Weekend update

REVIEW

Nastiest week of the bear market by far. The selling felt like it was on cruise control. The week started at SPX 2600. After a gap down opening on Monday the SPX made a new downtrend low at 2531. A gap up opening on Tuesday ended with a lower downtrend low at SPX 2529. Wednesday, FOMC day, had a steady rise to SPX 2585 just after the 25bps rate increase was announced. Then for the next hour, including a half-hour pressor with FED chairman Powell, the SPX dropped 100 points to a new downtrend low at 2489. Thursday’s gap down opening added to the selling, and another new downtrend low at SPX 2441. Friday had a quiet open, rallied some on NY FED Williams CNBC interview, then dropped 100 points to a new downtrend low at SPX 2409. New downtrend lows all five days. For the week the SPX/DOW lost 7.0%, and the NDX/NAZ lost 8.35%. Economic reports for the week were mostly positive. On the downtick: the NY/Philly FED, NAHB, plus weekly jobless claims rose. On the uptick: housing starts, building permits, existing home sales, leading indicators, durable goods, personal income/spending, consumer sentiment and Q3 GDP was finalized at 3.4%. The ECRI was unchanged at -3.9%. Next week’s reports will be highlighted by the Chicago PMI and housing. Merry Christmas!

LONG TERM: downtrend probable

If anyone was questioning this bear market, it certainly has made its presence known these past three weeks: -12.4%. In fact, CNBC has been touting this December as the worse one since 1931. We checked, that one was the DOW was down 17.0%. The DOW is currently down 12.1% for the month. Of the seven major US indices we track, excluding the SPX sectors, only the volatile R2K has confirmed a bear market. As of Friday it has already lost 26%. The other six are all close. The NYSE, which we carry as an international index, has also confirmed a bear market. It is down 19.2%. It joins Australia, Canada, China, France, Germany, Greece, Spain, and S. Korea. Which are also in confirmed bear markets.

The long term count posted on the weekly chart remains unchanged. A Primary I bull market from 2009 completed in 2015. Then a Primary II bear market ended in 2016. The recent bull market, 2016-2018, was Major wave 1 of Primary III. This bear market is Major wave 2. There are three Fibonacci retracement levels that should provide support for Major wave 2: (38.2%) 2509, (50.0%) 2376, and (61.8%) 2242. Obviously the first one did not hold. Our worse case support has been around SPX 2400, which is also close to the 50% retracement, and the 2385 pivot.

MEDIUM TERM: downtrend

We are still counting this downtrend as a large double zigzag. A Minor A zigzag from SPX 2941-2604. Then a Minor B rally to SPX 2815. Then a Minor C zigzag down to SPX 2409 thus far. At first we thought SPX 2478 could hold (C = A). But it failed on Thursday. The next two Fibonacci supports are SPX 2309 (C = 1.5A), and SPX 2270 (C = 1.62 A). Lots of Fibonacci support levels between the bull market retracement and the C wave relationship: 2376, 2309, 2270, and 2242.

Technically, most of the RSI and MACD indicators have not been very useful in this avalanche of selling. We had thought that the “Tariff Man” comment could lead to a mini-crash. Guess this week was it. Currently, the daily MACD/RSI are both extremely oversold. The weekly RSI has a positive divergence, which usually ends downtrends during bear markets. The monthly RSI is now as oversold as it was during the 2015/2016 bear market. When markets are this one-sided to the downside it usually takes an “event” to reverse them.

SHORT TERM

Trying to track the short term waves during this downtrend has been a nightmare. Fifty, sixty point rallies followed by one hundred point declines have occurred on a regular basis. We even had a 100 point decline this week that took only an hour after the FOMC statement. The SPX/DOW and NDX/NAZ have all wiped out their entire 2018 gains in just two months.

Nevertheless, there are additional potential supports at the previous downtrend lows of this bull market: SPX 2408 Minute ii, and SPX 2322 Minor 4. Add them in to the previous four potential supports and we have: 2408, 2376, 2322, 2309, 2270, and 2242. The market hit SPX 2409 on Friday. Best to your trading!

FOREIGN MARKETS

Asian markets were all lower and lost 1.8% for the week.

European markets were all lower and lost 3.7% for the week.

The DJ World index lost 5.2%, and the NYSE lost 6.1%.

COMMODITIES

Bonds remain in an uptrend and gained 0.5% on the week.

Crude remains in a downtrend and lost 12.0% this week.

Gold is still in an uptrend and gained 1.4%.

The USD is now in a downtrend and lost 0.5%.

NEXT WEEK

Tuesday: Christmas holiday. Wednesday: Case-Shiller. Thursday: jobless claims, consumer confidence, and new home sales. Friday: the Chicago PMI and pending home sales. Best to your week!

