Tuesday update

SHORT TERM: gap down opening DOW -193

Overnight US index futures were lower, and at 8:30 retail sales and the NY FED were reported higher. Nevertheless the market gapped down at the open to SPX 2715, and continued down to 2704 by 10am. At 10am the Home builders index was reported higher. A rallied followed to SPX 2716 by 10:30, then the market entered a choppy trading range between 2702 and 2715 for the rest of the day. Ending the day with a bounce to SPX 2711.

For the day the SPX/DOW lost 0.75%, and the NDX/NAZ lost 0.95%. Bonds lost 24 ticks, Crude added 50 cents, Gold dropped $28, and the USD was higher. Medium term support remains at the 2656 and 2632 pivots, with resistance at the 2731 and 2780 pivots. Tomorrow: housing starts, building permits at 8:30, then Industrial production at 9:15.

After a rally on Monday, when the SPX rose to 2742, between the 2731 pivot and the 2750 trend line resistance. The market closed under the pivot on Monday, then gapped down to open Tuesday. Index trading was mostly to the downside on Tuesday, as the 10YR resumed heading lower with yields rising to 7-year highs. The stock market rallied recently as yields hovered slightly above and below 3%. With yields on the rise again, equities are again feeling selling pressure. The three scenarios noted on Thursday are still in tack, and are posted on the SPX hourly/daily and DOW daily charts. The triangle scenario remains the preferred short term count. Short term support is at the 2656 and 2631 pivots, with resistance at the 2731 and 2780 pivots. Short term momentum displayed a negative divergence yesterday, hit oversold today, then bounced higher. Best to your trading!

MEDIUM TERM: uptrend

LONG TERM: uptrend

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

About tony caldaro

Investor
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376 Responses to Tuesday update

  1. alent1234 says:

    I don’t follow this as closely as I should, but take a look at 1999-2000. A top followed by a rising triangle before 9/11 and the drop. Virtually the same chart as the last few months.

  2. emuntrader says:

    Have a couple of harmonics at the .886 retrace (appr. 2739) both scenarios gives us a drop to 2660 – 2665 area. If the 2742 is taken out. I will give up on the triangle and look for a more bullish future.
    Not sure how to post charts here. GL

  3. phil1247 says:

    stan911

    i only mentioned 2691 in case the squeeze above 2716 fizzled before the short broke

    does this answer your question?

    • floyd drummer says:

      phil,
      thx for the chart.
      …..so, i am also running a traditional long from 2700.5 (bottom) to 2800 (top) as well, in addition to the ext short and traditional short.
      as the ext short did not complete, …i want to know the other side.
      are you also watching the traditional long here?

      in my limited experience, …38.2’s and 78.6’s can be locations to look support and resistance.
      at the end of the day, the 38.2 of the traditional long served as support to bounce @ 2717.25
      is that something you would have been watching for using DH?

  4. learnedmylesson25 says:

    Interesting that DOW didn’t explode up about 200 pts.Usually it does when levels are breached to the upside.

  5. kvilia says:

    Swooooosh is coming to town. Get your seatbelts on.

  6. pooch77 says:

    Choo tomorrow down Friday

  7. Theodore Lerts says:

    Houston, we have lift-off. Like I said, waaayy up.

  8. tommyboys says:

    Another new ATH on the NYAD. RUT new ATH on small banks rallying on bullish rate outlook.

  9. Phil, any of those 15 min buy or sell signals triggered lately that you sometimes mention?

  10. cj32 says:

    Cr. to CBZ

  11. vivelaamo says:

    Still need to stop getting influenced by this blog. Took profits too soon. Have to just wait for a pb now.

  12. E says:

    Do not forget the bear possibility. The time may be near.

  13. stcoleridge says:

    Way to go R2K.

  14. phil1247 says:

    es

    door has opened to 2762

  15. vivelaamo says:

    Thanks Tony. Good to see you back.

  16. ewmarkets says:

    Triangle already finished?

  17. gary61b says:

    spx gap 2718 to 25? before this morning push up. ES, being this is corrective waves abc could see the drop to 76%/2708ish level breaching the long set up but then a push up to the 2725 level. what a story but I am sticking to it. but a drop below 2704 forget the story.

