Tuesday update

SHORT TERM: gap down opening then slide, DOW -799

During the first two days of the week Asian markets gained 0.5%, and European markets gained 0.6%. The US market started the week at SPX 2760. After a gap up opening to SPX 2800 on Monday the market started to pullback. The pullback continued with today’s gap down opening as the SPX hit 2697. Quite a drop in two days, after a 5 day 169 point rally. Volatility continues.

We had counted five waves up from SPX 2631 to SPX 2800: 2672-2653-(2674-2656-2744-2723)-2754-2733-2800. The parenthesis are the subdivisions of wave 3. Notice all the pullbacks were around 20 points. On Monday the market dropped 27 points after that big gap up opening, suggesting the largest pullback since the SPX 2631 low was now underway. Dropping 103 points in 2 days is large, and swift. We placed a Minor wave A label at the SPX 2800 high, suggesting Minor B is now underway. A 61.8% retracement of the entire rally is at SPX 2696, close to today’s low. When Minor B concludes we expect another rally that should eclipse SPX 2800, then reach 2815 or higher. Short term support is at the 2656 and 2632 pivots, with resistance at the 2731 and 2780 pivots. Short term momentum was extremely oversold at the close. Best to your trading!

Tomorrow US markets are closed for a Day of Mourning for POTUS 41.

MEDIUM TERM: uptrend likely

LONG TERM: downtrend probable

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

About tony caldaro

Investor
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615 Responses to Tuesday update

  1. Slapdash says:

    A few more Q’s if those below are now used.

    Initiative Q is an attempt by ex-PayPal guys to create a new payment system instead of payment 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.

    Here is my invite link: https://initiativeq.com/invite/r8va4BbkN

    This link will stop working once I’m out of invites. Let me know after you registered, because I need to verify you on my end.

  2. amittsite says:

    Hi Tony…Namaste..
    Looks like Minor C of Int.A is going to be a triangle or ending diagonal with the overlaps..
    Thanks..

  3. unclegrandpaw says:

    For anyone looking….here are more Qs

    Initiative Q is an attempt by ex-PayPal guys to create a new payment system instead of payment 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.

    Here is my invite link: https://initiativeq.com/invite/BgLiTmdyV

    This link will stop working once I’m out of invites. Let me know after you registered, because I need to verify you on my end.

  4. Hi,thanks Tony
    Nasdaq not far from to complete a bullish pattern (possible in the middle of next week)
    https://invst.ly/9gb2k
    https://invst.ly/9gb5v

  5. jobjas says:

    AAPL – in charting EW always keep the big picture in mind

  6. Tony, looks like we are in dark blue C wave down now (which should be 5 waves?). Thoughts on the extension of this wave C? Should C=A (Putting us around 2500) or only .618 of A?

  7. Harp Man says:

    A close below 2603.54 is needed to mark daily 5 wave down, then big rally should start. Too many people calling for a crash or bear market, this does not happen at peaks. Would still like to see a true 38% retrace from early 2016, to 2510 or lower, before I would call this the end of the bull market.

    • allen kimble says:

      Like I’m saying. Crash callers everywhere you look. That is a very clear signal that a massive rally is going to take place. The Fed will juice this market up the week of the 17th by announcing a massive change of direction for 2019.

      2900 by year end folks . Buy your calls on the break of 2603. Amateur traders calling for a crash are about to get destroyed.

      • schizo1688 says:

        2900 by EOY ? Really ? 300pt in 20 days ? I know pot is legal now in certain state , but too much is bad for you kimbigballs

      • Kimble yells, Kimble yells, Kimble all the way …… Oh what fun……..

        Teasing. Just some Xmas spirit. A bit early, I know. But still …..!

        Sure hope this thing recovers. Today’s action was no good at all, but not surprising given everything.

        )

      • Hello. enjoy reading your investment material. BUT — My view — is that 2019 is the year, of at min, a recession. And, there is the risk that it could be even greater, or more serious.
        SP500 2940, maybe more serious a top than many, writers are thinking. And, that is my warning to the longs. So, it is not about price always. But, it is about “time” and while I respect Mr Allen Kimbles work, and views. I am taking a very cautious. I am not even in, the market currently. I’d say, that is cautious….

  8. Billy says:

    The DAX hit the sub10800 area yesterday where there appears to be decent lateral support from 2016 (yes that’s how far the DAX has fallen). I thought we’d get a decent retrace from there lifting other equity markets as many “look” to have enough waves down for a bounce as well. However yesterday’s low in the DAX only lasted one day (just like COMPQ, NDX, TRAN, SOX & RUT) which is a warning just how frail equity markets are at present. One of our colleagues on this blog (sorry, I forgot who you are) noted recently that it was a unrewarding process (paraphrasing) to attempt to count waves during a wave 3 due to extending waves. Certainly some merit in that statement. My plan was to buy pullbacks today but as the day progressed I was seeing too many bearish warning signs and made the decision to switch sides mid course. I also left some shorts on the table at the close which is not what most traders like to do, including myself. The market did not close on its LOD, nevertheless the weight of evidence has me bearish at the close with a potential count of 3 of 3 of 3 down or 3 of 3 of C down (take your pick). That would make yesterday afternoon’s rally 2 of 3 or 2 of C. If it’s a C wave down is it C of Int. A or just plain Int. C? Dunno, we’ll have to wait and see. One thing’s for sure, if the market is in a 3rd wave down at the close then a gap down for Monday is a lock. Should that not occur and a rally ensues instead, then we have a very well executed bear trap. Have a nice weekend. 😎

    • Billy says:

      If the market is not quite ready to take out 2603.54 on Monday then we rally back to today’s high for a flat and an expanded flat for the indices who went below yesterday’s low today. This will use up a bit more time (if yesterday was all of a wave 2 it was very short in duration) and reset the market giving the sellers another opportunity to regroup. The down trend line in futures will hit that area on Monday so no time to waste in a very whipsaw environment should it play out that way. Yeah, I like this as an idea as well with the bonus being it’ll make an even better shorting opportunity and catch plenty of participants offside thinking the market could not possibly reverse course yet again so quickly. 🤦‍♂️

  9. lunker1 says:

    SPX Double bottom from yesterday with significant +D. Then bounced 27 points. Is there’s more?

  10. elmer510 says:

    No more Intermediate A in Tony’s chart.

  11. allen kimble says:

    It will be a head fake! Look for the amateur crash calls below 2603, the swoosh down, the massive vix higher and then buy! High probability spx to close the year out around 2900. Don’t miss this folks and don’t listen to crash callers.

  12. allen kimble says:

    No crash folks

  13. Amar Jeet says:

    Tony, Did you change the wave count ? Looks like ALT A wave is removed from the chart .

  14. wildmarkets says:

    This market needs you to keep your stops before you enter anything. Glad this helped me a lot this week. I was not so great on doing that but I think now I cannot fail to put in my out on any trade before I buy.

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