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

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616 Responses to Tuesday update

  1. I will be taking my longs home overnight in CERS, EXAS, SRPT, GH, and QDEL. In fact, GH is +10% since I started nibbling on it a little after 11:00 am Eastern. See my post from 11:18 am below.

  2. tradingbot99 says:

    VIX is getting destroyed, I think today may have been last VIX spike before year end.

    • allen kimble says:

      Nope! You are to be proven wrong my grasshopper. Around the 17th of December will be another a spike higher to coincide with a spx print below 2603. Just enough to trap crash callers. Then massive Santa rally into Christmas.

      • schizo1688 says:

        And you didn’t call for 180 pt drop this week.. all you do is guessing that’s all .. just say the market will be trading 200 pt range .. no rally and no crashing

  3. No OPEC deal today. Everyone is waiting for the Russians to show up and “bless” a production cut, giving the Saudi’s some cover.

    • tony caldaro says:

      the “crude protection team” is Saudi and Russia

      • Many within OPEC (as well as outside of OPEC) believe that the Saudi’s are the one’s that should bear the brunt of a production cut, given that they were the one’s that created this mess in the first place, by producing above and beyond the 2016 Agreement of 10.3 mm bpd over the last several months. – – – The Russians in particular don’t want to cut, because they can enjoy a balanced budget at as low as $40 crude. This is why everyone is waiting to see what they “agree” to do when they show up tomorrow. The Saudi’s need their “blessing”. 🙂

    • riderbobo says:

      I believe non-OPEC countries are meeting tomorrow to discuss production cuts.

  4. Page says:

    If you are going to hold TVIX overnight … DON’T.

  5. Edward Disney says:

    On the Nasdaq from today’s lows,it looks like a wave 1 0r a then a wave 2 or b flat,then starting wave 3 or c.

  6. stan911 says:

    Don’t know if this means anything but ill share.Last time when we hit the high of 2877 there was a gap left at 2875 we dropped 345 pts to 2532 before returning to fill gap and make new highs at 2941 if and I say if that was to play out the gap at 2816- 345= 2471 and that’s the full C that everyone is talking about funny how these numbers coincide, if it plays out like that then the bounce we get is 409 and that brings it to 2880(84) the other number I said and others have called spook. So if 2471 becomes a large A and B 2880 then C is 2410 if it’s ganna be a ABC, I think tony is calling for a ABC
    anyway I’m still short and will try to trade it here and there add on spike ups so now I still have resistance 1 at 2688 and rising and 2700 support should be 2647-44. Question can this down move be a 5 waver if so then we go lower OR if we are to go lower like others have called just means that we’ll have larger ABC. Happy hunting

  7. wildmarkets says:

    Lunker, You should have not questioned fiona. Now he is posting his trades cluttering the forum 😉

  8. Updated pic. Notice that today’s decline began at the bottom white. Just as Tuesday’s decline was between two green’s exactly. The question is how long until we get to the dotted white?

  9. fxaprendiz says:

    This wave 4 we’ve been in since September 21st is proving to be even more complex that I had initially thought. Minute wave b subdivided into 3 waves that made a perfect flat. A minute degree wave b flat within a minor w-b flat, can’t get more complex than that, well except for a triangle within a flat…

    If this count is correct, expecting an upswing to complete the bigger flat up. That should be the last counter trend rally before the final rollover and then we should start the series of mostly down waves to complete wave 4. Attached my previous medium term chart for reference.

    SPX takes out 2603 and then it’s back to the drawing board. There’s no more leeway now, imho this is the last opportunity SPX has to go over 2800 again.

  10. kvilia says:

    2665-70 is proved to be quite a resistance, tested 3 times today. Went short 2665, measured move target – 2602. With all the volatility, will not be surprised it to be hit before end of close. Unless of course markets have a long setup in mind. Stops r us.

  11. ninjashade314 says:

    Mr. Caldaro, may I just float my 2cents of this count:
    2940-2603 int a
    2603-2815 minor a of int b
    2815-2631-2800-2621 minor b of int b (flat)
    2621- minor c of int b (target >2815)

    Is this still a remote possibility or this is not being considered at present?
    Yours sincerely,

    • fxaprendiz says:

      Ninja, that’s basically my current EW count, only I’m using one degree lower waves than you. Check my first chart in above post.
      You have a sharp eye, thumbs up.

