Wednesday update

SHORT TERM: quiet open then selloff, DOW -608

The first three days of the week display Asian stocks down 0.8%, and European stocks down 2.3%. US stocks started the week at SPX 2768. The SPX hit 2779 in the first few minutes after a gap up opening on Monday. Dropped to SPX 2691 on Tuesday, after a gap down opening. Then rallied nearly back to unchanged after being down 65 points. Today a quiet open then the selling resumed, and the SPX made new lows for the downtrend at 2652. Quite a volatile market.

Yesterday we thought the market had a chance to end this downtrend at SPX 2691, after several technical indicators looked positive. The market rallied big off the lows, and we were waiting for some upside follow through today before placing a Minor wave A label at that low. That upside follow through never materialized, and the market dropped right to our SPX 2675 initial target, and then the OEW 2656 pivot in the last hour of trading. Quite a volatile two days.

With today’s selloff the charts now display positive divergences on all timeframes. Naturally we would like to see some upside activity before thinking a significant low has been established. But this is what the RSI usually looks like at downtrend bottoms. Short term support is at 2656 and 2632 pivots, with resistance at the 2731 and 2780 pivots. Day traders markets!

MEDIUM TERM: downtrend

LONG TERM: downtrend probable


About tony caldaro

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448 Responses to Wednesday update

  1. torehund says:

    Oops looke at Tbt, really close. Chart later…

  2. lml25 says:

    Ira’s guess is 2575.A break of that drops the support to 2300.Gold has a chance to get to 1261 short term,he says.GL all.

  3. fionamargaret says:

    Thanks Tony.

  4. chadthundercockthethird says:

    I was apparently wrong on the last hour crash call – but I disagree with fx saying most here calling for crash – only myself and Fiona and Page are doing that. Most here are long. I stick to my guns that there is no capitulative volume in sight. Maybe it won’t come until the big C down in November but go check out danerics count – he may be right after all these years

    • fionamargaret says:

      Use protection everyone…no, not just a Tibetan Mastiff puppy….
      I think we go to the 2300’s …AAPL’s earnings…I shall look at different stocks over the weekend….x

  5. kvilia says:

    Last post – ES decided to rally all the way hwb from midday high to this hour low and defended short. Cash for the weekend but I’m not sure ES is out of the woods yet. See you Monday.

    • phil1247 says:

      nice work today k !
      better than getting chopped up with CL …..right ?

      • kvilia says:

        You bet, Phil! I am still learning, just 30 ES handles for me through SPXS. And I don’t hold overnight any more.
        Have a good weekend.

    • DOUBLE BOTTOM from 2 days ago. Such sharp close pattern after such a deep fast drop could easily catch everyone off guard next week. be careful betting against the rally here. It looks to me to be a possible huge run to 2780 within 3 days time. I have no idea what EW states about the possibility of such an event taking place. At this stage I will trust my “seeing” the pattern as opposed to dissecting the math. I love well delineated sharp double bottoms. Call me emotional but I have been making good money off of pattern recognition. the inability to break down at last 45 minutes also tells me the pressure seems off. this market WANTS good news as an excuse to rally. I see exhaustion for now on the down side. this coming from a guy that loves deep drops.

  6. fxaprendiz says:

    Testing of the Feb-April trendline: check
    Bullish harmonic pattern present: check
    Testing of today’s low and rejection at a Fib level (0.786): check
    Majority in the blog expecting a crash on Monday: check

    Conclusion: Up Monday. Interim bottom in. Wave b of A of a complex correction underway.

  7. kvilia says:

    Stopped out for a 3% profit booked. Have a good weekend.

  8. micky says:

    Phil I am curious just for today, how many SPX points per contract did you make so far today?

  9. Page says:

    Who is expecting crash Monday? this market not going higher until elections are over on Nov 6. there will be a lot of technical damage done by then.

  10. channelsforall says:

    Anyone wants to comment on the fact that a weak close and lower low Monday, may lead to invalidate the RSI +DIVs we have on all indexes? Does that mean we have to put in a new +DIV, which means even more downward chop for the next two weeks or so?

    • chadthundercockthethird says:

      Crashes don’t care about divergences. Crashes always happen when you’re oversold and typically have positive divergences. Hats why people get trapped in them

  11. chadthundercockthethird says:

    Call the close – spx 2598

  12. kvilia says:

    Bear below 2658.

  13. lml25 says:

    Gold completely correlated to SPX today.Stocks sell,gold rises and vice versa.Have a good weekend.

