Wednesday update

While the US appears to remain on cruise control we have been uncluttering the weekly charts on the chart link. Some go back to 2009 with lots and lots of historical, but currently unnecessary waves. For example the AAPL weekly chart looked like this:

now looks like this:

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

About tony caldaro

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439 Responses to Wednesday update

    • tommyboys says:

      Kinda silly. What does China currently import from the US that doesn’t already carry a Chinese tariff?
      Further notice the date – July 6. This is a negotiation and likely resolved prior to that date or date will get pushed out. Thirdly not unexpected at all.

  1. hi Tony have we seen the top in oil Saudi and Russians have kicked in production?

  2. According to EW count there is no chance of a deep drop soon is there? Chime in if my assumption is wrong. Please enlighten my naivete. Love to hear how it is or isn’t possible. Pretzel Logic hasn’t ruled it out yet he also uses EW. In fact he has the next drop exceeding the lows set in February. How can 2 different EW chartists come to such startling different conclusions?

    • mcgcapital says:

      I’ll answer this because you keep asking this same question repeatedly and I’m not sure whether you’re being facetious or actually genuinely interested in why.

      Of course there are valid bearish Elliott wave counts just as there are valid bullish ones. Different analysts have different counts as their base case as they each have a bias, for want of a better word. Like TC has the bullish bias because he believes we’re in primary wave 3 due to various factors he’s mentioned previously like being in a new growth saeculum, plus he only has 3 quantified waves up from 2009. The quantification of waves is proprietary to OEW so hard to comment on this further as I’ve not done the course.

      Pretzel has a bearish bias because of liquidity. But note he also projects the bullish alternative count as a lot of EW analysts do. So different people looking at different external factors and then looking at the market through that lense.

      Stating the obvious here, but the market moves based on supply and demand, more buyers we go up, more sellers we go down. So clearly there can’t be a pre-ordained path because whether or not people are looking to buy or sell isn’t known in advance and it depends on external events and how they develop. Generally speaking, if the economy carries on growing indefinitely then it gives people little reason to sell, so the downside is short lived. If it doesn’t, there will be a rush for the exits and it will go down hard.

      In terms of the count that is projected by OEW at any one time, that’s the base case scenario. There are bound to be others.. but Tony prefers not to discuss the hypothetical ones and stick to the main view. The main view changes from time to time when events happen and the market changes. Just because a crash scenario isn’t mentioned here doesn’t mean it won’t happen, it’s just that it’s seen as a lower probability event.

      What’s provided here is a market view, not trading advice or set ups. You can’t trade it therefore without filling in the blanks yourself and looking for trade set ups e.g. around the OEW pivots. That’s a crucial distinction between gambling blind on longs on the basis that people are bullish because of the OEW count vs actually trading with risk control.

      What you’re hoping for is that everyone suddenly realises that the tariffs war is a big deal and they all start selling. So far it hasn’t happened.. when this stuff was first coming out in March and April the reactions were much bigger because people were looking for reasons to sell. Now they’re looking for reasons to buy and are ignoring it for now. We’re still in a trading range so if we don’t break out, longs could begin to give up trying short term and we’d move lower again as supply exceeds demand. If the tariffs stuff does escalate then that’s going to give people a reason to sell and we could go down quite a bit. But it’s just as likely that it de-escalates.. we just can’t know in advance how it will play out.

      • Ray Soho says:

        Good post, mcg!

      • If only your answer was the majority here. Unfortunately whenever I mention possibilities of a sudden drop and I bring up Trump related causes most here would rather I get banned than mention some obvious glaring concerns. Just look at the business leaders, CFO’s and CEO’s and tell me this isn’t front and center on their minds? if it is to them don’t you think it has a strong bearing on market action?

        As to EW charting I wish most here understand it’s no the bible and interpretation can be many and cause one to see a breakout event while the other a crash. Take early 2016 for example. Couldn’t have been more wrong in it’s conclusion. Why does everyone pretend that glaring miss can’t happen again? Why does everyone that ridiculed me then pretend they were right all along? I don’t ridicule others unless attacked. never have, never will. Let it be!

