Wednesday update

SHORT TERM: quiet opening then volatility, DOW -92

The first three days of the week have displayed volatile markets worldwide. Asian markets lost 0.3%, and European markets gained 1.2%. Starting the week at SPX 2767, the US market dropped to 2749 Monday morning, chopped around in a 20-point range, then gapped up and rallied to 2813 Tuesday. Today a flat opening led to a nearly 30-point decline, before a recovery and a higher high at 2817.

While it is still very early in what we expect to be a multi-month bear market. We have started labeling some waves. Last week’s decline to SPX 2711 looks like Minute A of a Minor A downtrend. The rally underway off that low should be Minute B, and we have been expecting 2799, 2826, 2853 or just the 2835 pivot range for B. After that we expect the market to decline again in a Minute C to complete Minor A. That wave could bottom around SPX 2677 or the 2658 pivot range. These are all Fibonacci calculations. Short term support is at the 2798 and 2780 pivots, with resistance at the 2835 and 2858 pivots. Short term momentum is displaying a negative divergence at today’s high. Best to your trading!

MEDIUM TERM: downtrend

LONG TERM: downtrend probable




About tony caldaro

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310 Responses to Wednesday update

  1. fionamargaret says:

    I shall post charts at the weekend….meanwhile here is a piece of music I am not familiar with, so if you would like to listen to it with me, that would be lovely….x

  2. elmer510 says:

    In this market I go for Bear-EFTs connected to index. I stay calm with my bears. I remember Tony said – it’s difficult to trade upwards in a falling market and vice versa. Also I remember Tony wrote that he normally would not trade less than Intermediate waves. Well, I guess this time it depends how deep minor A will be. But there’s always some surprising things around, so to sit calm the main direction is a good strategy for me. 2-cent trades are not.

    So my main thing here is Tony’s chart and count. So far it looks very promising.

  3. torehund says:

    Good weekend Tony, bull, bears.

  4. Still heavy positioned on the short side with Puts. Monday is the deciding factor to stay short or sell. Tony’s short term count in line with my own expectation. 2650’s was my target for a while and now Tony’s also. Nice to be in sync. Now if only the market would listen.

    • As some have mentioned next week is the start of crash week. It is statistically one of the most negative market action of the whole year. I believe there is a prediction of a low on Monday followed by the rest of week decidedly up. In my mind the only way that can happen is if we get a mini-crash on Monday recovering some of it the rest of week.

    • tommyboys says:

      P/C was 1.3 yesterday close – prolly higher today. Lots of puts actually paid today 🤔. Doesn’t bode well for next week…

    • Add fire to political turmoil WTO listens to both EU and China complaint on the 29th of October. Start of world alliance against USA when trump tries to withdraw from WTO.

  5. micky says:

    Thanks all for an interesting and entertaining week.From the incredible calls of our host to sisterly love and tin hats. I also did not know about tourrettes.

  6. kvilia says:

    For all those wise guys with the attitude. DH has at least a week or even two of a free trial. If you want to talk on the subject, get access and listen to his webinars. Besides, I don’t really now who else would actually simulate trading live for $29 bucks a month.
    Have a good weekend.

  7. lml25 says:

    As of this second,market doesn’t look in the mood to crash today.Had its chance ,but we’ll see.

  8. gary61b says:

    spx close 2770

  9. Page says:

    Next week on Monday SPX will start with HUGE gape down. So be prepared some huge volatility.

  10. lunker1 says:

    SPX today’s range
    .382 hi
    .236 lo
    of 2941 to 2711

  11. emuntrader says:

    Ok guys, out of the office the rest of the day. Thanks everybody – have a great weekend.

  12. emuntrader says:

    Ashley, Even very experienced traders have there emotions fuel up from time to time, so don’t get dishearten. Personally, If I have more than 3 stops hit in one weeks time. I will paper trade for a week after or until I have a series of small wins.

  13. chandra d says:

    big bear market get out of stocks now if u r investor

  14. fxaprendiz says:

    I read a very interesting comment elsewhere regarding the VIX and its correlation to bears/crashes. Basically the author affirms no bear or crash has ever started without the weekly VIX 20 average being already over 20, months or even years before the high is printed. And then he goes on to list all cases since 1987. On the most recent bear and recession, he says the 20 wk average was already over 20 by mid 2007, months before the October high was printed.
    I’m still trying to find a long term chart to corroborate his statements but so far have only found a chart going back to 2008 which I can place a moving average into.

