Wednesday update

SHORT TERM: market opens higher, DOW +159

The first three days of this week displayed Asian markets rallying 0.6%, and European markets rallying 0.7%. The SPX opened flat on Monday at 2905, then dipped to 2886 late in the day. Tuesday and Wednesday the market opened higher as the SPX hit 2912 Wednesday. While this all looks and sounds good, there is something else that is noteworthy. Some would call it rotation.

As of this writing the DOW is +1.1% for the week, the SPX +0.1%, and the NDX/NAZ -0.9%. The only index, of the major four, to exceed its August high has been the DOW. Yes the DOW still needs to make a new all-time high. It’s less than 1% away. It appears, however, the DOW is the only index trying to make new highs, and the other three are just being dragged along by the DOW. But what happens after the DOW makes new highs? Quarterly options expiration this Thursday/Friday, should be volatile. Short term support at the 2884 and 2858 pivots, with resistance at the 2929 pivot. Short term momentum displays a slight negative divergence. Best to your trading!

MEDIUM TERM: uptrend inflection point

LONG TERM: uptrend


About tony caldaro

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215 Responses to Wednesday update

  1. quickrick38 says:

    Wow! A semi-civil discourse on politics on a Friday afternoon…without a lot of incessant wacko comments. I’m impressed. Differing opinions, of course, and some strong ones. But fairly civil. If that’s as bad as it gets, then this site is coming back. I was seriously worried there for a while. Good work Tony. And, for all those who could express their opinions -without being nasty, my hats off to you.

  2. fotis2 says:

    Re:GOLD based on past year end closes think best wait for Dec-Jan for swing long

    • fionamargaret says:

      I think Scotty has gold going down to almost the same as my figures, and oil I have as going to 83, but I mentioned because of the hurricane, the numbers could be skewed…oil changed sequences. Jobjas has oil around the same (I think).
      You are doing nice work…clever stuff..x

  3. Anonymous says:

    for Trump fans “Last week, Gundlach likened debt-financed U.S. budget deficits to Miracle-Gro plant food and remarked that the benefits of the ballooning deficit, stemming from tax cuts, were not permanent. On Wednesday, Gundlach said, “The deficit is insane. A truly strong economy produces a fiscal surplus.” enough said

  4. fionamargaret says:

    I found McClellan Interesting.
    I still have GLD going to 95, though I would watch it at 104.
    I have GDX going to 10, but 13 is another number I would watch.

    Thanks and love to Tony…..and everyone xx

    Bruch, and the Mercury Prize Winners for this Year….for all the romantics. Say I am not the only one.

  5. torehund says:

    Where does gold go: Went trough long range charts of Newmont and Barrick mining companies and they have both ascended considerably from their all time lows. Then they both stalled and are currently sinking at a rapid pace. Ar they attempting to find a wave 2 bottom or are they going for a retest of their lows ? If oil continues to go up and gold stalls or decline it will create difficulties due to higher expenses. At any rate it will pay to watch for a definitive move or hope for a retest and then be there for a healthy bounce…if you are a bull. Alternatively go short right now and hope for a retest, praying its not a wave 2 bottom right here. Its never easy 🙂 Third option is to hope gold miners have carved out a wave 2 and are ready for an upturn. Maybe the wise thing to do is to just watch the development.

  6. torehund says:

    God weekend Tony and all😀

  7. fotis2 says:

    Back when it was real..

  8. Page says:

    Hope you guys bought some Pot today 😀 next week buying frenzy all over….
    SPX has seen the high, now give back time.

  9. scottycj1 says:

    ABC upward correction over for the NDX

  10. 2933 has been tested and held several times today. That needs to break to go down. Any close over that probably means we head higher next week, Still short from 2830 no go down today will have to cover for a loss.

