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


About tony caldaro

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524 Responses to Wednesday update

  1. J.Wenger says:

    Whoops! Please delete that one! Wrong post!

  2. M Wags says:

    S&P 500 2018 Earnings Preview: Highest Earnings Growth in 8 Years

    CY 2018 Earnings Growth: 20.3%

    As of today (December 21), the estimated earnings growth rate for CY 2018 is 20.3%.

    If 20.3% is the final growth rate
    for the year, it will mark the highest annual earnings growth for the index since 2010 (39.6%).

    All eleven sectors are
    projected to report year-over-year growth in earnings. Nine of the eleven sectors are predicted to report double-digit
    earnings growth, led by the Energy, Materials, and Financials sectors.

    The Energy sector is expected to report the highest (year-over-year) earnings growth of all eleven sectors.”

    Bottom line: The market is discounting much slower growth in 2019.

  3. xEVAx says:

    Hey somebody said they like round trend lines, cool .)
    2632 sets up an ED in the C wave and 2604 sets up a larger (leading) diagonal??? It can bottom anywhere from 2325 to 2275ish OR we are already bottomed and we walk right on out and up through the bubble of doom 🙂

  4. Twosidedtape1 says:

    Haven’t posted herein awhile, but things are happening worth posting about. I’m expecting the market SPX to make a run at 2600’s then reverse to the downside. The 9 month EMA will drop to the 2600’s in January and that’s been a reliable area to sell the countertrend in past bears. Plus that would be a rally into prior support, which I would expect for a B wave. Next drop should take out the lows.
    Seems too optimistic to me to think the bear would have ended so quickly as to be already over. We haven’t even seen a proper B wave. Nothing underlying in the current situation has changed. When the government shutdown ends that may give another squeeze, whenever that turns out to be.

  5. xEVAx says:

    NDX 10 minute, ect….. Possible Expanding ED scenario for C of 4 or A =)

  6. lml25 says:

    Various analysts are predicting a quick drop to the low 2200s based on an ending diagonal.Ira’s system(he’s on va-cay)would guess we’d see higher prices–since the bearish embedded reading was just lost on SPX and the first target hasn’t been reached yet.Will be interesting to see which animal wins–bull or bear.Good weekend everyone.

  7. quickrick38 says:

    For the Record; While Thursday was a bit much with all the jabbering…over the last couple of weeks, this blog has been excellent with a lot of very good information shared by many posters. To all those who contribute to this board: Thank you.
    Happy New Year and best of luck to all.

    • Valerie wapiti says:

      I second that QuickR. The energy everyone feels tracking this zany market comes out in some irate/jibberish posts but all-in-all this crew rocks. Happy New Year you eccentric bunch of market addicts (:

  8. xEVAx says:

    SPX 10 minute =)

  9. gtoptions says:

    Thanks Tony ~ Happy New Year!
    SPX ~ Daily Pivot Shift Close > WPP ~
    ES ~ Weekly Swing Pattern Not Complete! ~

  10. xEVAx says:

    DOW 60 minute =)

  11. H D says:

    SPX -$3.10 doesn’t really show the full picture of a day like today. Amazing opportunities.
    Get it while you can. We will all be starving for volatility soon enough.

    HNY! Tony and all.

  12. 34 not included in sequence numbers of Fibonacci numbers less than 10, 10^2, 10^3, … are 6, 11, 16, 20, 25, 30, 35, 39, 44, … (OEIS A072353). For n=1, 2, …, the numbers of decimal digits in F_(10^n) are 2, 21, 209, 2090, 20899, 208988, 2089877, 20898764, … (OEIS A068070). As can be seen, the initial strings of digits settle down to produce the number 208987640249978733769…, which corresponds to the decimal digits of lnphi=0.2089876… (OEIS A097348), where phi is the golden Ratio!

  13. Dex T says:

    5 minutes until we find out if Sears will be saved or not.

    Sears is closing 80 more stores by March 2019

    “When Sears Holdings filed for bankruptcy in October, it said it would close 142 locations. In November, 40 more joined the list.

    The company may be forced to liquidate if it does not receive a bid for the business by 4 p.m. EST on Friday.”

  14. aahmichael says:

    Today’s daily R1 pivot was 2519.31. C=A at 2519.12 of the wave iv bounce from 2347. I reshorted at 2519.