    It seems that indeed the VIX average was already over 20 months before the actual 2008 crash. But it was also over 20 before the 2010 and 2011 corrections, so it’s safe to say the average over 20 doesn’t always signal a bear/crash, but it’s ALWAYS present before one appears.
    That wasn’t the case before the February correction, and it isn’t the case today.

    The weekly average was around 10 on January, and it was hovering around 13 before this current correction and still under 15.

    All this confirms to me this is only a wave 4 one degree under the Primary degree and it won’t trigger an stock market bear much less an economic recession. Usually Primary degree waves and up are the ones causing recessions. I’m still reserving that possibility for the 2022-23 years, after this wave 4 and the later wave 5 finish.
    We would be getting a warning signal with this weekly VIX average months if not years in advance, so I’ll be watching it from now on.

    • mcgcapital says:

      Thing is, if you look over the long term equity market volatility has averaged around 20%, so would assume during bull markets it’s usually 13-15% and during bears it’s 25+%. But this market cycle it’s been way way below those levels for long periods. I’m convinced it’s artificial compression due to derivative market positioning and don’t think it’s the new normal. No trader should have to be subjected to a 9 on the vix, absolutely horrible conditions lol. We saw in February what happens when the shorting volatility strategy gets unwound. Plus if you add in the fact that it’s been 10 years since we had a bear market, then all backward looking moving averages for volatility are going to be very low vs historical comparisons. I suspect that most of then shorter ones are upwards sloping now as vol hit a low in 2017. My point is, I think the analysis is too simplistic as it would be better to focus on rate of change and the slope of the MAs than the absolute levels as they’ve been compressed… and if they become uncompressed it can be much messier than usual

      • fxaprendiz says:

        I agree using just an average for the VIX to signal a coming bear and recession is too simplistic, and it’s prone to false signals as the years 2010 and 2011 showed. That’s why I am adding it to my toolbox but by all means it won’t be the only think I’ll look at when considering the possibility of a recession.
        There are other very good sites where they compile data and evidence for the probability of next recession and virtually all agree no foreseeable recession in next 6 months, although some of their forward indicators are degrading which says we are indeed in late business cycle. Just not there yet.
        Anyway, all of this goes well with my current medium and long term counts. This will be the last significant correction, under 20%, before the real bear and recession come in a few years time imho.

    • Anne Day says:

      As far as I know, what you said above is formally reported in a paper by Fischer Black (and possibly others). It is a crucial piece in the investment model I use. I myself like volatile markets in general (e.g., wave 4) but am definitely scared of crashes 🙂

  15. chandra d says:

    3000 is dream keep dreaming

  16. chandra d says:

    anyone here with me for 2.5 YEAR BEAR MARKET

    • reddragonleo says:

      In 1980 Ronald Regan was told by the elite to pick George H Bush as his running mate. He said “absolutely no way, as he’s a criminal”, but in the end he was forced into and become his vice president at the time.

      Regan was a pretty good person I think and not evil like Bush. I’m sure he was in some clubs with them but it’s my belief that there’s good people in bad organizations and bad ones in good ones.

      Anyway, the elite must have decided at some point that they couldn’t trust Regan to follow their script to the letter. So he was rewarded with the crash of 1987 during his last year as president. Sure, they could have delayed that another year or two and blamed it on Bush when he got in as the next president but he was “one of them” so Regan was the fall guy.

      Fast forward to now and you’ll see the elite don’t like Trump too much either as he can’t be controlled. So is he going to be the fall guy like Regan and get another massive crash while in office? I think so. In fact I think they rigged the elections for him to win and lied to Hillary telling her that they rigged it in favor of her but really didn’t.

      They want Trump to be blamed for what’s coming next. How long will it last? I don’t know? Maybe 1 or 2 years I guess? So you could be right on 2.5 years as lasting right into 2020 would pretty much seal the deal on his chances of getting re-elected. The elite will have someone else lined up that they control to run against Trump and win. I think it will be a woman.

