Tuesday update

SHORT TERM: flat open then decline, DOW -299

Overnight the Asian markets finished mixed. Europe opened higher but lost 0.1%. US index futures were relatively flat overnight. At 8:30 durable goods were reported lower and at 9am Case-Shiller was reported higher. The market opened three points below yesterday’s SPX 2780 close, then rallied to 2789 by 10:30. At 10am consumer confidence was reported higher. After that, as the new FED chair Powell began to give his testimony the market declined: https://www.federalreserve.gov/newsevents/testimony/powell20180226a.htm.  Yesterday the new FED vice chair Quarles gave two speeches: https://www.federalreserve.gov/newsevents/speech/quarles20180226a.htm, and https://www.federalreserve.gov/newsevents/speech/quarles20180226b.htm.           Around 12:30 the SPX hit 2757, rallied to 2773 by 1pm, then heading into the close the market hit 2744 and closed there.

For the day the SPX/DOW lost 1.20%, and the NDX/NAZ lost 1.25%. Bonds lost 12 ticks, Crude dropped $1.00, Gold fell $14, and the USD was higher. Medium term support remains at the 2731 and 2656 pivots, with resistance at the 2780 and 2798 pivots. Tomorrow: Q4 GDP (est. +2.5%) at 8:30, the Chicago PMI at 9am, and pending home sales at 10am.

The market opened slightly lower today after yesterday’s strong rally. Moved back into rally mode until 10:30. Then pulled back for the rest of the day. From Thursday’s SPX 2698 low the market had rallied 91 points to 2789 this morning. Today’s pullback appears to be in response to the overbought conditions after that rally. In fact, the point decline looks to be nearly sufficient for the second wave in this rally from SPX 2698: 2789-2744-xxxx. Short term support is at the 2731 and 2656 pivots, with resistance at the 2780 and 2798 pivots. Short term momentum ended oversold after being quite overbought. Best to your GDP trading!

MEDIUM TERM: uptrend probably underway

LONG TERM: uptrend

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

About tony caldaro

Investor
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501 Responses to Tuesday update

  1. torehund says:

    Ouch this market felt like Russia did 40 years ago. 60 min spx macd has finished an abc down. Calling the bottom for now. Uuuugly, as ugly gets 🙂

  2. tommyboys says:

    RUT & Trannies pointing the future…1/4 the damage there today.

  3. rabbittrader1 says:

    Buying SPXL May 18, 2018 call options Strike price $46. Rabbit

  4. Correction over. Gap and go tomorrow

    • alexhartley1 says:

      The correction is unlikely to be over and whilst futures may be down initially tomorrow am you may be proved right that we will head up from oversold. Short term cycle low due
      2nd-3rd March. May move up into the 9th. After that ….. watch out.

      Institutions have been and are likely moving money from equities to cryptos.

  5. alexh110 says:

    Very slight positive divergence on the hourly chart.
    The market could stabilise here and head back up for the next 3 trading days to form an inverse left shoulder.
    Then the bloodletting will likely resume!

  6. phil1247 says:

    FWIW

    BITCOIN analog has tomorrow as an UP day

  7. Page says:

    Today DOW to lose b/w 500-600, SPX in the 50s.
    Tomorrow margin selling kicks in.

  8. Bud Fox says:

    2:38 EDT 2659 SP, nice place for a low….

  9. hohoho598 says:

    Keep BTD, it’s going up sooner or later. It has to right? Volatiliteeeeeee

  10. chrisk44342 says:

    commence stick save at 50% retrace into the close

  11. mcgcapital says:

    Took some FTSE shorts off the table at 7110.. will reassess tomorrow, could bounce here

  12. phil1247 says:

    took profits at 2666
    62 es points is good for now
    see ya !

  13. If they let it go freely,anything is possible for point losses today.Then there’s Friday.My guess would be an 800-1000 point Dow loss today.Nasdaq unembedded its bullish stochastic,to add to the selling pressure to come.HYG,no support until 85.40 and 85.Good luck all.

  14. rksleung says:

    Tony is wrong?

    Wave 4 still on? We are down on c wave to go lower than feb 9?

    Or we are wave 5 and now in wave ii still as opposed to wave ii as tony implied?

  15. NEWBIE says:

    Any NUGT lovers out there?

    • fotis2 says:

      Gold bounced of 100dma as good a place as any to long monthly 3BR=1380 stop 1300

      • phil1247 says:

        looks good now .. broke above 1316 (ext short)
        i am a buyer of pullbacks that hold support now
        good luck buddy

    • GDX RSI + Divergence on hourly. Is extremely oversold on Stochs, RSI, and Williams. Stop at GDX $20.84 though NUGT new intraday lower low at $21.26 gives me pause for concern.

