Wednesday update

SHORT TERM: gap up opening, DOW -42

The first two days of the week markets worldwide have seen selling, especially in Asia and Europe. The US had two gap down openings, but recovered more than half of the early morning decline each day by the close. Today markets settled higher in Asia, and mixed in Europe. The SPX gapped up to 2773 at the open, had closed at 2763, then dipped to 2764 by 10:30. After that the market worked its way higher to reach SPX 2775 by 1pm. Then pulled back to close at SPX 2767.

During yesterday’s decline the SPX dropped to 2743. This was an important level because the high of our Minute wave i was at SPX 2742. No overlap occurred, and the market has rallied 32-points from that low. Short term trend remains up unless those levels are broken to the downside. Short term support SPX 2741/42 and the 2731 pivot, with resistance at the 2780 and 2798 pivots. Short term momentum hit overbought during today’s high, then declined to neutral. Best to your trading!

MEDIUM TERM: uptrend

LONG TERM: uptrend

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

About tony caldaro

Investor
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448 Responses to Wednesday update

  1. schizo1688 says:

    I don’t ask for much.. just wanna see snp 2735 today …

  2. Last night pushed the futures over 10 SPX points. Today when 2750 hit there was multiple candlestick patterns for a bullish reversal. Still no sign of capitulation or breakdown of any type other than the fact that this is the 6th day now of correction, one of the longest in a long time.

    Complacency extremely strong here. When the next break occurs without much support we should see that cascading event. Still believe we are in the current correction that causes that breakdown.

    No reply from Trump on EU retaliation measures. No specifics from China on retaliation over 200 billion additional tariffs. This of course will get resolved soon. When it does I suspect the market will conceded there is a full blown trade war happening.

    If we have a 9/10 day window for the drop to occur in this is day 6. Other clear pattern shows a shallow but well defined 5 wave structure on this current down trend. if the symmetry holds true for the last wave (currently in) it should find a terminal point at around 2740. (IF) we break below that assumed bottom we could be seeing a 2 to 3 day steep continuous drop instead. Might know today but definitely by tomorrow if we breakdown from 2740 area. We also need to see a continuous drop each day and they have to increase as we go.

  3. phil1247 says:

    done for today
    my grandson wants to play soccer
    see ya !

  4. I wonder how much the SCOTUS decision had of the markets this morning?

    SUPREMES DEAL BLOW TO AMAZON, WEB
    INTERNET SALES TAX!

  5. E says:

    2731 low today, Rebound tomorrow. Armageddon next week.

  6. CampFreddie says:

    Very Good longer term set ups in some soft agriculture. Just entered big on Wheat, Corn and Soybean Oil .
    Well worth a look Imho. glta.

  7. I believe the CTT may have started…underscore may. There was a classic 1 tick lower low, on /ES, trapping some bears who over stayed their welcome. The 50% SHORT from the overnight highs to this mornings low is /ES 2767.88. Guys watch this level…..if /ES defends2767.88 watch out below. One more thing, there is this mornings GAP that did not trade today, so that is another potential target for the CTT. If /ES trades above 2772.03, the SHORT is invalidated and /ES is trading LONG again.
    If the SHORT breaks, I am going to have a steak, a nice bottle of a California Cabernet and pass out!

  8. CampFreddie says:

    Good bullish structure in place now on S&P, so adding to my long positions in S&P futures here @ 2748.5 Aimho Glta.

  9. mjtplayer says:

    Overnight low in the Euro potentially completes 5 waves down from the recent Feb high, very clean wave count. Possible rally to 1.20 in a 50% retrace bounce – which would also be a right shoulder of a massive H&S pattern. Do or die for the Euro, bounce to 1.20 or melt down below 1.15

  10. alexh110 says:

    Could be a micro 4 failed flat today, alternating with the micro 2 zigzag?

  11. Page says:

    Time to go long.

  12. learnedmylesson25 says:

    Supreme Court rules states can collect sales taxes from the Amazons of the world,if the purchases are from another state.According to FOX biz,Walmart,Target wanted this to happen to even out brick and mortar with internet shopping.It applied to North Dakota,but now other states can get tax revenue from this case.

  13. Trend change on all the major index’s on the 15 minute charts. For /ES there is a profit target for the short at 2743.17 and a daily 50% “LONG” at 2735.50. I expect a counter trend trade, “rally”, at any time now (stocks don’t often go straight down), to a 50% SHORT….from this mornings lows and highs. If that level is defended and /ES sells off….look out below!