      Why? Because the number 1 is for man, the number 2 for woman, number 3 for family, etc… meaning that from a numerology standpoint 2020 is great year for women in power and 2022 will be even better. The elite know this and will use it in their favor.

      Anyway, enough rambling. I normally don’t chat this much but was bored today I guess.

  17. micky says:

    guys maybe i missed it, did anyone get the top just now?

  18. Lee x says:

    There’s a gentleman’s club here that I don’t know about ? Thx guys for nuttin

    You kids should be killing them with this recent price action, I honestly don’t understand why some are so grumpy ?? 😉

    Dealing with the darn pivot at the moment eh ?

    Hey Tony , Thanks

  19. ragnar5 says:

    From Tom Bowley’s blog in StockCharts today:
    Historical Tendencies
    After today’s close, we enter the most bearish historical week of the calendar year. October 22nd through 27th has produced annualized returns of -41.24% on the S&P 500 since 1950. That’s a full 50 basis points below the historical average annual return on the S&P 500 of 9% over that same 68 year period.

    If you think you might find historical refuge in the NASDAQ or Russell 2000, think again. Here are the annualized returns for each of these indices over the same October 22nd through 27th period:

    NASDAQ (since 1971): -65.52%
    Russell 2000 (since 1987): -47.00%

  20. phil1247 says:

    last one just to show how DH works

    “if 91 fails .. risk is down to 82”

    good weekend Tony and all

    • retiree247 says:

      down to 82…..just like you said. Have a good weekend Phil!

    • Mike Corrada says:

      What or who is DH? Thanks

    • H D says:

      Nice trade phil. I think this is best practice for that method. Quick little moves. It’s the calls for 3000, Tuesday, and 2894, today, while we are rallying that are hindering your rise to infamy. You had everyone on straight up Tuesday and again today. Then take a 10 post victory lap on 9 points DOWN. We rallied 20. That’s a better victory lap. Celebrate the trade in the called direction with 5-6 posts too.
      Just something to think about.

      • phil1247 says:

        you may not like to hear it
        because you are short and bearish …..

        but 2851 is currently a valid target while above 2755 es

        i am not interested in your opinion HD

        ” all in good humor “

      • lunker1 says:

        HD you’re taking the “straight up to infinity” literally. It’s just an expression
        meaning if the extensions don’t fail then price will go straight up but phil provides the number and chart showing showing where it does fail.

        phil has fun with his lines
        life is fun 😀

        “to the moon Alice”
        “fly like an eagle”
        “take the money and run”

        • H D says:

          Hey lunker, look directly below this comment. See chrisk44342? that’s a set up to trade. He managed that in 1 post too.

        • phil1247 says:

          yes lunker …. life is fun ….

          until some debbie downers come slithering along

          they must be ignored
          or they will make you as miserable as they are
          who knows why they are so unhappy ?

          glad we are having fun …

      • aahmichael says:

        Actually, Phil did not call for the market to go down to 82. He said if you’re long, then the risk is down to 82, meaning that’s where your long is proven wrong, and you have to put a stop at 82.

        • phil1247 says:

          phil1247 says:
          October 19, 2018 at 9:18 am
          dont want to see it below 91 any more going forward
          ergo ………if long .. stop was a tick or 2 below 91

          you are playing russian roulette
          with 5 bullets in the .38 special
          if you held on below 91 the second time after the bounce
          i have shown this many times
          . nick ext long .. bounce … then swoosh

          its not rocket science

          • aahmichael says:

            So you got long above 90 and ended up with a BE stop because of the extensions. However, your post about the risk down to 82, meant for those using the bigger picture retracement levels, 82 was the line in the sand. You’re right, the DH stuff is not rocket science, nor is it anything revolutionary. EWT has employed the same .382, .5, and .618 retracement levels long before DH was even born.

