Wednesday update

SHORT TERM: higher open, DOW +79

For the first three days of the week Asian markets have been marginally higher, and European markets up about 1%. The SPX opened slightly higher on Monday, dipped to 2789 by Tuesday morning, then hit an new uptrend high at 2817 today. Since the beginning of July this uptrend continues to make steady upside progress.

The SPX is now only 2% from its all-time high, which would be the minimum requirement to complete Int. v, Major 1, and the bull market. The NDX/NAZ have already made new all-time highs repeatedly during this uptrend. The other three indices we are watching: the DOW, the NYSE and the DJ World index, are also in the 5th wave up of their bull market. However, these three indices are 6% from their all-time highs: 6%! Cannot see them rising 6%, which they should do, without the SPX participating. If we add 6% to 2817 we get SPX 3000.

Short term support is at the 2798 and 2780 pivots, with resistance at the 2835 and 2858 pivots. Short term momentum ended the day overbought. 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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268 Responses to Wednesday update

  1. waterstim says:

    Exactly what the libs on this site do…..the same as their daddy: Scumbucket Barry
    http://dailycaller.com/2018/07/19/obama-house-rich/

    • stan911 says:

      Fotis yours thoughts on euro

    • torehund says:

      Every service is hollowed out, and protracted in order to wash out more pennies out of a simple diagnosis. They sell you a lot and give nothing back, thats how it was in Soviet union. Lets face it production went to the far east and we have not a whole lot left so why not stretch it to the limit with health bureaucracy….Trump attempts to reverse it but cycles are stubborn, the west still floats so the currency doesnt give any advantage in bringing production back yet. The west needs a crisis in confidence to make the currency low enough to even out the playfield and politicians seem to hasten the progress. We need a crisis🤔

  2. torehund says:

    What to say love you all, happy weekend😆😆😆

  3. waterstim says:

    Amazing. How can you talk without a brain?

  4. fotis2 says:

    Mcg thoughts on the new margin rates to be applied from 1st August?
    Current 30 july

    Initial Initial Maintenance

    Margin Margin Margin
    FX (Majors) 1.5% 3.33% 1.66%
    FX (Minors 2.0% 5.0% 2.5%
    Index (Majors) 2.5% 5.0% 2.5%
    Index (Minors) 3.0% 10.0% 5.0%
    Gold 3.0% 5.0% 2.5% 2.5%
    Commodity 2.0% 10.0% 5.0%
    Equity 10.0% 20.0% 10.0%

    Cryptos 50% Think that one will be a dead duck

    • fotis2 says:

      1st % is current margin rate 2nd New Margin 3rd Maintenance Margin

    • mcgcapital says:

      Well firstly think that it’s not something the government/regulators/EU should be getting involved with, people should be trusted to do what they want with their own money in terms of leverage.

      The brokers should offer whatever margin they think is necessary to protect themselves against the market moving, and that’s substantially less than what’s being implemented. In the U.K. it’s standard for the margin on major indices to be 0.5%, so it’s going to be a 10 fold increase next week when it goes to 5%.

      In terms of impact on trading, it won’t affect me much day to day. If I’m just doing FTSE, I’m going to have to have around 400 points of margin in the account (5% x 7700) and given I wouldn’t risk more than 2% of my account (usually much less) and I’m using 10 point stops, I’d have to have that much trading capital anyway. However, currently you’d be able to withdraw the excess to a bank account and earn some paltry interest on it.

      So basically it will stop people from risking more than 2% of trading capital at a time, which doesn’t seem unreasonable. However, if you wanted to trade multiple asset classes simultaneously it kind of kills that off as each is margined independently so you wouldn’t be able to do it.

      It’s also a pain if you’re in a position where you’re running a winner and trailing the stop, and want to add a second or third position. In that scenario your risk would be controlled, but the rules will stop you adding so cut short the upside potential.

      I think overall, if you have bad trading habits you’ll still go broke but just more slowly, and if you have good trading habits it takes something away from the upside potential.

