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. Thanks Tony
    NYA
    DT target met 11370,but looks very bearish
    https://invst.ly/9klw6
    W5000
    H&S broken,”most” of the time there is a confirmation pullback around 38.2% of the target
    https://invst.ly/9klyx
    Dow
    close to H&S target 22,9k
    tapering
    https://invst.ly/9kn7r

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  2. 123 abc says:

    Thank you Tony for the midweek update.
    At this pace, Major-2 bear market could over by early Jan 2019…!

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    • chrisk44342 says:

      Yes from a EW perspective I continue to favor this outcome. e.g. tony’s minors become intermediates. Sorry TC- he’s probably right- he generally is on the longer term view 🙂

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    • fionamargaret says:

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      • fionamargaret says:

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      • fionamargaret says:

        Another interesting choice from Tony’s readers.
        To me the closest you can get to classical jazz that has found its way into the concert hall within the guise of a piano concerto.
        Fun, lively, and if you like percussion…..and note the band-aid on David’s finger (softens glissades perhaps), and then there is the second movement that can reduce one to tears….
        David Fray (sometimes suggested as a European Glenn Gould) places his own stamp on the interpretation, but I have met him, like him and think he does a quite brilliant job….x

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      • fionamargaret says:

        One of the most interesting renditions of Hallelujah I have heard.
        Interesting back-up, with good balance between her strong, ethereal voice, and yet still providing an interesting counterpoint.
        Just lovely…you will be smitten by her.

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        • kjb0 says:

          Not even close to KD Langs rendition.

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          • fionamargaret says:

            I appreciate your input kjbo, as I do your work, but this was a video sent from one of Tony’s readers, which I thought deserved sharing……hope you have a lovely holiday, and come visit me on the blog if you want to escape (with music if you have something interesting to share)…x

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  3. right here at 2506, nice place for a 100 pt counter trend rally…

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  4. I agree that Trump and all of us would have been better off keeping Janet Yellen.

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    • I’d have to 100% agree, keeping Janet

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    • Egeorge.. IMHO, I have to disagree with your statement. Yellen should have ended the QE programs and stepped up the tapering program much sooner than she did. She was more concerned with keeping her job in a HRC admin., ….that she forgot to do her job.

      Powell’s/FOMC monetary policy is spot on. They are/were forced to play catch up. The FOMC should never bow to Wall Streets demands and never cave-in politically to any current POTUS.

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  5. aahmichael says:

    Last Post:
    Today filled the monthly gap from 8/17 @2519.36
    There are 2 other monthly gaps between here and 1800.
    1. 12/16 @ 2338.83
    2. 2/16 @1932.23

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  6. phil1247 says:

    tom fischer
    just because someone is trading billions
    does not mean he cant be wrong
    he can be horribly wrong

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  7. kvilia says:

    If a=c, then Tony’s pivot 2479 fits very well. What are the odds of a=c as the first leg of bear market? What are the other probabilities based on previous bear markets observation, anyone?
    Thanks!

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  8. aahmichael says:

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  9. And now a 6-8 % move up …2467 would be ideal …i bought 2538 monday …was out there at 2592 today , missed it – it happens ….We are in a layup move but may see 2467 …. if short , take em in

    Darkness (@SirDarkness) says:
    December 13, 2018 at 8:13 pm
    i’ll put it out there , Spx ( now 2650 ) will be2468-76 easily by jan 19th with a strong shot of jan 4,,,Iwm ( now 142.77 ) going to 133.5

    https://www.tradingview.com/x/31E0T3RY/

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