  14. lml25 says:

    What would everyone think if this dropped all the way back down?Answer:Crash Monday.

  15. mcgcapital says:

    Love this market 🙈. Well today’s rally looks a bit better than yesterday’s but this will test 2600 area before one sticks. Ideally will do it Monday/Tuesday then reverse and hold higher

  16. tommyboys says:

    Everybody and his brother – including me – looking for big swoosh and panic washout. Maybe we don’t get one?

  17. cj32 says:

    Cr. to CBZ

  18. purplember says:

    thinking minor A is done

  19. phil1247 says:

    rebuy short at es 87

  20. lunker1 says:

    SPX 1 hour chart since the high last Wednesday at 2817 has been a downward sloping accelerating parabola. You’d would assume a waterfall overshoot needle bottom straight down would be next

    down 62 2755
    up 43 2798
    down 107 2691
    up 54 (1.26x) 2754
    down 102 (.95x) 2652
    up 71 (1.31x) 2723
    down 95 (.93x) 2628

    Three ways to look at it.
    1. A trend in the deceleration of the drops from 107 to 102 to 95. 2628 is bottom.

    2. The 95 point drop is incomplete and the drop will finish in the 105 range similar to the last two drops. 2618

    3. 95 point drop is incomplete and total drop will continue to accelerate with the parabola from down 62, down 107 (1.72x), next down 200-300pts from 2723.

    An upward move greater than 71 points could signal the downward parabola wave pattern is complete.

  21. Page says:

    Next SPX targets are 2576,2409,2322 then final retest 666.

  22. blackjak100 says:

    Surely this correction is no where near ending…why? Need some panic selling which we had a little of on wed. However, we broke that low with no panic just orderly selling. Ultimate bottom comes in around 2500ish.

  23. kvilia says:

    Tony, one more leg down to your 2596 pivot?

  24. fxaprendiz says:

    SPX Update:
    The index went a few points under the red zone in the chart. No biggie, still within the yellow Potential Reversal Zone. Now rebounding. First target, closing the overnight gap, second target, maybe printing a green daily candle by the close. Third target… =)
    BTW long at 2634 with a 20 points SL

  25. scottycj1 says:

    Every where you look there are Bears—-(What happened to Newbie ?)
    Too many Last area for my work for the low is 2620—2624

  26. Lee x says:

    This is a Mc Rib announcement & 2632 pivot pop

    Hitting the road Tony , thx for your help

  27. Will be buying CALLS on SPX sometime today. Likely a fast reversal before end of day but still in negative territory. In fact if we ONLY drop 15 to 20 SPX points at end of day count on a 60 point rally Monday. betting despite the HUGE premiums.

    • Pulled the trigger. 200 277 SPY calls @ 1.00 for 11/9. I feel LUCKY! I am expecting a manageable drop by end of day between 15 and 20 SPX points. if it goes into free fall I am most probably screwed! My winning were so good lately I decided to push the best when I see a strong move coming.

      • If we close in the 15 to 20 SPX range that would mirror almost exactly the last rebound from 10/11 – 10/16? That implies a big day Monday. It also implies yet more pain right after. Love the wild moves and if I can capture 70 percent I would be very happy.

        • Now we hit my closing target of 15 SPX points down. I would be surprised if we close much higher so I expect any increase from here to stall and any deep drops to also stall. I will be ADDING yet more Calls (IF) the close of day shows a tight range as described above. On the daily charts it wipes out those intra-day swings and the setup is once again in symmetrical form for a huge move Monday.

          • Did NOT add CALLS. The symmetry I was expecting was a shallow 20 point drop at end to signify one more leg up. NOW we have almost the exact double bottom from 2 days ago. Didn’t expect that BUT it sure looks like it could morph into a HUGE rally early next week. How cool is that? I love visual clues. Crazy to think so? I Actually wished I saw this sooner. In any event (NOW) calling for a minimum 3 day rally straight up to 2780. As you can see I change as the market gives me different clues. if I am wrong about this rally I will exit the whole setup and sit on sidelines.

            Will exit if Monday starts out lower or doesn’t have the carry over strength after the first hour. Good luck everyone!

  28. lml25 says:

    Is catching this “bomber” going to trigger algos to reverse equities AND gold?

  29. Harp Man says:

    This is overshoot on downside, would still look for Minor B up to 2812. Use an ATR indicator to stop yourself in. Still expect Minor C to 2500 after the election to mark the weekly 1 wave down, then rally to 2750 for wave 2, then bear market to start down in earnest.

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