  18. phil1247 says:

    es trading is slop

    bonds are trading extensions like a champ

    why work for it with es
    when bonds are giving money away?

  19. Shorts these last 2 days have been squeeeeezed. WOW! 10 year note steady right at its top, 3.09. Dollar holding it’s gains. I await the decision on if we BREAKOUT or not. So very close and I suspect we do so in a fashion that blows the 3.11 right to 3.20. Trumps 2 year policy on China trade changed course on ONE TWEET and One Billion from China for his personal gains in an Indonesia theme park. Only problem with that is ZTE is know to be a security risk and espionage is likely. But thanks to trump they can now do it in the open. Always good to get it out in the open. What do you call a person that pushes for foreign entities to steal your secrets knowingly?

    Critical day today. it should determine the course of the next 2 weeks.

    • phil1247 says:

      extension targets are 31.17 then 31.32 …. so what ?
      what makes 3.11 magic ?

      • Critical day in stock action, not bond yield. What makes 3.11 critical? What makes any of your targets critical? Stupid argument. Mine is a very long momentum indicator from over a year ago that had the target set and set it still is. very critical. Like your short squeeze, if it breaks above and hold for just one solid day watch out! it should spike even higher and fast. Some don’t consider 3 or 3.5% a big deal but in the world market it is a HUGE deal.

        So we have OIL breaking out along with rising rates and treasury yields yet your common sense thinks it has no impact? really? It’s called peaking at the same time causing a decisive reaction by the public. We had these situations before and 6 months later the economy was struggling.

        Just ignore my silly posts and stay exclusively with your own advise.

        • phil1247 says:

          economy is doing just fine

          we are nowhere near any recession
          you are way way early to even consider that

  20. scottycj1 says:

    2725 is a magic level….if we are up thru that price by the end of the week its very bullish as it indicates we move up into the next weekly square. Yesterdays CIT is 90% certain a low. We can take off before the end of the week….will see how we trade if we go up thru that level.
    Enough for me today

    GLTA

  21. H D says:

    Great to see you back Tony.

  22. fionamargaret says:

    Short the indices, and long oil to 80. Long the crazies..
    UWT, SQQQ, SDOW, SPXS, TZA, UVXY and VXX
    2656, and then 2632,, 2594, 2465….2340…huh x

    Music and Kimble on Weekend Update.

  23. /VX rollover today? New contract is finding support at it’s 50% LONG (14.85) so far (?), just as /ES tests it’s 50% SHORT (2720.88). Could be an inflection time?

  24. phil1247 says:

    anyone smell a fuse burning ?

  25. gary61b says:

    ES is in an abc off of the 2700.5 lows b completed at 2704.5 and c is in play. spx does have the gap to 2725.

  26. phil1247 says:

    gary

    boys could not push it over 2716
    so 2698 target is still good

    • floyd drummer says:

      hey phil,

      DH’s model finally came together for me, …nice!

      thx

    • gary61b says:

      the HWB was hit overnight and it was confirmed short at the 61.8 at 2711.5. I am thinking we are headed south to 2698.

      • phil1247 says:

        you trading gold and bonds ?
        good trading in bonds
        gold is at crucial level now

      • gary61b says:

        Phil, The 2nd ext. short is what you have plotted. but the traditional MM is from the high to the low and it has a hwb at 2720.75, LIS 2725.75.

        • phil1247 says:

          yes but i am not concerned with that now

          it does not come into play until ext short is traded above at 16
          i had that traditional on my chart
          but took it off to show floyd to avoid confusion

    • scottycj1 says:

      Funny you say 2698…..that is one of my algo data points today.

    • Theodore Lerts says:

      Phil, you thinking 2698 will be the low before the next big push higher? Or are you seeing any lower targets?

      • phil1247 says:

        no idea theo
        going forward

        we hit 2698 target and bounce
        we go thru target and are in new ext shorts with new lower targets
        we break above 2716 ext short
        and go to full retracement from recent high

        in sum …. we are waiting for the target to be hit or the short to break

        • phil1247 says:

          my elliott wave analysis lol

          5 waves down with ending diagonal 5th wave from recent high
          we need at least a 3 wave bounce now

  27. allen1929 says:

    Welcome back Tony.You were missed.