  12. Lee x says:

    Guys they might be annoying but they’re great fades .
    Let the shot callers call their shots
    They’re givers

  13. schizo1688 says:

    The question is how high ?

  14. Page says:

    We have seen the low at least short term, SPX 2700 is next … one step at a time 😀

  15. Been nibbling on CERS, EXAS, SRPT, GH, and QDEL this morning.
    They are acting very well.

  16. torehund says:

    No comment, good weekend Tony and all.

  17. lml25 says:

    Question:Is this a H&S top getting ready to fall through 2625?If it is,2400 the PO.
    Now a Christmas poem:
    Twas 3 weeks before Christmas
    and all through the land
    Not a bull there was stirring
    Stocks,stuck in quicksand
    And as we ask why
    stocks fell through the floor
    The reason is clear
    for those who implore
    Santa Yellen is gone–
    Grinch Powell runs the store.

  18. fxaprendiz says:

    No time to post charts to explain my reasoning, but had a long order to be triggered at 2622 with 2600 SL, which have just filled.
    Regarding my previous 2634 long, I had a SL at 2685 that was triggered yesterday at the Asian opened. 51 points profit plus another 37 from an earlier hedge short was my reward for my previous position. Let a lot on the table but can’t complain too much about a profit however small in this trading environment.
    Some people are trading the downswings and making money, others are playing the upswings and making money as well. Kudos to the few ones in here capable of playing both sides and making a killing. For me right now it’s mostly about capital preservation until wave 4 is done mid 2019, making a few $$ is good too but not my main focus as of now.

    • jobjas says:

      Allen you need a detox ! If you respond to this with more garbage you need a serious detox – may be start with a coffe enema and then deal with your upper story

    • fxaprendiz says:

      Allen, I acknowledge that you exist and that you are in this blog; however I also acknowledge that you are a prick that just wants to pick a fight with anyone who doesn’t agree with whatever is your view at the moment. So while I acknowledge your post to me I’m not going to bother to explain my position to you, not worth it. And from now on any post addressed to me won’t even get a reply from me. You’re just a troll and nothing more, and such people is not worth of engagement.

  19. phil1247 says:

    straight down below 2639

    ie cover shorts there
    good luck and see ya tomorrow

  20. hugh jazole says:

    Remember, the charts have a “full bore-bullish” look.

  21. kvilia says:

    2632 pivot lost. This is getting ugly. How come nobody talks about inverted yield curve?

  22. fionamargaret says:

    2656, 2598, 2450 then 2340
    DWT (short oil) up to 24
    SAME X

  23. lunker1 says:

    Hey Tony SPX went under 2631 whacha got up your sleeve for this curveball? Thx

  24. schizo1688 says:

    Thanks phil

  25. Page says:

    SPX is getting close to Tony’s 2nd pivot 2632, get ready to buy buy buy ….. 😀

  26. quickrick38 says:

    Is the paint dry yet?

  27. I don’t know about you, but anyone that “trades” for a living would call a 150 point collapse in the S&P in 2 days a CRASH. – – – Never mind that the – 800 point day in the Dow Jones was the #4 biggest point decline in history.

  28. fenster6 says:

    Hi Tony

    Any thoughts on the count?
    Still just a B wave?


  29. fotis2 says:

    fotis2 says:
    November 22, 2018 at 10:58 pm

    Gold today close above 1233 will mark a weekly 3BR possibility of bullflag paying out at target gets another nod.

    Gold Bullflag setup oficially at play with the taking out of that little R of the 26/10 looks like a big CH a pullback to the low 1200s could give a decent 100 buck move lets see.

  30. Perhaps a bullish stick sandwich candlestick pattern on the spx weekly. Have to wait and see how tomorrow trades.

  31. Oil traders are looking for a 1.3 mm bpd cut. But crude tumbling another $2.09 to 50.80 as market participants worry that an OPEC cut will only be 1.0 mm bpd.

  32. ISM Non-Manufacturing Index 60.7 vs 69 estimate

    Factory Orders – 2.1% vs -2.0% estimate

  33. schizo1688 says:

    Market is moving too fast , just going long little by little until 2632 ..

  34. Guys…I don’t like what I am seeing in “SSO” trading this morning…they are selling into strength. Someone is ramping it up .10 and someone is selling ..down .20…wash rinse repeat.

  35. allen kimble says:

    I repeat, There will be NO CRASH in December. The markets will flush out all who want to get today. The ES has an open gap @ 2716. This gap will fill this week folks. BUY today to capture this move to that level.

