Wednesday update

SHORT TERM: rally continues, DOW +92

For the first three days of the week the Asian markets have gained 2.9%, and the European markets have gained 1.2%. The SPX started the week at 2532 and hit 2595 today for a 2.5% gain so far this week. When reviewing the charts of the SPX, DOW, NAZ and NDX we do not see them as choppy as we would have expected for a B wave rally. The SPX, DOW, and NDX look like three waves up, and the NAZ is one wave up thus far. Could be corrective, could be impulsive, too early to tell. With that in mind we did a bit of research.

Whenever the Presidents Working Group (PWG) gets involved in the markets through their Primary Dealers. The market generally rallies 10% to 13% before turning over and heading back down again. One time, 1990, it never did fully return to the recent lows. Was that the outlier? Or is that a possibility this time around too? The three levels to watch going forward actually fit with three OEW pivots. These are highlighted in green on the daily chart. SPX 2575, 2632 and 2656. The first is a 10% rally, which has already been achieved. The second a 12% rally, and the third a 13% rally. We would not expect a PWG B wave to exceed that third level. We are also watching market breadth, and have some parameters there too. Interesting juncture.

Short term support is at the 2575 and 2525 pivots, with resistance at the 2594 and 2632 pivots. Short term momentum displays a negative divergence at today’s high. Best to your trading!

After observing TESLA  for a few years we have determined it trades more like a commodity stock (abc’s) than a growth stock, and have dropped it from our charts. In its place we have added a few things. Fed-Ex (pg. 13), Intelsat (pg. 14), and GBTC (pg. 13) the pink sheet Bitcoin ETF. Under commodities on page 8 we have added to Gold and Crude, the CME Bitcoin index and Soybeans. Biotech remains on that page. The Housing index has been moved to page 15 with the housing stats. New Year improvement? Possible.

MEDIUM TERM: downtrend

LONG TERM: downtrend probable

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

About tony caldaro

Investor
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551 Responses to Wednesday update

  1. This Song And This Period Of history comes to mind when observing charts!

  2. turn back on the Buy algos so we can get to 2612-2615 today. lets go

  3. Dex T says:

    Gundlach is still firmly with the bears! Sees possibility of recession.

    “Yet it’s this type of “buy-the-dip” mentality that Gundlach cautions against.

    “Investors should use the strength of junk bonds that’s happened as a gift and get out of them,” said Gundlach, in a webcast on Tuesday. He said credit spreads had widened to the point that they were flashing “yellow” on a potential recession.”

    https://www.marketwatch.com/story/where-gundlach-sees-risks-some-on-wall-street-size-up-junk-bonds-as-opportunity-2019-01-10

    • valunvstr says:

      Too bad Gunlach has made one bad call after another. I saw him speak at a conference a few years back showing a chart or oil and inflation and drawing correlations between the two which led him to tell the group that the 10yr was going to 6%. He’s been a mess for a while. He get a call here and there right but who doesn’t. He should just stick to buying and selling bonds for his shareholders.

      • Agreed 100%

        He’s a guy that gives the financial media something to cover. Merely “headline” news. I dont know how “following” any of these guys actually helps anyone make money.

        I mean, how does following the opinions of Gundlach or Gross or Buffet or Cooperman or Druckenmiller or Jones make anyone here money?

        Shouldnt people here be trying to develop their own trading methodology and their own style as a foundation to execute from?

        That way, if something goes wrong in your trading you can at least know that you were accountable for it and why it happened.

        IMO, following someone else is a dead end.

  4. lml25 says:

    Upper bb at 2660,dropping 12 points a day?Will it make it that high?Tuesday turnaround?The answer is in the questions.

  5. xEVAx says:

    Global Bubble…..

    • I have to chuckle a bit because you just posted Daneric’s favorite chart (the GDOW) along with his favorite count (1-2, 1-2, 1-2) which he invariably falls prey to time and time and time again.

      FWIW: This is a “made-up” index that was launched 10 years ago that doesnt trade. Thus, I’m not sure how it is able to reflect collective investor psychology or the crowd psychology that is the foundation of the Elliott Wave Principle.

      The GDOW has 150 constituents with market-caps of anywhere from 8 Billion to 785 Billion. And if I’m not mistaken, it’s also an equal-weighted index; not capitalization weighted like the S&P 500 is. This fact alone, makes the GDOW a lot less volatile index.