  21. chrisk44342 says:

    61.8% retrace of Tony’s b, perfect opportunity for another leg down here

  22. fxaprendiz says:

    I told you guys that waves 4 are notoriously difficult to anticipate and trade, as they have the most diverse shapes in the EW repertoire.
    I haven’t traded for a few days, waiting for at least a few clues on direction, and the first clue was the daily swing low printed on Tuesday, marking last week 2708 as the end of last weekly cycle at week 35. Next clue is the fact that this week the SPX wasn’t able to print a new low, so most likely we are indeed at week 1 of a new cycle.
    If you look at my weekly chart posted before, you’ll see that no cycle since 2009 has ever gone down without at least 7 weeks of upside first. This cycle may be the odd one but still I’m expecting at least 3-4 weeks of bouncing around counting from last Thursday before the rollover down.
    Having said all that, this market is a bit safer being traded from the downside so if I enter a trade it will most probably be done by selling into strength.
    For next week I see as probable a tag of the 2847-52 area, then a 50-70 downswing, followed for more chop sideways then up again
    in 1-2 more weeks too test the 2880-2900 area, which I think would mark the high for this new weekly cycle and the highest high we’ll have under 2942. Then it will be down from there but in wide swings up and down so I’ll probably won’t be trying to hold onto any particular position for more than a few weeks, or hedge them at least.
    That’s what I see as probable now, unless 2708 is taken out today or early next week, then is back to the drawing board.

  23. phil1247 says:

    es straight up above 90

  24. travis01 says:

    I would think the rally is sold off at this 50% retrace of 2788-90, but not sure with recent volatility. Playing it both ways

  25. phil1247 says:



    same as yesterday above 69.68 can get the squeeze going and
    would confirm 5 of 5 down complete
    looking for long entry now

  26. Jack kendo says:

    I won’t be satisfied if DOW not up at least 500 points today Oct 19, 2018
    some SPY calls expire today are so cheap. 🙂

  27. emuntrader says:

    The Hourly is showing a clear 5 wave down from 2817 high. The lower time frames are not as convincing of a 5-wave, but could just be irregular 2 wave. I will favor another smaller higher high above the 2817 if we get above the 34 EMA and 61.8 retrace on the Hourly. Currently favor more downside here.

    On a personal note: I have a small roofing business in Raleigh, NC. I have been working more in the Fayetteville area where there is still a lot of damage from the Hurricane. I made my way down to Wilmington last week, but I have never seen devastation this bad before. There is damage all over the place, and still after a month peoples belongings are on the side of the road for the garbage pileups, due to the massive flooding. This goes on for 50 south to 50 miles inland. I grew up on an island in FL, so I am purvey to hurricanes, but never have seen anything this bad.

    • emuntrader says:

      I agree with you. My thoughts as well. But I still don’t know what an FP is? Do you mind explaining. Also, Great job lately. You have really nailed it.

      • emu..FP = false print=noise. This did not print on DH chart

      • reddragonleo says:

        The market is 100% rigged as you know I’m sure. So, for the insiders to signal to their buddies inside “the club” they put out what I call fake prints (FP for short). They use ritual numbers too, like 11, 666, 22, 33, 322 (23 is the reverse of it), 911, and just 9.

        Some of the “possible” FP’s are just market makers filling a buy or sell order after the close, and aren’t real FP’s for the most part. Sometimes the market will return that that print (within a day or two or not at all) and then I wonder if it was a real FP on not? Those are the hard ones to figure out.

        The easy ones point to a level that the market hasn’t every been to anytime recently. Like the All Time High( ATH) FP was put out on 2/27 of this year (2+2+7=11 and 2018 is also 11, therefore that was a double eleven day). That FP showed the SPY at 293.90 and that days trading range was about 270-275, with the ATH at that point in time being the January 26th high of 282.93, so I knew that FP was a real one.

        It took 7 months to hit but hit and pierced (common) by only .32 cents on 9/21 with a high of 293.22… which at that point I knew the high was in for the year. It was a total gift to catch it as they rotate around from platform to platform so I don’t get them all. I have not figured it all out and will probably never as I’m sure you need to be a member of “the club” to know that.

        But I keep trying and sometimes I catch something great and other times I miss it. Other members help me out by looking on their trading platform for FP’s too and will email me or just post it in the chatroom.

        As far as downside FP’s I have two of them but understanding them isn’t easy. I don’t want to go into detail here as too much exposure isn’t good, and Tony has lots of readers. You can email me or join the chatroom and ask me and I’ll gladly share my thoughts about them with you as well as the prints themselves.