    • kvilia says:

      If general markets decide to take a deep dive, everything will go down in synch except dollar – panic mode. I do not want to hold anything until ES and the rest finds support. Thinking this could be once in a couple of years opportunity to by at heavily discounted price.

  16. Gary Lewis says:

    It’s looking quite possible that we will have a three week test of the low tomorrow on SPX at 2619. 15.39 test still possible tomorrow as well. Could signal buys for both.

  17. scottycj1 says:

    For Phil, Asa and all the rest learning at Extension U…………carry on

  18. gary61b says:

    gary61b says:
    February 28, 2018 at 2:56 pm
    2711.5 next target then 2705, 2700, 2680.5

    Reply
    Next Target 2676.25

    • gary61b says:

      Next major support after 2680.5 is 2616
      minor supports 2669.5, 2657.5, 2652, 2638.25, 2635, 2631.25.

  19. jobjas says:

    5-3-5 correction complete at 2880

  20. micky says:

    just about to hit 3rd support,gotta see now

  21. lunker1 says:

    es 2658/9 fibs
    SPX 2656 pivot

  22. Page says:

    SPX 2620-2580 is next.

  23. phil1247 says:

    L unker 21.5 short was a gift

    did you take it ?

  24. H D says:

    I’ll take Tony’s 2731 pivot over any of the 250 DH comments here. Amazing opportunity

  25. stcoleridge says:

    So what is the OEW count now that 2697 has gone?

  26. wildmarkets says:

    “Federal Reserve Chairman Jerome Powell believes Amazon played a role in keeping a lid on inflation over the past decade.”

  27. mcgcapital says:

    At least all the posts about the fear and greed index, put/call ratios, ‘everyone being bearish’ despite 75% or posters looking for higher and twitter fin/cnbc etc pushing their usual bullish rhetoric seem to have dried up. This week has proven that all that matter is price and price action.. never once looked anything more than a countertrend rally

  28. My take:
    HYG broke 86.Strike one.Now,HYG has a gap at 85.40 that I assume it will target.Equating that with SPX,2700 most likely taken out.2690 taken out.Bottom bollinger band on HYG at 85–probably equates to 2665 (guessing),which Ira says is huuuge.to hold on to.VIX close to getting above 20 on stochastics.Strike two.
    FTSE breaks bear flag–strike 3.Unless PPT has other plans of course.Good luck all.

  29. so went up 31.6 points in like 30 minutes to 2730.89 we dropeed slightly more then .618 of that move up. As long as 2709 plus or minus 2 holds. in my opinion we ware up up and away. if not 2690 then see what happens.
    im in the up up and away camp
    good luck all

  30. lunker1 says:

    crazy chop. es the 62% of 2698 2731 failed down she goes?

  31. fxaprendiz says:

    Can the SPX move up from 2698 to 2730 be a wave 2 of wave C and we are just witnessing the start of wave 3 down? Disclosure: short at 2745 expecting a lower low in the 2445 vicinity

  32. kvilia says:

    Fotis – wow!
    I pray every morning (and I’m not religious) DH’s webinar is up and running, and I don’t daytrade. He does a lot of observations based on market patterns as well, so if you combine your trading strategy, correct time frame for your trades, and your exit strategy to tailor DH’s futures trading rules designed mostly for scalpers, you should find yourself in a profitable situation. I posted 24% profit last year after loosing 35% in my account going skiing and forgetting to close NUGT position (yep, call me what you want, I still wake up in cold sweat), and am 9% for the year in 2 months.
    The rule is not to loose more than 1% on one trade, so you should’ve lost or stopped out 60 times without posting winning trades. HOW WAS THIS POSSIBLE, my friend?
    I am just speechless, would recommend studying carefully what went wrong. Sorry for you losses, wish you get it all back and double this year.
    Cheers, mate!

    • Would recommend not trading and buy a S&P 500 index fund as it beats 80% of all the mutual funds out there on a 10 year basis.

    • fotis2 says:

      Your account is at 100%-35%= 65% left on witch you made the 35 back +24% on top for year end total 124.You turned 65 into 124 using the DH method that’s almost 100% profit so what’s so strange about me loosing 60%?

