Wednesday update

SHORT TERM: flat open then typical FOMC selloff, DOW -352

The first three days of the week had Asian markets -0.4%, and European markets -1.3%. US markets gapped down on Monday, and made a new downtrend low at SPX 2531. Gapped up on Tuesday, but still made a new downtrend low at SPX 2529. Opened flat on Wednesday, rallied into the 25 bps rate increase at 2pm, then made another new downtrend low at SPX 2489. Guess the market didn’t hear what it wanted to hear during the press conference. The FED did lower the number of rate increases for 2019 from 3 to 2. But did not mention anything about reducing the Quantitative Tightening, which has been draining liquidity at a rate of $50B per month. Since the next likely rate increase is not until June or even September, then it must be all about liquidity and QT now.

We can still be certain, at this juncture, the stock market is still in its first downtrend of this bear market. The OEW 2525 pivot, which was only added last week, was tested two times this week then broke today. The next OEW pivot is at 2479. Around that level Minor C equals Minor A. Strong support? Positive divergences continue to appear on the hourly and weekly charts, with oversold daily and monthly RSIs. With options expiration up next, the volatility is certainly to continue. Still a day traders markets!

MEDIUM TERM: downtrend

LONG TERM: downtrend most probable

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

About tony caldaro

Investor
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682 Responses to Wednesday update

  1. lunker1 says:

    2411 Pivot
    2404 = .236 of 667 to 2941
    2400 Minor C=1.236A
    2396 -.62 extension of 2940 to 2604
    2388 Minute C=2.236A
    2385 Pivot
    2376 = .5 of Major 1 1810 to 2941

  2. torehund says:

    Happy pre-christmas Tony and everyone.
    The weekly Spx macd line lost support and looks to be wanting to retest the 2009 bottom. Dont think there will be much to be had but downturn before retest is finished.

  3. Sethu N says:

    Dear Phil,
    I have been following Tony and you for quite a long time. Tony was helpful through e-mail lot of times. First thing, what I noticed wrong in Tony’s method of OEW pivots is looking for support is not quite right and going against the market in a downtrend. In a downtrend no support is sancrosanct. EW changes its color often. No point in trying to guess or chart a course of the market . Your method of FIBO also fails in the same respect. Target fixing is a wrong thing to do.Further, your method you have to keep on watching whether this support or resistance holds. A method which is widely followed or known will fail. The success of the method depends on the user.
    Finally, I have evolved a trend following system by using very time frames for entry and exit. Here what happens in higher times is important. For seasoned traders, I dont have explain how to trade in different times frames. See my levels on various times frames EOD 21-12-2018. If you want I will publish these levels either by e-mail or in this blog with Tony’s permission.
    Tony, if it ok with you, i will do it on a daily basis. Since we are in a downtrend I am giving the high levels. To tell you , I have effectively used this and I dont have to bother about anything. Pure Price Action.

  4. 15 mts 2,440
    Hour 2,464
    Day 2,575
    Week 2,672
    Month 2,706

    • kvilia says:

      Ram,
      Can you elaborate on these levels and how you use them?
      Thanks,
      Kv

      • Sethu N says:

        We are in a downtrend on all t/f and each rise is a sell. CTT also one can do. eg 15 mts t/f if you read the resistance 2440 failed , you go long with strict sl and watch for next higher t/f level hour 2464. If that resistance square up long and go short. From my experience, I find attempting long after hour strength is always rewarding. As of now each rise below 2464 is a sell. If a particular resistance in this case 2440 or 2464 holds , a new low is made. When a new low is made this level changes. When a new low is not made and hour resistance is taken out one needs to be cautious on shorts. In that case long levels will kick in.

  5. fenster6 says:

    dont let us forget the village idiot who said trade wars are fun. Who said the fed should move rates up. WHo has fired all the adults in his administration

    • valunvstr says:

      seriously? Said moving rates up is good? Brilliant comment which showed partisanship and lack of reality. Even if at some point in the past a comment about higher rates were made, it’s clearly on record that the size of the hikes and speed has been way to much and too fast and has called it a mistake. Gosh.

