Wednesday update

SHORT TERM: gap up and go rally, DOW +618

For the first three days of the week Asian markets have gained 2.3%, while European markets have gained 0.8%. The week started at SPX 2633 and hasn’t looked back. After a gap up opening on Monday and rally to SPX 2674, the market gapped down on Tuesday hitting SPX 2656 early, before rallying for the rest of the day. Another gap up opening on Wednesday took the SPX over 2700, then hitting 2744 in the afternoon, and closed there.

In the morning we had updated the charts to display a potential Int. A completed at the recent low. Then later a completed five waves down by the NAZ at its recent low. If the NAZ is going to do seven waves down to end the bear market it should run into resistance around NAZ 7320. If we are now in an uptrend the SPX could get back to 2815 before it runs into resistance. Interesting juncture in the market with the Santa rally and all. Short term support is at the 2731 and 2656 pivots, with resistance at the 2780 and 2798 pivots. Short term momentum ended the day extremely overbought after Friday’s positive divergence. 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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366 Responses to Wednesday update

  1. millswing says:

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  2. Jack Lad says:

    This chart has been sent to the weekend update and also to Wikileaks via a fake email from Vladimir Putin, so now it is no longer Top Secret and we all know who is to blame…
    https://wavecount.blogspot.com/2018/12/s-500-30th-nov-2018.html

  3. M Wags says:

    JW Bush just passed away.
    He was 94.

    R.I.P.

  4. M Wags says:

    Navarro and Lighthizer are tariff hardliners who remind Trump that prior Presidents have fallen into what they consider Biejing’s trap of endless negotiations that yield little concrete results.

    Bottom line: Trump is wary of any deal that makes him look weak.

  5. The last a wave up was like 150 points
    2603 to 2753 then a 50 point pull back. So 2780 probably a good place for a pull back.
    Amazing how wrong I have been and still made a little. I could of been taking to the wood shed

    • That’s good risk management.
      You said you are going on vacation. Have a great time!!

    • Bradley Hoffmockel says:

      That’s sort of my thinking. I’m trapped in a short position and decided to just ride out the storm (stubbornness is not one of my better trading habits). Was in the middle of meetings the two times I could have pulled the plug and broken even. I think trade agreement expectations are high and that there will be lots of room for disappointment + negative divergence + pivot in the 75 area + seeming close to complete 5 wave up, etc. I’ll either be happy Sunday night or reassess monday morning. Did well for the week but more or less sucked today lol.

      Have a great vacation!!

      • Bradley Hoffmockel says:

        LOL, Thanks Allen.

        It is what it is…could have pulled the plug at any time. I have a senselessly high risk tolerance so pulled my stop loss at the last second and decided to just run with it. Besides, if we’re up big I have a vast majority in a long position for int b so all’s good. It’s only my short term play money at risk.

        Regards!

        P.S. special thanks to Tony for having this site – this blog rocks 😎

  6. I’m glad for anybody making a lot of money on this 3 day rally, esp after such a large slide from early Oct., but this “trade Agreement” is starting to sound like tulip bulb mania.

    Do people in the markets even understand that there are several Chinese nationals (at least 10) right now in Federal prison for stealing secret military designs. These are people who were working as contractors to weapons builders. Although these weapons builders should have had better security, the fact remains: People’s Republic of China (PRC) acted as an military adversary to the U.S in these operations. That’s not small change.

    And these actions are not an aberration This is a Chinese way of life.

    For more perspective, PRC has a long term practice of violating property rights (patents and copyrights). True story: John Denver once went on vacation to China (at the advice of his manager – 1974 ??). His manager had told him that nobody would know him there, as they had never sold one record. What Denver’s manager didn’t know was that Pres. Nixon had recently hosted the President of China, and had given him a few Denver cassettes, and other collectables. The Chinese President subsequently bootlegged the cassettes and promotional material throughout China. So as soon as John Denver arrived at the Chinese airport for a “quiet, anonymous” vacation, he was mobbed by autograph seekers.

    Bottom line, If Trump says this weekend that we have a deal. and the SPX soars 200 handles on Monday, hats off to the longs. But this deal (if it happens) will take at lease 10 years to verify.

    • Tim Waters says:

      It would take a whole lot of agreement w/ provisions for verification for the markets to be satisfied on Monday morning. I may be wrong, but I just don’t see that happening.

