDX needs to start going tomorrow….period.HYG continues nicely up for equities to keep moving up.Just hoping the equity/gold correlation continues tomorrow(or later today?)Slight possibillity lower gold is forecasting a turn in equities,but that’s slight right now. Keep an eye on HYG for clues.Later all.

  16. Jack kendo says:

    historically, there was a pattern that market down from the top, bounced off 200 day MA, and then the dead cat bounce petered out at 50 day MA.

    Re: to answer “tommyboys” & “stcoleridge”

    phantom sale? i don’t do that.
    look at the time of sale: 8:35 AM Feb 14
    that was pre-market sale, tvix ran as high as 11.1 pre-market.
    that’s shortly after the CPI release:
    cnbc Feb 14: “Dow futures fall more than 200 points after inflation data shows 0.5 percent, faster-than-expected rise”

    i was in averaged around 10.5, out 11

    Jack kendo says:
    February 14, 2018 at 8:10 am
    market should found support at this morning CPI reaction low, and should comfortably clear SPX 2673 in the days ahead. took profits and position accordingly.

    Jack kendo says:
    February 15, 2018 at 1:17 am
    “pattern” indicates tomorrow morning should be gap and crap, and that should be the dead cat bounce top from spx 2532 low.


  17. fotis2 says:

    Worth a look CL valid DB 4hour so long last Fridays low holds should be good to 63.5 old school stuff 🙂

  18. H D says:

    I know it’s not sexy and doesn’t require 50 posts to explain but the 50DMA and 200DMA, oldschool stuff is worth a look.

  19. in an effort to figure out were we are and were we are going. I have palyed with some numbers.
    if we take 123 chart
    2532 -2677 minute 1 145 points
    2677-2637 minute 2 40 points
    3637-2871 minute 3 1.618 of minute 1
    2871-2754 minute 4 .50 retrace of minute 2 117 points
    2754 – 2899 minute 4 minute 5 = 1 145
    thats 367 points for just minor 1. Int 1 was approx 350 points, so from 2532 plus 350 thats a total of 2882 for all of int 5 when it = 1. at the current pace of 123 chart Int 4 would or could reach 3378. which would be 846 points. Int 3 was approx 872 points. Not looking correct to me. I think we are in Major 4 heading lower. with 2300-2470 then we could rally 700-800 points and fits better to end this bull.
    A further break out of Int 5 on this pase
    Minor 1 1 2532-2899
    Minor 2 2899 -2705 .50 retrace of 367
    Minor 3 2715-3308 1.618 of minor 1
    Minor 4 3308-3011 .50 retrace of minor 3
    minor 5 3011-3378 minor 5 = ninor 1
    way to high for a int 5 wave when Int 1 was 350 points and int 3 was 872
    think we go lower in Major 4.

    Anyway good luck

  20. cj32 says:

    Cr. CBZ

  21. Data came out at 6:30 sp futures were up 7 after, 15 minutes later up 16.25. Laser on target for 2720-2728, should be resistance. Question is what happens then.
    Good luck all

  22. phil1247 says:


    before you head to the beach………….
    check out my response to your 5: 37 am post today ………… LOL

    • phil…you misread/misunderstood my reply chart to abc123. I believe wave 3 is CURRENTLY subdividing and SPX is still trading in wave 1 from the bottom. In English, these are probably micro waves on minute 1.

      Now off to the beach. As much as I love 80 degree sunny weather, great food and water sports….I missed a great trading opportunity just like February 2016 and my contractor has free range without my oversight. Good thing we are at the painting stage of the renovation!…and yes, my wife is starting to get impatient with you not me..LOL

      • phil1247 says:


        i an not mr ew ….lol but i am referring to your blue wave 3
        the red 1 2345 ……… red 3 is the shortest
        i dont believe that is allowed
        maybe 123abc can offer some help
        i dont want to get bogged down discussing potential counts
        … they dont enter into my trading
        GO OUTSIDE !…………lol

        • I blamed it on you for not getting onto the beach earlier. Showed her your post and I said ” honey just trying to help a lost trader” ….she said, ” just tell him to buy a S&P 500 index fund and spend more time with his wife!” P. S. my wife knows nothing about investing or what an index fund is…she hears just hears me saying that to friends….I almost fell off the chair when she said that…LOL.

  23. Thanks Tony!
    Your analysis is probably the only objective , unbiased , unemotional and reliable source of information that any trader should be following. If someone is disciplined enough to ignore all the noise , forum discussions and news feeds, then its possible to make money using OEW.
    Just need to be disciplined enough :)..

  24. phil1247 says:

    BONDS ….ZB…. TLT

    downside targets coming up about 1 point below here
    if we can blast thru . can reach downside blowout HUUUUGE target
    over 4 points below
    still looking to take partial profits on TBT at target

  25. mcgcapital says:

    Cashed out of longs this morning. This 2711-2728 area could be resistive.. if it’s anything like 2011 or 2015 it will level off here and the vol will continue for a few weeks with a potential failed retest of the low to come. Feel like that’s the most likely outcome, loads of supply overhead given the blow off move we had in Jan with bulls piling in. Probably will take time to build enough strength to go for new highs

    • vivelaamo says:

      Nicely done mate. Held long FTSE while everyone was calling a crash!

      • mcgcapital says:

        Cheers.. not sure what’s next as FTSE still looks pretty ugly on the monthly. Plus this rally has been quite choppy all week so not sure it holds first time around for a sustained push higher. Either way, good opportunities to trade on both sides

  26. torehund says:

    …wavy action 🙂

  27. vivelaamo says:

    2728 is the b wave high and the 20 sma. Expect some resistance there in the next few days before finally blasting through with target of 2900 to be hit in the next few weeks/months.

    Either that or 2728 holds and we crap like many on here are expecting. I’d be suprised if that happens but the market is full of surprises.

    Have a good day all.

  28. Jack kendo says:

    “pattern” indicates tomorrow morning should be gap and crap, and that should be the dead cat bounce top from spx 2532 low. my reading says 2532 is not so called int iv low.
    it’s all VIX related, if one knows how to read VIX, will be ahead of the market.

    sold VIX 25% ahead of the game.

    Jack kendo says:
    February 14, 2018 at 8:10 am


  29. stockop says:

    held overnight yet again. did the futures really gap up tonight? if we don’t fill that is super bullish. i am honestly surprised at how many shorts are still around. lot of resistance coming up ahead. lets see if they use AH to drift through it all… imo the window is a big deal!

    • tommyboys says:

      Stockop weren’t you the one worried about a 25 VIX because Mar/Apr futs implied 20+ then? What a difference a day makes…

  30. CygnetNoir says:

    Big Up is on to 2915 or so SPX. Cash (Index) is king. It might happen quickly, but 2 to 3 months is my time frame. Have stop loss, will trade.

  31. Thanks Tony. Here’s a likely (60% IMO) prediction that should be considered:

  32. Two thoughts:Ira says a bull trap would occur at 2620–if broken by Friday’s close.Otherwise up to 2750.
    HYG still looks like it could go to 86.50.If true,look what happened to the S&P when it reversed at 84.09 and 2530.160 S&P handles up to 2698.Back to 2850?
    Good luck all.

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