    Also, for those keeping count, today is the 18th consecutive day that SPX sold off a minimum of 34 points from its early high. Does that seem like bull market action to you?

    • stockop says:

      you and phil in the same state of mind! i dont know if i’ve ever seen option buyers jump in hand over fist to buy calls literally at the top like that (for now).

    • stockop says:

      aah sorry for the double post. hypothetically, If a 3BR sell signal were to be given in the last half hour of SPX trading would it be consider valid?

    • tommyboys says:

      34 pts is arbitrary and meaningless. What percent is that? Has the market rallied 20 or 30 or 40 points low to high in any given day during the period? Any series of days – all of the days? Did the Dow rally 1000+ points on any day? Did the markets rally 5%+ on any days? Meaningless. Volatility has been increased for sure the past 60 days and markets move faster during higher volatility. Is this a correction or a bear? Does it matter? Is it over? Will it continue? Unproductive semantics. Closer to a bottom than a top is one opinion – but just that.

      • riderbobo says:

        34 happens to be a number in the Fibonacci sequence

      • aahmichael says:

        The December crash began at 2800. Using that high number, and understanding the minimum sell off that has occurred for 18 consecutive days has been 34 points, then that means there has been a minimum sell off of 1.21% for 18 straight days. If you think that’s meaningless, then please show me when it has ever happened before.

    • Nice call Michael!
      Nothing more Bearish than a counter-trend rally that ends at 3PM Eastern.

    • harsh kapoor says:

      Hi Aah, appreciate your contributions, Question,: I thought you entered trades on on 3BR (long or short). In this case at 2519 we did not get the 3BR, although we got it end of the day. what triggered your entry.? Thnx

  15. phil1247 says:

    a = c spx 2520 done

    • riderbobo says:

      On December 24th , soulsurfer posted to watch for a 38.2% retracement from the low to 2801.55 cash which he said was the previous B. Cash SPX got to 11 basis points from that level.

      • riderbobo says:

        I take it that is the level you are referring to.

        • phil1247 says:

          dont know about soulsurfer
          this is what i mean by a=c

          • xEVAx says:

            22902 opens up 20370 =)

          • riderbobo says:

            Maybe different methodology but same result.

            38.2% retracement of the level he was referring to is typical wave iv move

            • Bobo,

              First move up off the 2346 low was 121 points up to 2467.76 for (A). Simply add 121 to the (B) low at 2397.94 from 12/27 and you get today’s high for (C) at essentially 2520.

              2520 was also R1 as aamichael pointed out above.

              2517 was a 50% retracement of the move down from the Dec. 12th high at 2685.44

              I get all of the pivot numbers on my trading platform automatically calculated every day, for every index and stock. 🙂

              • riderbobo says:

                I see. As I mentioned it also corresponded to the number soulsurfer had on Dec. 24th before that trading took blace, albeit it required a slightly lower low on Dec, 26th which derived the 38.2% retracement number.

                I used to look at the R1, R2 and R3 numbers. Need to get back with the program.

              • riderbobo says:

                I didn’t think we would hit 2519/2520 today and started to unload leveraged positions at about SPX 2510. It worked out ok.

        • gary61b says:

          ES looks truncated on the c. a=c on ES at 2562. watch for a possible wave 2 flat of c. 2520-2472

  16. lunker1 says:

    3 posts is a Gentleman’s (and ladies) Agreement. some days or weeks none, some days more than 3. it’s the spirit that matters. a few years back during market extremes posts were averaging 400-600+ per day so Tony made the rules to make the blog more manageable. Some people have fun with it. you’ll see some gifting their 3 posts to their favorite poster like wishes, so that they will post more. Thanks for posting really interesting info

  17. fotis2 says:

    Kvilia you catch that one?Looks like Father Xmas got his days mixed up

  18. xEVAx says:

    DOW loks like a leading diagonal, ab,abc, 3 UP underway 🙂

  19. Three day rally followed by one day small retrace. That should fit nicely with last rally that lasted 6 to 7 days. If we close higher today and small retrace Monday count on another 2 to 3 day rally after Monday. I will be betting near close Monday (IF) my assumption pans out. Love the symmetry even though at times it is hard to see,.

    • LOVE symmetry! Mondays shallow drop should set this sucker up. Betting BIG late Monday if my scenario holds. An easy triple is what i seek. But firt we have to close higher today and retrace a small percent Monday. Can’t wait. This market has been very good to me.

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