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

About tony caldaro

Investor
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854 Responses to Weekend update

  1. hugh jazole says:

    I’ve never seen BPSPX this low. Has anyone ever seen it print an 11?
    https://stockcharts.com/freecharts/gallery.html?$BPSPX

  2. lml25 says:

    Sentiment is the wrong word,imho.Many times the sentiment is bearish–as it was last week–and the market still went down mightily.Trend is possibly the better choice.I’ve heard about “sentiment” on here as if its a mystical secret driver of markets.To be more cynical,I’ve always said,the major movers of these markets–JP Morgan,Wells etc–plus since 2008,the PPT,government etc–use the markets as their own money making machine–on the upside mostly–but then they sell the **** out of it to restart the whole process again at a much lower price–profiting in both directions.

    • chrisk44342 says:

      I agree with your assessment. How often are those guys from sentiment trader right? Almost never. The ‘stock market’ is not driven by earnings and peoples’ reaction to the earnings as much as it is liquidity. In that sense, the SPX trades more like a commodity than it ever has. Back in the day, Alcoa kicked off earnings season and the market eagerly awaited the news. That no longer happens. It’s a giant liquidity operation.

  3. Buying some Diagnostics companies this morning…. EXAS, GH, GNMK, ILMN, IDXX, and SRPT.

    • riderbobo says:

      What about CERS?

      I bought LABU on Monday.

    • Not being too aggressive because the first rally always fails.
      But “nibbling” nonetheless.

    • hi blue…seen EXAS recommended a lot lately. I did some cursory research work on the company. Would be interested in your sharing the main 1 or 2 reasons why you like the stock.

      • riderbobo says:

        He is an expert on the stock and has held it for years. He attends the annual conferences in Madison, Wisconsin and listens to all the confernce calls.

        • rider…thanks, saw your post after I posted. Are you going to nibble in this stock as well when the market turns back up?

          • riderbobo says:

            I have been thinking about it. Blue is in the company for the long haul. It can have some fairly dramatic swings in the stock price over time, going back over the years.

            Quite often news driven which Blue can explain.

      • For starters….

        Only 3% of the total addressable market is penetrated for the #2 cancer killer of people over the age of 50 in the United States. Excellent management team. No competition in the non-invasive space. The Mayo Clinic is their research arm. They command a ton of IP. They have over $1.0 Billion in cash. 350 sales reps. Just entered into a sales collaboration partnership with Pfizer. The company is spending a ton of money creating a “brand”. They arent concerned right now with going profitable.

        CMS fully reimburses Cologuard at $512.00 once every 3 years. Every year, 3.5 million more people turn 65. Plans in the works for lowering colon cancer screening down to age 45 from 50. That would add another 20 million to the market. Commercial insurance is now up to 95% coverage. Could easily see $1.0 Billion in sales on 2 million tests around the 2021 time-frame. Q3 COGS got down to $125 per test. Gross Margins were at 75%

        Next catalyst will be the pre-announcement of Q4 top-lline numbers during the JPM Healthcare Conference in San Francisco.

        I strongly suggest going back and listening to some quarterly conference calls and investor presentations in order to get a better understanding of the Company and what they are doing.

        I’ve owned shares in EXAS since 2008 and as low as $2.10

        A great growth stock that has been able to execute at the clinical level as well as commercial launch level due to a tremendous management team. 🙂

        • phil1247 says:

          very user friendly………..
          just poop and pop
          it in the mail

          • phil1247 says:

            i much prefer it to colonoscopy
            especially since a 50 year old healthy colleague of mine
            died from colonic perforation and sepsis

            • Colonoscopy has been granted the title of the “Gold Standard”, but it is a highly invasive procedure that carries “risk” . . . as you have clearly stated above. Interestingly enough, when a GI doc finds out that you tested positive with Cologuard, studies have shown that they have increased their “scope” time from an average of 13 minutes to 20 minutes. 🙂

              Cologuard is 94% sensitive for the detection of early stage colon cancer (stage 1 and stage 2). – – – It’s only a matter of time before Cologuard becomes the standard of care. I’ve used it twice now.

              • phil1247 says:

                yes sensitivity of cologuard is close to colonoscopy

                but specificity is 95% with FIT
                versus cologuard 90% which is not bad

                and specificity of colonoscopy approaches 100%
                depending on the skill of the operator
                ergo i have both FIT and cologuard

              • riderbobo says:

                Scheduled for another colonoscopy in February. Annually now, given my Lynch Syndrome/HNPCC diagnosis.

                I am electing no anaesthetic this time. GI doc said I am a candidate for that when I broached the subject. A friend of mine goes no anaesthetic.

        • thank you blue…will do my homework

    • tommyboys says:

      SRTS

  4. Lee x says:

    Yeah snagged a couple thousand at the globex low last nite while traveling, I’m starting to get bored, too easy might just call it a decade 😉

  5. travis01 says:

    The “news doesn’t matter; it’s all in the waves dammit” argument usually goes right out the Twitter window as soon as the news is not what you like. Trump news…destroyed market. Other news…didn’t matter we live by waves. Kinda like a Lib argument I guess.

