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

CHARTS: https://stockcharts.com/public/1269446/tenpp

 

 

About tony caldaro

Investor
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310 Responses to Wednesday update

  1. whartonmba2000 says:

    Is the next bounce the best (highest) exit point in the bear market?

  2. I am looking at today’s lows as wave 2 of B with wave 3 up to 2850 next few days. Wave 1 was 108 points today’s low was at 2755. 53 points. Approx a 50 percent retrace now back up. We shall see. I went long today. Looking for free money Friday. And wave 3 of B. Will see. Good luck all

  3. garstall says:

    Tony, thank you for all the great information. I am learning a lot.

  4. Theodore Lerts says:

    Anyone trading Oil/WTI….Here’s a very easy road map if you are trading an ETF like DWT or SCO: there is currently around a $10 dollar premium on WTI. The general trend from now until January is down. Bounces will be relatively small. Trade accordingly. My two cents.

  5. gary61b says:

    Thank you Tony, Looking over the length of minute wave A from 2940 to 2710, and viewing the upside of minor 3 and they look relatively the same length. Is this normal

    • tony caldaro says:

      Yes.
      We have effectively had a decline to the previous second wave.
      Minor 2 in this case, of the previous uptrend.
      In bull markets, normally that is as far as they go.

    • Ashley says:

      Think I’ll be up all night again LOL

      • fionamargaret says:

        I enjoy your company, and ideas x

        • fionamargaret says:

          Interesting what some of the English fundies were saying….the Chinese obtained loans based on what their stock portfolios were worth….ouch.

          • fionamargaret says:

            …and seeing Brexit is never far from mind, arguably our best divorce lawyer, Ayesha Vardag was asked to go through the 5 stages of separation, and how she would negotiate it.
            Of course this was fodder for the wags to suggest a series, with a wide range of personalities suggest their plan…..at least I chuckled at the diverse suggestions……a touch of sunlight after the hand-wringing of the Chinese market…x

      • Ashley says:

        I want to apologize to anyone that gets mad at me or doesn’t like my posts, THANK YOU TONY
        See my blog for my charts .)
        My real name is EVA, still new at this blog stuff but I’ve learned a LOT from Tony and the rest of you here, Thanks…..
        https://evastrading.blog, or click on Ashley, GL =)

  6. kvilia says:

    Do we have positive divergence on CL?

  7. Hi Tony
    Glad to see you are posting and are feeling well.
    Tony, quick question about labels with colors showing degree of wave….Tony, conceptually, before this downtrend completes we could for example go through a series of zig-zags….the low of the first zig-zag will be labeled green “c” which you will then relabel dark blue for minor “a”. Repeat the entire ziz zag and blue minor wave “c” will then be relabeled intermediate wave “a” in magenta.

    Finally this correction completes when intermediate wave “c” in magenta completes at which time you will relabel that wave 2 in black to signify major wave 2. Is this correct?

    BTW, any OEW student can please chime in, thanks…..

  8. emuntrader says:

    The Hourly does show 5 waves down. Thinking we gap up tomorrow and then sell off the rest of the day. IF we gap down big tomorrow, I’ll be looking for a Major wave A bottom.

  9. the battle of 2768. think we rally into close and up big tomorrow. will see

  10. Jack kendo says:

    are they the same pattern?
    hard for me to believe as I see SPX 2710 was the climax bottom.

    cheers!

    • chadthundercockthethird says:

      I don’t get what you’re trying to display with this one. You called the drop last week so I give you cred but this chart makes my head hurt.

    • aahmichael says:

      Both the Jan decline and the Oct decline fell approximately 250 pts in 7 days in a 5:3:5 subdivision, and then did a corrective abc back up to almost 50% retracement. Jan then made new lows. Oct hasn’t made new lows…yet.

    • Jack kendo says:

      my analysis and bet is:
      we start the sustained rally tomorrow.

      cheers!

      • aahmichael says:

        To make a bet is gambling. Trading/investing in the market should never be a gamble. You have yet to present any basis for your “bet” that the market is going to new ATHs. What we know is that the move up from 2710 was a corrective wave. An abc. Impulse waves don’t start with an abc.

