Wednesday update

SHORT TERM: higher open, new highs, DOW +61

So far this week Asian markets have gained 1.6%, and European markets have gained 1.0%. The SPX started the week at 2875, and gapped up on Monday to reach 2898. On Tuesday it broke SPX 2900, and hit 2917 on Wednesday. All new record highs. The DOW, NYSE and DJ World index all continue to work their way higher as well. The DOW is now about 1.7% from its all-time high.

This Int. v uptrend continues unimpeded, and remains in Minute iii of Minor 3. Our short term count from Minute ii SPX 2802 remains unchanged: 2819-2806-2850-2834-2873-2917 (now). This suggests a small pullback soon, and then a push to new highs before a larger pullback. With a negative divergence of the hourly RSI, that small pullback can come at any time now. Short term support is at the 2884 and 2858 pivots, with resistance at the 2929 pivot. 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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265 Responses to Wednesday update

    • fionamargaret says:

      Tore, are you back from Peru? Do you have a publisher yet?

      If you scroll back last Weekend Update, you will find a piece of music I posted …Handel’s Ombra mai fu” sung by Maureen Forrester with a suggestion that it was a nice piece of music to reflect on Quantum Physics, Classical Physics and the Soul.
      You know I think of time in a more fluid way, which might be worth discussing at some point, but I don’t think death is the end…x

      • torehund says:

        Book is still snoozing, need to add a chapter , moderate myself a bit at certain passages. Waiting for the oomp to dive into it…No publisher yet, and back at pond paddeling in Norway.

  1. fionamargaret says:

    I posted Queen once, and one of the posters here told a story how he had met Freddie Mercury when he was a GI on leave in London…
    Here is a complete concert, beautifully filmed, and this is for everyone who thought Freddie and Queen just totally wonderful.
    Only sad things….it was not Wembley, and for Freddie it was the beginning of the end….

  2. asaraniti says:

    Minute wave iv over?… above /ES 2909 confirms it for me…

    asaraniti (@asaraniti) says:
    August 31, 2018 at 7:52 am
    From memory… DH had 50% longs at 2893 and an old set up at 2887. Interesting that the 61.8% move long is…
    1. 61.8% long on the current set up
    2. 50% long from an old set up
    3. Tony’s pivot.

  3. Should not be surprising how the U.S. markets will outperform other markets, at this point in time.
    The guy who ran for POTUS in 2016 promised he would “Make America Great Again“.
    In other words, he promised that he would do this.
    Now he is President.
    What is so surprising?
    Not a political rant. Just a reality check.
    ***
    Going much higher.
    GTLA

    • mcgcapital says:

      It’s not surprising, but it’s a problem the wider the divergence gets. And it’s not got that much to do with Trump, that’s a secondary factor.

      The US stock market isn’t the US economy, and FTSE isn’t the U.K. economy, Dax isn’t the German economy etc. Because you have to consider the regional distribution of revenues, and the currency they’re earned in. It’s true that the US market has a relatively high proportion of earnings earned domestically, but the overseas element is still a lot at 30-40%. And for the European indices, the proportion earned overseas is more like 60-70%, with much of that being dollar denominated as commodities are priced in dollars, some EM countries use hard currency, the dollar being the global reserve currency and of course US exports. So what’s surprising is that the dollar has been mostly rising since April time… and all else being equal, this increases earnings in GBP, EUR, JPY etc. So what you’d expect is that this would be a positive for non US markets. But it hasn’t been, as it’s been more than offset by the liquidity problems caused in EM from having a stronger dollar, plus the reason behind why the dollar has been rising is that growth outside the US is slowing down.

      So when it comes to making asset allocation decisions, everyone in institutional is going overweight the US vs elsewhere as 1. That’s where the momentum is; 2. That’s where the perceived domestic growth story is and most importantly, 3. The US is the most diversified and liquid equity market in the world.

      And it’s because of that you’re getting capital chasing US stocks such that momentum is extended. Now clearly this can carry on for a time, but eventually it will mean revert, and the US will underperform elsewhere. So to be bullish on the US what you want to see is some positive momentum build in overseas markets such that the divergence closes but with markets rising. Alternatively, if you don’t get a positive trend going overseas and the US continues alone, I’d say those all time highs are less sustainable. Best returns this decade for SPX (2013 and 2017) have been in good years for foreign markets.

