Tuesday update

SHORT TERM: gap up opening then selloff, DOW -425

Overnight the Asian markets gained 0.8%. Europe opened higher and gained 0.1%. US index futures were higher, and at 9am Case-Shiller was reported higher. The market gapped up at the open to SPX 2682, ticked up to 2684, and then started to pullback. The SPX had closed at 2670 yesterday. At 10am consumer confidence and new home sales were reported higher. Just past 11:30 the SPX had dropped to 2661, closing the gap and turning negative. Then after a rally to SPX 2672 by 11:30, the selling accelerated. At 2:30 the SPX hit 2617, the low for the day. Then the market rebounded to close at SPX 2635.

For the day the SPX/DOW lost 1.55%, and the NDX/NAZ lost 1.90%. Bonds slipped 3 ticks, Crude dropped 75 cents, Gold rose $6, and the USD was lower. Medium term support drops to the 2632 and 2594 pivots, with resistance now at the 2656 and 2731 pivots.

The market gapped up at the today. Which is nothing unusual these days when considering all the gap openings during the past few months. After running up to yesterday’s high, 2884 v 2683, the market headed south in a hurry. At today’s low the SPX had dropped 67-points, in 5 hours, on no negative news. It must be a correction. Today’s drop increased the probability of the double three scenario posted on the hourly chart. This suggests a retest of the February/April lows should end this Intermediate wave iv correction. Levels of interest, noted over the weekend, are SPX 2586, 2554 and 2533. Short term support drops to the 2632 and 2594 pivots, with resistance now at the 2656 and 2731 pivots. Short term momentum hit extremely oversold at the lows. Best to your trading!

MEDIUM TERM: downtrend

LONG TERM: uptrend

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

About tony caldaro

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357 Responses to Tuesday update

  1. Holly Silver says:

    Market can’t seem to behave. My multi-week prediction is on the line here. I expected a very weak showing today. Did have a daily 7 wave advance and filled the gap. Which means we are in no-mans land again.

    BUT I have the secret to this market’s continued health. it isn’t earnings. Watch for any sign that tariffs are going to be reversed. I have next weeks options and I sat on it today which might be my mistake tomorrow.

    All I have to know is if May 1st tariffs go into affect. You know what happened the last time they did.
    I will decide late Friday whether to load up on absurdly OTM puts for expiration May 4th. I mean taking one quarter of my winning these last few months and going for a grand slam home run!

    All know is the EW chart will adjust no matter what the outcome and claim it was always set in stone. Implementations of Tariffs will cause a 3,000 DOW drop next week. I actually expect a HUGE RALLY if Trump reverses his decision on tariffs.

    Tariff no tariff. Step by step, inch by inch. slowly I turn. Off the cliff or not? that is the question.

  2. fotis2 says:

    This is going to pop some shorts overnight over and out lads see ya tomorrow.

  3. E says:

    Interesting finish. I wonder if we are in wave C (Apr 18 start) of C (Jan 29 start) of the correction OR the first new wave up from yesterday???

  4. vivelaamo says:

    Money rotating back in to tech. Risk on!

  5. @@@ Out of all my longs and calls for a quick profit around 2672. It looks like the first wave has completed at 2676, and w-2 correction is coming. My 267 calls triples.
    This entire wave structure targets over 2800, by the end of this month.

    • Jack kendo says:

      super bullish, 1-2-1-2-1-2
      after last 2 completed, will be parabolic megaphone up into 333


    • On second thought, the top of W-1 won’t complete until 2712, by Monday. Tomorrow will be another 20+ points up-day. This last half hour decline is the zigzag fourth wave; it has another five and fourth for the entire W-1 to come.

  6. stan911 says:

    If we close at 2672 daily will have a 2 step method

  7. rd3777 says:

    Will it pop or drop?

  8. Vishal says:

    SPX looks like headed to gap over 50ma…to the 2750 gap area in few sessions.
    Key for me is banks get a bid ..lots of bullish call action .. speculating them to turn at turn of the month

  9. phil1247 says:

    2669 spx held retest at 34 daily ema

    ready for liftoff

  10. johnnymagicmoney says:

    Just from a market behavior standpoint there seems like a fair amount of symmetry with January 16. Sharp drop, three months or so of a correction, and multiple retests around the initial low. Interest rates are worrisome (amongst other things) but the market has dropped into that mid 2500 to low 2600 level quite a few times. I would not want to be short here. To me the market says its doing nothing but building a base to make its next move up. This does not look like its going to be a series of lower lows which will last 5 or six months. I would not be short here unless we break the FEB lows decisively. Why on earth would you want to be short unless that took place. Market is consolidating ready to rip higher.

    • CampFreddie says:

      Agree. see my charts below.

    • mcgcapital says:

      Looks nothing like 2016 to me, which is unfortunate as it would have been easy to buy a double bottom and ride it up towards the highs. 20/1/16 was the first low at 1810, then some chop up to 1950 and a retest at 1810 on 11/2/16. So that’s about 3 weeks between the lows. The rally off it was then sharp and clean, had no problem getting back through 1950 and into the 2000s before it had a proper pullback. This time around we had 2530s-2800-2650-2800-2550s.. never quite got the double bottom. Then since then it’s a choppy mess, but making lower highs overall. Interestingly other markets have managed to rally so it just the US that’s struggled. I associate choppiness with corrections.. it’s a brave man who’s piling in on the long side after these bounces have already happened as the market has a lot to prove

  11. garstall says:

    Hello Tony. Hope you are doing well. Looking forward to tonight’s update. Concerning all the triangle talk, isn’t there an old saying that if it is obvious to everyone, it is obviously wrong?

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