    • lunker1 says:

      It’s not about rates it’s about negative asset purchases so now the path of least resistance for the market is down

  6. kvilia says:

    Last thought for today. Could it be that this week selling was for tax purposes to write off losses?

    • Dex T says:

      Not of this magnitude.

    • M Wags says:

      No.

      Why would you think that the worst week in a DECADE is due to tax loss selling?

    • fionamargaret says:

      It was suggested there will be even more selling after 1January for those that do not want tax consequences for this year,.
      Also at some point folks will stop expecting the market to rise, and that is when the washout happens (and the possibility of a crash) with high volume selling).

      • For me, the Landscape is clear and laid out in my comment below. I am short via QQQ puts thru 2020. Long JNUG, but I will now use the great minds on this blog to navigate the inevitable rip-rallies that occur in Bear markets .

    • valunvstr says:

      The fact that the biggest winners are getting crushed the worst might suggest some merit to you le comment. Hedge funds are collapsing and hundreds expected to shut down. More forced selling from there too.

    • Valerie wapiti says:

      Before everyone says no, not at all…the VIX may be saying something different. VIX did not track market behavior this week- was far more lackadasical than was Ms.Market. Possibly VIX knows something we do not AKA a portion of this week’s drop was due to rebalancing and EOY selling.

  7. SP 2940 sure looking like a big top, in SP that’s my take…

  8. The House just adjourned without a deal. So a partial shutdown is virtually assured.

  9. kvilia says:

    Camp, did you go long today? I highly doubt they are going to drop it hard before Christmas Eve.

  10. pooch77 says:

    Can someone tell me what Allen Kimbel is saying so i dont have to go thru 650 posts

    • kvilia says:

      Heard he was selling at the close.

    • phil1247 says:

      NO CRASHES IN DECEMBER …. got that ?

      (or something to that effect)

      • kvilia says:

        Phil,
        Since the target held at the close, do you expect another retracement on Monday? I am wondering if there is any possibility of Black Christmas 🙂

        • phil1247 says:

          i will show you over the weekend what i think might happen
          but it has only happened the last 2 days
          so no guarantee it will happen again

          • kvilia says:

            Any hint Phil? I have a long one still open !

          • Dear Phil,
            I have been following Tony and you for quite a long time. Tony was helpful through e-mail lot of times. First thing, what I noticed wrong in Tony’s method of OEW pivots is looking for support is not quite right and going against the market in a downtrend. In a downtrend no support is sancrosanct. EW changes its color often. No point in trying to guess or chart a course of the market . Your method of FIBO also fails in the same respect. Target fixing is a wrong thing to do.Further, your method you have to keep on watching whether this support or resistance holds. A method which is widely followed or known will fail. The success of the method depends on the user.
            Finally, I have evolved a trend following system by using very time frames for entry and exit. Here what happens in higher times is important. For seasoned traders, I dont have explain how to trade in different times frames. See my levels on various times frames EOD 21-12-2018. If you want I will publish these levels either by e-mail or in this blog with Tony’s permission.
            Tony, if it ok with you, i will do it on a daily basis. Since we are in a downtrend I am giving the high levels. To tell you , I have effectively used this and I dont have to bother about anything. Pure Price Action.

      • how do you define crash? But, with the major top now in
        place – I also would not expect a crash line decline,as such.
        Yet – the new trend has begun

  11. Easy buy at 2410 area to go long targeting 2500-2550 next week or so IMO. Then, another massive 200 pt. or so drop on SPX possibly. IF that move goes below 2408, this bull is dead IMO…confirming 5 waves down.

  12. Simon Rootbeer says:

    Brace yourselves for a massive gap up sunday might im thinking…

    “Shutdown Averted? Schumer, Corker Strike 11th Hour Deal”
    just hit the news wire…

    • riderbobo says:

      I haven’t been watching the news. The last I heard Corker was en route to Tennessee yesterday by car.

