Tuesday update

SHORT TERM: US pulls of out Iran nuclear deal, DOW +3

Overnight the Asian markets gained 0.5%. Europe opened lower and lost 0.2%. US index futures traded lower overnight, and the SPX opened 6 points below yesterday’s 2673 close. After a dip to SPX 2662 in the opening minutes the market traded to 2676 by 11:30. Then the SPX dropped to 2660 on rumors the US would pull out of the Iran nuclear deal. When it was announced it was true, the market rallied to SPX 2672 by 2:30. Another decline followed, but this time to SPX 2655 just before 3pm. Quite a choppy day within a 20 point range. Then the market rallied into the close to end the day at SPX 2672.

For the day the SPX/DOW were mixed, and the NDX/NAZ were mixed. Bonds dropped 6 ticks, Crude slid $1.00, Gold was flat, and the USD was higher. Medium term support remains at the 2656 and 2632 pivots with resistance at the 2731 and 2780 pivots. Tomorrow the PPI at 8:30, and wholesale inventories at 10am.

The market traded lower overnight in an anticipation that the US would pull out of the Iran deal. At 2pm today Trump’s uncanny streak of campaign promises kept, notched another one. The market was quite choppy all day and didn’t panic on the news. In fact the economy is just humming along despite all the short term news glitches. Today job openings were reported at a record high, while unemployment is already at 3.9%. No slowdown in the labor market. Monday’s rally to SPX 2683 double topped the 83/84 resistance area noted in the weekend update. And the pullback, thus far, is to today’s low at SPX 2655 (2656 pivot). If tomorrow takes out today’s high, the market could be resuming the rally from SPX 2595. Short term support remains at the 2656 and 2632 pivots, with resistance at the 2731 and 2780 pivots. Short term momentum was oversold at the low then rebounded above neutral. Best to your trading!

MEDIUM TERM: downtrend

LONG TERM: uptrend

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

About tony caldaro

Investor
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335 Responses to Tuesday update

  1. vivelaamo says:

    SPX has broken out of the down trend and closed above April 18th high. Price is also above 20 and 100 dma. Something it hasn’t managed to do since March.

    I get wanting to short at oversold levels but surely it’s just for scalps? The sensible low risk trade has to be long or looking to go long at pbs doesn’t it?

    Or am I missing something?

  2. micky says:

    https://imgur.com/a/esu4GaY
    Follow up..
    Its an ABC until its not…its really that simple

  3. Phil you trading TLT any today?

  4. fxaprendiz says:

    In a previous post I mentioned I might try a short in the SPX at 2750 area depending how it get there, but without giving specifics. Well what I need to short this baby is to see a pullback from today’s high (so far 2725) to under 2700 ideally the 2670-60 area, then another leg up to my desired shorting zone, and all this should be done by the end of next week.
    If SPX does shoot straight up to 2750 from here in a day or two then I would hold on shorting it until it goes back down under 2700.
    I have my reasons but basically it’s all about symmetry and a certain harmonic pattern I’m following.
    In any event, the short from 2750 should be good for 200-300 points, no more, as this is just a consolidation period not a bear.

  5. mcgcapital says:

    For those who take a global view on equities, this rally is now 7 weeks old without interruption. It doesn’t usually run much more than this without some sort of pullback. The US has lagged badly over that period, not sure why exactly but suspect money managers have been cutting allocations to lock in gains on the tax rally.

    Overall, medium term analysis is a bit out the window as it’s a mixed bag to me. Seeing some stuff that I wouldn’t expect in a bear market but also the chart pattern on SPX is a little odd vs previous bottoms post 2009.

    But pretty sure there’s a dip coming on European indices.. not sure if the US holds up anyway as the correlations have been a bit off recently, but usually the directions are similar at least, so would wait for a dip before thinking about buying

    • tommyboys says:

      Our market hasn’t been rallying for 7weeks, its been in a volatile correction – just energing out. Why do you bears constantly look for ST tops to short for 10 or 20 pts? Why don’t you enjoy the rallies for 50-100+ pts?

      • Ashley says:

        You really want all the bears to buy it??? Im an uber bear and Im thinking of going long, that wouldn’t comfort me much if I was all in bullish .)

      • Mr. MCGCapital is a pretty skilled trader.
        You shouldn’d run your mouth with his posts.

      • He did say for those who follow European markets.
        It’s just that US market is lagging badly, which Mr. MCGCapital said several weeks ago would be the case

        • fionamargaret says:

          Good words…I really like McG’s work.
          We used to converse on the Weekend Update. I had a number 2609, and we were a few hundred points below, and asked him what would make folks take their money out of bonds and into stocks to that degree.He gave really thought-provoking answers.
          Now I have TLT suggesting much higher, against all reasonable outlooks.
          Now numbers give an idea before charts, and as it has just turned, it may change back (not usual). As it is, TLT is positive, while TMF is not, but I have put it out there.
          The trouble to doing that here, is being subject to ridicule if wrong.
          Academic life is more forgiving as ideas are expected otherwise no progress is made.

