Wednesday update

SHORT TERM: lower open then rally, DOW +172

For the past three days the Asian markets have gained 0.3%, and the European markets have been mixed. The US market traded down to SPX 2795 on Monday, rallied to SPX 2830 before reversing down to 2811 on Tuesday, then rallied to SPX 2848 on Wednesday. A strong week thus far.

We are still seeing three waves up from the SPX 2692 low in June: 2743-2699-2848. Quite a strong third wave now. Certainly looks like this market is impulsing. Short term support is now at the 2835 and 2798 pivots, with resistance at the 2858 and 2884 pivots. Short term momentum ended the day extremely overbought. Best to your trading!

MEDIUM TERM: uptrend

LONG TERM: uptrend


About tony caldaro

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244 Responses to Wednesday update

  1. vivelaamo says:

    Doesn’t matter if I’ve been wrong for a year and a half and I’ve lost all my money. I was right in Feb 2016 when everybody else was wrong.

    It’s all that matters.

    • jobjas says:

      this is not a competition – all that matters is if one learned from ones mistakes (in real time and even with real money) & improved ones technique of tracking waves (or any TA ) to have a better success rate and a larger trading account .
      As for EW users the principle is universal , a successful method to track the waves (in any time frame & for any instrument) is what each one has to develop and improve upon .
      It is better to be wrong and learn than to be merely lucky and continue to remain dumb.

  2. torehund says:

    What a bleak day, one to forget.
    Wishing Tony and crew a happy weekend🔝

    • Anne Day says:

      On the bright side, this is the kind of day when one could try to buy some
      (or short some like SDOW). I myself prefer to sell some puts at the end of
      a day like this one. Hate to miss an opportunity as such.

  3. Hi,thanks Tony
    Dollar index appears to be in an AT
    DOW and W5000 have divergence on the daily chart

  4. fxaprendiz says:

    SPX update:
    Most in here must think I’m glad about today’s pullback. Well I’m just glad that I hedged my tactical long on Wednesday, but I’m cautious about that day’s high being the end of this up move from 2692 (2690.25 in my charting software).

    SPX already filled the yellow rectangle area outlined 2 weeks ago, and then went on and overshot above it. Here’s the thing with overshoots of areas of resistance… it means SPX might go on and test the next area/s of Fib resistance (orange and red rectangles) after a brief breather back into the yellow rectangle. That, and the fact that SPX touching the 2856-2867ish Fib lines would make for a better double top, have me sitting on my hands for now.
    On the other hand, a touch of 2802 would have me thinking 2846 was the final high, and a break of 2790 would confirm it.
    EW wise, we can say that there’s already 5 waves up from the 2692 low, with wave 4 low at 2790. I’m actually counting 7 waves up in my weird own EW system, which is enough to end a progression series, but sometimes, especially when wave 1 is as small in time and length as this one, wave 5 subdivides into 3 subwaves just like wave 3 does, to make a progression series of 9 subwaves. So I’m not ruling out this pullback from 2846 being only wave b:5, in which case there’s one last, minimal new high to come next week. A break of 2790 first though, would signal wave 5 didn’t subdivide and down we go already.

    So, based on this analysis, I’ll wait a bit longer for confirmation of either scenario. Planning on going short in any case, either on the test of the orange-red rectangles in the 2856-2867, or on a break of 2790 and lower high afterwards.

  5. jobjas says:

    stubbornness is difficult to cure . Your eyes see what your mind (brain) wants to see !
    Hope the “traditional” bears won’t come up with another bear pattern OR raise their stops yet again – when the market continues the uptrend tomorrow .

  6. learnedmylesson25 says:

    Msny -divs on the dollar,and today a fresh +div on GDX.But its embedded,so to kick the +div in we have the question:Chicken or the egg.Does the embedded stochastic get taken out,enabling the +div to work or does the +div work,taking out the embedded?Or does it just keep selling?All it needs is a fuse to be lit to move up quickly,but the sellers are not allowing it.21.50 needs to get cleared somehow.I’m adding today.Something has to happen with the dollar that allows gold/GDX to rally a bit.Good luck all.

  7. Phil – thank you! Great call regarding S&P.

    • phil1247 says:

      thanks triple

      if short you dont want 2818 trading any more till 2803 target is hit

      hasta !

