Wednesday update

SHORT TERM: gap up opening, DOW +545

For the first three days of the week Asian markets lost 0.8%, and European markets gained 0.5%. US elections ended in a split decision. The Democrats took control of the House, and the Republicans maintained control of the Senate. The market anticipated and obviously liked the result. After last Friday’s pullback low to SPX 2700 the market has soared. It closed at SPX 2723 on Friday, SPX 2738 on Monday, SPX 2755 on Tuesday, and SPX 2814 on Wednesday after hitting 2815. Quite a rally in just a few days.

Out short term count remains the same. From the Int. a low at SPX 2604 in late October, the market has rallied in a zigzag to SPX 2757. Pulled back to SPX 2700. And has now rallied to SPX 2815. Our initial resistance levels for this entire advance were: 2773, 2812, and possibly a little bump over the mid-October 2817 high. With the first two already accomplished the third appears to be next. There is also the possibility of this C wave equaling the A wave (2604-2757), which would occur at SPX 2853. Between these Fibonacci levels, and the OEW pivots, this rally should run into resistance in the coming days. Short term support is at the 2798 and 2780 pivots, with resistance at the 2835 and 2858 pivots. Short term momentum ended the day extremely overbought. Best to your trading!

MEDIUM TERM: potential uptrend

LONG TERM: probable downtrend

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

About tony caldaro

Investor
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318 Responses to Wednesday update

  1. torehund says:

    Good weekend Tony and the gang.

  2. chrisk44342 says:

    .50 retrace hi to low ES to the tick

  3. purplember says:

    50% retrace from high to low on late friday afternoon. tough to take short trade over the weekend

    • chrisk44342 says:

      It’s ok, use less leverage/smaller position, etc

      • chrisk44342 says:

        This is where EW in isolation will not help traders or quasi speculators. Tony has prudently marked his chart with a small ‘a’ at yesterday’s high. It’s impossible to know if that was ‘a’ or ‘B’, even though we satisfied the 61.8 retrace already. So what to do? You could use your own method for exits/entries while the downtrend remains, and get more cautious on the round trip back to .50 retracement from low to high around 2720ish. I am guessing Tony relies on divergences to warn him to scale out near pivots/fibs, etc

  4. Page says:

    Thanks Tony. Great call as always.
    Looking forward to weekend report. 🙂

  5. tommyboys says:

    Well defined IHS on the 60 min (and daily) – maybe TOO well defined?

  6. fxaprendiz says:

    Last updated chart and I’m out for at least 2-3 weeks.
    ttps://image.ibb.co/n6cHxq/spx-weekly-ew-11-09-2018-JPG.png

    Taking an early holiday until 2900 is hit. No point in hanging around posting when I’m almost sure the voices in here will get louder and louder as the remainder of this wave B causes ups and downs and people will get frustrated by the apparent lack of direction. Anyway my contribution up to this point is done. I don’t think my view will change regarding this wave B, and the probable path the rest of the complex wave 4 will follow is laid out in the chart.
    Will be reading you guys from time to time… Have a good one and see you at 2900 (or 2603, whatever comes first)
    P.S. I have already unhedged my 2634 long position. It is now just watch, relax and have some almond milk =)

  7. looks like 2764 bottom retrace to 2784 then down to 2710.early week

    thanks all have a great weekend

  8. lunker1 says:

    Tony put a green Minor A of Int B on the SPX chart. Minor B targets
    38% 2735
    50% 2710
    62% 2685

    Int B likely to finish above 2815 unless

    Below 2685, more so below 2656 pivot, Int B could have completed at 2815.

    • blackjak100 says:

      And if it does, it will look like 5 waves up from 2604 with the possible 90 min stick save in Progress.

  9. Page says:

    Selling is exhausted, the next rally will be Santa Claus rally and it will be explosive one. 😀

  10. Wow! If (and so far so good) tony nails this next bit then everyone should pay their respects to the maestro because I dont see anyone else even getting near his calls so far.