      The fact that someone like Daneric actually tries to give the GDOW credibility, is most telling and should be a big blinking red light to anyone.

  6. fionamargaret says:

    VXX has just broken down…..

  7. So the last 10 days have been the best 10 days since July of 2009 and the first 7 days of the New Year have been the best first 7 days since 2006. Let’s put this current 10.7% rally into some perspective.

    Seems as though we might be looking at the 4th non-recession “crash” since 1950, with the other 3 occurrences being 1987, 1998, and 2011. Once the market saw a climactic low, there was a sharp reflex rally followed by a retest of the low within 4 – 5 weeks, then new highs. This could very well be the “playbook” that the Street winds up following.

    Just casually looking at the charts, the 2011 final low on Oct. 4th took about 9 weeks from August 25th. The 1998 final low on Oct. 8th took about 12 weeks from the July 20th high. And the 1987 final (retest) low on Dec. 4th (221) was about 14 weeks from the August 25th high.

    Each one of these declines experienced a decent counter-trend rally before a final low.

    2011: 11.8% (1100 – 1230)

    1998: 13.8% (940 – 1070)

    1987: 19.4% (216 – 258)

    The reason that I am reviewing this is because it just might be the “consensus” that the Street will be following. Whether or not the consensus winds up being right, is another matter…. but at least it gives us some parameters to use going forward.

    • stockop says:

      interesting data set. big difference between then and now is what the Fed is doing. They were not raising rates or lowering liquidity in any of those years. In fact in every case didn’t they lower rates or do QE?

      • Excellent question Stockop.

        Although the FED was not raising rates in 1987, the 30 year bond yield rose over 2 full points between March and October of 1987. ( 7.5% to 9.6% ) due to rising inflation expectations, which surprisingly the FED hardly reacted to. There was one small hike in the discount rate from 5.5% to 6.0% in September when Greenspan replaced Volcker as Chairman, but the October CRASH occurred before policy could be tightened further.

        Also, there was a ton of LBO fever going on (particularly in the oil patch) and the Fed didnt seem to care. (stocks like Cities Service and Pennzoil) – – – However, the mere thought of increased taxes on these deals by a proposal in Congress, caused much speculation to “pop” like a balloon, which was a key leading indicator before the CRASH.

        In the Fall of 1998, the FED started to cut rates for fear of a slowing economy. They even did a rate cut (in Oct.) that was in between FED meetings. It was the first such cuts ( in the fed funds and discount rate ) since Jan. 1996

        In 2011, the FED was embarking on QE2 which lead to them expanding their balance sheet by roughly $578 Billion.

        Hope this helps!
        🙂

        • valunvstr says:

          Don’t forget there was a trade war with Japan in ’87. So rising rates and trade battle with Japan. This time was higher rates and trade fight with China.

        • stockop says:

          appreciate the expanded answer. seems most similar to 1987. which would imply a policy change is needed to reverse the current situation. they did lower rates after Black Monday and again in early 1988. While our Fed chair is talking raising rates and QT as the markets fall. debt levels were also a fart in the wind compared to today. instead of the oil sector we’ve got venture cap/PE firms/ and publicly traded tech companies today!

          • The styles between the last 2 Fed Chairs is like night and day. Powell is essentially an attorney who worked on financial regulation and private equity deals (Carlyle Group). He’s essentially an academic.

            In contrast, Yellen is an economist and experienced with the nuances of changing dynamics in the economy and (more importantly) how to respond to them. Instead of having her head burined in forecasting models and “Dot Plots” like Powell, Yellen would actually look at what the current markets were telling her…. be it crude oil, treasury yields, emerging markets, etc. She was totally in tune with how unusually weak the pace of expansion had been.

            Case in point: The FED finally increased rates in Dec. 2015 after being at Zero for nearly 7 years. This was supposedly to be the beginning of a long cycle of gradual tightening.

            But in March of 2016, the FED downgraded the possiblity of 4 rate hikes to only 2, as Yellen highlighted the lack of convincing evidence of a pick-up in wage growth, a characteristic of continued slack in the labor market.

            At the end of 2015, the Fed Funds Futures had priced in a 60 basis point tightening over the coming year. That fell to Zero during the following 6 months as Yellen and the FED cut its forecast.