      It’s a pain, but everyone has already flagged these problems with it and they’ve gone ahead with it anyway, so guess everyone will have to adapt to it. Tells you something about the EU really when they don’t listen to what the majority of stakeholders think before making decisions.

  5. Hi,Thanks Tony
    By TA the wedge target on the DOW could be considered reached
    Let’s see if this time 24,9k work as support
    all waves inside the wedge looks corrective for me,mainly the first one,and excepting the second one
    so,if it is an impulsing wave my count would be as indicated

    https://invst.ly/81k92

  6. vivelaamo says:

    aah are you still short for the weekend or closed out?

  7. STEPHEN BARTLETT says:

    I like Glenn Neelys count. Triangle off the high. abc rally as wave x and now a down, b up and then c down to 2600 and something from this area up to 2838.

    • fionamargaret says:

      Stephen it is really nice to see you back.
      Here is Nate’s chart…you know I don’t read charts…is he suggesting an ending contracting diagonal…if this is complete nonsense, you can say (nicely)…and also say what you think he is saying…

      • fionamargaret says:

        …or anyone else….

        • aahmichael says:

          The person who made this chart is saying that the bull market from March 2009 to January 2018 is over, and that the initial decline to the 2/9 low was an impulse wave 1, and everything else since then has been a wave 2. This is an extremely bearish wave count. In fact, it’s as bearish as you can get, and projects a violent move back down to 1800 at a minimum.

          • fionamargaret says:

            Thank you Michael, and for yesterday. Sparrow came on the site initially to do exactly what you did. Chivalry is alive and well.
            Now about the chart, is this something you would entertain?
            The positive spin if I am just going to intellectualize, is currencies in EM collapsing, and flight to the perceived safety of the US stock market and long bonds. (I never do this really…I just visualize the pattern that the price has taken and where we are going…like TVIX could only go higher today…..x

            • aahmichael says:

              I don’t agree with the labels on the chart, but that doesn’t mean that the market can’t do another 10% decline (or more) from present levels. On the other hand, it can also go to new highs from here. So, I’m afraid I’m not much help.

          • fbqueen3 says:

            We had such an exhaustive rally ending in Jan. such that it’s conceivable that our top was reached for this cycle. Does wave v of iii does have to exceed Jan. high?
            Just thinking out loud.

      • STEPHEN BARTLETT says:

        Hi Fionamargaret! Thank you! Not sure what he has done there because he has this rally marked as wave 2 which doesn’t fit with a diagonal?
        I gave up counting long term impulsive waves like he/she has here years ago anyway. If a market is going straight down I want to be a seller without counting each wave. Counting waves will only try and get you out at wave 5 until you realise too late it’s only larger 1 etc. You might even buy. Its basically forcing you into top or bottom picking without you even wanting to pick a top or bottom. I find anyway. Diagonals are horrible to count and same thing. You are top or bottom picking if counting a diagonal rather than a 1-2 series or running correction in a long term trend. What’s the point. Once every 10 years you might be right that a diagonal ends a bull or bear mkt.
        If a market is going sideways and I see a recognisable pattern I work from there. Sideways corrections are much more Elliott wave friendly and more fun! Trading wave c or wave e etc offfers really low risk trading.
        So. What am I saying . Not a lot. Haha

  8. aahmichael says:

    This post is a reply to Tom Fischer. I thought I had posted it below, but I don’t see it, so I’ll post it again here:
    ————————————————————————

    Hey Tom. Always appreciate your thoughts and comments.
    1.) We don’t know if Trump is the richest President. He has never disclosed his audited financials or tax returns.
    2.) Trump has already presided over 6 major financial calamities (bankruptcies.)
    3.) Since 1/29, the trend in SPX, DJI, NYA and all global markets has been down. While there has certainly been lots of money to be made on the bounces, there has been even more money to be made on the declines. 50% of the stocks in SPX are more than 10% below their 52 week highs. 10% are more than 20% below their 52 week highs. This has occurred despite tax cuts, great employment, great earnings, and a great economy.
    4.) “Don’t fight the tape,” is a smart stock market truism, but “don’t fight the Fed,” is an even smarter stock market truism. I continue to believe that QT will be a stronger headwind than the tailwind from Trump and the economy. Those 2 opposing forces have been mostly evenly matched so far this year, but QT is only going to get stronger. Trump knows that, which is why he has now flip-flopped and took his first shot against Powell yesterday:

    “We have a very false economy. At some point the rates are going to have to change.” Candidate Trump, September 5, 2016.