  6. phil1247 says:

    es
    key level is 2376 bear below

    above there opens door to 2390

  7. H D says:

    project, monitor and adjust,,,, Thanks Tony. You’ve been a great teacher over the years.

    close enough….

  8. phil1247 says:

    kvilia

    CL just gave another 38 SPECIAL short at 43.42
    got SCO ?

  9. quickrick38 says:

    Let’s talk a little bit about “Sentiment”. Whenever you go onto an Elliott Wave site, you encounter a mix of people. There are those few that understand how the news influences sentiment and sentiment, in turn, influences the market. Next, you have those who are completely clueless about how that works and think that the day to day news influences the market. Finally, you have the majority who simple do not know nor understand how sentiment works.

    The financial news media is a good example of the second group where they are completely clueless about how world events, i.e. the news, influences sentiment. These folks try to assign some cause from the news of the day to try and explain why the markets did such and such. They are usually wrong.

    Note well that “news of the day” can have an impact on the market. However, it is typically an overt but temporary ‘disruptor’ that produces some knee-jerk, followed by the market returned to what it was doing before the disruption. A good analogy is running a stick through a line of ants marching along. Yes, it causes disruption, confusion, but it is only temporary and before you know it the ants are back in formation doing exactly what they were doing before the disruption. In effect, little or no change in the market sentiment.

    Sentiment, you see, is very much like an undertow. It is a very strong and very powerful influence over what the market does. Sentiment dictates market moves. For the most part, day to day news only influences the market indirectly by the way in which it influences sentiment. Now, if you can take that at face value then, it makes it a lot easier to understand when and which things can function as exceptions. For example, when is a news event so powerful that it has a direct (and lasting) impact on the market. The answer is when that news has an immediate and direct impact on sentiment. And, yes, there are few things that do that. But there are some.

    One obvious example are major terrorist attacks such as 911. That accounted for wave 5 of ‘C’ in a correction wherein the market didn’t start to recover until early the next month. One could argue it was more of a disruption but it was definitely one that lasted for more than a day or so. In other words, such a major event has a lasting impact by immediately influencing sentiment.

    Another example in the opposite direction is the early November 2016 election. The results of that election was a surprise and had an immediate and lasting effect on the market. The S&P rose 138 pts from the low of 2028.50 to the close at the end of the day at 2166.75. After that, the market just kept going up and up and up. THAT news had a very strong and lasting impact on market sentiment. That day the DJI went from a low of 17,418 to close 1,114 pts higher at 18,532.

    Those are rare exceptions. Generally, the day to day news events have little or no impact on the market. It is the underlying sentiment that controls the market. That sentiment can be (and often is) the polar opposite of the day to day news influence. And that is why people who trade based on news typically have a hard time making money in the market.

    • torehund says:

      Something went wrong with posting, here is the one…Tony, please remove the above

    • H D says:

      “I’m a tariff man” Dec. 3, 2018. SPX drops 16%

      • phil1247 says:

        rick interesting comment

        the key to using sentiment as you have alluded to is the trend
        prior to 911 attacks the market was already in a downtrend
        and it continued down afterward

        prior to kennedys asassination the market was in an uptrend
        and after a one day blip … it continued up
        so the key is to find the trend and where you are in the trend

        not the news

        • schizo1688 says:

          LOL, Phil , looks like you are at least 50 yrs older than me

          • YEAH ! Me too schitzo…….I wasn’t even born for 9-11. That was in the 80’s right ?
            yep….I cancelled my vaykay……be here all week. lol

            • quickrick38 says:

              You guys are hilarious! 🙂 Thanks Phil…right on the money. By the way when Kennedy was assassinated I was already ‘old’. Heck, I was 14 at the time. But, I will never forget it. That was a real tragedy for the country. Of course, you know that if Kennedy, a democrat, was alive today he would considered an ultra-extremist conservative.

    • waterstim says:

      But this market maybe poised for a bounce……a textbook one. My goodness, have you ever seen a market go STRAIGHT down without a bounce for this long without some type of decent bounce? I believe the sentiment, at present has more to do with the reality and the perception of QT/liquidity. But who knows, maybe the market takes a straight dive to negative infinity.

    • johnnymagicmoney says:

      So what you are trying to say is news fakes people out and in turn they move the market but that move is a fake break out or fake break down because ultimately it is sentiment that makes the news fake even though sentiment ends up align with some of the movement of the news which of course isn’t the true move but the fake move even if the move is in the same direction of the true move led my sentiment proving the news to be fake? So truly indeed it’s all fake news in the end…..I knew it!!!!!!!

    • I would suggest that the financial news media allows you a great opportunity to “identify” what the consensus is. Once you do that, you can then anticipate whether or not the consensus will be disappointed or not.