  14. scottycj1 says:

    Algos turning from green to red

  15. CampFreddie says:

    Gold looks to be putting in a Bear-trap low here and with good pos/div on the daily. I got flushed out for a small loss last time, but having another go here @ spot 1265.2 (position trade) Aimho and Glta

  16. phil1247 says:

    ym 24461 target ahead

  17. emuntrader says:

    After minor b is complete looking for a rally back up to the 2785 level. Then a zig-zag down next week that should take us down to the 2710 level.

  18. mcgcapital says:

    FTSE and Dax breaking support and holding it on a backtest. Plus SPX opening around unchanged so no gap close algos today. Maybe this is the day it sticks on the downside

    • Look at QQQ now. How can any move has traction on the downside if they can always prop up those QQQ?

      • mcgcapital says:

        I’m not following it that closely but Phil seems to think it’s a last gasp move up then decent sized drop. It’s basically 5 stocks.. the wider market keeps selling off most days, it’s just a matter of time before one sticks. This isn’t what we usually see prior to a leg higher

  19. emuntrader says:

    $INDU looks to be completing an impulse movement to the downside. Expecting a B-wave rally around the target shown. A C-wave should follow after that, but I don’t think they will bring down until next week. Still holding by my mantra for the rest of the week. Buy the dips and sell the rips.

  20. No pull back 2800 next target by Friday close.

    Good luck

  21. phil1247 says:

    /GC

    gold finally hit 1268 ext short target and is going thru
    below 1274 its a bottomless pit
    as mentioned many times …………

    gold is dead money or worse

  22. Lee X says:

    And then there’s the pivot……

  23. asaraniti says:

    News headline out on zerohedge.com….let’s see how the markets react to this news…..

    China Quietly Approaches US To De-escalate Trade War

  24. asaraniti says:

    News headline out on zerohedge.com….let’s see how the markets react to this news…..

    China Quietly Approaches US To De-escalate Trade War

  25. E says:

    Things looking very bad. Ftse just broke 7600. Nikkei appears to be at edge of Grand super cycle collapse. Oil and gold still falling. All signs of deflation. If today is an impulsive down day then it’s more plausible SPX and dow are already in a bear market, with ndx and rut to follow. In that case yesterday was a Wave A correction. Today there should be two waves down in b wave. Then, there will be a final c wave rebound within next 3 days. Finally, Swoosh we go toward 2450 in minor wave 3 down. Let’s see what happens today first. GL.

  26. phil1247 says:

    NQ

    after hours we ” popped the top ”
    looks like the beginning of the flop

    top is in until proven otherwise
    bear below 7332 nq

  27. asaraniti says:

    This chart shows the overnight activity. BTW… / VX supports this analysis.

  28. asaraniti says:

    On first glance at looking at the /ES futures this morning Isaid oh no not again!

    However, in the overnight session /ES broke a 61.8% SHORT by a tick….bullish…. and an immediate 50% LONG is drawn up. In the overnight session the long was front run by a few ticks meaning
    /ES never traded all the way down to the 50% LONG because limit orders were placed above the 50% long….so far. This analysis is invalidated below /ES2754.

    In English, / ES traded in a bullish textbook fashion…if this pattern holds I expect a higher high soon.

  29. schizo1688 says:

    China is down over 1%, the question is ” will US follow chinese market ? “…. the Snp will be below 2743

  30. pooch77 says:

    Futes just took a crap???

  31. alexh110 says:

    The pattern on the futures market looks bullish to me: sequence of three nested 1-2’s off the 2732 pivot low. The first wave off the low appears to be an LDT.

  32. cj32 says:

    Cr. to CBZ

  33. learnedmylesson25 says:

    What happened with futes?PPT’s up late tonight.I guess after SPX lost the bullish stochastic,they got nervous…so they dipped a toe in.Maybe Nasdaq pulls everything up another day.Crazy stuff.

    • asaraniti says:

      Trump made positive remarks on trade negotiations in his speech in Minnesota tonight and Fox accepted Disney’s 71 Billion dollar take over offer

      • stcoleridge says:

        That’s funny, the index that should be up the most on those comments (the Dow) is up the least after hours.

        • Anne Day says:

          I suppose there is still a lot concern with DOW due to the trade war, real or not.
          On the other hand, maybe it is time to switch out of TQQQ and switch into UDOW.