    “I’m not thrilled. I don’t like all of this work that we’re putting into the economy and then I see rates going up.” President Trump, July 19, 2018.

    What Trump doesn’t understand, and what is perhaps the most interesting aspect about his remarks on rates & the Fed is that the fiscal policies pursued by his administration all but guarantee the Fed will continue to hike rates. Unfunded tax cuts will do that.

    5.) Finally, a comment about your assertion that people going short must be frustrated. Frustration is an emotion. Every successful trader/money manager I know is incredibly engaged, yet dispassionate. Many confuse this for not caring, but it simply means not being influenced by strong emotion, and so able to be rational and impartial. Emotions, when tied to trading/investing, preclude good decisions. Nevertheless, it’s hard for me to understand how even an emotional person who played the short side since 1/29 could be frustrated. The profits on the short side have been massive. You could have made your entire year in just 3 trades between 1/29 and 4/2, and taken the rest of the year off.

    • Sorry but your number 5 narrative is just plain silly. While I did make good money on those 2 dates the whole year was so confusing and Frustrating it became impossible to hold onto those gains thru the year. That’s like saying had you only invested in the 10 biggest day moves of the year you would be way ahead of the game. To capture the drops like those 2 you had to already be inclined to believe there was a cause and affect, or even a technical indicator suggesting a reversal in trend. It seems elusive now. Trade wars are here and accelerating even as the market struggles to recapture it’s old highs.

      Most traders are emotional and it becomes impossible to not let it affect you. Your astonishment over the immorality of trump is testament to this fact. If you want to be honest with yourself you would admit emotional frustration is there. Irrational market behavior of this kind ONLY occur during major reversals.

      • Anne Day says:

        Have to agree with you on this one!!!

      • aahmichael says:

        I was referring to trading the first 3 declines of the year. (I said nothing about trading 2 individual days.)

        Decline #1 was 1/26-2/9 = 340 SPX points.
        Decline #2 was 2/27-3/2 = 142 SPX points
        Decline #3 was 3/13-4/2 = 248 SPX points

        That totals 730 points. Subtract 182 points (25%) to allow for space at the tops and bottoms (since no one would ever nail the exact top and bottom ticks) = 548 points.

        SPX began the year at 2674.
        548 points on an unleveraged basis = 20.49% return.

        You could have very easily achieved this based strictly on simple technicals. I know several people who did, myself included. Add in the leverage that the futures markets allow, and the returns were insane for those who chose to use leverage. These moves were about market volatility. They had nothing to do with Trump, or tariffs, or whatever else you go off about each day. These weren’t the only declines that were great trades this year. They just happened to be the first three.

        I’ll strongly disagree with your claim that most traders are emotional and are affected by that fatal flaw. I will agree that all failed traders are emotional, and it’s because of that fatal flaw that they all fail. I know a lot of very successful traders/money managers, and not a single one of them allows their emotions to come into play.

      • mcgcapital says:

        The declines that aah mentioned were the really obvious ones in February and March. The initial decline felt like it had no bid whatsoever from about 2800 right down to 2530, so it was easy to stay short on that one. Then the ones off 2800 it was quite clear it would attempt to retest the low, so that was nearly 250 points available there. The others have come off obvious pivot areas once momentum starts to roll over, but you’ve had to pick your battles and react when it forms support and get out. You can’t just short everyday on the basis of the newsflow. If traders aren’t nimble then they’re dependent on the wider trend bailing them out… might get away with that for a while but in the end most cause significant damage to their accounts as it’s not always obvious what the wider trend is. A good test is to say to yourself, if the market does ‘x’, what do I do in response? If the answer is hold on and hope then you’re doing it wrong

    • kingfrogcash says:

      4) Goldilocks would like the rates, just right

    • Michael,

      I thought I posted already, but I don’t see it now.
      As mentioned, I have admiration for your trading.
      But I am disappointed in these political comments.
      Especially the ones that are just thin (unsupported) political talking points.
      For example:

      2.) Trump has already presided over 6 major financial calamities (bankruptcies.)