      • I agree.
        Also, Trump has been passionate on this issue (fair trade) since he entered the political arena. Some people say he will cave, just to get favorable publicity.
        I don’t think so. He had favorable publicity before (top rated realigy show, and Miss America)., and walked away from all of that.
        For him, this is much bigger.

        • M Wags says:

          Are you really comparing the notoriety of hosting a TV Reality Show with being the President of the United States of America?

    • lunker1 says:

      Tom the market already understands everything you wrote and in the end the only thing that matters is price. Talk is cheap.

      • Just saying, if the market continues to go up, we are in a euphoric phase.
        To put a pencil to it, Yield curve is currently @ .21%
        Yield Curve guru guy Tony Dwyer says that it will go negative with the rate hike later Dec, or at the latest, whenever the next hike is.
        I like bull market too, but I know when they are spent.

        • lunker1 says:

          Bond guys don’t do well in the stock market.

          Tony’s a stock guy and has been doing very well. Int B to 2815 maybe 2850 then down to the 2500’s and correction is over

          • I’m not a bond guy, although I understand bonds.
            I mostly a stock guy (swing trader), and usually beat most money managers.
            But I used to be Registered, which means I’m trained in risk. (at least used to mean that).

          • Just to add, I went to cash first few days of October, and urged caution, posted on this website. Even though I’m not long here, I’m much further ahead right now than all the folks riding it down, then partly back up,

        • lunker1 says:

          Bond guys are negative. They’re afraid of their own shadow. They’re afraid of every what if. That’s why they’re bond guys

          • M Wags says:

            Bonds have been rallying on softer global economic data. The 10 year yield is down to 3.02%

            Anyone who has been short Bonds in the last month has gotten crushed.

      • Yield curve: for comparison, after the Jan-Feb 2018 crash Yield Curve was at .63%.
        Now at .21%
        We are not just closer to the ditch now, we can see it out the side mirror.

  7. vivelaamo says:

    Taken some profits at the 200 daily sma. Need it to power through for confidence.

  8. torehund says:

    Think its very difficult to deflate the real economy from here, due to inflation that has been creeping steadily since 2009. Then farms will be abandoned and we Get higher prices anyway. That means the trend has exhausted upon itself, and only way possible is up, at least for the raw materials. iPhones we can manage without…. Good weekend all☺️

  9. Hi
    DOW
    Nothing changes if ~26100 is not surpassed
    https://invst.ly/9dvq2

    EURUSD
    https://invst.ly/9dvpf

    CL trying to bottom
    https://invst.ly/9dvoh

    Ciao

  10. Nazdaq closed right at resistance 7330. Typical bull move would be to gap over it on Monday and go. I’m surprised with today, but market always surprises me. but I’m out , glad market opened down. Got out even today. and not trading in December, since on vacation, no time to be at a computer all day. I guess will see what happens on Monday. It’s a coin to ice to me

  11. Jack kendo says:

    Tony Thanks.
    Has WROC buy has confirmed?
    If yes,
    With WROC medium term buy signal confirmed for both SPX and DJI, with 96% successful rate, the odds of making new all time high is high.
    This is the first WROC signal since the top in Oct 3.

    I see this is the same failed flat as Feb – Apr.

    cheers!

  12. STEPHEN BARTLETT says:

    December rally is going to fail to impress. This is a wave x high Nasdaq and if tech isn’t going anywhere nothing else is. Europe perform over u.s in dec.

  13. lunker1 says:

    ES Dec anchors 2626 -> 2684.25
    .50 entry 2655.25 (twice)

    targets
    1.236/1.272 2698/2700 hit
    1.618 2720 hit (support 2723)
    2.00 2743 hit
    2.618 2779

    • phil1247 says:

      2764.5 target hit on the nose
      post triangle thrust for wave 5 could be done there

      prudence suggests exiting all longs now
      and hold only token longs for a lotto prize next week

      hint hint

      • Bradley Hoffmockel says:

        Phil, thanks for sharing your knowledge. I for one appreciate your thoughts and throwing in a few teaching nuggets along the way. Good observations this week.

      • I’ll let you know on Saturday night (late) or Sunday morning if you won the lottery! Good luck. Sticking to my plan, day trade until Monday. Notice, 1 or sometimes no entries into the long on a daily basis this past week, a lot of ramps at the European close and in the last 1/2 hour or so….. a bit odd.

        Phil can you post a chart with your updated analysis. DH a bit too bearish and his 50% longs are way to conservative, this week. Would like to see a rogue analysis…lthanks @nd have a great weekend!