  6. NEWBIE says:

    Flash crash or Gap down overnight is coming.

    • If Israel and Iran go to war, I agree.

      However, all timeframes are now bullish in my system, although, technically, we are range bound. Until we break above and maintain above 2717 and 2793 and then 2872 (or to the bottom…2600 and 2550 and 2530), it’s all sideways.
      I say we pullback/pause to the /ES 2709 area and then resume the advance.
      The bearish outlook only comes into play if we break back below 2700 and 2670.

    • tommyboys says:

      NEWBBBB…. 👍🏼

    • travis01 says:

      I’m taking some small shorts today. Stalling here at vix touching lower band while sp touching upper. Looks to be ready for pullback just not convinced if my levels will get reached. There has been no fear lately.

  7. fotis2 says:

    2725 DING!
    says:
    May 5, 2018 at 1:48 pm
    Thanks Tony ES daily DB still valid 2 daily 3BRs valid Targets 2921,2740 and 2725 respectively note 1 daily 3BR Down invalid

    https://invst.ly/7dbix

  8. stcoleridge says:

    Apologies, I’m well over my limit today but just waiting for the next Credit to Coolbiz post.

  9. bolderbob says:

    Lead by breakouts in the R2K and NAZ, the SPX also broke out of its symmetric triangle to end the Int iv correction. NYSE Adv/Dec is breaking out to new highs to the upside both daily and weekly.
    I am not a day trader but I have getting long again because the probability is high that Int v is underway IMHO.

  10. phil1247 says:

    gary

    my most aggressive ext failed
    i am ready to exit
    you staying in long ?

  11. bears only have 15 points more possible upside. If over 2744, were 1=3 the count is wrong and this is minute 3 of minor 1, which should travel well over 2744. so Double 3 out. Triangle possible or minute 3. should know soon enough

    I shorted again 2722 Making pennies on my shorts when i should have been long and made lots. such is life

    Good luck all

    • The “pistachio ice cream has turned”.
      – Mater

      Got my sell signal on the 1-min also @2722.. Will ride it for however long it takes the market down. If it’s a blip so be it, I’ll be LONG again.

    • I agree. over 2740 and we head much higher. Never used EW but mapped that out and mentioned it here a while ago. Easy decision because it has to reveal itself very soon. Since today or tomorrow was my timeline for the end of this rally its pretty simple. A spike move soon breaching the 2740 area scraps my assumptions. No bet for crash if that happens.

      • 2725 area seems to be IT! The move is mimicking the 2/26 and 3/9 peaks. I expect the next 2 or 3 days to be a slow draw down and gain speed after that. The last 2 deep drops started very slowly and gained speed as the 9th or 10 day of the slide approached.

  12. Because of this move up,SPX 18d will cross bullishly over the 100d.More times than not a selloff occurs because that usually means the index is overbought.Doesn’t happen all the time,just much of the timeJust like golden crosses are sell signals short term.But after any selloff,should be up and away–IF there’s a selloff.GL all.

  13. Anyone expecting a 20-30 pt drop from here? (2723)Anyone expecting a 20-30 pt drop from here? (2723)

  14. fenster6 says:

    I am very confused about the current count, no doubt to my own dumbness.
    But was the recent low at 2594 enough to qualify as a C?? a good 40 pints above A?

    • Needs, 5 ways up. For now only 3: 1,2 and an extending 3. that could be a C or the expected D

      • stcoleridge says:

        Yes this could be the C wave of the ending diagonal int v from 2553. In the triangle count it is wave D with wave E down due to start sometime between here and 2802. Think it’s fair to say the double three is no longer an option but will defer to Tony on that.

    • stcoleridge says:

      There are now 3 counts. If today’s rally holds the triangle count comes more into play plus obviously the more bullish count introduced in the W/E commentary.

    • searchme2017 says:

      I’ve always been taught (Classic Elliot) that “E” waves usually overshoot or undershoot and rarely end on the trend line.

      But……search me………..

  15. phil1247 says:

    NEWBIE

    i know you have your own methods
    but until 2708 es is broken
    there is little chance of it going down

    good luck!
    and see ya !

  16. H D says:

    “suggest a rally to exceed SPX 2717 in the coming days”

    Tony, excellent call.

  17. vivelaamo says:

    Man bears on this blog never learn. It’s like Groundhog Day on here

  18. jobjas says:

    2716 should be top here

  19. NEWBIE says:

    Tony C, are you still of the opinion we return to 2500 area from here?