    Respect earned and deserved over the years I’ve been reading this blog.

    • stcoleridge says:

      Didn’t Allen Kimble nail it yesterday? Oh wait….

      • allen kimble says:

        Will be selling my long position (2760 was my entry) on the next bounce, which should be Monday or Tuesday. I will short full force for a retest of the close on the spx @ 2640. I admit I was wrong big here and as such will react fast and switch sides. Today is a confirmation that the upside is over. On the flip side once the SPX, NAZ(not dow) do reach their previous lows, we should have a rip your face off rally into Christmas.

        Cheers,

        • stcoleridge says:

          Tony has a tentative “a” in at 2815 which I am interpreting as minor a of int B. This implies a pullback for minor b with 2734,2708 and 2684 as the usual fib targets.

  11. fxaprendiz says:

    I think the jury is already out and is telling us this is indeed a complex wave B from 2603. With all due respect to analysts there’s no way now that this upwave can be counted as part of a path to new ATH anytime soon. Just too many overlaps and too many potential 3s instead of 5s.
    Having said that, this being a wave B correcting a downward move, it will move up most of the time. I can now tell with confidence that my ultimate target zone for it to end is the 2880-2903 range.
    I know some will say wave B is already done at 2818 and we are in wave C down already. Here’s the thing though, we are in only week 1 of the new weekly cycle, and there’s no way such cycle can roll over after only one week of upside.
    Anyway, enough ranting. I’m willing to put my money where my mouth is, and by the end of the trading session I’m going to unhedge my 2634 long position. I might even do it sooner, if I see the low of the day is in already. I’ll place at SL on it at 2603 and a hedge short order at 2900. I’m a bit tired of trying to micro-manage this long position, so I’ll just let the SPX take whatever path it wants to the 2880-2903 area.
    This will surely take at least 2-3 more weeks so I might just as well take an early holiday =)

    P.S. this is the update to yesterday’s chart.

    • Anne Day says:

      I have a similar view. I see that the near term (next few weeks) market is choppy and slowly up.

  12. fotis2 says:

    Tony…++++++++++1!

  13. lunker1 says:

    SPX Fibs 667->2941

    .056 2814 (hit 2825)
    .09 2736
    .146 2609 (hit 2604)
    .236 2404

  14. Here’s the updated bear pennant that I posted on Tuesday, Nov 6.

    Looks to be finally resolved, to the downside.

  15. Hi…been a while since I have commented. My view to share 🙂 2940 looks like one, big top…end

  16. gary61b says:

    Tony, you are razor sharp. Thank you for your insight of the market day in and day out, it is very helpful, I can guarantee your not background noise. Have a good weekend all.

  17. phil1247 says:

    aggressive extension long esz18 broke at 99…….resistance proven ( not shown )

    daily ext long failed at 86 and retest failed …… resistance confirmed
    bears in charge until 2800 can be traded above

    see ya next week

    Thanks tony !

  18. Great ! Great !! Great !!!
    Spx is hit targets today !!

  19. blackjak100 says:

    $SPX close right here leaves an ‘ugly’ weekly candle needing confirmation. A move higher rest of day leaves impulse alive and well from 2604 IMO and a not so ugly weekly candle. Big inflection point right here and now.

    • Jack kendo says:

      You know why I gave up on the running flat of Int 4?
      It’s 5-waves up from Apr low to Oct’ 2941.
      It can not be wave B from Apr low to Oct’ 2941.
      Check the counts for all SPX DJI NDX, we would know.
      Can the biggest market leaders, like AAPL, AMZN be wave B from 2018 low to high? Certainly not, it’s 5-waves up.

      cheers!

  20. tommyboys says:

    SP has big open election gap to 2756. Likely fill then assess.

  21. gary61b says:

    ES, next sand box for price to play in is 2764-2700 if it gets there today.