      The most recent FED statement is a PRIME EXAMPLE of that.

      You had everybody and their brother writing Op-Eds for the WSJ and chiming in about how the FED should be done raising rates and needs to “pause”. That literally was the consensus going into the Jerome Powell press conference.

      🙂

    • All depends on whether the “news” comes from news media or major players like central banks. In recent years Draghi, Abe, also Saudi Arabia in oil, were great opportunities to make easy money.

  10. hugh jazole says:

    Is the bottom in for CL?

  11. waterstim says:

    Blowout retail numbers….strongest in years. I’m dubious about the carnage continuing, for now.
    https://www.wsj.com/articles/u-s-holiday-retail-sales-are-strongest-in-years-early-data-show-11545777668

  12. tradingbot99 says:

    Happy holidays! and please remember that bear markets are known to trigger the most vicious counter rallies. Preservation of capital should be your goal.

  13. Trader Sal says:

    Tony

    I didnt take full advantage of this chart but there were almost 500 points to be had if you look at the previous chart I posted around nov 8th. Ofcourse one had to endure couple of up waves within but it had the roadmap to 2318. Todays low came in at 2317. This is where I was supposed to get off from 2800. Unfortunately I tried to time sub waves and played it safe after 3 down which went on to become 5. But still my opt trade was successful albeit it left a good chunk on the table when I exited prematurely a week or so ago when the real down move occurred after fomc. I wasnt expecting the whole move down to complete before jan/feb.

    I also remember mentioning in my posts in nov that it was going to be slow decline followed by accelerated move towards the end. Sure enough it took time to break the 2603 level and after that it did one pullback and then has been almost waterfall like. I needed a little more patience. Consider that as lesson learnt. Btw, back then it was unthinkable that snp would drop 500 pts.

    before

    after

  14. Jack kendo says:

    Merry Christmas Tony.

    The most bullish case is we have a short term pain, then ever happy after : 1987+13=2000
    2019+13=2032
    I think the 13 years up after the correction is oew main LT bullish theme of Major 3 of P3.

    And the worst scenario would be:
    Probably it’s too much for people here, so until next time …
    As I checked the posts on this blog for the last whole week, ALL posters are buying the dips, not a single person sell or short the market.

    cheers!

    • Jack kendo says:

      C = 4.138 A
      Black Wednesday?
      Level 3 will be at SPX 1880

      cheers!

    • aahmichael says:

      You don’t read very closely.

      • Jack kendo says:

        I don’t count the following:
        After the fact (after with certain advantage) trades.
        Fake trades.

        cheers!

        • waterstim says:

          Jack, I think you’re over the allowed limit for missed forecasting of “black” days 😊

          • Jack kendo says:

            LOL waterstim, You know, there are so many dip buyers here for the last 7 days, took 10 pages screen to save all the buyers list.
            The highlight was Sunday night when future up 12 points, so many are so exciting, one by one, claimed they are long.

            One shot, short term pain is better than cut it by a thousand knives, water torture everyday.
            You should be appreciated if black day comes. By saying black day, I am helping you, so that you can have “happy ever after” 13 years oew M3-P3 later.

            By guidance, PPT can not convene at this kind everyday 2~3% decline. It’s water torture!
            So you better wish the black day comes! Then the pain will be over.

            https://www.cnbc.com/2018/12/25/trump-lashes-out-at-fed-again-theyre-raising-interest-rates-too-fast.html?forYou=true

            “Treasury Secretary Steven Mnuchin on Monday hosted a call with the president’s Working Group on Financial Markets, a body known colloquially as the “Plunge Protection team,” which normally convenes only during times of heavy market volatility.

            But the call did more to rattle markets than to assure them. Regulators on the call said they were not seeing anything out of the ordinary in financial markets during the recent selloff, according to two sources familiar with the matter.”

            cheers!

            • waterstim says:

              Oh sure, Jack. I’m ready to see a bounce as well. Then try to position myself to try to short to the probable 1810-ish bottom. I’m sure you know how these things go…..you blink your eyes and it’s up 800 points because of some announcement coming from some unknown entity. One thing’s for sure….I’m grateful for all of the smart people on this board including yourself. This has been, by far, my most successful four months of trading in my life. Kudos to all of you. Even to the one’s with which we disagree politically. Best to you!

            • There was no conference call with the PWG.
              You’re literally making stuff up to fit your narrative.

    • M1 says:

      Merry Christmas Jack !!
      Quite interesting. This pattern is one of those that I have on my radar.
      You should add the following: 1987`s selloff was abt 7 years after the end of the commodities bull market. Similar time frame is now. However, this doens’t mean we will have a similar situation. In fact, nobody knows how exactly this selloff will end. At this point the worse scenario points to 1810 (spx). I guess Tony and the group already know that. It would be a nightmare for many people/traders. (A 40% drop).
      Good luck

  15. hugh jazole says:

    Any speculation about the final bear market low?