            • stockop says:

              you seem to be bullish and yet we’re on the same page with the current fed. do u just not believe the underlying economy is in any danger?

              • The fact that Powell has done a 180 gives me hope that the economy will avoid a recession this year. That’s not to say that growth wont be subdued and slow below 2% over the next 4 quarters.

                While there has been a build-up of emerging market debt (financed in dollars) and the growth of the CLO market has gone ballistic, I just don’t see rates heading up dramatically that would cause these players to suffer a lot of pain right now. I also cant say that the consumer is over-leveraged or that there are excesses going on in capital spending (like the 2000 Dot-Com Bubble) or during the Real Estate Bubble (2007) as a result of sub-prime mortgages.

                More importantly, my capital is at risk (not in the indexes), but rather in diagnostics and life science stocks that actually have a strong correlation of outperformance when the economy is weaker…. as there is typically a shift out of cyclical stocks and into biotech.

                If there is one single thing that I can share with someone that is starting out in the markets, it’s that it is “a market of stocks…. and not a stock market”.

                Owning the securities of individual companies …. is a lot different than owning the “market”.

            • stockop says:

              consumers not over leveraged?

              https://www.wsj.com/articles/lenders-shunned-risky-personal-loans-now-theyre-competing-for-them-1535103000

              https://www.wsj.com/articles/household-borrowing-reaches-record-13-3-trillion-as-rising-rates-have-yet-to-bite-1534258838

              (whereas credit card debt looks to be marginally down from 2007/2008, auto loans have more than made up the difference)

              https://www.wsj.com/articles/corporate-debt-is-reaching-record-levels-11546099201

              that looks like quite a bit of leverage across the board to me. and none of this even includes margin debt. will be curious how that looks after december. excesses look to be across the board. low rates didnt keep people from defaulting after 2009.

    • Bluehorseshow, thanks for the post; you might be onto something. Here’s a fact(s) that should be considered when speaking of “non-recession” corrections (or crash, if you must)… During the years that you listed, and the ones in between that corrected in such ways, the largest demographic, The Boomers, were well into the workplace and spending; we have a different situation now…Boomers are mostly gone. That’s the 1st point. 2nd point is who’s left; many are in various debt, some living at home w/no job, and that’s not to mention what govt is doing (entitlements, etc.), and won’t drag this post out with it. Fact is, there’s a lot less people in the workplace to finance the type of lifestyle U.S. has had since WW2, and IMO, this is by design. There is a recession coming, and furthermore, I’ll characterize it for you: Deflation of most assets, and inflation of staples. Taxes will go up, AND govt will still print, but money won’t move as fast as it used to move, due to job loss, etc. One of the last things to happen at the end of an upward cycle is hiring, and full employment; we are seeing that now. IMO, I think we’ll be well into recession by next election, if not sooner. There’s more I could comment on, but this post is already long enough, and is JMO. Thanks for posting your info!

  8. So what time does the market open today? Geez!! Seems like everyone took a 3 day weekend

  9. OK, who is going to being the first to tell me this isn’t possible?

  10. gary61b says:

    spx is making more head room for a further push up and still maintain a neg. d on 60. come on 2648. no guessing Phil 🙂

  11. Mornin’ Folks!

    Not that you guys need another indicator, but MMFI is extremely helpful. Take a look at it long-term, and it’s very telling. https://www.barchart.com/stocks/quotes/$MMFI/technical-chart?plot=CANDLE&volume=total&data=I:30&density=X&pricesOn=1&asPctChange=0&logscale=0&im=30&indicators=EXPMA(9)&sym=$MMFI&grid=1&height=500&studyheight=100&id=121339

    The present bi-monthly open range ends next Thurs., 1/17 at EOD close. According to it’s set date (1/3), SPX should close at 2467.47, or lower. If you track this, it has at least an 80% accuracy rating, and last time we were in this sort of set up (stocks way higher than range), I made a lot of money as the range returned to where it was set. I normally don’t buy weekly SPY puts, but am seriously considering it for next week.

    It should now be glaringly obvious that we have a Fed Chair that really has no idea what he’s doing. He’s not good at public speaking, or communicating with the public, in general. Brain likely starved for O2 due to living in the clouds for so long.