      • kvilia says:

        A little less than that since the loss came after some gains in the first two months of 2017. I’m saying that your winning trade can travel 3,4,5 up to 10-15% in my case whereas losing trade should be limited to 1-2%. I was not sure how this happened. Any way, its in the past. I in turn just missed this short from yesterday afternoon and biting my teeth now.
        Just wanted to cheer you up, Fotis.

  33. phil1247 says:

    QUIZ … for Lunker

    if ext short fails
    where can we squeeeeeeeeeeeeeeeeeeeeeeeeeeeeze up to ?

  34. H D says:

    Tony, this is the count I was asking about the other day. Last year 2/27/17 marked a high, 80 point hit into March… Previous 4th found some buyers.

    • aahmichael says:

      HD, the high of that move last year was on 3/01/17. That was the day after Trump’s first speech to congress.

      • H D says:

        well that was pretty lucky I saw it 2/27 isn’t it :mrgreen:
        Did anybody buy the previous 4th? Sell Tony’s 2731 pivot? There are harder methods….

      • nsteve24 says:

        michael, do you have a downside target for this cycle? thank you

        • aahmichael says:

          Steve, I don’t use targets. I still expect a retest of the lower daily Bollinger Bands at a minimum, though. Will have to reassess if and when that happens. Normally, after the kind of decline we had from the highs, a retest of the low occurs about 30 days later, so that would be by next Friday. If those lows are broken, then the next level of support are the August lows where the melt up began. First things first, though. First we have to close below the 20dma and this previous 4th wave.

      • H D says:

        hmm, I don’t see that as wave 3 is now below 2 so that would need to be eliminated wouldn’t it? If you were sitting in minor 3 you just took a 90 point stop loss.

  35. Gary Lewis says:

    SLV failed the three month test of the low yesterday (15.51) and appears poised to also fail to find support tomorrow at the three week test of the low 15.39. Doesn’t look good but gold appears strong. The silver mantra continues. keep on stackin

    • phil1247 says:

      gary

      i have gold in extension shorts
      it is bearish below 1316
      target at 1301 about to be hit
      if it goes thru …..downside acceleration is likely

  36. lunker1 says:

    es micro long 2703.75 front run the .50 at 2703.25. 1.618 was 2715. 2.618 is 2725.

  37. alexh110 says:

    Had another look at the SPX charts this morning.
    Looks like a double-shouldered inverse H&S from the ATH, completing at this week’s high, with a strong downwards incline.
    Seems logical to assume the market will repeat this formation to create a new deeper low.

    Now think we trade sideways into Friday to create a first left shoulder, with a severe decline next Monday/Tuesday. Then a recovery on Wednesday/Thursday, and a final decline into the low next Friday to complete the following Monday. This would be a repetition of the 2 days down, 2 days up pattern from the ATH into the 2532 low, and would also achieve a pattern of 10 days down from the ATH, followed by 10 days up, then 10 days down.

    I had been puzzled for sometime about the asymmetric pattern around the 2532 low; but yesterday it all fell into place when I realised the pattern was incomplete, so we’re only seeing the first part of it. Fully expect to be proved wrong though!

  38. NEWBIE says:

    Anybody have any good day trade recommendations for today?

    • 1. expect inc. volatility.
      2. Don’t trade from 9:30 – 10:00…a lot of reactionary trades will go through the tape.
      3. Expected sudden swings up/down secondary to Powell comments at the Senate hearings.

      LOL I know what you were asking!

    • fionamargaret says:

      As mentioned yesterday 2656 then 2632….the better base. 123’s chart shows it well.
      SQQQ (the qqq’s were rebuffed at the top of the channel
      UGAZ is a buy at 49.8
      If lower 2594…I shall stick to us hitting 2465 at some point…

      • fionamargaret says:

        VXX is in a sequence to 57….broke out positively today..

      • fionamargaret says:

        SPXS is what I am using for short S&P…to 2656, then 2632

        • fionamargaret says:

          If you like patterns, check the hangman on the transports, etc., which led to 23% down in the past….
          I just do numbers and 2656, 2632 is where we are going…

        • Holly Silver says:

          Rick Ackerman charts have a strong support on this uptrend near your calls. On ESH18 he has 2644 target on lows (GREEN LINE). I am looking at the other end to place SPXL if/when we hit lower target. Rick suggests the upside because the previous ceiling easily exceeding the target which should indicate higher prices still.

  39. aahmichael says:

    One of my favorite reads every morning is Kenny Polcari. I’m going to start posting it here each morning.
    https://mailchi.mp/oneilsecurities/morning-thoughtsdo-you-see-the-pattern-try-the-kale-pesto-wshrimp

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