      • schizo1688 says:

        Thanks Phil.. but I trade SnP cash . What’s your stop on going long ?

        • phil1247 says:

          no longs advisable until 2821.4 SPX is traded above

          it just doesnt seem to work as well on cash spx as the futures

          • phil1247 says:

            ps…see that dotted yellow line at 2848?

            that was a WEEKLY target hit…..
            also its the weekly upper bollinger band
            so a pullback was no surprise
            when we did not go thru the target

            why people get apoplectic about it is a mystery
            the bull market is not over yet
            despite BIASED calls to the contrary

            • I remember those bias calls in late 2015/early 2016. Seems the market went biased also. When major directional changes occur you can bet it gest stretched on the long end and short end. This sucker is expecting another 2 trillion giveaway and zero taxes on wealthy along with zero restrictions. Lets push the GDP up again with another announcement for trade wars. Smoke and Mirrors. How was trumps prior 8 quarters? You mean to tell me it took all that giveaways and fear of a trade war just to get 4 percent? No wonder most economists are calling for 2.8 for the WHOLE YEAR. Do da math. 2.2 and 4.1, that means a WHOPPING 2.5% for rest of year.

              Common sense please. Is jobs going to accelerate from here (lol). Wages (lol), Exports (lol), Investment spending (lol), less taxes (lol), less restrictions (lol). The real question is how will the expected 20 percent built in earnings growth be achieved?

              Hey PHIL, what was your thoughts in late 2015/ early 2016? Can you go back and change the archives like trump just did?

              • phil1247 says:

                dont care about the past
                dont care about months or years from now
                and certainly dont care about NEWS

                only the next few days are in my sights

          • schizo1688 says:

            Thanks Phil . So 2821 it is …

            • phil1247 says:

              but remember… break the short is part 1
              then the next pullback must hold the .618 retrace

              go look at gold for why you need both parts or you will get smacked
              gold broke ext shorts a couple of times recently but could not hold .618
              on the pullback and down it continues to go

  8. jobjas says:

    B wave tops in CL
    Next target 62

  9. Short term deep moves especially when over extended or after an exhaustion can easily be because of external news. If the news is a knee jerk reaction with no long term consequence than it remains a one time event. if however the news has longer term implications it can be the catalyst needed to cause a real reversal in trend.

    So what exactly was the EU trade deal? Like I stated before Autos will be part of tariffs. Trump when cornered likes to pick a fight. maybe today it’s Turkey, but he will attack the EU and that is consistent with his longer term pattern. he got some relief for soybeans but that will not stop him for his goal.

    Market drop, consistent with a 38.2% retrace is around 2790. Notice the US dollar is trying to sell off to relieve the pressure. Small drop so far. this pattern will be broken soon. Watch for a deep drop and the dollar continues to rise. One more attempted rally in August?

    • Here we go! This is the second day of drop. Never heard of only 2 days. Minimum THREE! Lets see how today closes. I expect a “normal” retrace from the Seven wave advance. UNLESS the weekend news is really bad. Still holding out for an August up month. Low today was 2808 so far. I expect the very long conditioned day traders to pounce on a double bottom today. Phil loves days like this. Good odds.

  10. mjtplayer says:

    A close here in the QQQ’s would print a nasty weekly shooting star candle, the next 2 hours are critical….

  11. stan911 says:

    I have resistance at 2840-46 then down to 2771-65

  12. emuntrader says:

    May have one more leg down. Chart pattern has support 2789/90. but personally looking for upside. Will probably wait til after the WE.

    • torehund says:

      IT the last upwave zig zag is a 2, it fully retraced on the day of the full blod moon, exam for the market will be next week😳

  13. E says:

    I suspect the higher degree waves have finally arrived. 2795 will be strong support, but once it breaks through there, then it’ll be down down down for some time…

  14. stcoleridge says:

    Well there’s your “30-40 point pullback.”

  15. emuntrader says:

    Closed SPY shorts. added to AMD

  16. aahmichael says:

    At the close on Wednesday, the usual suspect here was insisting that the market was in a 3rd wave, calling for SPX 3000+ and NDX 8000+, while mocking anyone who was taking the other side with pictures of a bear with his head stuck in a trash can.

