Wednesday update

SHORT TERM: gap up opening, pullback, then DOW +1086

For the first three days of the week not much happened in the foreign markets, as most were closed, or open a limited time. The US market, however, was a bit different. Even though there was a half session on Monday, the market tanked to SPX 2351 at the close. Down 65 SPX points on the day. Today was a totally different a story. The SPX closed at 2468: +4.96%.

On March 4th 2009 POTUS Obama stated to buy stocks because they were cheap. The 2007-2009 bear market bottomed only 4% lower and two days later at the infamous SPX 667. On Monday Treasury secretary Mnuchin convened a meeting of the Presidents Working Group (FED, SEC, CFTC and Treasury). On Tuesday, Christmas day, POTUS Trump stated to buy stocks because they are cheap. Did the market respond to the POTUS or the PWG? Keep in mind POTUS Trump tweeted on December 4th that he is the Tariff Man. The market promptly dropped 15.9% over the next three weeks.

If today’s activity was because of the PWG, better known as the Plunge Protection Team, there is certainly more upside ahead in the coming days and possibly weeks. Managed
Markets for a Managed Economy (MM4ME). The rally from today’s SPX 2347 low, the 7th consecutive day of new downtrend lows, looks like three waves thus far: 2414-2394-2468. Short term support is at the 2456 and 2444 pivots, with resistance at the 2479 and 2525 pivots. Short term momentum reached quite overbought during the rally. The daily RSI just came off its lowest level since the 1987 crash. Best to your trading!

MEDIUM TERM: downtrend

LONG TERM: downtrend probable

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

About tony caldaro

Investor
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524 Responses to Wednesday update

  1. quickrick38 says:

    Definition of “re-balancing” for licensed professional financial advisors: You need to split your money between winners and losers…”Take the excess money you have in winning investments and move the money into your losers.” That’s what they call ‘professional’ financial advice. 🙂

    Like

    • aahmichael says:

      Not true. Rebalancing portfolios is based on the concept of asset allocation rather than market timing. Diversifying your holdings, rather than concentrating your holdings. You start with a target allocation, and rebalance back to the target allocation if/when the actual allocation exceeds its thresholds. That doesn’t always mean selling winners and putting the money into losers. It means selling a portion of the relative out-performers and putting the money into the relative under-performers. The net result is that at each rebalance, you are selling a portion of one asset class at relative highs, and buying another asset class at relative lows. It’s a very sound money management/risk management practice for those who don’t time the market. (which is about 99.9% of financial advisors.)

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  2. kvilia says:

    Interesting, DH has it still as a short setup for ES. Gap above at 2468, bear below 2493, target – 2249.

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    • Anthony Saraniti says:

      Kvilia…DH has a bias….. currently bearish. This time I agree with him. Haven’t seen his site today but he is just using s higher high as the high anchor. My bet is that he will do that until /ES breaks the full, 61.8%, measured move short…….using 2942 as the high anchor and the recent low as the low anchor.

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  3. STEPHEN BARTLETT says:

    Wasn’t it just long only fund managers saving their jobs.
    U.S equities have always been the hardest market to short. The rest of the world can be collapsing but Billy Joe in Kansas running his 20million will still be waving the flag and buying. Also. No other country really cares about what the stock market is doing. It ranges from the odd nod to complete indifference. If the U.S market has a mild correction they are talking about plunge protection teams or QE one hundred or whatever else. When it does fall it happens so quickly, like recently, that barely anybody is in on it anyway. What’s the point. If we fall again and find 1900 points S&P which I think we will it will be done in the same way and hugely difficult to be involved in anything but a small part of the decline. The point is, they are so much easier ways to make money globally and in different instruments than short positions in u.s equities which is fighting multiple forces. Buying it for starters. If it starts falling aggressively. Buy it later. Warren Buffett gets it.

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    • Dex T says:

      “Billy Joe” in Kansas has little to do with it since he isn’t making much money or using it to buy equities.

      Also Buffet is/has been playing on a much higher plain than most investors.

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  4. fotis2 says:

    2350s hit we now have a bullish engulfing setup on ES short term bounce on the cards

    https://invst.ly/9mhpf

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    • kvilia says:

      Agree on entry, stop should be under 2384.

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      • Sethu 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

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          • micky says:

            I must have it wrong, I understood you said those are shorting levels.

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          • phil1247 says:

            micky

            see ………. the risk was way more than the 30 points for most agg ext long
            it went right down to larger ext long .618 at es 22 and bounced perfectly

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          • micky says:

            Nice 1 Phil, one day I will look deeper into your stuff as it has a lot going for it.Appreciate your reading of it. Meantime Im happy with my 2 to 3% a month lol.

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          • kvilia says:

            Phil,
            Could be that ES wants to go all the way hwb, 2401. And I also thought that Sethu numbers were shorting levels.

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          • phil1247 says:

            if 22 fails i would rather be short

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          • Anthony Saraniti says:

            The real question is why are you up at 5:44 AM…..posting?

            Great call last night…. I was thinking either a 38% pullback for a wave b of c (aah, coolbiz wave 4) or 50% pullback (DH/I know wave label).