  22. Bulls think this is wave 4 and a 5 up is due. Bears think 2815 ended the uptrend. Simple battle, its what makes a market. break 2769 Looking not so hot for the bulls.

    Good luck all

    • aahmichael says:

      NAZ/NDX have already overlapped. Any possibility of wave 4 is eliminated. The rally from the 10/29 low was a corrective 3:3:3 subdivision, and it’s impulsing down from yesterday’s high.

      • blackjak100 says:

        Agree and disagree, correct about NAZ/NDX but still want to see $SPX overlap 2757 for confirmation

        • aahmichael says:

          Still 3 hours left in the day. Patience. 🙂

          • blackjak100 says:

            Yes, and I’m leaning towards a wave 4 completed running flat at 2604 now. It does not matter to me which way it goes, but I know it’s a big spot for the future direction

            • aahmichael says:

              All year long I had been counting it as a wave 4 flat, but the proposed b wave took too long, so by the time the 10/29 low hit, the entire 1/26-10/29 move was longer in time than the 5/2015-2/2016 wave, which means this year’s move can’t be a flat because it would be a degree violation. So, my view is that 2940 completed 5 up from 1810, and could have also completed 5 up from 667.

    • Mark Smith says:

      Can you share why you think 2769 is going to nullify the bullish view? I’m not an expert on OEW, EW, or OEOEO (Time’s “Jungle Love” humor), but classic TA suggests support at 2754-ish, which would fill the recent gap up. blackjak100 suggests that’s where the overlap is… Thanks!

      • Well the move up was 115 points
        .38 retrace is 2771
        .50 is 2757
        .618 is 2744
        I usually give 2 points just in case thergo 2769. but bull case still has hope until 2742 the .618 level. But this is a staight up or straight down market. so can see 2770 area but if that breaks favors bears. Thats my simple thought and still hoping for a close at 2735.

        good luck

        • Mark Smith says:

          I see; it’s the 38.2% retrace of the immediate prior wave. My traditional support at 2754-ish is your 50% at 2757… The math of the market is never surprising. The gap-up that starts at 2757-ish foretold that wave’s high, if one believes in 2-steps-up, 1-step-back. It’s also exhibited if you measure from the 10/29 low up to the start of the gap on 10/31. Add that range to the start of the gap, and you get the wave’s high. Restated, a full 50% retrace of that wave would have returned to the start of the gap on 10/31. Thanks!

  23. travis01 says:

    Holly is off her meds again.

  24. jobjas says:

    SPX – intermediate B tops at 2815 ; back to 2600 area

    • 4-week T-Bill now 2.23%, zero risk, no state taxes.And several rate hikes certain in the next 12 months.
      Alternately, try picking entry points (long or short) in a stock market that gaps in both directions.
      A lot of retail money will be coming out.
      For sure.

  25. Harp Man says:

    Good $SPX support at 2734, then one more move up to end Int B. Still need final move down to 2500 to signal major move back up to possibly 3125. Watch UBOT at 2500 for possible double. My story, sticking to it for now.

  26. phil1247 says:

    the name says gary ….
    but the caps say otherwise 😉

  27. fionamargaret says:

    DWT up to 16.75.
    $WTIC down to 46 (sequence of numbers allowed lower)
    TBT to 51
    2656….then perhaps 2598….2785 I suggested to Sal 2 days ago, with 2598…

  28. all major equities index’s traded to their 50% SHORT from 9:30 highs to lows (DOW breached temp). Next set up levels to watch for a “large” counter trend trade (CTT) is a retest of this mornings lows, 2774.55 and 2769. Not trying to catch a falling knife, will let the market tell me when to take a scalp long.. This is why I trade with DH…offers specific defined levels. He brought to our attention in the CTT be careful of the 50% short from 9:30 lows/highs.

  29. Jack kendo says:

    cheers!

  30. phil1247 says:

    CL
    60.53 stopped the advance
    trade above there and risk to shorts is up to 63

    careful here people

  31. lml25 says:

    GDX dropped below the 10 and 20d a couple days ago and as usual,a freefall.SPX has 2760 as key support,using the 10 and 20 d.Keeping it simple for now.