  28. tommyboys says:

    Dunno what to think. Can envision Camp’s crash call for next week yet total P/C closed at 1.3 yesterday. The high this year so far was 1.34 in March. Certainly getting up there…

    • mcgcapital says:

      This is the thing with indicators… sometimes they’re a sign of continuation and sometimes they represent the best entries for moves in the opposite direction, we can’t be sure in real time.

      Think the key is last week’s low.. hold a retest and it could set up a decent rally back towards the highs, break it and the bottom is falling out. The way price is acting it looks like we will chop around until we get that retest.. but I think it holds 2690-2710 and we defer the is it a bear market question until after Xmas. Ultimately it’s going to be dependent on the economy which way this breaks… is a complete collapse justified right now. I’m not sure it is because the economic data hasn’t weakened yet. But we’re late cycle and it feels like a matter of time until it does with rates going up too

  29. stan911 says:

    Gap up above at 2806.22,2812.35 & 2813.85

  30. lml25 says:

    Can they pull another Friday rally out after a Thursday selloff?Might be important for Monday.

  31. Good morning all. After a big down day I expect the counter trend rally that started late afternoon into the overnight session to continue at least into the early morning. There are three targets above that range from 2782 to 2790. It is basically a 50% retrace of yesterday’s trading activity. Bear markets like violent moves in both directions. On the smaller 15 minute charts 50% retraces are common.

    When we get to a minor “b” retrace that’s when we can look for a 50% on the daily chart. For now let’s see what happens in the above zone for this counter trend trade

  32. floyd drummer says:

    thanks! tony

  33. CampFreddie says:

    I have been a Perma Bull since mid 2010 and this Bull mkt has been very good to me, However I now now see Price technical conditions, Sentiment, Breadth etc that could easily facilitate a crash scenario. A sharp swoosh down to 2600 is the least I would expect, I have small leveraged short position, and have sold longer term equity holdings down to 50% during this week. As I say I am not,nor ever been a permabear. Aimho Glta

    • fionamargaret says:

      That is the conclusion I came to as well Freddie, apart from having blank bid/ask intermittently…but think probably postponed to next week.
      Italy has to come up with something on Monday.
      At least after I mentioned the loans based on stock portfolios in China,Bloomberg picked up on it, and we had a slew of Chinese officials come out to reassure….
      Then there is MSB.
      Have a nice day…I shall be around later….x

    • lunker1 says:

      thx Freddie. I went cash and just playing some swings until I see some stability

  34. mcgcapital says:

    Ashley, please can you stop spamming the blog it’s really irritating. Since Wednesday night’s update there have been 210 comments, and more than 50 of them are from you, all of them are short and don’t provide any insight at all so are not worth reading (you could probably condense them all into about 2 posts worth reading including your charts and market view). And that’s not including the threads which have been deleted already where Lunker asked you to stop and the one where for some reason Fiona condoned your behaviour. It’s like you have tourrettes or something!

    People might say you can just scroll past the posters you don’t like reading, but when I use this site on the right hand side it shows the last 10 comments. If I see a comment from the likes of Aah, Fxa, Tom Fischer, abc123, lml, fotis, Asa, Phil, HD, Chrisk, reddragon, bouraq etc (there are others, sorry if I missed anyone) then I can click on it directly and know that there’s likely to be something half intelligent there on markets and it’s worth a read. Others that I know post continual nonsense I then ignore, or read for comedy value. But the last 10 comments this morning all say ‘Ashley’ so I can’t do that and it basically means I can’t be bothered reading the blog

    • CampFreddie says:

      ….tourrettes 😀

    • fionamargaret says:

      McG at 6.30 I suggested Ashley not pay heed to a derisive comment and leave the blog. She does interesting work, means well, and I like her. I think I also encouraged you.
      Relax…Tony can remove most of the superfluous postings….

      • mcgcapital says:

        Lol Tony will have to delete 50 odd comments then as they’re all superfluous… the way I see it is, if every single commenter on here posted in the same manner, you’d have thousands of worthless comments per day and the comments section would have to be closed it would be that bad.