    And yes news does matter here. Any fool can see this.

  36. filipozze says:

    nasdaq looks impulsive. and gap down, if price retake yesterday’s low correction is about to finish right now in my opinion. here the chart:

  37. jobjas says:

    ES projection
    follow the waves – news will follow 🙂

  38. zvyezda says:

    Today is the Feast of Saint Nicholas so if we are going to have that rally it better start today.

  39. phil1247 says:


    SPXU has almost 2 points of profit from tuesday
    too much to give back with risk up to 2695 and
    still no break of spike low on es
    have you done anything yet ?

  40. Stop with arrest as an excuse! She was arrested Dec 1st, last Saturday. The Chinese govt was well aware of the arrest that day. Reality check, the market sucks and the price doesn’t lie!

    • stockop says:

      …. when it reaches the masses do you 100% honestly believe there isn’t a single fund manager, let alone a bunch of idiot retail investors, who will not be selling on that news? I truly do not get how so many people believe news has zero effect on the market. if one were to be a conspiracy theorist you could even say people in the know knew this and began selling as a result Tuesday. thats neither here nor there, but geez its a bit ridiculous. that trade meeting on saturday didnt cause that gap up? come on.

      • stockop says:

        also, I want to mention that this news just so happened to be released about 20 minutes before futures started trading. coincidence?

        • aahmichael says:

          What I find odd is how they were able to keep the news from being published for 4 days. In this day and age, that rarely is possible.

          • Ahm….I thought it wasn’t until yesterday or Tuesday that the DOJ formally asked Canada to hold her pending a formal extradition request was filed. Maybe the smart money saw this coming on Tuesday?

            • aahmichael says:

              The reports I read said that she was detained on 12/1. Here’s an interesting take on this:

    • aahmichael says:

      The Chinese government has been aware of the news, but traders didn’t know about it until last night. Of course, that doesn’t change the fact that the SPX/DOW bear market began at the 10/3 high.

      • stockop says:

        no it does not at all. and this type of news flow imo only confirms it to me. news good or bad often happens in the direction of the market trend. “The trend has been established before the news is published, and in bull markets bear items are ignored and bull news exaggerated, and vice versa.” – Reminiscences Of A Stock Operator

  41. E says:

    Let’s see if anyone is still insulting me over seasonality for my warnings after next Tuesday. Respecting the elliot waves and technicals is respecting the market. It’s possible that Tony’s count is incorrect but at least he gave the warning to be prudent weeks ago. That’s a nice attempt QuickRick, but I say there is no point trying to count the little waves during a wave 3 bear market drop until it is done. You never know how any subdivisions there will be. Good luck to those who were actually humble enough to listen to Tony and others who saw this possibility.

  42. mcgcapital says:

    Well at least that’s seasonality as a trading tool put to bed. ‘There has never been a market crash in December. It’s just not possible.’ Lol.

    Was also going to say, after reading the comments here before anything else this morning, why are people pinning this move on the arrest of a Chinese national? Seems completely irrelevant to me. Then I saw that the financial news outlets are reporting that as a reason. Its like they have to see what newsflow is out that day so they can attribute why it’s moving.

    This move is about fundamentals, and nothing else. Economy is going to turn here globally led by China. So earnings have peaked and may even begin to contract as margins are at record highs. Compressed risk premia will expand so valuations will come down. Market is going down. It wouldn’t have mattered what happened at the China dinner last weekend, because it’s a sideshow. But too many think this is a simple as trade war bad, no trade war good. Which is why they’ve been caught out this week and no doubt their panicking is exasperating the selling

    • mcgcapital says:

      And FTSE and Dax have made fresh 2018 lows under the March and October ones on heavy volume, straight line selling and no bid. Highly unlikely they turn higher now the range has been lost. Expecting SPX to follow later and break 2600 soon

      • stockop says:

        trend line fast approaching on the FTSE from 2009 lows (log scale) do you think it’ll crush through it or is a bounce pretty much expected?

        and while I agree with you on the news, for the most part, I think ignoring headlines and placing it all on fundamentals is incredibly biased from someone who has a fundamental background I can see where the bias would come from. Yesterday Putin came out bringing up cold war rhetoric with the promise of retaliation if we back out of the arms treaty, the chinese national arrested is the CFO of the company, daughter of the founder, with HUGE ties to the communist party, and to top it off Apple is lowering the price of the XR (fundamentals, but still news) clearly showing weak sales and giving credence to all of their suppliers cutting revenue projections. I do agree that the fundamentalists and smart money are a majority of the selling, but to completely throw out the news and act like any of the above isn’t causing people to sell is incredibly obtuse thinking.

