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


About tony caldaro

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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:

      Can you elaborate on these levels and how you use them?


      • 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.


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