    I don’t normally follow CNBC pundits re: trading, but I do give kudos to Steve Grasso! He has called the recent turns like clockwork! He called the market high, he called the bottom of the recent drop to within about 2 points, and his retrace levels are spot on! He’s calling for a retest low to hit SPX 2200 area. I’m not quite in that camp yet, but hey, I’m flexible. If you want to see what he’s putting out there, his Twitter is: @grassosteve

    Next week will be the tell. Happy Trading!

    • Grasso was also the guy that was the first on TV (at least) to be talking about the massive pension fund rebalancing at the end of Q4 that required a big move into equities and out of bonds.

    • The tell? First off lets not blame the FED for everything. How about a trade war that this president (JUST) asking congress to allow him to impose AUTO tariffs on our allies. How about this president that has single handed closed part of the government with a temper tantrum. People actually discussing how he can issue emergency powers when the border crossing is at multiple decade lows? Humanitarian crisis? Funny since he created it. Lets get clear here. My statement from 2 years ago stand. he is a CON and Crook. He is also a TRAITOR to this country. he hired 17 lawyers that will tell him he can’t stop the Mueller report. He is now threatening to take funds for natural disaster, specifically California (DEMs) fire protection. I am sure like everything else this immoral disgusting human has done you will find excuses. Mulligan anyone? But wait, you have NOT seen the worse.
      The complicit silent GOP will allow TRUMP to do his worse before they debate his removal. GOP is the politburo and as long as the ignorant 40 plus percent supporters stay the course we will have the biggest constitutional crisis in our history. But the markets already anticipated this? Now that is funny.

      Anyone here that actually thought there was going to be real progress in the Trade War is too naive to play this market. Clueless. Timeline: Now set at mid-February for Mueller report to be submitted. Rosenstein implied this with his announcement on when he will step down.

      The report will be so shockingly damning that within one years time of this report Trump Companies will be dissolved. Imagine your name as your profit point turning into Benedict Arnold Towers. In that time most here will deny ever supporting him. Where is my original post from 2 years ago? Silly me I guess I once again just got lucky in guessing who the man is.

      BTW, the candlestick short term indicators (over last 2 days) were extremely positive preventing any deep drop here. how long they can hold it? Open question. Will be resolved by trumps next temper tantrum.

      • gary, I’m certainly not blaming Fed for everything; was just making an observation. As for the political end of things, it’s likely to go on for a long time. Happy Trading!

        • Absolutely NOT! Treasonous actions (collusion) has been proven with his top men. Leaked new report on Manafort seals fate of trump. So does fixing an election using hush money. Mind boggling to think that once Mueller reports congress ignores it? As we wait for report stomping his feet Trump will create as much chaos as possible. Made possible by his brain dead GOP, or should i say masochistic GOP.

          You think small actions like trade war and closing government is nothing wait what happens over next 6 to 8 weeks. Think Putin with his Politburo’s support and RT News creating propaganda cover. We are the USSR in that respect. have been for 2 years. If Moore’s almost win and endorsement with the KKK and Nazis didn’t shake his support so long ago the GOP is helpless to step in. they believe in keeping their job over sacrificing for this nation. Lots of cowards from the top on down.

          I made it crystal clear 2 years ago the disaster we were getting into. I have badly misjudges the inability for Americans to see clearly as the crazy inhuman acts piled up. TREASON and TRUMP will become synonymous very soon. If the gutless GOP refuse to impeach we have a world crisis. BUT, i expect real hard facts shown a dozen different ways will relent. This however is still an open question.

    • fionamargaret says:

      Oh MA, don’t tell me this is what the boys were referring to when they said “mm, FI”

  12. Hi There……? are you folks watching the rally in SLV ???
    might be a pretty good investment, or trade. Take a look at the chart.
    Tony, may have a few comments as well.
    Bud E Fox I

  13. Page says:

    Expecting DJI to close down 300-400 points and SPX 30-40 points down.

  14. 8 waves, 1 more rip higher should do it
    Have a great weekend all

  15. lunker1 says:

    Monthly P 2545.76

    Weekly R2 2602.33
    Weekly R1 2565.53

    Daily P 2584.35
    Daily S1 2569.95
    Daily S2 2545.31

  16. Dex T says:

    Trump closer to declaring emergency

    “Trump was consulting with White House attorneys and allies about using presidential emergency powers to take unilateral action to construct the wall over the objections of Congress. He claimed his lawyers told him the action would withstand legal scrutiny “100 percent.”