            Like

          • phil1247 says:

            thanks asa

            i have been up since tooth hurty

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          • Sethu says:

            Yes these are resistance or shorting levels as long as that resistance hold. When the resistance is taken out one has to reverse and trade long. Notice the full green bar above the red line. Now I will explain for today as long as new high is not made above 2468
            15 mts 2430 support
            Hour 2436 support
            Day 2542 ( based on the low of 2347) the previous one 2512 was based on 2351
            Now spx can dip to 2430 and rise or it just goes below 2430. But day t/f is short till 2542. 15mts/hour is long as long as 2430 is protected. But a higher t/f always prevail in the end.

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          • Sethu says:

            ES tested 2426 and bounced above 2430 see the green bar in 15 mts t/f

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        • chrisk44342 says:

          I think the answer to that Sethu is that the market rarely operates in such visceral up/down patterns that a simple indicator could tell you to go long or short

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          • Sethu says:

            It is pure price action you follow the price and it is based on the principle a resistance is proven when the related low is taken out ( uptrend) and a support is proven when a related resistance is taken out. 2377 is the resistance for the low 2351. I hope you understand now. Ultimately, what counts whether you make money or not I am making money period

            Like

  5. ariez5 says:

    AAHMICHAEL,
    First, I just want to say, thank you for your posts. Everyone has a different way of trading. For me, yours are the posts that best align with my system of anyone on this blog, and you write with many times the clarity of most. Thanks for the time that you put into this. I am sure you have far more profitable things to do. It also makes me sad to see how a bunch of small-minded, malevolent Trumpian storm troopers assail you for holding views about their Dear Leader. Politically opposed to a man who has publicly lied 5 times a day since taking office? You must be a socialist, even though this has nothing to do with economic systems!! Morally offended by a man who would boff multiple porn actresses while his wife was home with their newborn? There’s no place for morality in politics, unless we are talking about a Democratic president!! These same goons probably lie to themselves about their trading losses as well.
    Anyway, though I long ago gave up on posting here, I have held the same count and view as you for the last two months. I have a question about the 3-BR reversals. First, would you happen to know how to set Stockcharts to start 60-minute bars at 9:30 am? And second, assuming you had set the hourly bars to start at 9:30, you would still have a 30 minute bar from 3:30-4:00. Would you use that 30 minute bar as part of a 3-BR reversal if one appeared?

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    • valunvstr says:

      “If you like your doctor you can keep your doctor. If you like your insurance you can keep your insurance. Period!” And even if somehow you believed this was only ONE lie as opposed to Trump’s “five a day”, it was one that was a lie about 26% of the US economy. So stop kidding yourself. And really “what difference does make?” Well, unless a bunch of US patriots are killed that is?

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      • scorp100 says:

        “We are working on a middle class tax cut bill. The bill will be done by 1st of November”. That was just before mid terms and congress was not even in session. What’s the percentage of middle class Americans?

        Like

    • fishonhook says:

      Aries – 10+

      ++

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    • aahmichael says:

      Thanks ariez. Glad to know that my posts are helpful. I ignore the personal attacks. They’re not worthy of recognition. I can’t help you with Stockcharts because I know nothing about that website/service, or whatever it is. The last 60min bar of the day only consists of 30 minutes, but that’s fine. Treat it as a normal 60min bar.

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  6. Page says:

    Tomorrow SPX will dip 10-20 points, this will be your opportunity to go long. Don’t listen to fear mongers. 😀

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  7. fionamargaret says:



    Thanks Chris Kimble

    Thanks Tony.

    Like

  8. Derek P. CT says:

    What’s TMT SCT on chart? Sorry if it was already explained.

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  9. Dex T says:

    Tony,

    Trump has been President for nearly 2 years and the market has shrugged off many of his statements.

    Why should the markets move according to his comments made in recent weeks?

    Like

    • Michael Wiseman says:

      Look at the 200 week SMA on the S&P 500. This rally had nothing to due with POTUS, unless of course, you think like a criminal. Could it be that he ordered the PPT to bid this shite up to say that he’s better than the previous POTUS. I would not put it past him.

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      • Dex T says:

        I don’t think Trump has much to do with it. Neither the Federal Reserve nor the shutdown, all of which have been brought up as reasons.. Some of the movement may be due to nervous traders buying/selling on these comments.

        The main drivers are likely fund buying, foreign outflows, collapse in oil and maybe some trade war issues.

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      • M Wags says:

        How does the PPT work when much of the Federal Government is shut down…including the SEC and CFTC?

        And why would the PPT not intervene on Xmas Eve….an abbreviated session?

        Makes no sense.

        Like

        • xEVAx says:

          Lets see…. Trump calls Powell, then Minuchin, Mnuchin calls Banksters from Cabo and makes a “liquidity check” LOL, All on the same page??? Pull it!!! Then they turn the buy algos on while they get ready to wrap up Trump year 2….. CONgress and the media are of course all in on the scam, maybe…. Or Maybe Trump starts locking them all up .)

          Like

      • valunvstr says:

        Yeah, sure, he order a bunch of Democrats to bid up the market and they listened. Yawn.

        Like

    • nsteve24 says:

      because, unlike Trump supporters, the market now realizes the narcissistic sociopath conman is unstable, unfit and a clear and present danger to the US economy

      Like

    • M Wags says:

      It doesnt.

      But it collapsed after the Jerome Powell press conference.

      Like

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