        • CampFreddie says:

          stockop – Good post thnx.

        • mcgcapital says:

          FTSE I have 6620 and 6500 as next levels of support. Kind of thinking one of those holds and it bounces back to 7000 for Xmas with more selling in Jan. But momentum is strong here so it has the feel of a sell and hold all day kind of move.

          With those 3 news events, the Apple one is something stock specific. The Putin one is irrelevant to markets unless you were to try and price an escalation in geopolitical tensions. If we were trending up because of good fundamentals it wouldn’t matter, a bit like with the NK rocket tests last year. The market went up despite them.

          And on the China news, I still struggle to see how that’s relevant to markets. They are clearly arguing that it’s relevant to trade negotiations but I can’t see that really.

          The markets are going down because of the earnings outlook and risk premia expansion. Unless there’s some news out that can change either of those, it probably carries on. So thinking central bank news, fiscal stimulus, better economic data etc. The rest is irrelevant.

          Would also say, before any of that news came out, US markets were down big on Tuesday, closing at the lows. Then yesterday European markets were unable to close their gaps to Tuesdays close, and closed at the lows at the bottom of their trading ranges too. The markets were likely heading down today with or without newsflow.

          • stockop says:

            I completely agree with everything you are saying. But it sounds like you are honestly trying to say that increased geopolitcal tension between Russia and China (yes, the arrest is a big deal. this is her dad: https://en.wikipedia.org/wiki/Ren_Zhengfei , this arrest alone could completely shatter any shot of a trade deal, China has already demanded her return) has no impact. Also, I have no doubt people sold on the NK rocket news. It was a bull market so they were wrong. I am just trying to get across that these type of news events increase the selling pressure. it is not just ALL fundamentals causing this sell off right now. it is being exacerbated by the news.

            trend line looks to tag around 6650 so a little undershoot fits in perfectly with your targets. thanks for sharing.

    • CampFreddie says:

      MCG – Good post and agree.

  43. quickrick38 says:

    Bear in mind, these short term wave counts are tricky…but here’s what I’ve got so far.

    • quickrick38 says:

      Sorry, I missed labeling wave ‘4’

    • stockop says:

      right before your iii, it can also count iii-iv-v, with your current 3 completing 5 down. basing this a little off the Nikkei whose followed us pretty well recently. the count on that index is a little scary

      • quickrick38 says:

        Yeh, stockop, I just took a flying shot for the fun of it. 🙂

        • stockop says:

          its a good one. I don’t know if I subconsciously remembered your count from a few weeks ago, but I came to the same conclusion this weekend and so far so good. keep it up I enjoy reading your posts/counts

    • phil1247 says:


      ” bear” in mind ? 😉

  44. qball1976 says:

    Not saying we crash but just continue to grind
    Lower with increased volitility. We should be
    happy with this opportunity to make trades
    but it is somewhat a no brainer that we get a recession and things go south for 2-3 quarters but then it’s happy times again 😃

  45. qball1976 says:

    Retiree247- normally you’d be Ok but please
    if you have a short term time horizon as in less
    Than a year don’t play around here. I could give a lot of reasons why we are late in this credit cycle… yes it’s credit cycles that influence business cycles now but this is not appropriate here. Sometimes the fundamentals outweigh technicals and here we are. I’m sure in 6-9 months we will all have great buying opportunities.

    • retiree247 says:

      Hi Qball, nice to meet you. Just to let you know….I’m not here to play. I am a retiree who has relieved my PNC wealth manager from his duties as of Jan. 2, 2018.
      I am very flexible, my trades via SPY shares vary from 1 day to month’s depending on the trend. I try to keep it simple, using TC’s pivots. I’m in today long from 2632 and 2655. Cashed out 1/2 at 2690 before todays close. I’m keeping some for tomorrow and have a stop at 2650 just in case it goes rotten tomorrow. With the help of guys like Tony, Phil, Asa ,KV, and Lunker my IRA is 12% on the good side. Keeping that in mind, I don’t trade blindly on other peoples opinions. Bottom line… Its my money…I MAKE THE RULES!!!!
      Take care and God Bless!

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