    “A congressional official said the White House has directed the Army Corps of Engineers to look for billions of dollars earmarked last year for disaster response for Puerto Rico and other areas that could be diverted to a border wall as part of the emergency declaration. ”

    https://www.msn.com/en-us/news/politics/trump-closer-to-declaring-emergency-800000-wont-get-paid/ar-BBS5ILh?OCID=ansmsnnews11

  17. quickrick38 says:

    Trying to make sense of these waves…here’s another look that maintains a wave 4.

  18. hugh jazole says:

    Any opinions on $NYMO? The last time we went from extreme oversold to extreme overbought, within such a short time frame was March 2009.

  19. phil1247 says:

    Tore

    CL

    continues STRAIGHT up and hit extension target at 53.25
    also broke extension short
    rocket ride up continues until extension fails

    enjoy !!

    • phil1247 says:

      wow

      70 cent bounce from extension support
      will it hold ?

      • badhabitforme says:

        Greetings Phil,
        First, thank you for what you provide here – it is impressive and kind and I think helps
        a lot of people and I cannot for the life of me understand how hate rolls in over someone simply posting info (I can see questions on trades to keep someone in check always doing well, but not so much that in regards to providing technical info)… I am all over the place with oil in both side positions trying to maneuver my way out – i got stuck near the top where the charts here were supporting 85 and FionaM (who i have respect for) was pointing that way to. Btw the oil charts on Tony’s site are showing still a rise with a top hit – Then we know what happened… I was expecting a more meaningful pullback off of 53.3 to maybe high 49s before another run to perhaps 56. Did we break the extension support for shorts or come to it? Did we break extension support long or come to it? What exactly happens on those events occuring?

        I have a ton of questions – but to not do that here how would one learn to follow your work better. 1). By the book – the DH method from that site? 2). Is there a post a long time ago you could refer me to that you shared more of your “rogue” DH approach here on this site?

        #3 – would you share a longer term view with crude and next possible setup since the one here on the site I am not sure if met their objective of 70 to 85 and now there are new numbers lower than what we hit. Would be nice if that could be update as well but I understand this is all free.

        Thank you and continue to do what you do

        looks like i missed my drop on this – darn – things are so fast to react with this V – not even a day down to remove hedge.

  20. floyd drummer says:

    moring phil,

    the chess game.

    white’s move?
    Qg3, ….not Qh3. if black takes QxQ, …the white Bf6, …and it’s mate. a very beautiful Q sacrifice.

    white Qh3, …allows black Qg5, …and white mate threat ends. white B must move, …black d6 attacking the white Q, …white Q moves, …and black Bd2 defending the black Q , …and black is back in the game.

  21. re SLV…has anyone, looked at the SLV chart lately. Right, sure looks Bullish.
    Wonder if Tony has already bought SLV….???

  22. mcgcapital says:

    I still see no reason to change the longer term bear stance. This is the largest rally since the bear began on all indices, so we’re definitely in intermediate B.

    There’s not been a significant enough change in narrative from policy makers or the macro data for me to believe in the bull case. Powell has all but confirmed QT will continue at a pace, so the fact that short term rates won’t go up because growth is weak isn’t a positive really. Ex-US macro continues to come out weak.

    FTSE rallies have all been 300-350 points, this one is now nearly 500. 7100s is still the line in the sand – swing high since the sell off in October, 2015 high, 2016 breakout point, 2017 support. Above there and something has changed, below there and it’s just a steep retrace. I’m seeing a similar pattern on this rally to the one we had in Q3 last year on SPX. Choppy rally making higher highs and lows with steep counter trend moves. When that pattern ends it can be a brutal reversal (would currently need below 6860 to confirm it’s done). Until then, it wouldn’t surprise me if we saw 7100. It’s a difficult one, rally could end anytime or it can extend.. hard to say which it is which makes longer term trading difficult.

    Very tricky spot for entering swing trades and reminds me why I day trade. There’s been plenty of opportunities intraday both ways without having to commit to a big move one way or the other.

    • “There’s not been a significant enough change in narrative from policy makers”
      Correct, there is nothing in the news.