  14. Investors Intelligence Bulls down to only 38.3% with the percentage of participants looking for a Correction at 41.1%

  15. Noah J says:

    I repeat: The rally that will resume on monday (or sunday night for those who trade futures) is going to be utterly breathtaking. Strap in and enjoy.

  16. Stocks rose on Friday after a Chinese official reportedly said the U.S. and China are finding common ground on trade ahead of a key meeting between President Donald Trump and Chinese President Xi Jinping.

    Sunday night is going to be very interesting one way or the other.

  17. travis01 says:

    longs over “meeting” w/e or walk away and play Monday? decisions decisions

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  19. phil1247 says:

    third and final post of the day ……

    yes someone commented on all the posts by me today
    but by Tonys own accounting method there were only 2 until now…………

    es looks like a triangle wave 4 developing over the last couple of days
    clue was the breaking of shorts and longs on 15 minute chart
    if so look for a

    ” pop the top before we flop ” wave 5

    have a good weekend Tony and all !

  20. cj32 says:

    Cr. to CBZ

    • valunvstr says:

      The “death cross” is utterly useless and often marks the bottom of the correction. Happened in 1994, 2010, 2011, 2015/2016 and selling the cross was a total disaster. Also happened in 1998 and the market hit the death cross retested lows and went higher. By the time the “golden cross” occurred the market was meaningfully higher. And 1990, oh my, talk about a horrible trade. Out near the bottom and back in at new highs. The death cross only matters if you are in a secular bear market. If you are in a cyclical bear (eg 1990, 2011, etc) then it is an utter mess. So you need to ask yourself if this is a continuation of a secular bear market. If yes, then maybe a good thing to look at. You’d likely be VERY wrong to come to the secular bear conclusion but that’s your choice and to each there own. If not, then the cross is useless and should be ignored.

      • cj32 says:

        CBZ says to check out Nov.2000 to March 2003 Cycle-A Degree correction and from Dec.2007 to March 2009 a Cycle-C degree correction of Super Cycle IV.
        He believes its a CYCLE-II CORRECTION here in a secular bull market since 1932 Lows. Must stay below 2868.71 Or it may try for new ATH towards 3050.
        Follow your own excellent analysis for trades…GL

  21. stcoleridge says:

    Lunker’s blog’s busy I see. 🙂

  22. Jack kendo says:

    Tony Thanks
    At current pace, looks like we are going to have WROC medium term buy signals on both SPX and DJI.
    WROC has a 96% success rate of making new high in the past, what’s the odd of making new high with this fresh WROC?
    In the past, was there any WROC during a bear market correction and how high were the averaged retrace?

    cheers!

  23. fxaprendiz says:

    Regarding the topics of news, I’ll say my very humble opinion and not talk about it anymore.
    News do matter, only not to the point they are worth being followed for trading purposes. Chart attached for examples.

    Of the last 3 relatively important news events, there was some news related to the China tariffs, that only caused a pullback of a trend already in motion, and then SPX resumed the uptrend. Then the midterm elections came and they caused a move alright, but it was only a final thrust up of the same trend already in motion. Actually during the following 3 days the move up was completely negated and faded. You can argue that the midterms caused the reversal down but that’s not what actually happened. The midterms initial up thrust was faded afterwards, nothing more. Now we had Fed’s Powell this week, and what happened? an acceleration of a trend ALREADY IN MOTION. See what’s the recurrent theme here? If you are missing the point, look at all the red circles in the chart and try to find a news event capable of explain each and all of those turning points, that were the real causes of subsequent moves. Most importantly, I dare anyone to find a news event that occurred on the very same day of the sell-off (long blue shadow) and that can directly be attributed as the cause of the sell-off. Direct cause, not coincidence. Coincide is not causation.
    Do news matter then? for a day trader, maybe. And even he will still have to determine the probable move after the news are released. For a swing trader, probably not, as he can better determine direction by trends already in motion. For a medium/long term trader, definitely not; for him the news are merely background noise 😉

    • valunvstr says:

      One can argue that the charts lead the news, and not vice versa. It sounds silly as the market goes higher on good news and vice versa but the oversold condition sets up the good news outcome. Meaning whether the news was good or not the market already prices in the fear. Bad news might have created a rally since the expected was realized. And good news the same result.

  24. fxaprendiz says:

    Update on my (own version of) EW count.