        I’m not saying they shouldn’t post, just that they should condense their thoughts into a few readable posts rather than what’s currently happening

        • aahmichael says:

          Ashley’s problem is that she’s a compulsive gambler. Her non-stop postings, cheering the market on and trying to will the market to do what she wants it to do, tick by tick, are no different than what you hear from the people who surround the craps tables. She needs an intervention.

          • mcgcapital says:

            Most retail traders are as statistically 80% lose money… and it’s mainly because people have difficulty using stop losses effectively. It’s not easy to know where to place them and it takes a lot of work, so lots of retail don’t use them as they think they will get continually stopped out. Then that leads to needing the market to do something, running too far offside, adding to losers to average out and overleveraging. From the comments, it looked like Ashley is long from much higher up and has tried to average out.. then felt on edge because it doesn’t look like the markets going up, hence the constant nervous posting

            • aahmichael says:

              There’s an old market adage: “amateur traders are more faithful to their losing positions than they are to their spouses.”

            • Anne Day says:

              There is absolutely no denial of the importance of using stop losses. But everything in trading has a cost and has risks associated with it. There are other ways to stop losses (e.g., using options) than just drop a line somewhere on your chart.

      • lunker1 says:

        Fiona there’s no reason to enable an adult that creates a lot of work for Tony. That’s disrespectful to Tony and now is not a time for him to have extra work. Let him relax and enjoy his day.

        • fionamargaret says:

          Lunker I posted a message at 6.30 pm before the numerous messages…and I am not going to address this nonsense of postings with you again
          I tend towards seeing the good/better self of folks…certainly enough to give them a chance.
          I send people Tony’s way, and my own work is scrutinized as I mentioned before, as this is the only site I am on.
          Please just get a life….I refuse to accept your guilt trip..

    • dwr51 says:

      I have a theory that was developed many years ago and I believe still holds true today and that is….. the ones with the most to say are the ones that know the least.

  35. Jack kendo says:

    The chart looks like a gigantic, steeper 3 of 3 up for Oct 19.
    Heavily loaded SPY CALL options toward the bottom of Oct 18’s.

    charts later…


  36. cj32 says:

    Cr. CBZ

  37. fionamargaret says:

    Thanks Chris Kimble
    Thanks Tom McClellan
    Thanks Raymond James

    Thanks and love to Tony…..and everyone xx

    Scroll down to the music of last night to read how Grieg was filled with such self-doubt after listening to this symphony, he requested his own symphony never be played…
    Embrace the artist in your life, for it is a lonely road….x

  38. Ashley says:

    SPX 10minute line chart, Im working on it an it’s open to criticism, Cheers =)

  39. Ashley says:

    DOW daily, it’s a work in progress but it’s been working .)

    • Ashley says:

      Though I’ve been doing well with the DOW that chart will be updated soon, DOW had 2 extra TICKS today on the line chart and the DOW chart isn’t perfect .)

      • Ashley says:

        Marketwatche’s line charts are usually in line with the TICK, thats whay I chart GDOW all waves are counted real time, and charted =) Im exhausted but Im new to charts (remember), next to figure out how to overlay the TIC =)

  40. Ashley says:

    SPX daily, TL’s support/resistance, and FIBS =) .)

    • lunker1 says:

      Is there something specific you’re trying to show the other readers with your charts? Normally when someone post a chart they are sharing a specific view: bullish, bearish or neutral and then provide their specific reasons why.

  41. Kisshu2 says:

    Thank you Tony, Do you expect minor b to be higher than minute b? Also when do you start scaling back in?

    • kvilia says:

      I don’t think so, jobjas. Two previous downtrends travelled appr. 800 and 900 ticks for wave a. This one is already 860 ticks – very limited downside for a of abc left. Then 300 and 370 ticks for wave b previously, and a lower low for c. So I’m expecting around 350 ticks close to 72 for wave b this time. Then down to 66 or so before new uptrend starts.

  42. kvilia says:

    Tony, I know it is a bit earlier before the weekend update but still want to ask. Do you think next down move will take CL along or you see no correlation?
    Thank you.

  43. fenster6 says:

    So is this a minute wave and we have to move up now…yes? I am confused as usual, but from what I understand this comes next , unless Tony has readjusted…

    …we have been expecting 2799, 2826, 2853 or just the 2835 pivot range for B.”

Comments are closed.