      Problem is, if anybody suggests anything that might reflect well on the current resident of the White House, it starts a massive food fight on Tony’s blog. Just a mess.
      There were some disagreements when obama was in the White House, but not nearly this bad.
      All you safely say right now is “Energizer Bunny Rally”

      You’re a good guy MCG.

      • mcgcapital says:

        Whoever became president in 2016 was likely going to have to deal with the economic cycle turning during their term. We’d had 7 years of growth, lots more debt and interest rates about to go up. Kind of inevitable something would happen over the next 4 years.

        Problem for Trump is that he owned the rally on the way up and will find it hard to disassociate himself on the way down. I think he’s been fairly market neutral overall… tax cuts and economic optimism at the start good, and tariffs triggering global slowdown bad

        • Dex T says:

          Trump now has the Democrats winning congress to blame.

          The narrative for him is easy. If the economy tanks he will point to the Democrats in congress obstructing him and blame them completely. He’s been doing it for years and will continue to do so.

          As long as he remains active in pushing his agenda (even if nothing happens) he can stay on top

        • M Wags says:

          Dont forget about all the debt that went into that economic stimulus.

          It was just a Sugar High.

          🙂

  23. Okay beautiful people, you know I make an occasional Trump joke. This has nothing to do with politics, because I dislike all politicians uniformly. He has a special place because of the ridiculousness of everything. 🙂

    Please don’t use this as an excuse for a political rant. But I wanted to share with you something I read today that made me snort my tea all over my laptop — and that is a rare thing because I drink very good tea. 🙂 Most of you will appreciate it, especially the people who understand how options are priced and how bookies use odds. Probabiity. Black Scholes. Etc.

    https://www.actionnetwork.com/politics/president-trump-lies-prop-bets-sportsbook-big-losses

  24. Jack kendo says:

    Great Debt Deflation

    cheers!

    • xEVAx says:

      Im warming up to it……

      • xEVAx says:

        That last chart just take out the red 1-2 and mopve blue 3-4 over taking out a subdivision on the DOW, this one looks COOKED though and is correct .) Yes I know bulls are salivating LOL but…..

    • Mr Kendo, I don’t know if it’s “right”….but I love above chart.
      What I do “know”, is that “V” is in…..within 6 months the rest will be history being written.

    • lunker1 says:

      Jack you’ve been here about five years more or less off and on. Has one of your crazy charts been right yet?

      • mcgcapital says:

        You must have been here about 5 years too and I’ve yet to see you post anything worth reading. All you do is hassle everyone else. Do you have any of your own views or opinions on anything, or are you happy in life just brown nosing? Reminds me of the kid at school that tried to copy everyone else’s homework because they’re too thick to do it themselves lol

        • lunker1 says:

          Sorry I forgot you were invented economic fundamentals and were born knowing everything that you write on here.

          • mcgcapital says:

            That sentence doesn’t even make sense.. bottom set for English too then 😂

            • lunker1 says:

              I put in the extra word to see if you were smart enough to figure it out. Sorry it tripped you up so badly. Thought you had the processing power to get the point.

              I still think you did.

              Everyone learns from everyone. Fibonacci, Elliot, Caldero, Bollinger, Wilder etc.

              Quite ironic that you discuss long term economic fundamentals ad nauseum but yet you mostly day trade?

              And ironic that you said you been stuck in a long position for quite a while and were looking for a decent bounce to get short.

              Seems you don’t trust your own thoughts. Mabye that’s why you types of many of them?

              • mcgcapital says:

                I’ve never been stuck in a long position so no idea where you got that from.

                There’s no irony.. I’ve made my thoughts pretty clear many times. Best way to trade is to take each day and move as it comes, that way you never get caught out. But make no mistake fundamentals are what move markets, technical analysis only works in that context. You can keep thinking we just perpetually move between different Fibonacci levels, but that won’t tell you where the markets are headed. The fundamental picture is obvious, you have to be blind not to see it

                And opinions are fluid as market dependent. But I’ve not changed mine.. was looking for a bounce from Xmas eve onwards, was a day early on that call. Now i see it as a tricky area where we should turn lower but haven’t yet. That doesn’t mean we won’t, it means trading is tricky until we do

        • aahmichael says:

          He can’t even copy things correctly. (ex: look at the incorrect pivots he posted this morning.) They don’t call him lunkhead for nothing.