        • Jack kendo says:

          “bet” is just a word, it’s my analysis from all fronts.
          I have done through analysis short term, MT, and LT.
          P5 does not end like this. I previously posted P5, but a few days ago, I realized the P5 case does not stand.

          my chart shows 5 waves up from 2710.54 to 2816.95, then 3 waves down to today’s 2806.04. all perfect alignments, no violation of any EW rules.
          I have not posted my overall EW counts yet. and it’s all valid, highly probable. To me, new ATH is a done deal, and much much higher with melt-up.
          btw, I don’t turn bullish easily, unless after done convincing analysis.

          cheers!

  11. emuntrader says:

    So far we have 7 waves down shown on the 30 minute. If we are impulsing to the down side then I would measure this first wave as a Wave 1 and expecting a retrace. If we go up from here, we could be in a c wave from Minute B. If we have a massive end of days sale. Then, that is all I will be expecting. so far the decline looks pretty structured and make me lean toward us putting in another small low for a wave 1 of 5 to the downside.

    Best of Luck.

  12. looks like rally or die here. good luck all

  13. Harp Man says:

    FYI:Since World War II, after a midterm election, even if we had a majority change in Congress, the market has risen in price and the average gain was between 12 and 13 percent,. In the year after, if there was no majority change, the market was up even more, an average of about 20 percent. If Minor A bottoms at 2656 area, and Minor C=Minor A, Minor B could reach 2785, Minor C could spike down to 2500 by election time, the monthly Murrey Math auto bottom, then rally as high as 3125 before the bull market finally ends. Trying to correlate Tony’s wave counts to the Murrey Math projections, although this could change Tony’s Wave 1 peak if correct.

    • lml25 says:

      Ira Epstein said the same thing.But the main indicator for equities is the Senate.Republicans control it and equities go up double digits.

      • Harp Man says:

        Good point. The weekly wave 5 is in place, just a matter of when it decides to finally turn down. I will not be convinced of bear market until 10MA goes below 50MA.

    • fxaprendiz says:

      Harp Man, that average gain of 12-13%, was achieved over days, weeks or months? Because if it is over months, then that’s not tradable information, as the stock market could easily drop 5% before your gains.

      • Harp Man says:

        fx, that is a 12 month or better projection. Tell you what, I can post Murrey Math projections based on 60M time frame with Tony’s wave counts. Mid 2650’s for the minute C we are probably in. When he posts Minor A as complete, I’ll post the next 60M MM upside projection. Does that work?

  14. Tony,
    I’m a little confused. You are showing a minute (a) on the chart (which is a 3 wave structure) and indicating we are looking for a (b) and ( to form a zigzag for minor a. Elliott Wave does not allow a 3 wave (a) in a zigzag. all a waves must be 5 waves except in a flat or triangle. How do you square this?

  15. chandra d says:

    page real fall will happen after november only that fall would continue until december

  16. elmer510 says:

    Thanks to Tony for update.

    So simple, and so correct !

  17. chandra d says:

    chandra d says:
    October 18, 2018 at 10:07 am

    possibly again to 2750 levels and then up

    • lunker1 says:

      Friendly reminder three posts per day rule.

      There’s no reason to repeat something from 45 minutes ago.

      This is not a chat board.

      • phil1247 says:

        last one lunker
        68 was a good short exit
        if 82 doesnt resist … back up she goes

        see ya!

        • Jack kendo says:

          phil1247, that was perfect on your call.
          I see the same. if my reading of the market is correct, we should have a huge up day tomorrow on the anniversary of Oct 19, 1987.

          cheers!

    • I say possible to 2650 and then up. NORMAL drops like this always has a short rebound and almost always finishes the move with a lower low. Strong support is 2650 area. I do not see why it should be delayed. next few days will tell the tale. As for YOUR Monday 22nd date it does fit nicely with the low of this continuation drop. Whether we have a huge rally after to satisfy your 2900 retrace by end of October that might be hard to do but not out of realm.

  18. Page says:

    Don’t try to catch the sharp falling knife, the selling will intensify and continue into next week. SPX could easily go below 2700.

  19. lml25 says:

    Pre-Open market analysis-Al Brooks
    “Yesterday sold off to the 60 minute EMA and reversed up to above Monday’s high. The 2nd half of the day was a trading range and the day closed just above the open. While bullish, it increases the chance of more trading range trading today.