  16. Gesu Bambino
    Published 1919
    by J. Fischer and Bro. (J. Fischer being Josef, my father’s grandfather)

  17. bolderbob says:

    Merry Christmas Tony and Thank You for your extraordinary contributions to understand non linear market dynamics! What do you think the chances are that this Bear Market is actually finishing as Major 2 now or soon rather than just being in Intermediate A?

  18. @Tim Waters-Unless a post is made in hindsight, there is not one made on this blog that isn’t opinion. You sound triggered, and your long the market (that I know). I also know I’m not a bagholder, like you. Dow will close -1300+ tomorrow, Trump is already desperate for dip buyers and the Chinese have only started. I know that, too. Merry Christmas!

    • Slapdash says:

      That, of course, is also nothing other than opinion.

      Being certain of a 6% drop tomorrow is most likely going to be wrong. How close it may turn out will be revealed by hindsight.

    • rabbittrader1 says:

      Chinese have cut way back on buying and holding US Treasury bills(so has Russia and others). FED continues to raise rates despite no inflation and low unemployment. They are trying to attract China to continue to support the US spending needs. China and Russia are not buying US dollars . They intend to use the Chines currency and (Russian) and SDR’s to buy oil (not dollars) . They have both been buying Gold and Silver and will back their currencies on a fractional basis with precious metals . This will undermine the US dollar .. Bottom is near ,as some have suggested,at SPX 2250 area.,Rabbit! Merry Xmas

      • The FED sees +2.2% growth in the PCE inflation index last month as a threat.
        The PCE hit their 2% inflation target in March for the first time since April 2012.
        That is clearly why they continue to raise rates.

        Meanwhile, China continues to hold a massive amount of US Treasury Bonds and Notes. They are the second largest foreign holder of our securities next to Japan.

        They were at $1.17 Trillion as of July of this year.
        That was down from $1.18 Trillion in June.

        • Not only that….we buy a half a $Trillion worth of their goods per annum. Think they want to endanger that Plum Pie? Your remarks are nothing short of asinine

        • rabbittrader1 says:

          Bluehorseshow, China owned $1.32 trillion of US bills and notes at the peak in November 2013. They now own $1,14 trillion as of October 2018 (more than 11% less) and down from 1.18 trillion in June 2018.. Therefor, China is decreasing ,slowly, its holdings of U.S.debt. I disagree with you on why the Fed continues to raise rates. Rabbit.

          • Understood Mr. Rabbitt.

            I just think that there are people here (Tim Waters) commenting about the FED that really don’t have a very good knowledge base about what they are focused on…. their dual-mandate of the rate of unemployment and inflation.

            If anything, they need to “normalize” rates so that they can have some “ammo” during the next Recession…. given that Trump and Congress have done nothing but deficit spend, which limits their fiscal policy going forward.

            Cheers!

    • Tim Waters says:

      No, I just asked a simple question, docta…..And you failed to answer. Complete speculation on your part. Sight some sources. Simply as that. Other than that….Have yourself a Merry Little Christmas!

  19. Bruno Custodio says:

    Know that Tony is putting his line on the sand at SPX 1810. But looking at several other indexes like nikkei, dax, nyse etc… just looking at the graphs it more and more has the looks of being a retracement of the 2009-2010 bull and it that case it can go another 20% down even with the due bounce in between.

  20. torehund says:

    Insider speaking on FED, rate consequences and liquidity starvation.
    And happy christmas, despite the shocking market downturn we have to keep our heads facinf forward. Its only money, and its just a game after all😌
    Think there will be some intervention, qe or the likes. Gov has already involved the ppt, that only undermines conficence furter, negating that nothing will be done. Good old qe addiction.

    • fionamargaret says:

      Happy Holidays Tore…don’t listen to the naysayers on your book. You have a very unique way of expression…x

      • torehund says:

        Fiona I am a kid and 1000 years old at the same time, sometimes sharp as a pencil, but very often way off. Book is humming along, reality tested daily. Now I need to do cycles of letting it rest, do minor changes here and there and work on making thoughts and flow of words as seamless as possible. Phase of self-critique…
        Merry Christmas Fiona.

  21. zvyezda says:

    Buon Natale, Tony!

  22. stcoleridge says:

    Tony, PWG?

  23. Bill Manscoe says:

    Tony A very Merry Christmas to you and your family

  24. phil1247 says:

    kvilia.

    .. Merry Christmas !
    santa gave us a nice present with CL
    looks like CL had a B wave triangle
    with 20 more dollars down from here ..
    straight down below ……

    well …you already know ….

    • schizo1688 says:

      Hi Phil , merry Christmas … with 20 more dollars that means stock market will go down further ?