  32. elmer510 says:

    I think we have started IM C already.
    It looks rather impulsive – the move from 2815.

  33. Now it gets interesting…/ES broke a 61.8% LONG in the first 15 minutes on a Friday. If trading is technical, when this decline levels off and begins to rally by a few ticks, there will be a counter trend rally (CTR). If /ES trades up to a 50% SHORT (which is what I expect from trading this algorithm and my EW wave count) and that level is defended…look out below….first trarget is 2776 Conversely, if that CTR breaches the 61.8% SHORT, I expect additional rally.

    Note /VX and BANK is not confirming this decline…YET.

    This is why I like the DH trading method…gives me well defined entries into both longs and shorts.

  34. Maud Gilson says:

    Dear Tony, I’m Maud Gilson, from FXStreet.
    We would like to get in touch in you to propose you a content contribution on FXStreet. I sent you a LinkedIn connection invitation a few weeks ago. If you are interested, can you please accept my invitation so we can discuss? Thanks!

  35. Update on my last 2 posts regrading the trading activity of /ES. For the past few hours /ES has been dancing around the 50% LONG at 2992. HOWEVER, during this time /VX has been rallying up to it’s 50% SHORT and both are defending these levels (meaning they are not breaching these technical levels) /NOTE THE INVERSE RELATIONSHIP/, if this trend continues, equities look like it will rally. DH charts…. below this morning and last night.

    Bottom line /ES 2786 bullish above and bearish below..watch /VX trading to confirm trading in /ES.

  36. phil1247 says:

    CL
    still straight down in extensions of extensions below 60.56

    kvilia and page

    until above there ……..its a bottomless pit

  37. fotis2 says:

    Waiting for Phil’s long and the sky ‘s the limit call so I can get Short

  38. mcgcapital says:

    I’m trying and struggling to differentiate here between current price action and what we’ve seen all summer in Europe. 300 point FTSE rallies, max 2 weeks, lower highs, roll over, new lows, repeat. Likewise with the Dax. So is that bullish or bearish action?

    The only difference between this counter trend rally and the others we’ve had this summer is that this is the first one where the US market is in sync as it was making higher lows prior to October. So there’s a reluctance to accept the change in trend amongst those who trade only the US indices. Is that denial bullish or bearish?

    Scottycj and Allen Kimble long and talking seasonality. Bullish or bearish?

    Looks pretty conclusive to me. However, I’m open to it going higher and here’s what I’d look for. SPX making higher highs vs the futures on Wednesday night. Rallies have been choppy at the start, then impulsive on short covering, then no follow through. We’ve had two of those since the lows last Monday. Unlikely we get a third so would be a positive sign if it trades above 2817. FTSE holding above 7100. Just not managed it. Every rally above has been lacklustre and sells off back down to 7100 soon after. That’s the key bull/bear line. Dax 11800 H&S breakdown. So far we just backtested it and failed again. Not bullish action. Bears are in control unless one of those happens

    • Anthony Saraniti says:

      Hi mcg…..the scenic in me suggests that the FOMC in concert with the 12 district Fed presidents and perhaps the CEO’s of the 21 member banks which I will collectively call the big boys. rallied the market’s from the low at 2611 to Wednesday at 2:00PM…..when the FOMC released their statement that they will continue to raise rates in December 2018 and 3 times in 2019.
      In English, the FOMC is slowly letting the air out of the equity bubble while bringing interest rates down (think mild recession) so they can unload their balance sheet to the public at a profit, of course.

