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

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

About tony caldaro

Investor
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448 Responses to Wednesday update

  1. 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.

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  2. fionamargaret says:

    Thanks Tony.

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  3. 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

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  4. 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.

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    • phil1247 says:

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

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    • 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.

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  5. 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.

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  6. kvilia says:

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

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  7. micky says:

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

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  8. 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.

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  9. 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?

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    • 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

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