      All I’m saying is, the more you watch the non US indices, the harder it is to build a case that the selling in them is about to miraculously stop and we start to go higher. They’ve been very choppy but are consistently struggling to make headway and then keep giving way to fresh lows. It’s just not bullish action, and I’m not sure what the narrative is on the horizon that’s going to drive some buying on the fundamentals.

      It’s not about America winning or being better than other countries or having a better economy. Because fundamentally it’s the same factors that are driving stock prices around the world: liquidity, currency movements and global GDP growth given the largest companies by market cap (and hence the biggest weights in the indices) tend to be global regardless of whether they’re listed in New York, London, Frankfurt, Tokyo etc. So there really isn’t a fundamental reason why US stocks should diverge from the rest indefinitely. It’s mainly a flight to quality that’s driving it plus some momentum chasing particularly now SPX has made new highs. And that says to me that sooner or later, selling will come in if non US markets don’t stop the bleeding. But the momentum on SPX is strong at the moment, so I’m not saying short it, but just to be on the look out for it turning if everything else is cratering. In the past, the US has often outperformed prior to corrections

      • Tom Fischer says:

        You are over thinking the whole thing.
        Trump is just unofficially ending the Marshall Plan.

      • phil1247 says:

        mcg…. you say…

        “really isn’t a fundamental reason why US stocks should diverge from the rest indefinitely”

        fundamentals dont matter
        at some point market participants will lose their confidence
        and will start to sell

        then all will proclaim ….
        see ……. fundamentals do matter

        and yes my friend … you are overthinking this stock game
        it is not rocket science
        and has nothing to do with logic or fundamentals

  4. Lee x says:

    Enjoy the holiday weekend Gary !
    Appreciate the post but fortunately or unfortunately most of us here have access to the same news you post here , some even more I’m sure.

    See ya soon

  5. I never agreed with NAFTA, and hope Trump either makes U.S. a good deal, or no deal. We can take the heat.

  6. TNDM has been my pride and joy all year long. Like lunker, sometimes a blind squirrel finds an acorn.

  7. Hey Folks! Long time, no see. This MMFI concerns me. Look how low it is at ATH’s compared to other highs. ANd looks like H&S formed since mid Feb. Happy Labor Day!
    https://www.barchart.com/stocks/quotes/$MMFI/technical-chart?plot=CANDLE&volume=total&data=DO&density=X&pricesOn=1&asPctChange=0&logscale=0&indicators=EXPMA(9)&sym=$MMFI&grid=1&height=500&studyheight=100

  8. gary61b says:

    ES, the short setup with target as shown for now.
    https://gyazo.com/9e30806fced74f0c3f3a4fe59724e7a8

    • gary61b says:

      ES,above 2909, puts this teddy bear to bed. but to keep everyone guessing a close at 2901 should do just that.

  9. mcgcapital says:

    Waterfall decline has been underway on FTSE this week and we’ve now closed well below the 200dma and 7500 bottom of the trading range. Sticking with the bear market call on FTSE, and don’t think it happens in isolation. No doubt we’ll have some more wave counts posted with a wave 2 label being lowered and a wave 3 of 3 to 9000 underway lol. Lower highs and lows have been tipping this move as the most likely outcome for months

    All about liquidity.. US is half the market and capital flows have been concentrated there. Just a matter of time before the wider downtrends in most indices take hold of the US indices too. Nothing about this rally has been impressive since April despite new highs, but will wait for a lower low under 2800 before thinking that’s what’s happening

    • phil1247 says:

      mcg
      i think you are going to be absolutley amazed
      when you see how high the ndx will soar

      the new target is 8400 but i have little doubt 10000 ndx will be seen
      before the real ” melt up ” is over
      that is where the massive speculation will be seen
      as we reach the end game

      • Wow Phil, looking at that chart, I am going to switch to NDX from SPX in this last leg up !!! Have a great weekend.

      • mcgcapital says:

        For me, we had the melt up last year. This year is literally just capital flowing into the strongest sectors/regions, but that leaves those areas of the market vulnerable. The markets are going to recouple at some point, and I think it will be the US joining the rest rather than new uptrends in everything

        • Anne Day says:

          >>The markets are going to recouple at some poin

          I would argue that the markets are going to become more and more disparate.