    As mentioned already, I think this upswing from 2626 is taking the shape of a zigzag, with its subwave a about to end, maybe close to the 2777. If this is indeed a zigzag when the whole thing since 2603 is a 3-3-3 or wxy flat.
    There’s no doubt for me that the SPX will end up above 2818. The only remaining question mark is whether it will end around 2870 or 2903. Things seem to be going faster than anticipated, so instead of having an end of the year hurrah, the SPX may already top by mid-December.

    • alexhartley1 says:

      FWIW cycle wise I have us topped on 2nd or 3rd latest so we may be able to squeeze to 2780 pivot (supposedly positive news from the G20 garbage collection I’d imagine will be the justification for the rally if there is to be one more push). Down into 4-5th or 8th latest before another strong rally.

  25. Can someone count the number of times Phil1247 has posted today? My calculator doesn’t go that high.

  26. lunker1 says:

    Guys this blog is not the place to chat all day about the fed or Trump or tariffs of FOMC or Powell or News

    the purpose of the blog is to post your stock market view just like Tony does.

    Numbers and charts.

    “Just the facts Ma’am”

  27. schizo1688 says:

    Hi Phil , how high? CL ?

  28. vivelaamo says:

    I bet you all a million Q tokens we will see a test of new highs before new lows in spx. Maybe even this year.

  29. Lee x says:

    It must be so boring to always be on the right side of the markets.
    Congratulations internet wizards !

    You suck , no you suck ! haha

  30. fionamargaret says:

    $WTIC down to 34
    DWT (short oil) up to 24
    GLD to 950
    TVIX
    Stops
    X

  31. schizo1688 says:

    Hi Phil … straight up CL ? 🤣

    • phil1247 says:

      dont know
      was profit stopped on DWT
      now i have only a moderate amount left
      bull above 50.04 but its a baby step

      bigger pic is still no mans land between 53 and 49
      its a crapshoot and i want out

  32. phil1247 says:

    asa

    re powell and rate hikes

    powell sees what is going on
    thats why i have been pounding the table to buy 3 to 5 yr notes with both fists
    anytime they pop over 3 %

    rate hikes are coming to an end
    not by Powells decision
    but by the market telling him

    • floyd drummer says:

      mornin’ phil,

      is it time for a ZB chart?

      thx

    • Can’t disagree with your analysis….a likely outcome. Still think the FOMC will do a rate hike in December and another either in March or June. What I didn’t like, was Powell saying the week before Thanksgiving, “we are a long way from neutral.” Then Wall Street and Trump throw a temper tantrum and Powell folds like a cheap suit, “we are just below neutral.” Powell shouldn’t cave, he needs to show strength and independence from Wall Street and Washington. Or the next time he stays too hawkish for too long a period of time.

      • phil1247 says:

        i dont listen to news and especially dont listen to anything powell says

        all you had to do
        to see rate hikes are coming to an end
        is look at the 2 yr note chart
        someone is buying them like crazy

        me too !

        • Phil/Tommy/Freddie……just out from Zerohedge …also, see another Zereohedge article earlier this morning on Goldman Sachs take on the probability of 3 outcomes of the China?US talks tomorrow.

          Having slumped to session lows, US stock futures – extremely sensitive to any trade-related headlines – surged instantly when Bloomberg reported that trade hawk Lighthizer had a good feeling about tomorrow’s dinner and would be surprised if the China dinner fails:

          LIGHTHIZER SAYS HE WOULD BE SURPRISED IF CHINA DINNER FAILS
          The headline was enough to spike equity futures, however algo momentum was quickly stopped when Reuters published its own take on what Lighthizer had just said:

          LIGHTHIZER: EXPECT XI-TRUMP DINNER TO BE A ‘SUCCESS,’ BUT NO PREDICTION ON POSSIBLE DEAL
          The following clarification from Reuters did not help sentiment either:

        • lml25 says:

          Two things:Theme of the day–“Straight to nowhere”.
          Second point:Phil puts his own spin on “the news”.”Powell sees what’s going on.That’s why I’ve been pounding the table…”Sounds pretty subjective to me.A 100% totally unbiased trader would never make a statement like that.Not consistent with the rhetoric of,”I just watch the charts.”
          Other than that I pay little attention anymore.Yesterday,I would have been disembowled twice,watching 2740 above bullish and below bearish.GL all.