      I assume that’s a reference to Atlantic City casino bankruptcies.
      The problem with that assertion is that nearly all the Hotel and Gaming companies that invested early in the Atlantic City operations went bankrupt. Trump was just early in the process, realized earlier than most others, the business environment was not working.
      Trump got out early, took his losses.

      The reason that the Atlantic City Gaming never worked is because the politicians has indicated (perhaps even contractually obligated) to use some of the tax proceeds to build a new airport
      Atlantic City International Airport
      But it never happened.
      The politicians just milked it dry.
      Now it’s moving back toward an economic wasteland.

      Can you imagine Las Vegas thriving if it didn’t have a major airport?
      Would Las Vegas even exist if everybody had to drive there?

      I am just saying all of this to dissuade you and others from clogging up this MB with political rants, that have very little substance.

  9. Theodore Lerts says:

    The call for bonds going to new lows is wrong. I can almost guarantee it. Bond yields will fall, after 8/1/2018

  10. phil1247 says:

    CL is still in a series down

    currently in #3 of the series
    it came within 5 cents of breaking the series but no cigar

    until 68.96 clu8 can be broken above ………….
    keep looking down

  11. alexh110 says:

    Pretty boring sideways day; all the action was in the pre-market!
    Still feel quite confident there’ll be a much deeper sell off next week, followed by an equally strong rebound.

  12. BTW, the dollar obeyed trumps command and promptly dropped. 10 year note stuck in a very tight range. As long that the dollar remains tame and yields stay in tight range the market can ignore their impact. How they ignore a closing deadline to a constitutional crisis is another matter.

  13. emuntrader says:

    OK. Markets do not follow the President – They follow the FED. Period. Janet Yellen was very good at being somewhat dovish and at times hawkish, but never really raised rates too high to fast. Jerome Powell on the other hand has been hawkish and playing catch up on raising rates. The real question is – Has the market priced in 2 more rate hikes this year in Feb or has it not. NOTHING THE PRESIDENT DOES WILL AFFECT THE MARKET THAT MUCH. NOTHING. NOTHING. NOTHING. The president is a figure head (democrat or republican) and nothing more.

    • emuntrader says:

      sorry was looking at older post and thought Gary L was back on. lol

    • Page says:

      So what’s your point, NOTHING?

    • With all due respect, I don’t agree.

      When you say markets, I assume you mean Stock Markets.
      If that’s the case, stock markets do not follow the FED.
      Stock markets represent ownership of productive assets.
      As such, if stock markets follow anything, they follow economic growth, GDP.

      The President of the U.S.traditionally has a leadership role in Fiscal Policy.
      As such, he can certainly affect economic growth.

      • learnedmylesson25 says:

        How do you account for some of the biggest moves of the year on Fed day?I’ve seen stats that say,if you were just in the SPX for Fed day and no other days–you’d be up close to 8-10% with no other worries the rest of the year.

        • That’s a perspective of day traders, squiggles, blips in the bigger picture.
          Warren Buffet is one of the best investors ever,
          He rarely talks about FED stuff.

          If the FED controls the economy, all the people who vote to choose a President at election time based on better economy are wasting their time.

          If the FED controls the economy, we should hold elections to select the FED chairman.

  14. phil1247 says:

    gold free fall should slow down now
    most aggressive ext short has failed so a rally up to 1245
    would be no surprise

    blue horseshoe warned last week what was coming in bonds
    someone said they dont like the fed raising rates
    after all the work he has done
    getting the economy going

    he is going to be apoplectic when bonds break to new lows…
    and surge well over 3 %

    TLT to 113 then 110

    have a great weekend everybody !

  15. fionamargaret says:

    Long gold miners JNUG, NUGT ….and.short oil to 66, then lower….DWT….toes curled

  16. gary61b says:

    ES, AM trade hit target at 2805.75.. looking at 2809.75 as possible reversal level and yes 2808.5 is the 61.8 and it did hit and reversed?