    The bulls still need strong follow-through buying after Monday’s reversal before traders will believe that the bull trend has resumed.

    Since the reversal up was strong, the bears will probably need a micro double top before they can resume last week’s selloff.

    The big reversal up created confusion, which usually leads to a trading range for a few days. The bulls will probably get at least some follow-through buying today or tomorrow.

    The S&P 500 Emini is down 11 points in the Globex session. Since the dominant recent feature is Monday’s strong reversal up, the odds favor at least a small 2nd leg up. The rally might reach the 20 day EMA at around 2850.

    Trading ranges usually continue longer than what seems reasonable. Therefore, today might continue yesterday’s trading range. Traders will look for reversals until there is a sustained breakout up or down.

    Yesterday’s range had lower highs and higher lows. Consequently, it was a triangle. The 1st breakout of a triangle has a 50% chance of failing and reversing. In general, there is a 50% chance that the successful breakout will be up or down. Since Monday’s bull trend was strong, there is a 60% chance of a bull breakout in this case. But, that probability will drift down to 50% if the trading range continues sideways for another day or two.”
    LML25:Meanwhile GDX continues to look impressive in the face of a higher dollar.The +div on the weekly continues to cause GDX to slowly move up.GL all.

  20. So according to the consensus wave structure we can’t drop from here to 2650 before seeing one more rise? If that’s true and we do drop that far in next few days what does that say about the charts? I’ll still stick with my “intuitive” method for now. In my mind we had a 3 day BOUNCE off a steep drop forming a clear 3 wave structure on the rise. Both timing and retrace distance is satisfied for ME.

  21. chandra d says:

    choppy choppy days as i mentioned yesterday

  22. mcgcapital says:

    I’m not sure exactly why this is, and it’s been discussed before, but opex week is following its usual pattern. One of the days Monday to Thursday has a huge ramp then the rest of the week pins the price around the level that the market ramped to on the initial move. So probably going to just hang around 2800 all week now. It looks quite clear that we will roll over after that to me.. I don’t quite get why it happens but it seems to always work like this

  23. fxaprendiz says:

    It seems many people like to look for expanding diagonals for ending patterns and triangles for continuation patterns.
    Expanding diagonals are actually very rare. Horizontal triangles are a bit more frequent but they often break the other way they’re supposed to so their predictive usefulness diminishes greatly. When looking at expected long corrections, it’s better to look for complex structures like a flat-zigzag combination or double zigzags which are more common than diagonals and triangles..
    Just my 2 cents as it’s sad to see so much time and talent in here wasted looking for patterns which frequency is actually low.

    • Jack kendo says:

      from oew live charts, Examples of Expanding Diagonal, and Expanding Flat.
      I know, many are looking for Expanding Flat for current case. (not me, as I see the tightest correction has completed at SPX 2710.51, and next would be new ATH).

      cheers!

      • fxaprendiz says:

        Jack you are confused.
        I wasn’t talking about expanding flats, which btw are quite common. I was talking about expanding DIAGONALS, either ascending or descending. Those are the rare ones.
        Btw your first chart is not an expanding triangle, it’s just an abc regular flat.

        • Jack kendo says:

          fxaprendiz,
          look at my chart above, I noted blue “I” as expanding triangle diagonal.
          my experience see “expanding triangle diagonal” as the terminal wave very often in all time frame. another example is Apr 19, 2010 top, then followed with the flash crash.

          btw, I was just listed expanded flat as you and many people are anticipating the form from 01/26/2018 top to 10/03/2018 top.

          tomorrow is Oct 19 with OE, anniversary of Oct 19, 1987 (was a day after OE Friday).
          does that mean anything?

          cheers!

          • fxaprendiz says:

            Jack no offense but you’re wrong again. That blue “I” after the 4, which you delineated with 2 blue lines, is more like a regular channel the way you drew it. And in any case, if you draw the lower ascending line with a steeper slope, then it IS a diagonal, but not an Expanding one but a CONTRACTING diagonal. Expanding diagonals by definition have their lines separating over time not getting closer. Contracting diagonals occur much more often than expanding ones, which ultimately are the ones I was talking about in first post. Repeating myself, Expanding Diagonals are rare. Contracting ones occur a bit more often but not nearly as often as zigzags, flats and complex.
            Again, no offense but it seems you need to get your definitions of EW basic corrective structures right first.