      • phil1247 says:

        Merry Christmas schizo

        i dont do any correlations

        spx goes straight down until…..
        well …. you know by now

      • micky says:

        Schizo,make it easy on yourself, price is trending down on this 5 min chart. In order to change that trend it will first have to get above the 1 SD (circle) for starters . Each of those bollinger lines above price is resistance while trending down. It’s easy to see for yourself.

    • fionamargaret says:

      I don’t understand this every 30 minute changing stuff Kvilia or “bears losing their mojo”.
      When $WTIC broke 72 to the downside 34 was in the cards.
      I suggested if we went through 44 it was clear sailing to 34, and maybe double bottom with the low of yore….
      No ‘to the moon” in between and no “after the fact” charts…or ATF ‘lotto tkts”.

      I appreciate Jack, Tom, Rick, Eva and Stan who patiently listened to my downward suggestions and drew charts. .Also Jack listening to my suggestion of a 1 for the whole upward movement. (still to be discussed more).

      Yes, I expected us to turn down at 2609, but if you got out there, a short while later the market went to its February lows below 2609. the market while it was above 2609, still had the lower numbers as the dominant pattern, thus my mentioning . The market was tenuous.

      Thanks to Michael, Fotis, McG, Freddie, FX, CN,,Mat, Micky, Page, for really great ideas that are original and helpful.

      And to everyone Merry Christmas, and a terrific New Year…..peckers up..x

    • Momentum indicator hit within 4 cents of expected low. Big rebound in store. It should carry stock market with it UP, up and away. in fact count on a big and fast rally over next 3 days.

    • CL hit within 4 cents of expected low. Expect both to rally big over next 3 days.

      • fionamargaret says:

        Gary, forgot to thank you, Joseph and Mr Coleridge…and my not mentioning is you three provided me with ideas that helped my soul, the tapestry of my being…is that not what DNA is…

        Now Gary if you are right, then I can start doing “after the fact” stuff……x

  25. hugh jazole says:

    Recession or nah?

  26. Sethu N says:

    Levels for 26-12-2018
    15 mts 2377
    Hour 2424
    Day 2512

      • DT D says:

        Hi Sethu, are those levels that you expect SPX to reach Wednesday? Day 2512 – stands for what you expect SPX to close at ? TIA.

        • Sethu says:

          These are the levels at which yu can initiate a short when there is a bounce since the trend is down see the red arrow marks in the chart

    • Sethu N says:

      Sethu N says:
      December 24, 2018 at 10:09 pm
      Levels for 26-12-2018
      15 mts 2377
      Hour 2424
      Day 2512
      Pl see the attached chart. Trading cannot become simpler than this. Day is yet to turn positive. Why break head on so many things

  27. wildmarkets says:

    Tony, I see that you have put in some notes in your SPX charts. In regards to AAPL do you see AAPL is close to completing 5 waves down on daily?

  28. aahmichael says:

    Today’s break away gap and acceleration down confirms once again that we’re in the middle of 3 of 3 of 3 to the downside from the 12/3 high at 2800. It amazes me how many people on this blog keep trying to pick a bottom, and continue to get run over by the speeding train. Folks, you should never stand in front of a subdividing wave 3. Never. It’s suicide. It will always go further than you could ever imagine. Overbought/oversold indicators are meaningless during a subdividing wave 3, as are all technical indicators. EW is the only form of TA that clearly identifies where you are during waves like this. Waves like this don’t happen very often, but when they do, you want to get ON the train, not stand in front of it.

    For those keeping count, today was the 15th consecutive that that ES declined a minimum of 34 handles from its daily high. That’s everyday in December.

    • fenster6 says:

      So what is your long term count AAH ?

      many thanks

      • aahmichael says:

        I don’t have a long term count. I don’t bother with long term counts, because even though I’m a position trader, I’m not a long term trader. What I do is try to determine what wave the current move is retracing. Since the Oct high, I’ve been saying that, at a minimum, this wave is retracing 666-2941. IMO, that was written in stone once 2493 was taken out. So, 1800 will be the minimum, but 1535 is probable, and 1175-1075 is possible.

        Also, while I don’t trade based on cycles, I can see some obvious things. We had an 18 year rally from 1982-2000, followed by a 9 year correction to 2009, followed by a 9 year rally to 2018. It could easily be many many years before we exceed 2941.

        • “aah”……These two previous submissions by ahh were excellent. This is why we keep him around ! lol

        • Just curious aahmichael….. where do you see 2019 S&P 500 earnings in order to get you that 1800 minimum number?

          I’m trying to figure out how big of a contraction you see in EPS for the S&P compared to previous economic contractions ( ie. 2015/2016 and 2008/2009 and 2000/2001 )

          FYI: The forward consensus is currently at $174.38

          • aahmichael says:

            I don’t do those kind of fundamental calculations at all. I look at the 666-2941 rally, and I see that 1800 is a 50% retracement, as well as 4th wave of lesser degree. So, in my view, that becomes a major magnet. It’s the same way that 2350 became a major magnet once 2620 was taken out. It’s strictly technical.