      • Corker lives in Chattenooga, TN.
        That’s 600 miles from Washington.
        I really doubt he ever drives that, esp winter months.
        Interstate 81 is a really long 2 lane road loaded with 18 wheelers.

        • fionamargaret says:

          Tom, when I read this at about 2.30 in the morning I found it so totally funny I couldn’t stop laughing.
          Add moose, deer, the occasional lynx and owls to the mix, and you have the road to my hut…

    • M Wags says:

      With all due respect, your wrong.
      You need to read through the article and actually comprehend what it actually said.

      The only thing that was agreed upon was to continue talking.

      It was a “procedural” vote. Had nothing to do with substance. It was Procedural in that it gives them (the SENATE) an ability to handle the House-passed CR from last night.

      FYI: There aren’t 60 votes in the Senate that will support the $5 Billion in funding towards Trump’s Wall. In fact, they cant even get a simple majority.

      • waterstim says:

        Listen up. The line has been drawn. It’s pretty clear to me that the Dims are going to continue to push this straight into civil war territory. Go ahead and continue to flap your gums and get schooled like you did yesterday. We will win and you Antifa wachos will be stopped. BUILD THE WALL NOW!

    • lunker1 says:

      I don’t think the market cares about the shut down

  13. travis01 says:

    Vix finished slightly below lower BB, SNP slightly above upper BB, and 2410 range was projected low on multiple charts…but still hard to go long yet

  14. kvilia says:

    Is after hours trading going on? ES not moving at all.

    Merry Christmas, everyone!

  15. Will be interesting next week
    A was 337 if C is 1.618 of A that’s 545 from 2800 or 2255. Or another 161 more point to go.

    Merry Christmas all. Have a nice weekend.

  16. davidmlamos says:

    Merry Christmas Tony. Thanks for all you do and I wish you health and happiness in the new year.

  17. lml25 says:

    The h&s I pointed out, at 2620(after a quick fake out)WORKED!2408 IS close enough.Send all your thanks and Christmas money of gratitude to…LML25 Charity Foundation…lol.I wish I had something set up like that.That’s all folks.Many H&S that complete,reverse up quickly.We’ll see about this one.Later.

  18. xEVAx says:

    Well there’s this….. Yes I win for the most DOOM on a chart LOL

    • fionamargaret says:

      …clever…

    • jobjas says:

      if your labeling is correct …. you are looking at a bottom at 125-250 DOW !!!

      • xEVAx says:

        Probably bottom ticked it short term LOL, 2024 lines up with a LONG fib date (right at the end of the black T/L from 09) and I wouldn’t be surprised if we did the mother of all ED’s right up that black line and through the top long red one…. Then DOW 666….. Cheers =)

  19. I know many of really big cotton farmers scared of hemp crop

  20. stockop says:

    IWM and QQQ with A=C targets hit (IWM H&S target and gap fill). UVXY filled gap from April. still a big one from April at 97 that i expect to be hit at some point shortly. feel stupid holding over the weekend. absolutely relentless selling. sure does look like a w3.

    price action is absolutely horrendous. some internals reaching record oversold records. weekly charts are depressing. not anything bullish on the charts except fills and targets hit. only thing keeping me from being short is it would have been a purely emotional trade and those always end badly. either a serious bottom made today or were gonna have a third crash in less than 20 years. expecting a big move either way. i would be shocked if we opened flat on monday.

  21. blackjak100 says:

    TC, is it fair to say if there is a collapse coming due to the monetary policies implemented in 2009, then OEW has it considerably wrong going forward?

    Merry Christmas!

  22. Jack kendo says:

    Tony Thanks
    Merry Christmas to you.

    cheers!

  23. wildmarkets says:

    Tony, You think the entire downtrend might be close to getting over?

  24. Dex T says:

    Another brutal day. A longer and deeper recession awaits us in 2019.

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