        • mcgcapital says:

          In my experience markets tend to focus on what’s directly in front of them most of the time. So this week the main stories were central bank related.. it’s no coincidence that Wednesday we saw selling on a hawkish fed, Thursday sees buying on a dovish ECB, then today they’ve begun to focus on tariffs. That could be the dominant story the next couple of weeks with not much else on the agenda given the economic calendar is front loaded to the start of the month. So you might get your drop now. I actually don’t think people are overly concerned about tariffs yet.. but so far it has gone further than I expected in that I thought there would have been a climb down by now.

          Nobody wants you to get banned it’s just that they don’t want politics to dominate the discussion on here as that’s what TC wants. So you need to tone down the anti-Trump rhetoric and keep it factual and relevant to markets. Trump is a divisive character in that people either love him or hate him so it sparks off these long debates on non market related stuff when mentioned. But tbh it wouldn’t be a complete discussion if he was just ignored when he is driving the fundamentals newsflow both positively (tax cuts, strong economy) and negatively (tariffs, geo politics).

          I agree on the early 2016 OEW call being awful and that made me discard it really in terms of my thinking. But that being said, to be fair to TC.. if you go back and look at the posts of the time, he was quite reactive to the market, he wasn’t just fixated on the view. For example, near the lows he was looking for a tradable counter trend rally. So he wasn’t short at the lows, he was saying buy. It’s just that that countertrend rally ran and ran rather than just been the expected retracement. An actionable trading set up is a market view plus supportive price action. The market didn’t give any supportive price action for shorts like potential topping candles until we were at 2000+… he was looking for reversals off there but they didn’t come, so shorts there were losing trades. He then quite quickly shifted the view back to bullish before we broke out to new highs. People can’t really complain in that OEW reacted to the market despite the view being way off which is what good trading is about.

          A lot of people take a view and then trade it without reacting or having invalidation points so they get shafted when the view doesn’t work. And some people come on here to look for some holy grail which tells them when to disinvest from the market, which obviously isn’t possible. People who don’t understand that clearly have short memories or have only been following for the last couple of years when OEW has nailed the rally.

          • stcoleridge says:

            That’s right McG, OEW has a proprietary rule that conventional EW doesn’t which I believe was the major factor in Tony changing the count when he did in 2016. To be fair to him the market has advanced pretty much in accordance with that change in count ever since. Still only in major 1 of primary III.

          • Good couple of posts mcg. Thorough and detailed.

          • vivelaamo says:

            He seriously thinks people do not like his posts because of his bearish views. 🤷🏼‍♂️

            Some good points made there Mate. Thanks.

      • torehund says:

        A crash scenario just cant happen AS long AS mainstream aren holding shares. Stocktrading isnt all about the economy, its how assets are distributed. Markets are LED by skewed ratios and not the other way around. And if you are participating in the market listen to the ones that are leading it, or used to. Martin Armstrong had 3 trillion Usd under his supervision at one time, why overthink and with lesser reliable info mess it up yourself. Its OK not to follow his advice and stay out but to challenge his view is plan stupid. Very seldom is both Tony and Martins view to be neglected so why go severely upstream at this point in time. You have Tonys P 3 and Martins experience and computer modell in your back going long. No need to go upstream a frothing river. Thats my 5 cents, see you at dow 38 000🤓

        • mcgcapital says:

          To me Tore the maths doesn’t support the primary 3 count. Because basically we’re saying SPX 3000-3200 then down to 2400-2500, then up to 4000+ for 3 of 3. All at a time when debt in the system is sky high, we appear to be late cycle and valuations are quite high, plus long term rates are trending up for the first time in a long time. I’m not saying that it’s impossible, but would be reliant on something like AI massively increasing productivity and the growth rate being much higher. I don’t see it unless there’s a change in current economic dynamics.

          All that being said, I didn’t expect 3000 when we were at 2000. I can’t predict any of these long term trends, it’s extremely difficult and that’s why I don’t believe in active management, as an investor just have a long term strategy and stick to it, market will do what it does. And as a trader, I just try and react to the vibe of the day

  3. Ashley says:

    Wow this might be one of the more bullish RED days I’ve seen in while LOL Yea I know bears got a whole 3 points down!!! It’s a start anyway and you bulls might want to peruse Tonys count on the tech ETF XLK, It’s the same one I have for comp Q and SPX, DOW I expected to play along but so far it hasn’t, Id like to see a high over 26K but it’s just another divergence I guess… The 60 minute chart on COMPQ has a nice neg divergence at the high and all through this bounce… If the count is correct it’s going all the way down to the lower trend line before one more blow off top back up to the upper trend line and then well thats all folks…..