  17. vivelaamo says:

    Oh great. Newbies back. Time to rally hard!!

  18. nasdaq hit 7850. see if that invokes a pull back to 2780 pivot

    • Ashley says:

      No “free $$$ Friday”??? We actually kinda have a positive divergence somehow on the short term chart…..

      • Ashley says:

        I mean it’s just sitting there on support, only thing missing is the rally =) It needs to get and stay above 2708…..

        • Ashley says:

          LOL 2808, 2708 is the ST target in bear fantasy land, 2808 is the 50 on the 30 minute chart and COMPQ/NDX is CHEAP LOL

          • fionamargaret says:

            ….2465 and 2340 are good numbers in bear fantasy ….from 2714, 2656, 2632, 2594….almost like a winnebago with a gun turret…that fantasy entered my mind when you mentioned guns back some..an interesting take to Priscilla of the desert….x

        • Im in favor of an afternoon sell of to the 2780 pivot. But what do i know. Going to play golf. Good luck to you ashley. See ya next week

  19. Tim Waters says:

    I am highly offended that aahmichael is allowed to post that the President of the Inited States is an agent of the Russians. Why is that allowed on this blog? He is the most condescending and pompous poster on this blog and is an clearly Obama sycophant.

    • amazing to me how thin skinned people are. I get this isnt a political blog and politics should not be discussed. Its highly toxic issue.
      Problem is, Since the gore Election this country has been divided right down the middle. 40% of Americans vote republican $40% vote democratic, the remaining 20% determine the election. I get there are issues that people are passionate about and there is a place and time to discuss. Just not here. Maybe one day we can all play nice and share our toys in the sand box, but im guessing its not today. Just realize not everyone agrees with what you do. Thats what makes America great and leave it at that.
      Play nice everyone

    • One thing I would never start a post with is “i am highly offended” 🙂 Please don’t stir up trouble, we are trying to get the class to behave here….

    • Page says:

      Truth hurts.

    • Anybody who is trying to short this bull market is very frustrated. I can understand that.
      aahMichael is a very talented and skilled trader. He says he is profitable on the short side of the SPX. I believe him.

      What I don’t understand is why someone would try that (shorting the SPX), when we have as President of the United States, the richest man since George Washington.
      To think that Pres. Trump will preside over large financial calamities is to think of fantasies, which is not the stuff of what good investing is.

      Just this morning, Pres. Trump is talking about all the many $Billions returning to the U.S. because of his changes in tax policy.
      Trump did that, intentionally.
      And the stock market goes up.
      This is one way he is measuring his success as POTUS.

      Trump is one very powerful guy right now.
      Don’t fight the tape.
      This is not so much as a political rant –
      But more of a public service announcement.
      ***
      Breadth on $NDX expanding quickly.
      Same as $SPX, but not as quickly.

  20. The SPX is really still not acting impulsively. I wonder if we could still be in ED of int 4 with an overshoot of upper trendline.

  21. torehund says:

    ..not only for the remaining bugs😅

  22. emuntrader says:

    Newbie this is for you.

    Also, we had a completed TD 9 count happen in the $INDU under a TD resistance point which is bearish.

  23. Well, futures reversed quickly to red

  24. stockop says:

    starting to feel skeptical at these levels. still see some bullish setups, but the picture is starting to get murky. feels like no market is in complete sync (besides rut and ndx). I am seeing what looks like fifth waves in multiple indices finishing up soon. hopefully there will be a clear signal when to short. maybe gartman going long? looking to sell into any real strength. even the thought of going short is giving me PTSD. hopefully thats a good sign…

  25. jobjas says:

    Where is US real estate heading ….. ?

  26. emuntrader says:

    Phil, are you looking at in any levels in the $SPX?

    • phil1247 says:

      too busy with new computer

      maybe next week

    • asaraniti says:

      Emun… futures were down around 11 points in the overnight session. At that point if you look at yesterday’s high to last nights low, the futures had a counter trend trade to a 50% short to the tick, defended that level and began to sell off. Futures were down 6.5 points as I write this post. As long as the corresponding 61.8 short isn’t broken the profit target of this set up is 2787.