    Have a great week end all see ya monday

  11. phil1247 says:

    straight up while the extension longs hold

    interesting that 2931 es..
    .. remember that was yesterdays steve miller target ?
    has been the cash machine anchor working like a charm
    there was a slight nick early am but retested perfectly at oval

    as such.. 2936.5 es should be ROCK solid support
    if it fails .. start looking for the exits

    have a great weekend Tony

    good luck to all … see ya!

    • Momentum indicator mentioned before 2936.25 was ceiling. breached easily intra-day. We should go higher still. Set up for an even bigger drop in October. Trump walked back his demand for unredacted FISA document. if he didn’t we would be in the throws of a dramatic drop.

      • fotis2 says:

        Low blow, Trump advantage!

        The deputy attorney general, Rod J. Rosenstein, suggested last year that he secretly record President Trump in the White House to expose the chaos consuming the administration, and he discussed recruiting cabinet members to invoke the 25th Amendment to remove Mr. Trump from office for being unfit.

        • tony caldaro says:

          He probably wrote that NYT editorial piece two weeks ago. “A high level government official called to oust Trump using the 25th Amendment.”
          Rod also appointed Mueller to run the Special Counsel.
          And has constantly refused to turn over many document to Congress.

          • H D says:

            What if he’s right about Trump?
            We have all seen with our own eyes his behaviors.
            Not related to policy, he’s simply unfit by any standard.

            • Blasphemer. Watch it buddy! You talk heresy here. Most would prefer deaf, dumb, incompetent Intel officials. hey PUTIN if you are listening…. The staggering number of highly efficient and qualified career personnel that had to leave is staggering. More staggering is the complicit nature of the GOP. Banana Republic? Is there any doubt? if you do have doubt watch the show progress before end of year.

            • tony caldaro says:

              All those officials that got fired for lying and leaking thought they were right too.
              “They want to protect the country from the likes of Trump.”
              Clinton will finally be right. After the election Trump will fire many more liars.

            • purplember says:

              the DEEP STATE is corrupt beyond belief. The only “COLLUSION” is Obama, FBI and DOJ to GET trump.

              if we had REAL media in this country, this would all be over long ago. NBC/ ABC/ CBS is no better than Russia news – all propaganda. they don’t want facts

              • H D says:

                Nobody is talking about that though. All you ever offer is media talking points.

                The topic is Trumps behavior. Nothing else.

              • fionamargaret says:

                Personal whims replaced the rule of law and how does one recapture respect….US policy was the gold standard for the world’s trading system.

              • tony caldaro says:

                The growth secular cycle began in 2016.
                During such a cycle institutions are torn down and rebuilt, the GDP soars, the middle class expands, interest rates and inflation remain low, and everyone benefits.

  12. lml25 says:

    The two prices to watch for GDX are 18.58(20d ema) and 19.29.20d ema on the low side should not be breached.If it doesn’t–should rise to the upper bb at 19.29.Today,as Ira said,gold hit its head on its own upper bb.Dollar needs to continue down from its H&S breakdown–price target around 92.20.GL all.

  13. purplember says:

    If Tony’s count is right (which i think it is) then minor 5 max is 2979 as 5 can’t be larger than 3.
    my personal count to complete minor 5
    micro wv1 2908
    wv 2 2886
    wv3 2940 done ?
    wv 4 2920 ish
    wv 5 2960

  14. scottycj1 says:

    I’m thinking the Naz indexes get the worst of the pullback here….SPX & DJI likely hold up better

  15. Observation…in addition to Tony C. “parameters” for a top….. IMHO, before a top in the index’s are printed, we often see bull market headlines in a magazine…i.e. Time, energy stocks trade very very bullishly and a small high flying industry has a parabolic move and crashes. Bitcoin/cryptocurriences could be an example on the January decline in the equity index’s…could marijuana stocks, Tilray (TLRY or MJ), be taking down the index’s this time?…not there yet but we may be getting closer. As always, we’ll see.

  16. torehund says:

    2 monsters, oil to the upside and real estate to the downside ?