          • phil1247 says:

            obviously you dont know how to trade
            prime example is your horrible botching of precious metals and GDX
            even tho thats all you seem to be interested in

            i am just a casual observer there
            and you failed to heed my warnings about the coming carnage there

            • lml25 says:

              You’re a doctor all right–a spin doctor.That’s fine.Lunker can’t be too far behind now…lol.Have fun y’all.

              • phil1247 says:

                lml
                sorry to be harsh
                but if you would put aside the conspiracy theories and bias
                i believe you would do well
                good luck and good weekend to you

      • tommyboys says:

        Powell won’t change course due to any Trump “tantrum”. The global bond market makes the call. All Powell or any other Fed head anywhere in the world can do is follow. Actually the easiest job in the world – wish I had! All ya gotta do is follow that market. Can’t fight it for sure. Phil maybe you can post that Prechter chart again highlighting this (about the only one worth a wit he’s ever printed 🙄) …

        • Tommy he Powell changed course already. Now one can argue whether it was Trump (probably not) Wall Street (more likely) or the bond market more likely) or a combination of all. I don’t follow all news events …just major market moving events China/US trade talks is one of them. As always, we’ll see.

          • phil1247 says:

            asa
            someday you will believe that none of that matters
            nothing can change the trend
            not even the assassination of Kennedy

          • stcoleridge says:

            Powell pulled a fast one on Trump by dialling back just days before G20. He has temporarily removed the Fed as a potential risk factor for the market and put the ball in Trump’s court to get something done on trade/tariffs. If Trump holds firm and the market tanks next week it’s all on him.

            • …and the FOMC is not political /note sarcasm/…good point, as I was thinking the same thing since Powell’s speech/comments.
              Just goes to show you how 2 great minds think alike….LOL

              • stcoleridge says:

                Haha, if I had to put money on it I’d bet Powell’s IQ is a tad higher than Trump’s. I never used to be a fan of ivory tower academics running the Fed given their lack of real world business experience and a slavish devotion to an 80 year old redundant economic dogma. Having said that the current batch of politicians and senior bureaucrats with their lawyer based mentality make the Fed look like saints in my opinion. I’m not a US citizen but I think one simple law that prohibits lawyers from senior political positions wouldn’t hurt this great country. Apologies to all lawyers on the blog but seriously the thought of Avenatti running in 2020 must send shivers down everyone’s spine.

        • phil1247 says:

          tommy

          no matter how many times i post this
          people still think that the fed determines rates

  33. phil1247 says:

    ES

    dont wait for the last 6 ticks 😉

    as posted yesterday
    ..if 2756 did not print
    20 es points down could happen fast ………..
    we got 25 points down so far

  34. fotis2 says:

    Allen K if not big time Short than you are a …….

  35. All kinds of rising wedges here.
    Blue lines are parallel.
    Red lines are parallel.

    • E says:

      There was also clearly bearish divergence during yesterday’s rally and vix has been shooting up at extreme rates during the minor 10-20 pt pullbacks in the last two days. Something is out of whack. I see the drop from 2940-2600 as wave A. Just sayin’.

  36. mcgcapital says:

    Cashed out of all shorts now. FTSE and Dax sold off again, still not seen anything to suggest we’re about to see a massive rally.

    But want to go into the weekend flat, anything else is just gambling as there’s no control over the trades. I suspect there will be an outcome that’s initially viewed as market positive, but that it will be faded by the end of Monday. So ideally will sell gaps up over the weekend. If it’s a negative, will just have to see what the situation is once it settles down. Would rather be out wishing I was in, than in wishing I was out…

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  38. millswing says:

    Here are my last invite`s if you didn`t sign up yet,

    Initiative Q is an attempt by ex-PayPal guys to create a new payment system instead of credit cards that were designed in the 1950s. The system uses its own currency, the Q, and to get people to start using the system once it’s ready they are allocating Qs for free to people that sign up now (the amount drops as more people join – so better to join early). Signing up is free and they only ask for your name and an email address. There’s nothing to lose but if this payment system becomes a world leading payment method your Qs can be worth a lot. If you missed getting bitcoin seven years ago, you wouldn’t want to miss this.
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  39. fotis2 says:

    Kvilia ..CL… this is the setup I’m looking forward to no need to rush anything let the Market do the talking break above 52.65 will confirm a 3BR Daily/IHS 5hour either way TP1=55.70s opening stop low of yesterday.PATIENCE am sitting with a AUS/USD IHS long 17 trade days…
    https://invst.ly/9dhxu

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