          • stcoleridge says:

            I’m buying Dow and selling RUT after hours. Someone has to fade this Algo driven herding at some me point.

        • asaraniti says:

          Not necessarily….Dow companies book a great deal of profits from overseas operations. Europe is in deep trouble DB reported some truly nasty surprises and Draghi is ending QE by the time he leaves office… December 31 2018. Countries like Spain, Portugal and Italy will now have to rely on private investors to service their debti…..I don’t know who wants to buy Italy’s sovereign debt ….and what price/yield Italy will ultimately have to pay.

          I think the Dow might be pricing in this outcome with the other index’s not to far behind….Tony’s wave major 2. Would rec. reading zerohedge.com recent articles…. full disclosure he tends to be a permabear

          • learnedmylesson25 says:

            They’ll be ending QE only if a financial accident doesn’t occur–and maybe not even then.Reminds me of when auto companies announce new emission standards for 10 years from now.In about 5 years,they say they can’t do it and get another 10 years delay.We never know what the hell they’re really doing–except beating gold down.

          • vivelaamo says:

            Asa Zerohedge has been calling a crash for 8 years and always has every good fundemental articles to back up his views. He may well be right about the economy and the mess country’s are in but he has been so so wrong for years about the stock market.

            I would recommend people read his articles for enterainment purposes by all means if they must. But never let it affect your trading or create a bias.

  34. Phill there’s your pop sp implied open plus 12. I think we’re headed to 2820 then 2480

    Good luck all

    • stcoleridge says:

      Yeah there’s your 0.50% “pop” in after hours trading on what volume? Maybe I’m the only one worried about the lack of liquidity in the market.

  35. fionamargaret says:


    Thanks Chris Kimble

    https://raymondjames.bluematrix.com/sellside/EmailDocViewer?encrypt=31a05604-c332-4710-8555-c61671ee3d4f&mime=pdf&co=RaymondJames&id=Jeffrey.Saut@RaymondJames.com&source=mail
    Thanks Raymond James….Charts of the Week

    Thanks and much love to Tony, our mentor……and everyone xx

  36. Anne Day says:

    I mentioned earlier shorting SQQQ and the great underlying risk.

    I would like to add another note of caution: It is not enough to just study
    daily closing prices as there may be huge intra-day spikes that can trigger
    margin calls. If it happens, you would not even have time to max out your
    credit cards!!!

    • schizo1688 says:

      except it wont be, unlike the xiv and svxy..

      • Anne Day says:

        I implemented a model showing otherwise.
        That is why I say I used to short SQQQ. If I had known the risk, I would probably have not done it in the first place.

        Of course, it all depends on how much leverage you use. What I said above is that you have to consider intra-day spikes carefully if you build a model to test it. I literally had a lot of cold sweat when I realized that intra-day spikes could easily wipe my entire account out.

  37. xuwu992000 says:

    @ If my turning date (6/19) works again, then the 2743 low won’t be violated for at least 5 days. Interestingly, the next potential turning date is 6/25, and that would end the W-(2) rebound from 2743.
    @ My EW count of a very RARE expanding leading diagonal W-(1) from 2793 did pan out as predicted. Though there are other bullish counts, i.e., WXY or triple zigzag, I don’t think that bullishness is warranted. The entire rebound from April 3 has ended at 2793, I believe, tracing a huge ending diagonal as W-C of a FLAT.
    @ What does this mean? Well, a leading diagonal is a VERY negative omen, which will be followed by an EXTENDED (261% or 423%) W-(3), to at least 2650. Also, the equally bearish ending diagonal from 2553 to 2793 (72 calendar days) will NORMALLY be totally retraced in a crash leg with 1/3 to 1/2 of the time span that it formed, i.e., 24 to 36 calendar days.
    @ Buckle your seat belt — China’s “comprehensive retaliate measures” will be known to the world in a week or two [NK, Iran, RMB devalue, etc.]. I can’t fathom the discrepancy that the 2nd largest economy is almost entering a bear market while the largest economy hitting all time highs. Someone has to give. Hope this help. best,

    • Anne Day says:

      I like your predictions because they have time frames attached.
      This means that I can actually plan a way to act if I believe their happening
      in reality.

      >>Someone has to give…

      Maybe China is just a paper tiger right now?
      And Trump sees the point crystal clear. The housing bubble is China is so HUGE, and Trump knows it by his trade. China is so afraid of bursting of this bubble!!!

      • The main issues with China is that those people in charge in the govt have lots of personal assets in the US. That render them difficult to retaliate much.