  17. mcgcapital says:

    FTSE could stall out around here 7490-500 for now, so cashed profits. Quite strong momentum though so pullbacks probably for buying. See how it handles the 7500-7600 area for clues on longer term trend

    • micky says:

      good area, I did not realize you bought again after your 60 point exit.

      • mcgcapital says:

        Well didn’t post my entries but posted bullish above 7320 on Wednesday night and going to 7500 first thing this morning. I average 4 entries a day so can’t post them all or I’d be taking over the blog. Still all looks quite bullish here at 7500 as RSI is hugging overbought.. would expect it to have some difficulty with 7540-60 area assuming it goes through 7500. Through 7600 and my bear market call was probably off

  18. emuntrader says:

    I have a couple of Old fibs coming at 43/47. I do have expanding triangle fibs coming in at 43,44,46. Above that I would start looking for much higher results as I would count this as a wave iii extension. I do prefer the ending expanding triangle scenario.

  19. willi2001 says:

    Should have no sizeable pullback as long as high made in overnight session. Waiting for high in RTH session.

  20. phil1247 says:


    re bonds

    zb aggressive ext short was nicked
    so far a long from lows is holding
    these are the hints that shorts are getting more risky for a squeeze

  21. phil1247 says:

    ES straight up above 2936.5

    falling below 2928.5
    which is the larger extension long support
    is a big red flag for bulls

  22. I should have known better today is free money Friday and when would gap up. Sp About ready to take out Tony’s 2929 piviot. Which means 2955 is possible. No volatility yet, just straight up. The only big bear count is an ending diagonal that could go to 2975, and if Tony’s count is right max is like 2977. So possible 45 points to the upside before a decline.

    Good luck all and have a great weekend

  23. micky says:

    since FTSE hit daily 2nd support 2 Fridays ago we got a very nice bounce so far. How far this c wave will go I don’t know. It entered the hourly 2nd resistance area so I’m expecting a retrace today.

  24. mcgcapital says:

    FTSE impulsing higher for the first time since May, higher highs and lows and a strong bid under it with genuine fear of missing out. Same with Dax. The story is still all about global recoupling… I had thought this might come on the downside but looks like it will be on the upside. So expecting US markets to underperform as the rest rebound from big sell offs. The bigger picture pattern could still potentially be bearish, but no market is too high to start buying or too low to start selling.. momentum is up now, so will wait for that to change before making an assessment on where we’re at. Can see 7500s on FTSE now before we hit an inflection point

  25. fxaprendiz says:

    I know I said I wouldn’t post any more charts, but this one is just too important not to share.
    Since the August 29th high in the SPX I have entertained the idea of a final bearish harmonic pattern showing up in the charts to give a warning signal for a reversal down. That was the reasoning for me expecting new highs in the SPX. Well, yesterday it gave me the answer. Only it wasn’t the pattern I was expecting. I thought the bounce would stall in the 2920-2930ish area but it was too strong to stop there. The only pattern left at these highs is this one:

    A bat/crab hybrid, which in my experience is a deadly combination. It usually causes at least a retracement to the point C, and more often than not to the point A (the lowest point in the pattern) and beyond it.
    Now, it’s not complete yet. For it to be fully formed it has to touch the Potential Reversal Zone which is very tight in this pattern, in this case the 2944-2949 area. Once done it should cause some sort of reaction, at least a sideways move, before rolling over.
    Warning, if the SPX keeps going much higher than 2949 then the pattern will probably fail.
    This pattern is particularly important to me because it will finish forming very close to my limit of 2970ish for keeping my medium term bearish stance. So basically this is it. If it works then down we go for several months. If it fails or just causes a temporary setback for a few days and new highs are made later, then I’ll switch to a bullish mindset for the medium term.
    I’ll probably won’t post when the pattern is completed in real time, as I’ll be busy trying to position myself short. That’s why this early warning. The second wing is very steep so if some momentum is left it may be done as soon as today.
    Good luck to both bulls and bears.

    • CampFreddie says:

      FXA, I hate to say this, but you have been fighting this clear uptrend for months and steadfastly finding a new “this is top” target as multiple ones come to pass. have you considered you may have a Bias ?