    In the midst of all that nonsense, xuwu posted the following on his Twitter account at the close:

    “Uber-bullish ending, a very likely extended w-5 of W-5. Though DOW still has some up-ward move left, SPX has all the waves needed to complete its entire run from 2692. I won’t be surprised to see the 2808 gap filled by Friday, and bought some ST puts. Also, Fri. is BIG MOVE DAY”

    Let’s all give credit where credit is due. I think this call by xuwu is the best market call I’ve seen since I’ve been on this blog. Today’s current SPX low is 2808.34. Xuwu absolutely nailed it. Well done!

    • chrisk44342 says:

      You kill me man. Because someone called the end of a bull market, you are saying that a 30 point move down means he nailed it/something?

      • aahmichael says:

        He did not call the end of the bull market. He called the end of a 5 wave impulse move at the dead high from 2692, and said that 2808 would be hit today. Did anyone else here say at the close of Wednesday that the market would be trading at 2808 today? Nope. Not a single person on this blog said that. Instead we got a bunch of pictures of a bear with his head stuck in a trash can. Xuwu also said that he bought ST puts that no doubt expired today, so catching 40 SPX points with those puts in less than 36 hours resulted in monster profits.

        Lots of people post non-stop calls on this blog, most of which are dead wrong. Xuwu has also had many incorrect calls, but when he get a call correct, it’s usually a grand slam. As I said before, give credit where credit is due. He nailed it.

    • jobjas says:

      Too much excitement !
      Both OEW and many traditional EW analysts have this as wave 4 of 3 to 2780 and then to 2860 to complete wave 3

    • Ray Soho says:

      Totally agreed.

    • Aah, thanks for the comment. The Big Move Day is based on astro pattern, since today has multiple powerful aspects, and most of them are super-bearish, starting with lunar eclipse and Sun opposing Mars. Cunningly, this formation is almost a repeat of Jan. 31 & Feb.1, when it had super bloody moon, the eclipse, etc. Although I still think this will be the W-D of an ending diagonal that would set a new ATH later this year, a potential of a quick collapse (Jan 31 to Feb. 9) lurks behind the stars. My trade of SPX 2825 puts today (7/27, entry 1, exit 10.5) turns out well.

      • Correction: this ongoing retrace would be w-b of W-3 of an ongoing ending diagonal. The entire W-3 would top over 2870 next month. Then a larger W-4 zigzag correction would start.

      • aahmichael says:

        I’m still counting a double 3 up from the 4/2 low. I just don’t see how to count any kind of ED. I reshorted at ES 2848.50 late Wednesday which was based on the daily pivot, the upper weekly BB, and the upper channel trendline that connects the 4/18 and 6/13 highs, plus the massive negative divergence in the NYMO. Stop is now at 2841. Besides the lunar event tomorrow, $24B of QT comes out on Tuesday, and that has caused a sizable market decline each of the previous 6 months. So, I will continue to play it that way until the market does something different.

        • Kudos to your perfect entry point! Like I said earlier, the ED started May 3 at 2595. To be valid, the next move up can not exceed 2888. This current retrace is going to be deep, 61% most likely, to 2750 area. Today’s ending sets up another gap-and-go for Monday. I still keep some Monday-expire puts.

          • aahmichael says:

            The problem with counting a 5th wave EDT from 5/3 is that normally W-(1) of an EDT will exceed the previous W-3. However, in this case, the 6/13 high only got to 2792, which is a long way from 2872. We’ll see. Time will tell.

            • @ In addition to using the wave pattern, ratio, appearances, etc, to count waves, I rely on several indicators to identify the key turning points. Several indicators all point to that 2692 low on June 28 is a W-2 low, whether it is a W-2 of an impulsive (I saw someone counted May 14 to June 28 as a running flat W-2), or a W-2 of an EDT, I am not certain. However, one major determinant that I give it a 50% weight in my decision is a multi-decade cycle I am following. It points to a late-year multi-year top, if not a multi-decade top. To make it work timewise, I have to adjust my counting accordingly; so far so good.
              @ Also, not sure about the expanding EDT option? Since it is so close for W-3 (esp. Dow) to exceed W-1, which if it does, then makes that a potential possibility.
              @ Early next week would be a great time for some bear feast. As of now, no tangible support until 2794. QT schedule certainly makes a swift slice-through a high possibility.

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