        Common sense would have China targeting INTC / MSFT / AAPL using environmental ordinances as a cover-up to disrupt their supply chain. Instead of hammering at what hurt the most, they chose to go for Soy Beans and other inconsequential goods.

        That tells me they in no way can win any trade war.

        • Anne Day says:

          Very convincing. To me, they are playing according to Trump’s script. Is that smart?

        • xuwu992000 says:

          From the very beginning of Trump’s presidency, the Chinese deciders & their advisers [H]UGELY mis-read Trump and under-estimated his “walk the talk”-type of nontraditional political maneuver. The trade-war is not the first mis-judgement, in fact. North Korea is, which is much more serious to China than the trade dispute. Now, after the 400 Billion threat, the whole echelon suddenly wakes up from the rosy pipe dream and Trump’s “best friend” easy rhetoric. Thus the dilemma: either fold and yield to Trump’s pressure and lose its legitimacy in the eyes of Chinese masses, or fight back hard and cause severe economic pain nonetheless strengthening its grip of power. I bet CCP leader will not hesitate a moment to choose the latter. Kim is in Beijing now–to me, this is the prelude to a major realignment. Short AAPL, BA, CAT, if you haven’t. Also, 67% of Chinese exports to U.S. are manufactured goods for American brands; the escalated trade dispute is a lose-lose situation for sure, and the real challenge for both nations is the pain tolerance level.

          • fotis2 says:

            ”WNU Editor: These are the numbers ….

            …. China imported $129.89 billion of U.S. goods last year, compared with U.S. purchases of $505.47 billion of Chinese products, according to U.S. data. The figures differ from those provided by Chinese customs, which showed China imported $153.9 billion of U.S. goods and the U.S. purchased $429.8 billion of Chinese products.”

            China is a communist one party state as such they couldn’t care less what the masses think of them since they have much more to loose I’m convinced they go for for option A

          • E says:

            I know BA chart looks bad but are there other fundamental reasons to short it? I know for fact CAT has been overvalued for years and has some fundamental weakness. I would short that.

    • schizo1688 says:

      thanks xuwu.

    • aahmichael says:

      China doesn’t have to limit themselves to the tit-for-tat tariff game. They could go nuclear.
      https://www.politico.com/story/2018/06/20/china-trade-tariff-trump-635413

  38. kingfrogcash says:

    AAPL is a DOW stock. Nothing more to say. It’s going up. The DOW will go with it.

  39. kjb0 says:

    Thanks Tony…….

  40. phil1247 says:

    the person banging the table that the market has to go down
    should get a present soon

    it has nothing to do with any NEWS

    NQ looks to need one more pop to finish up 5 waves up
    then a 200 to 250 point drop is expected
    back down to around 7100

    should set up another buy in that region
    probably just about when the word ” crash ” is being touted

    ideally tomorrow ………… we pop the top before we flop

    • Anne Day says:

      This is big!
      Any time frame for this to happen?
      Sounds like I could buy a lot of puts on QQQ.

      • phil1247 says:

        lol…………
        it hasnt happened yet
        tomorrow lets see if we get a pop and flop

        • pooch77 says:

          And you just showed us the chart on sqqq now your turning bearish ????

          • phil1247 says:

            a 200 point ndx drop is expected under my bullish scenario
            i think its a wave 3 of 5 top here
            wave 4 goes down to 7100
            then new highs

            but what if my count is wrong? ( i know….impossible….. lol)
            and its 5 of 5 now ?
            i dont trade based on EW
            only DH
            but it helps to have an idea of possible paths

            • Anne Day says:

              You impressed me with your call of exit at 7329 (NQ) today. So I have to follow your call at least one more time 🙂

            • Anne Day says:

              Please excuse my newbie’s ignorance. What does ‘DH’ refer to?

              • randomacts4 says:

                Anne, did you ever get a response back from Phil on DH? I’ve asked before as well and, as a newbie like yourself, would like to know. Can you help?

              • Anne Day says:

                It may be some kind of gap trading stuff. If you search for gap trading, you should be able to find out more.

              • randomacts4 says:

                Thank you. My hunch is that he’s trying to protect his “system” and doesn’t wish to share the details with anyone wanting to learn.

              • syedsma says:

                DH —> David H.

                Eminiaddict.com

        • Anne Day says:

          🙂

          I will be waiting for your timely yell of “crash”.