  20. Got crushed on the last bet. TOP today or tomorrow. 2720’s area. This should resemble in many ways 3/1 thru 3/9 run. From this Top we should have a 10 day drop to see minimum 2550. That’s where it gets interesting. IF there is a sharp one day bounce after 2550 is hit odds favor yet another week of even deeper drops to perhaps 2350 area. Shoulda woulda coulda. Pretty convinced we can’t go much higher since so many unresolved issues will be front and center in next 2 weeks. MAY 18th will be a Big Day! Any silly notion that China reconciliation is around the corner will be dashed. If i am wrong on this and tensions ease we could very well see a retrace of all time highs. Odds are low IMO.

    • E says:

      My timing shows May 16th to be an important day (likely down), although not as important as today. I would suggest placing options out to May 25th to derisk timing inaccuracy. Just a suggestion.

    • alexh110 says:

      Your time-frame sounds very similar to mine. Though I think it could be an 11-12 day drop due to the elongating pattern I posted below.

      • Yes I agree. that’s why i suggested the 2550 are might be hit within the 10 day window where everyone is expecting a bottom. the extension would be a false bottom at the 2550 area. I still see 2350 area as most likely bottom. Lets first get past the assumption that the current move ends today or tomorrow. If not back to the drawing board.

  21. Quick update:Gold DID stay unembedded and is in a little rally.Over 1321 means more upside.Also the 18d crossed under the 100 which many times leads to a short term rally.To see how it works,HYG 18d just crossed OVER the 100d April 16th and there was a selloff,but now the main trend is reasserting itself–up.Gap at 86.Looks like the longshot scenario is happening.Gold will go back down about 6 days or so.Not a new trend imho.Later all.

  22. micky says:

    no sell signals since 2660,only buys,wow! taking resistances out like it does not exist lol

  23. phil1247 says:

    2712 es target hit
    upside acceleration in force
    door is now open
    to retrace to all time high

  24. alexh110 says:

    I think this is the pattern playing out on the Dow.
    A double-shouldered IHS on the daily MACD, with an elongated time-base for the two right shoulders.
    Have put back my expected end-date for Int iv due to the elongation. Now think it will end around 24th-25th May.

  25. fionamargaret says:

    TMF, UGLD (long the long bond and long gold)
    SPXS, SDOW, SQQQ, TZA (short the indices)
    UVXY, VXX, (quelle surprise!)

    2656, 2632, 2594……2340

  26. phil1247 says:

    es pushed thru 2707 target
    if in new extension
    look for upside acceleration

  27. stan911 says:

    2706.23 gap filled

  28. phil1247 says:

    gary lewis

    told ya 2703.5 target was validated yesterday
    and i wanted every penny ! LOL

  29. phil1247 says:

    blue horseshoe still likes silver
    but intial profit target
    and resistance is just pennies away

  30. quickrick38 says:

    Wave 5 targeting 2722.

  31. cj32 says:

    Cr. to CBZ

  32. Here’s a humorous exchange from ZH regarding today’s move up.
    El Hosel Wed, 05/09/2018 – 16:12
    Breakout sounds so exciting, why isn’t there any volume if everybody is so excited?

    What sector made a new high?

    Fiat Burner El Hosel Wed, 05/09/2018 – 16:21

    Bullsh*t made a new high.
    LML25:Pretty funny stuff.

  33. Btw where has Mr Wu disappeared to?

    • xuwu992000 says:

      Thank for asking–I updated my trades and wave count on twitter constantly. Now, I see a pop-up tomorrow over 2704 and then a retrace to 2660 area. Early next week will see bullish movement to conquer 2736. AND THEN, THE FUN BEGINS.

  34. Nvda any prediction on how high it can go?

    May 10 th Earnings After the market closes

  35. Theodore Lerts says:

    If you aren’t long right now, then you are wrong. Very easy to make money in this bull. Grab it by the horns and ride it on up. To the moon. I’m serious.

    • fionamargaret says:

      If you have a chance to go hear Trifonov, you will not be disappointed….he gives one of the best interpretations of Shostakovich’s Piano Concerto I have heard, and his youth captures the mood of the composer in quite an interesting way as Shostakovich was approximately the same age as he when he wrote it. The Russian spirit is well represented….x

  36. NEWBIE says:

    Everybody bullish again, exactly what is needed before the rug pull.

  37. Bulls remember Tony’s weekend update. Rally above 2717 implies triangle. Bear counts are still all viable and expect to visit 2550-2560. Only real question is how high we rally to. Looking like we may rally until Friday and down till the 21st will see.
    Good luck all

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