            • Jack kendo says:

              fxaprendiz, both charts, line and labels, are Tony’s charts.
              Blue I at 2134.72 was Diagonal as Tony said.

              Cheers!

              • aahmichael says:

                Diagonals come in 2 forms: contracting and expanding. The diagonal at the top in 2015 was contracting, not expanding. fxa’s comments were correct.

              • fxaprendiz says:

                Jack, you are talking about the shapes to the left, I am talking about the shapes to the right.

                Expanding Diagonals are rare.

            • Jack kendo says:

              Diagonals are dangerous, either expanding or contracting.
              2010 was an Expanding. I can find many more Expanding, 1929 top was Expanding.
              now is a Contracting as the way I noted, different than all others.

              cheers!

              • fxaprendiz says:

                Jack my point wasn’t whether diagonals in general are dangerous or not, my point was that specifically Expanding Diagonals seldom happen, compared to the rest of EW shapes. If you can find many examples of them then good for you. Me I rarely see one that adheres to the rules and ultimately works. It is usually another EW shape only labelled incorrectly.
                This has gone on too long. I made my case you made yours. Have a great day!

    • chrisk44342 says:

      100% dead on post. This is the curse of EW 🙂 People trying to predict instead of anticipate. Those things sound the same but they are actually quite different.

  24. emuntrader says:


    We have a clear 7 wave (ABC) pattern off the lows on the 30 min and hourly charts. Right now I am leaning toward Minute B has put in its high at the 2817 level. This could be a smaller ‘wave a’ of a larger Minute B though. time will tell. My initial target was about the 2670-80 being about a 9% drop from the top for Minute Wave A – but no more than 13.2%.
    Best of Luck

  25. cj32 says:

    Cr. CBZ

  26. filipozze says:

    Hi tony, don’t you think expanding flat is a possible variation to your count?. in this case after 5 waves down uptrend will return very fast. Here the chart
    https://www.tradingview.com/x/WfF8oZTJ/
    in this case expanding flat should bottom at 1.618 extension of (B)
    let me know thanks

  27. kvilia says:

    Phil, I think CL may really bottom at 66 as Bouraq suggested. Logically, it will retest broken trendline around 72 before bottoming at 66. Let’s see.

  28. Anthony Saraniti says:

    Good morning all

    /VX trading in no mans land, in between a long and a short. /ES tested and defended it’s 50% LONG at 2801. … so far. In a snapshot in time, the nod goes to the bulls. For the bears, /VX needs to trade above 17.81 and /ES needs to trade below 2797.

    Bottom lone for this mornings trading… /ES 2797, bullish above and bearish below. DH charts.

  29. Tony C…thank you and what a great trend analysis with nice levels for us to follow, your pivots are extremely helpful….

  30. phil1247 says:

    CLZ18 Dec contract

    straight down in extensions

    68.65 next

  31. Ashley says:

    NOW let’s start counting =) DOW looks DONE, for the time being .)

    • aahmichael says:

      No offense intended, but EWT has very strict rules, and your proposed count violates 6 of the most basic rules. For starters, wave iii absolutely must exceed the end of wave 1. Yours doesn’t. Wave iii can not be the shortest wave. Yours is.

      I won’t explain the other violations, but you might want to learn the basics of EWT theory before you start slapping random labels on charts. A presentation like yours is what gives EWT such a bad name.

      • Jack Lad says:

        aah goodness gracious, no offense but {offensiveness}
        Well no offense Doc but I do believe you have a ponse in your trumpet and so I give you a challenge… play this on your instrument in E flat minor while you prep an apology…

        • aahmichael says:

          The title of Tony’s blog is “the Elliott Wave lives on.” While Tony utilizes his own method of EWT, even his method stays true to the most basic EWT rules. So, it seems absurd that someone would post an EW count on this EW centered blog, which violates all of the most basic rules of EW. You can be offended if you choose to be and stay safely in your ignorance of EW, or you can take the time to at least learn the most basic rules of EWT.