      • aah is following stocks only.
        And I like him, but he’s a short seller by trade.
        So, his views are not that balanced – this is a big cycle change.
        ***
        We need to see what the bonds do.
        I’ve posted about the bonds (as well as the stock drop starting Oct 6).
        Phil has opinions about bonds too.
        See what happens

        • aahmichael says:

          I follow all markets. I rarely comment about anything other than equities on this blog because the positions I take in other markets usually last at least 6 months, For example, my last positions in bonds and gold lasted 14 months each.

          I am not a short seller by trade. I’ve played the long side in equities for about 26 of the last 33 years.

    • Jack kendo says:

      Another one bites the dust. And another one’s gone, and another one’s gone. LOL

      cheers!

      • @Keno…

        If you are implying that David Tepper just “bit the dust” for “nibbling” on some stocks yesterday when the Dow was off 2 – 300 points, you are not only sadly mistaken, but it just goes to show how poor your knowledge base is.

        I’ve noticed that there are posters here that only look at major indexes. They dont even drill down one more level and take a look at sectors, let alone how individual names are acting within a sector.

        Never mind that Appaloosa has $14 Billion under management.

    • mcgcapital says:

      What are you looking for to suggest that there’s a counter rally coming and you need to cover? It’s kind of hard at this point for people who aren’t in short already… it’s very extended on the downside already but can easily extend more. On the counter rallies, it’s not that clear how far they’re going to retrace which makes entering fresh shorts tricky.. and on longs, SPX has been that weak they’ve not been worth playing (still had a few decent ones on European indices).

      I’ve never seen anything like it when researching markets.. maybe 1929-31 is the closest example as this is much more aggressive than the tech bubble or financial crisis

      Would say that there’s no necessity to play this market unless there’s a set up you’re happy with.. at this point I’m quite happy to not have a position a lot of the time

      Still think that for the first leg of the bear it doesn’t feel justified to go straight for 1800 here.. there’s likely a bounce somewhere soon it’s just finding when

      • aahmichael says:

        The first thing that has to happen for me to cover is for a 60min 3BR buy signal to occur. There are other things that need to coincide with that which I keep to myself, but the 3BR is 90% of the equation. The one thing I’m absolutely certain of, though, is that whenever a bounce does occur, it won’t mark the bottom.

      • mcgcapital…. I’m not one of those that is looking for 1800 minimum before a rally.

        For me, there is most likely a trade-able low that will come in in the low 2300’s. (2322 – 2335). We are almost there given Monday’s close. But also know that I am primarily an individual stock trader that is focused on medical diagnostic stocks and oils.

        And given what I’ve been watching in certain sectors (too long to go into here) I can see why David Tepper started nibbling yesterday morning.

        🙂

      • waterstim says:

        Well put. Classic gloom and doom. Fear. The market will soon pop. The market will tell us when. Everything else is speculation and noise.

    • schizo1688 says:

      Thanks AAh…

  29. valunvstr says:

    Always interesting when two FIB retracements overlap at the same price point. from 2011 low to 2940 top a 38.2 retrace is around 2245. From 2016 low to 2940 a 50% retrace is…2245 also! Lower than I thought this would go but for those that believe in FIB, that’s an interesting coincidence.

    https://stockcharts.com/h-sc/ui?s=$SPX&p=W&yr=8&mn=0&dy=0&id=p0961336017c&a=637123364&listNum=30

  30. It’s M2……until it’s not.

    Pretty sure it’s M2 though, mostly….

  31. The whole “Confirmed Bear Market” think is like monday morning quarterbacking after a 20% drop. A Bear Market really is when a preponderance of the stocks are in a downtrend, or below their 50 day moving average. Its been a rolling Bear for several months.

    With that said, have always had 1810 as Primary 4 low and 2940 as Primary 5 highs. Our view is this is Cycle 2 down, and this is A of ABC cycle 2. 2250 is a perfect multiple convergence zone for the initial leg of the Cycle 2 Bear.

    The Primary 4 low as 1810 was about 38% of Primary 3, too shallow really to be a Primary 2.

    666-1370
    1370-1010
    1010-2134
    2134-1810
    1810-2940… All fits neatly for Primary 1, 2, 3, 4 and 5 top…

    Here is our chart with updated notes…

    https://pbs.twimg.com/media/DvNs33JWwAIwCnh.jpg:large

  32. Theodore Lerts says:

    Bond traders

    In my estimation, the next few days, possibly even a week or two, may provide a small opportunity to short bonds. I personally will not do it because I don’t think the Risk/Reward is worth it….What I will say is this: around the end of January, possibly into early February, will be a decent spot to exit mid to long-term bond positions. There will probably be another opportunity to re-enter in late spring, but we will cross that bridge when we get there…As always, you should rely on your own modeling and data to be safe.