  28. Thanks, Tony ! Keep busy, keep well….always appreciate your views; great guidance…health is very important (man, do I know)…looks like a kiss to test the triangle to me…higher lows so far.

  29. Welcome back Tony 🙂 , Nice to see you here

  30. floyd drummer says:

    welcome back tony,

    …and thanks for all you do!

  31. It’s great to see see you back, Tony. Thanks for all the selfless, awesome work you do.

  32. SP500 Day Bracket

    2745.45
    2613.06

  33. learnedmylesson25 says:

    Great to see Mr C’s Tuesday update.NASDAQ staying embedded is a worry for the bears imho.IF it breaks down,that’s when the green light flashes for some decent selling.Good luck and health to Mr C and all here.

  34. Menachem Uzan says:

    All the best to you Tony. Thank you for all the years of your expertise. I’ve enjoyed tuning in to hear your view. May it continue in good health and happiness for you and your family.

  35. Billy says:

    Always nice to hear your voice. All the best to you Mr C. Trying to identify the near term wave action from the recent high at 2742.10, it appears we might have had 3 waves down to yesterday’s low. The 1.618 extension was easily surpassed for the 3rd wave reaching as high as 2.27 for the DOW/YM. The gap down yesterday is also a potential hallmark of a 3rd wave. 3 waves down all by themselves don’t mean much and could simply be a correction with higher highs still to come. However the relatively narrow & sideways overnight action is starting to satisfy the expectation of a 4th wave in the sequence. ES is currently trading around 2712 around 67 minutes before the European cash session starts. The down trend line (DTL) from the recent high is around 2715 which coincides with the region of the smaller prior 4 (4 of 3). The DTL and 2715 will meet around an hour or two into the European cash session. If we get a 4th wave high in that area, judging by the lengths of the first 3 waves, I’d expect the 5th wave to find a bottom around 2695. That would be a 47 point drop from 2742, give to take. The HWB from that level for a larger 2nd wave or a B wave would be around 2718-2719. European bourses I have stated recently appear to be running out of waves. However every time the Euro dives and the USD rallies, European stocks rally as well adjusting for the weaker currency. The Euro may be in a 5th wave down now and a bounce may be around the corner. A 5th and final wave up for European bourses may coincide with the larger wave 2 noted above from the 2695 back to the 2718-2719 area. If all that comes together a larger general equity decline would be expected.

    • Billy says:

      A calculation error … I’d expect the 5th wave to find a bottom around 2691 (not 2695). The decline would then be 51 points from 2742 with the HWB in the 2716-2717 area.

  36. fotis2 says:

    Very glad you back!

  37. Count says:

    Welcome back,Tony. Yes, no place like home.

  38. Tony!

    Your not fooling us! Who’s the nurse? That stole your heart? Love someone before it’s too late! Used to be your motto ..

    I’m sure in due time you’ll tell us her name!

    God bless Tony

    • Xy Z says:

      swingtraderamos, by jove, I think you nailed it! We were all getting concerned for Tony’s well-being but if the truth be known he’s just been playin’ it large with nursey and we’re now well down the list of his priorities! The only illness he’s got is the love bug and he’s getting all the treatment he can!!! 😉

  39. tommyboys says:

    Welcome back and Godspeed always Tony.

  40. kjb0 says:

    Thanks Tony…..take care of yourself.

  41. Lee X says:

    Triangle is a trigger word to some here 😉

    There’s no place like home so Im glad you’re there .
    Thx again

  42. Thanks Tony. I hope you’re doing well. God Bless.

  43. Page says:

    Thanks Tony. Best wishes.

  44. travis01 says:

    All the best Capt! Rise to 2731/50 then drop below 2600…it’s like you have a crystal ball sometimes. The fun part for me is trying to identify keys and back testing to see if our paths align. Thanks as always

  45. Thanks Mr. C.
    All the best to you.

  46. chairman67 says:

    Cheers again Tony.

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