          • Jack Lad says:

            Looks bullish to me… even if the local self appointed pretentious prat displays arrogant and pathetically defensive myopia, ala ponse.
            https://jsecharts.blogspot.com/2018/10/s-dow30.html

            • aahmichael says:

              Your ad hominem attacks, while not surprising, don’t change the fact that your “supposed” EW count violates 6 of the most basic EW rules. In other words, your count is not an EW count at all. It’s just a bunch of labels randomly slapped on a chart.

              • Jack Lad says:

                And I thought there were only 3 rules to the Elliott theory. What an uneducated guttersnipe I must be. Go teach yourself about rules and guidelines. Try to stop transferring your own issues onto others. Look at your your fingers when you point at others and see 3 of them pointing back to you. Disingenuous prat.

  32. My 2 cents is NOW in agreement for lows hitting in next 3 trading days followed by a big rally. All should be fast and furious. Placed bets right at close today.

  33. fionamargaret says:


    Thanks Chris Kimble

    https://raymondjames.bluematrix.com/sellside/EmailDocViewer?encrypt=2fdc020c-b938-421e-91d7-9413f51506d2&mime=pdf&co=RaymondJames&id=Jeffrey.Saut@RaymondJames.com&source=mail
    Thanks Raymond James…Charts of the Week…not Charts for the Weak

    Thanks and love to Tony….and everyone xx

    • fionamargaret says:

      This is the only finished symphony written by Grieg, and after hearing Johan Svendsen’s symphony in D Major, Grieg became so embarrassed at his own work that he wrote on the manuscript “Ma aldrig opfores” (must never be performed).
      We have all been there…yes…x

      • ttsden says:

        Ashley TC gave a perfectly possible and probable short term trajectory,
        closely in line with OEW principles but you will persist in conjuring games of chance. Trying to confuse the Collective ? Like to see your name in lights Yah ?

      • ttsden says:

        FM In the distant Oriental Far East you would considered to be the reincarnation of a wizened musical personage with many other embedded talents. Be bessed.

  34. Anonymous says:

    well so much for OIL going to 83:) I said 68-70 first before 78 🙂 now everyone calling for 60 herd mentality

    • fionamargaret says:

      …not so fast Anon…I still have oil showing to 83, and when Kvilia asked me today why I said DWT had a DT breakout, I told her that was the best sequence in oil today (i.e. down) BUT oil has a nasty habit of having folks give up just at the wrong time….
      (Yes, I remember your analysis in my dreams)….I did suggest hedging with a MM lottery ticket..xx

      https://stockcharts.com/freecharts/gallery.html?%24WTIC

    • ttsden says:

      Anon You have been correct. But presently, IMVHO, and in accord with OEW;
      WTI is now about to rebound in 3 waves to $72, prior to next down waves to $ 66-64.

  35. Trader Sal says:

    Hi Tony,

    If you recall I talked about two scenarios out of which second one didnt look like a good fit only because of the limited time C would have had in relation to A and B.
    https://caldaro.wordpress.com/2018/10/13/weekend-update-673/comment-page-2/#comment-366230

    This was over the weekend and since then first option has become a viable option as the range was broken to the upside. I think it could be a plausible outcome.. What do you think?

    This was before:

    This is now:

  36. Thanks for the clear and concise update, Tony. I hope your health is not getting worse and hopefully even improving.

  37. TommyB says:

    Tony, looking forward to your comments over the next several weeks…….I firmly believe you are 100% correct in your assessments.

  38. makiori says:

    Repetitive as it may sounds, but let me say it too: Thanks Tony!
    now I can go back lurking…..

  39. 123 abc says:

    Thank you Tony, appreciate the midweek update; looking forward to your continued guidance navigating the bear market.

    A top for Minute-b rally at 2835 by end of Oct would work well with trendlines…

  40. lunker1 says:

    Thx Tony.
    Ready for Halloween? 🎃

  41. bouraq says:

    Chart of the day is #OIL at http://www.tradingchannels.uk

  42. Page says:

    Great update. Thanks Tony.

  43. philip912 says:

    Spot on update, thanks Tony.

  44. H D says:

    Thank you Tony.

  45. Lee x says:

    Thanks Tony

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