      • Anne Day says:

        It is simply unfair to compare FTSE with NDX.
        Allow me to borrow a phrase from Rumsfeld: FTSE is “old Europe” 🙂

        • mcgcapital says:

          It’s not just FTSE though is it, it’s everything ex US. Have to question why haven’t indices like FTSE and Dax been rallying with dollar strength when most of their revenues are dollar denominated? It’s liquidity.. when all of the money is flowing into the US segment of the global equity market, that leaves that segment vulnerable to correction if the rest of the market continues to fall. It’s amusing how people laugh of these divergences as if it’s ‘oh it’s fine, it’s because America is amazing and the rest of the world isn’t’. It’s a symptom of financial conditions in the market.. trust me, eventually all of the indices are going to realign in the same direction, whether that’s up or down. In the up corner we have a weak breakout in the US and in the down corner everything else

          • phil1247 says:

            thats not how it works

            if everything else is going down
            and ndx is soaring day after day
            everyone will concentrate there and send it to unbelievable heights

            there will be no stopping it till all shorts are bankrupted
            and the last grandma in kalamazoo has put in her last nickle

            • mcgcapital says:

              In the short term yeah.. but it’s like a rubber band which will break at some point and they will correlate again. It’s up for debate whether that’s up or down. Personally want to see sub 2800 on SPX to have lower lows to be sure, but if most markets are going down that’s not a good sign for growth/liquidity/general health of the market

  10. ultimard says:

    No drama before the holiday wknd, go for the vpoc 96

  11. lunker1 says:

    phil who liked 91?

    • phil1247 says:

      lunker liked 91 ……

      what is happening now is showing you important information
      they were front running the 38% levels before
      now they are pushing it to the limit near 618 support
      severe loss of mojo for bulls
      run outside boll band gave you momentum peak
      price peak is out there … probably at 2927
      then we will have to see how much more gas is in the tank

      have a great weekend Tony and all !

    • lunker1 says:

      Dow nested 1,2’s from August 15?
      Those 3’s will get it to ATH

  12. Someone knew something before yesterday’s White House news announcement….big boys were selling
    https://pbs.twimg.com/media/Dl7ixinUcAEKw8y?format=jpg

  13. quickrick38 says:

    Folks, this is a wave 4 from 2803. Now we all know how wave 4’s behave. Right?

  14. Hi,
    monitoring targets in the Dow triangle, reached 38.2% of full target, which is a good indication, the pullback confirmation was already made right after the break, so I do not think there will be another for now
    https://invst.ly/8h9oj
    https://invst.ly/8h9sc
    thanks

  15. fxaprendiz says:

    Update on the bearish pattern in SPX.
    Since this is a very big pattern, spanning most of this year, the Potential Reversal Zone is big as well, from 2876 to 2971. Trying to pinpoint a narrower area for point D, there are 2 candidates: either the confluence of Fib lines at 2929-32 or the 2971-72 lines.

    Actually the SPX has already met the minimum requirement for point D when it traded within the yellow rectangle for the first time last Wednesday. That’s why I’m really vigilant now and watching price action for clues about that being the point D or another high is still to come.

  16. phil1247 says:

    kvilia

    Re CL

    if you took the long this morning
    i would be exiting into spikes up to daily bollinger band

    still straight up to 75

    but there is some resistance near
    and the long weekend ahead

  17. fionamargaret says:

    2872 and we either go through or turn
    DWT…short oil to 60
    TVIX, VXX

  18. phil1247 says:

    es

    diagonal POP ! see chart from earlier

    was there NEWS?…. i dont know … lol

  19. fxaprendiz says:

    Long again SPX from 2897. Yesterday’s low tested and held. When going long becomes routine and relatively easy like this is when I get extra vigilant though, the bear might show up when you least expect it to bite you in the rear. If it doesn’t though, expecting to take profits in the 2920-30ish area, then probably reverse short. Daily cycle getting mature next week for some sort of move.

  20. Seems most are on the same page . Looking for 2890 to hold and then rally. I agree, but if it breaks, swoosh to 2873 then up.

    Good luck all and have a great 3;day weekend all

  21. jobjas says:

    SPX ready to resume uptrend

  22. quickrick38 says:


    Perhaps just a bit unusual; 3 = 1:

    • quickrick38 says:

      If waves 4 and 5 complete, that will put us at 1-2, 1-2, 1-2. After a small correction we’ll then start 3 of 3 of 3 🙂

  23. gary61b says:

    ES, short setups still in play, above 2909 resume up. https://gyazo.com/f6359af157dec7d5e98167d27af9be82

  24. Ashley says:

    Looks like it’s decision time to me, need to start going UP soon OR prepare for the downside .)

  25. Ashley says:

    Still looks viable =)

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