      • mcgcapital says:

        I’m not sure that the Fed actually control enough capital to impact markets. A lot of it comes down to them convincing participants, so if they want lower yields and higher stocks, they signal to the market that they will be accommodative and hope that that’s enough to make people buy and hence get the desired result. That’s worked quite well post financial crisis. If people lost confidence in them then that process would be broken and I don’t think they’d be able to jawbone the market. Would also think that yesterday we traded a tight range before the announcement which suggests that participants were waiting on the announcement rather than knowing what it was going to be. If the big banks already knew the outcome you’d assume they’d have been exiting the market before it came out. Looks like some people will have thought maybe the fed will back down on rate hikes given market volatility but they signalled it’s business as usual, so maybe those who were long hoping for that were disappointed.

        SPX 16th October (opex move), 1st November (Apple earnings/Trump trade jawboning) and 7th November (midterm results) all look similar to me. Big rallies that last all day but no follow through the next day. As soon as we lose momentum on the day after those moves they look like good selling opps with stops above the high

        • Hi mcg you may be right about the FOMC singularly but collectively with the 12 presidents of the FOMC and the CEO’s of the 21 member banks …they have the fire power to move the markets.
          From memory, equities were rallying into the last FOMC meeting and then equities declined after the announcement of their “planned” rate hikes in December and 3 times in 2019. There was increase in volatility for about a week, a rotation in stocks? from growth to value? and after about a week the markets topped and the rest is history.

          Again from memory, Goldman and Morgan had something like 350+ days off consecutive profitable trading days …ie without one day of trading loses…..Permit me to ask a pertinent question…what did the big boys know and when did they know it.

    • fotis2 says:

      Scotty and AK long??Big short coming up…..

  39. Good morning all. As a follow up to last nights post, /ES did in fact trade down to 2792 and continues to test this level as I write this post.

    Bottom line../ES 2786…..Bullish above and bearish below.

    • ….I could add..the chart is currently bullish with a target at the green dotted line at /ES 2830…..Bear case is /ES 2786, the 61.8% retracement.. is breached target is the pale white dotted line in the 2760’s.

  40. quickrick38 says:

    I’m thinking this drop (in the ES) could end at 2787 then head up to finish off wave 5 of this ‘c’ of ‘B’.

  41. CampFreddie says:

    Dax30 looks like its doing its final probing down before a strong reversal, and I think there is a “fat pitch” here. I am intending to take swing at it (not day trade) when/if I see the “right” price action in the futz.
    Short term price action looks good in the futz with that oval area indicating “strong hands” buying, also many of the Dax constituents look ripe for a rally. Incidentally my previous attempt at a swing long on Dax was a dud, but I am more confident on this one. Worth a look. Aimho Glta.
    Dax30 hourly fut 24 hr continuous :-

    • CampFreddie says:

      Consensus seems to be this H&S on the wkly is going to play out (and it may do eventually) but for now it looks and smells like a decent bear trap set-up. Aimho Glta.
      Dax Weekly continuous for context.

  42. cj32 says:

    Fluid markets Cr. to CBZ

  43. Good evening all. /ES futures are currently down 7 points. Earlier this evening, /ES traded down to 2799.75, which broke the micro LONG (red line). If /ES trades technically, it should continue to decline and test the 2792 (yellow line).

    • chrisk44342 says:

      Yeah, it looks a little bull flaggish to me. best to wait i think. no divergence at last peak, MAs just crossed. Not saying it won’t happen, but I don’t mind waiting either

  44. You all know I’m a bear so this won’t surprise you. I was looking for 2735 today, hoping it’s a delayed action and we see it tomorrow. Black Friday. Still think 2500 level this month.
    Good luck all

  45. fionamargaret says:




    Thanks Chris Kimble

    https://raymondjames.bluematrix.com/docs/pdf/aa924888-7b90-48f3-931b-6eb4acc9a5f2.pdf
    Thanks Raymond James….Charts of the Week

    Thanks and love to Tony…..and everyone xx

  46. Michael Wiseman says:

    Anything is possible.

  47. Trader Sal says:

    Lot of assumptions here .. but assuming todays high is B and it holds and lot of tough levels below break, is it possible to see C go as far as 2300s?

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