    That’s all for now.

  33. schizo1688 says:

    Market crash in oversold condition … is this still true ?

  34. wanderer says:

    From time to time, I provide a summary of the comments posted in this blog. This is my service to the OEW community. Over the last few days, you have not missed much: pretty much all discussions/comments were about the following four individuals:

    1. Allen Kimbell. Apparently, a certain attorney in Santa Barbara, CA, used at least five electronic devices to bombard this site with his market advice, which accounted to, basically, “just buy, because markets always go up in December”. A restraining order has been issued to require Allen to stay at least 500 yards away from the site.

    2. Donald Trump. This dude is an enigma. He is either trying to make America great again, or to destroy it. I personally can’t make my mind about it.

    3. Jesus Christ. Now that nearly all Fibonacci support levels failed, it’s only natural to ask, “What would Jesus buy and sell in this market?”.

    4. Steven Mnuchin. Steven Mnuchin is an American financier who provided funds for the production of some pretty good movies, such as “X-Men”, “Avatar”, “American Sniper”, and “Mad Max: Fury Road”. Apparently, he is currently working on his next flick, entitled “The Plunge Protection Team”. The plot revolves around a group of unemployed plumbers who come up with a revolutionary design for a toilet plunger, and become millionaires by selling it on Amazon.

  35. frankrizzo31 says:

    Is CL really printing another 7% down after hours? Absolute carnage.

  36. stockop says:

    we had lower volume full trading days in july. yikes. even more apparent in options volume.

    going to be a very interesting day after christmas.

    • fionamargaret says:

      …and the Toronto market is closed….
      I mentioned the numbers when I did today, as they suggested a lower close.

  37. gtoptions says:

    It’s official ~ #BearMarket is trending on Twitter!
    I really hope everyone used proper risk management.

    Merry Christmas & Happy New Year!

  38. kjb0 says:

    MERRY CHRISTMAS TO ALL .

  39. Dex T says:

    “I am all alone (poor me) in the White House waiting for the Democrats to come back and make a deal on desperately needed Border Security. At some point the Democrats not wanting to make a deal will cost our Country more money than the Border Wall we are all talking about. Crazy!”

    • wildmarkets says:

      All the adults left that bragger egoistic baby alone 🙂

    • Page says:

      ha ha ha … reminds me ‘Home alone’ movies, fits perfectly 😀

    • tommyboys says:

      …and the REAL hypocrite baby that doesn’t want someone else accomplishing what his party couldn’t – or wouldn’t – fearing losing the illegal vote….

      • Tim Waters says:

        They can’t help themselves, Tommy. China has been allowed to ravage us for the last 4 Presidents. No immigration policy or rules the last 50 years. Trump stands up to them, and he’s to blame for everything, A to Z. Look at France. The sicko Uni-Party doesn’t think there’s limit to their actions. Trust me, there is…and it ain’t gonna be pretty. That said, Merry Christmas to all…even to those that hate America

    • johnnymagicmoney says:

      There have been many tactics of his that I have said to myself “there is a method to his madness” but the way he has handled the slide in the markets discussing firing Powell and (probably) getting Munchkin to tweet his call to the banks has left me with one clear thought…………….”his method is madness”.

      “I am all alone (poor me) in the White House” ………………..I guess nothing should surprise me at this point but the child in him is astounding

      Yours Truly,
      Less Faithful Republican But Will Never Be a Democrat Johnny Magic Money

      • valunvstr says:

        The fact you would even quote Bill Maher tells the board all they need to know about you. Politics aside, he is a scum of the earth human being.

  40. gary61b says:

    VX, has targets that have not been hit, 27.08 and 27.64 as of now. ES 2240/60 could be coinciding level to the VX targets and close to the 1.618 of a. Oh and Merry Christmas to all and to all, will see ya back here tomorrow at 5 cst.

  41. fotis2 says:

    Merry Xmas people

  42. lunker1 says:

    They closed it at 2351 on purpose that’s a 20.0% drop it’s a bear market kiddos

  43. wanderer says:

    This decline does not feel like “shaking the tree” any longer. We are not too far from the 2015 SPX levels, so the entire 3 years worth of gains are in jeopardy. I think the decline would continue until the “BTFD” crowd gives up.

    • I don’t think you’ll see a spike in VIX to confirm capitulation this time around. Most retail investors have gone the passive route, so the liquidation by ETF’s is much more orderly than in the past. VIX is WAY above 10ema, think a temp. bottom is coming up.

  44. tony caldaro says:

    Merry Christmas guys and gals

  45. chrisk44342 says:

    https://invst.ly/9lzc6 We’re gonna need more fib levels

  46. IMO…..if this is a Bull Market ??? Has strange way of showing it…

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