    • tommyboys says:

      How bout no drama… how bout markets just hang for a year or two? No huge up – no crash – just an up and down boring grind sideways – which would look like a big bullish consolidation in a year or two. This would tick off all the drama queens 🤔

      • mcgcapital says:

        How often does that happen though? It’s all about the economy really.. if it keeps growing at 5% nominal then it probably will find it hard not to break higher over that timeframe. And likewise if there’s a recession it will almost certainly break lower. The bull vs bear debate is there because we all have different views on where the economy’s at.. you’re at the optimistic end of the spectrum on that and if it plays out in line with your expectations then you’re right to expect higher stock prices. But there are valid reasons for concern there and the music could stop any time now.. very hard to predict when though. Consensus is that we’re late cycle, that’s probably right but what consensus won’t get right is where the top is. Until 2800 is exceeded then there’s a possibility it was in January and that the economy we have now is as good as it gets and it deteriorates from here. Impossible to know though, but worth keeping it in mind until resistance breaks up

        • tommyboys says:

          Why does economy have to deteriorate or bust at 5%? Why can’t it hum along at 2.5-3.5% – which is much more realistic. Economy however is not the end all be all for the stock market. Two separate entities.

          • mcgcapital says:

            I meant 5% nominal, not real.. so basically 2% inflation plus 3% real growth which is about where we are now. 2.5%-3% nominal would be anaemic real GDP growth. Thing is with growth is that usually it trends.. so if it gets too hot and rates rise, quite often that doesn’t just bring it back down to a lower rate as once the economy starts decelerating it can go into recession. Anything can happen of course, but an economic cycle is usually boom and bust.. this time around we’ve had a long period of low but positive growth with no boom or bust but now we’re in the boom phase with the fed raising.. I just think that if it starts decelerating then recession risk is high

  4. stan911 says:

    Dow backtested the neckline of HnS

  5. I have yet to see the market listen to the above/below 2770,2765 line in the sand that Phil pointed out today.Other times as well.Not sure if we’re back in whipsaw-ville,but the market just as easily could reverse the last hour and drop below 2770,2765 again.The numbers are meaningless imho.

    • phil1247 says:

      phil1247 says:
      June 15, 2018 at 10:14 am
      floyd drummer

      re ES

      series down has broken
      door is open now to full retracement to top
      bull above 2770 esu8
      >>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
      you were given almost 20 es points
      if you dont take them its not my fault

      • phil1247 says:

        rogue trading rules say
        if long from near 2770 esu8
        2784 is a NICE place to exit

        have a great weekend !!!!!!!!!!!!!!!!!!!!!!!

    • aahmichael says:

      The prices he quotes are the futures. When he posted to Floyd to buy ES, it was trading 2776. When he says “bull above,” that means that’s where his stop is (the .618 retracement level.) It doesn’t mean that’s where he got long. The market dropped immediately after his post, and went down to 2770.75, but did not hit his stop. It eventually rallied to 2788.50, and is now trading 2780.50.

  6. Theodore Lerts says:

    And that, folks, is how you trap and barbecue a bear. Mmm good cookin’

  7. phil1247 says:

    ESU8 …

    shorts broken
    2808 target validated
    2770 long from this am was never threatened

    enjoy !

    • Down only 3 SPX points as I write BUT the move from the 11th on suggests strongly we are about to go off the cliff. Today the bulls in complete control so far. Easy sharp up moves by the minute rallies. So easy in fact you would think we can never fall. No matter where we are at 3:45 I add more Puts. Irrational behavior doesn’t come along so often and this market’s euphoric acceptance of external events is going to be tested over weekend. I would expect a 1 percent down at start of session Monday. been wrong before and this is no different BUT to ignore the double down opportunity. Week 21 next week and setup couldn’t be more dramatic.

  8. fotis2 says:

    Nice one Fiona 59.7 measured Bear flag
    https://invst.ly/7qz0u

  9. Page says:

    I think Oil may hit 60-59 next week before OPEC meeting. This is to put pressure on OPEC clowns.

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