      AT times yesterday, /ES and SPX were trading at roughly the same price. Caution…. if /ES (SPX) trades to this profit target, it it close to a 23%
      retrace. That is my minimum level for a wave 4 that abc123. Doesn’t mean that we can’t go lower just saying I am watching how SPX reacts to this level.

      • asaraniti says:

        Should read as the wave 4 abc123 is using in his EW analysis

        • gary61b says:

          asa, I have noticed setups have not been playing out to the Target or retracing beyond 61.8.. setup last night is to the tick… but the target is in the other direction from price direction at the moment..DH methods in a correction does not have a high participation.. this is when you hear the ES is not technical, instead of saying my tool does not work all the time and a trader needs more tools for validation. possible pb to 2798/96.75 to T=2805.75 .. wave A to 2793 now B wave is in progress to 2806?

          • asaraniti says:

            Hi Gary
            I agree trading recently has not been “highly” predictable using DH algorithm. However, DH looks for other technical levels that algorithms are attaching themselves to. That’s why I like following DH, your posts as well as Phil’s.

            My post earlier was just the set up I saw in a snapshot in time.

          • chrisk44342 says:

            I feel part of this is just natural profit taking. I personally take some profit at the prior bottom or top, and i expect algos have been programmed to do the same thing. I also have different expectations on the day and time. On a friday, I don’t anticipate the market aggressively taking out that prior low or high, nor do i expect it in the overnight sessions.

            • Chrisk Didn’t want to mention this again in this board but in addition to your comments, there were a few news flashes that caused marker dislocations in GC, currencies and equity futures. Trump said he didn’t like the FOMC raising rates, China devalued their currency several times in July (China version of retaliation. Trump said on CNBC interview that he wants to raise additional tariffs against China and then last night after the close, CNBC released a clip with Trump suggesting 500 billion dollar worth of tariffs are on the table to reduce our trade deficit with China. These statements momentarily spooked the markets with various 50% and 61.8% moves being violated on both sides of the trade.. This reply also partially address gary’s questions as well.answer

              • gary61b says:

                asa, Momentum and volume have a significant impact on market movement, the lighter the volume the more price wonders from levels of technical nature. The fibs are a good tool, participation volume is a good measure and accurate price volume is a much better tool.
                When you combine all that with a accurate wave count you even have a slight bias :). I learned all I could from DH, then I had to leave..A tin foil hat is required.. lol.

      • emuntrader says:

        Thanks asa, I understand what your saying but not familiar with the strategy. do you have any literature you recommend?

        • emun…
          My suggestion for you at the very least is to sign up for a 1 week trial for DH’s (David Halsey) program (eminiaddict.com). It costs 1 penny for a 1 week trial. Once you are a member you have access to all types of videos on day trading. It would be a tremendous leaning opportunity for you and many others on this board. He also has a book entilted Trading the Measured Move. BTW, once a member, you have access to morning and evening set ups as well as LIVE TRADING OF FUTURES WITH COMMENTRAY (9:15 AM EST to 4:15 PM EST).

          Good luck

  27. emuntrader says:

    EW counts both bullish and uber bullish counts given here.

    • NEWBIE says:

      No bears left just like in February and well you know what happened next.

      • emuntrader says:

        i was never a bear. And there are a ton of bears still out there – all revising there counts the higher we go. i guess we could all be bears until the 1.618 ratio of wave A happens. which would still put us at 3000+.

  28. emuntrader says:

    Alot going on in this chart. Resistance @ 2822-2828 for a 5-0 and crab harmonic pattern respectively. if we push through here 2854 comes quickly.

  29. J.Wenger says:

    Should we make hats for S&P 3,000? 😉

  30. torehund says:

    https://www.armstrongeconomics.com/international-news/turkey/turkey-the-poster-child-of-emerging-market-crisis/

    Turkey getting notatbly more toast. Westernized to increase bureaucracy then reverted and slimmed to little too late. How will this impending disaster be confined ?

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