      • fxaprendiz says:

        Yes, Freddie I do, but then again most everybody does have a bias when it comes to trading. The difference would be in the reasons each one has said bias. Now, it’s not like I’m just stubbornly being bearish without thinking about it. To me the first few months after the April low were too sloppy, overlapping and corrective looking to qualify as part of an impulsive wave 5. Usually when you really bottom the later move up is sharp and takes no prisoners, forcing traders to chase price. Only the last couple months has SPX started to behave impulsively from 2692, and it may well be a wave C up which is usually this sharp. Furthermore, we are still in the SPX within the usual 3% above previous high (January 29th) that can make this a wave B within an Expanded Flat. Everything still within reasonable limits and still possible for a bearish resolution.
        Now, at some point one has to consider the alternative, and for me that comes over 2970. Break that and I’ll switch to the bullish camp just fine.
        Besides, it’s not like I have been just playing my bearish bias. I have taken now as many long trades as short ones, and most have been successful on both sides. Having a bias doesn’t have to preclude one of playing both sides when things are clear enough to choose one for a swing.
        At the end of the day, as long as your account keeps growing, bias is just a reference point 😉

        • mcgcapital says:

          I agree with all of this, you’ve traded SPX really well the last few months despite the bigger picture view being completely wrong so far… proves that good trading is reactionary and not view based.

          This has been an extremely odd year on the back of last year’s extremely low volatility. At the end of the day, buy and sell orders move the market, and it’s not always easy to know how or when sentiment will change. If you look at the April-June period, the narrative from institutional was to underweight the US over trade wars, and that period off the March lows was very strong for ex US stocks. Then the narrative flipped to ‘the US will win the trade war’ and then everyone was overweight US and the rest started struggling. As I’ve said before, there’s no real fundamental reason why for example a US company will do much better than a European or Asian one just because there are some tariffs… most earnings for large caps are split globally and driven by the same factors (e.g global growth). So what it comes down to is liquidity and sentiment. There clearly hasn’t been as much liquidity as in recent years so asset allocators have had to prioritise rather than indiscriminately buy which is why we’ve seen such divergences develop as people follow momentum.. don’t think it’s a fundamentals story. I think that explains why it was such a choppy start to the rally.

          This week is the first time in ages everything has rallied strongly together, and it’s a positive sign. But I think liquidity is going to remain a problem long term whilever the fed is tightening and QT is ongoing. We can only have visibility on what the next move is likely to be, and we’re trending up… but when you have liquidity being withdrawn it doesn’t take much to turn it back around. Plenty of catalysts for markets to go down are around at the moment, so sentiment could easily shift again in a few weeks time. But will show on the charts if it does

          • fxaprendiz says:

            Thanks mcg! As usual the voice of reason. Really enjoy your posts and train of thought. As long as things don’t become crystal clear all we can do is play both sides for a few days then move on to the next set up.

    • stan911 says:

      Fx the numbers that talking about are they cash contracts or dec futs?

      • fxaprendiz says:

        Stan, I trade using a CFD instrument (Contract for Difference) called SPX, which tracks closely the moves of the S&P 500 but aren’t always exactly the same, so there may be a difference of a couple points up or down.

        • stan911 says:

          Fx I trade CFD as well, cash has spx at 2939.8 as a high and dec contracts at 2945.7 as a high that’s why I was asking

          • fxaprendiz says:

            I see, then my CFD resembles cash more closely ( I have 2940.35 as last high) even though it moves 24hr like the futures.

            Also remember those 2944-49 numbers are a more or less fuzzy area of reference, SPX can print a high slightly above or below those numbers. I still remember when I used to trade the EUR/USD, and missed the top of the year 2008 because I was too strict on the numbers and was expecting a harmonic pattern to complete to the Tee. The EUR/USD came like 5 pips short of my Potential Reversal Area then sunk never to see those high levels again…

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