          My tentative plan is 100 puts of QQQ @ 175. Right now, this is about $2000, but it should be cheaper after a pop.

    • stcoleridge says:

      On board.

  41. Page says:

    Thanks Tony.

  42. phil1247 says:

    thanks Tony
    keep on truckin’

  43. Lee X says:

    Thx Tony

  44. vivelaamo says:

    Thanks Tony.

    Turn off your charts and tune in to the pope. That’s how the big money is made.

  45. 123 abc says:

    Tony, thank you for the update, hope health is improving.

    Q: Assuming the pullback to 2743 is Minute-iii→Micro-2 wave, why is it important that the high of Minute-i at 2742 is not overlapped? Unless, of course you are suggesting the pullback to 2743 is Minute-iv wave?

    • ABC, a couple thoughts. While Minute 1 can be counted as a leading diagonal, it lacks the appropriate form one would expect from either a leading or contracting diagonal … the minute e throws it out of proportion. IMO the Int iv triangle count you abandoned several weeks ago will, in time, play out as correct. Agree with Minute i and ii labels but count your micro 1 as nano iii, with nano iv just concluding with an ending expanding diagonal … today’s action and futures point towards nano v under way … or if one degree higher we’re in minute v. Good luck, and as always, appreciate your insight and contribution to this space.

      • 123 abc says:

        Great feedback, much appreciated.

        I see the rally from 2627 to 2791 as one completed wave, so the current pullback I see as a wave-2 of some degree. The DOW has already overlapped the equivalent waves Tony has highlighted, so its looking corrective. Thinking about the following alternative bullish count….

        • quickrick38 says:

          I was thinking the same thing -but can’t put a probability on it.

        • aahmichael says:

          Counting the 4/2 – 6/13 rally as a LD doesn’t work because waves ii & iv are required to be zig-zags in a LD. In this case, wave iv was an expanded flat. The 2/9 – 6/13 rally is still a valid wxy, though.

  46. This is NOT a healthy correction. in fact it’s so shallow but lasting 5 days, the longest in a long time.
    3 very different indices. Q’s on fire, DOW dead, SP500 in the middle. If my scenario is to hold up there should not be a single close in the next 3 that is positive, the drops should get exponentially steeper. The final low on Monday or Tuesday should be lower than 258 prior low.

    Right HERE! Catalyst should be double down against EU retaliation. If tomorrow is a bust for me I will throw the white flag and surrender.

    • stan911 says:

      I agree if we are to go down it had to start tomorrow otherwise the candle pattern on the weekly Dow could be forming a 2 step method where the low could be in for the week and next week we get a failed test of the spx high high and the week finishes at or near to high or a reversal. Few have mentioned 22-25 at a top so either Friday or Tuesday

    • tommyboys says:

      This sideways consolidation is perfectly normal. What we see is directly related to a stronger dollar. International comoanies in the Dow are pulling back a bit while donestic companies in the Naz & RUT are picking uo the slack as a stronger dollar will not affect them the same. Small banks in the RUT bern doing stellar for this same reason. Meanwhile Biotech broke out to new highs and the A/D made a new ATH. This is not bearish action. Remove your bias-shades or continue the suffering…😎

      • aahmichael says:

        The overlapped waves in the Dow are not perfectly normal and invalidate the upward impulse count.

        • tommyboys says:

          What’s abnormal about a falling DJI?

          • aahmichael says:

            As I said, because of the overlapped waves, the upward impulse count has been invalidated.

            • mcgcapital says:

              How often do you manage to get all of this indices aligned in an upward impulse count? There always seems to be something lagging somewhere, even during the up legs. I agree this market looks more like it wants to puke than break to new highs, that weekly SPX just looks like we used a lot of energy to make it back to the top of the trading range. Bulls are mistaking sector rotation into the winners (tech) as strength when it’s narrowing leadership. As I said yesterday, that A/D line can’t mean much as there’s no weight given to the size of the up and down days. I know it diverged the last two bear markets, but it also diverged in 2015 and that didn’t work. Each market environment is different… price is showing it’s hard to break out.

              • aahmichael says:

                Tops are a process, and things get ragged at tops. Go back to the 09 bottom, and you’ll see all the indices were in sync for many years. Even when RUT and NAZ go their own way, DOW and SPX are almost always in sync, although in 2000, the Dow topped in Jan, while SPX topped in March.

  47. tradeanimal says:

    Glad to see you back Tony. Wish you a solid recovery!

Comments are closed.