          • lunker1 says:

            Here’s the source
            Prove it’s wrong

            https://www.dailyfx.com/sp-500

            • aahmichael says:

              Here’s your proof that every one of your pivots are wrong:

              The formulas:
              (P) = (H + L + C) / 3
              R1 = (2 x P) – L
              R2 = P + H – L
              R3 = H + 2 x (P – L)
              S1 = (2 x P) – H
              S2 = P – H + L
              S3 = L – 2 x (H – P)

              Yesterday’s SPX daily
              high = 2597.82
              low = 2562.02
              Close = 2596.64

              Therefore, SPX daily
              P= 2585.49
              S1= 2573.17
              S2= 2549.69

              Your weekly and monthly numbers are wrong too.

              • aahmichael says:

                ES is irrelevant. Very few people on this blog trade ES. Tony never says a single word about ES. Your post didn’t say anything about ES. You might as well have copied and pasted pivots from the Turkish stock market. They would have been just as relevant.

              • lunker1 says:

                You’re so full of crap. A lot of people talk about ES on here.

                It’s bizarre that you guys think because you introduced a concept on here that you then own it but yet you suck at teaching the concept and so you’re allowed to ridicule people that are trying it.

                It shows that you’re not here to teach you’re just here to pump your ego and act like a big shot.

                BTW all your recent calls have been after the fact well after the close. You said that’s because you’re busy during the day but what’s funny is that you frequently chime in during the day whenever you feel like it.

                You’re a fraud

  25. fxaprendiz says:

    After double-checking my long term charts I have found 6 standalone (not part of a correction of higher degree) corrections of Primary degree since 1932 which didn’t trigger a recession. Thus they aren’t as uncommon as one might initially think.

    Those examples run from 19% to 33% decline, so while technically bears they aren’t actually true bears as the business cycle is still in bullish mode underneath the surface. I think we are in the middle of such type of correction.

    Still studying the charts but the different lows printed on 25-26 of December make things difficult for Fibonacci based projections. 2347, 2334, 2313 depending which broker you check out. But roughly I would expect a final low closer to a 25% decline than to 30%. The timeline remains the same though, 3rd quarter of 2019.

  26. rd3777 says:

    This is a 4 day candle chart. Just a huge broadening top,about to break down.

  27. purplember says:

    everyone is talking about Jeff Bezos divorce. sad i never like to see any families split apart. However this is a great opportunity to meet a woman who has a bit of extra spending money…….

  28. dwr51 says:

    I have been here for many years and have never posted a guess as to what is going to happen. I agree with aahmicheal in that we are going much lower but because I only use PnF charts our reasoning and timing are different. To begin with I believe we need to hit SPX 2725.79 before we can fall to approx 2301.59. I can not share charts as my charting service does not allow it. This is based on a number of indicators that I am sure are unfamiliar to everyone except Dorsey Wright subscribers.
    Best to all in the New Year
    Dave

    • fionamargaret says:

      Dave, I use P&F as structure/architecture, combined with a little “rain man”, and have $SPX going to 2750 …..scroll back some to find my stockchart (beside an earlier music offering).
      You will read of my scepticism, but also the suggestion maybe we had to achieve this lower high before going down.
      I don’t know if this scenario fits well with the waves.

      What I would really like is for my USD/CAD to gain hugely, enough for me to sell some….x

      • Jack kendo says:

        Fiona,
        stockcharts P&F target price objective is not reliable, and depends on what you select on the methods and scaling reversal numbers.
        Price Objective are different if you select “Reversal” or “Breakout”
        And If you have different numbers for the Reversal of Chart Scaling Method, the results are very different. For example, if you have Scaling reversal with 10, then $SPX Price Objective is 4829.

        imho, If you like to use Point & Figure, I suggest study Dorsey Wright’s following book (I studied many years ago, not using the method anymore).
        Point & Figure Charting: The Essential Application for Forecasting and Tracking Market Prices

        cheers!

        • Jack kendo says:

          And $SPX (1830?) and TVIX (100) never reached the Price Objective during December’s market sold off.
          Meaning stockcharts Price Objective is not relaible, and can not be trusted.

          cheers!

        • fionamargaret says:

          I post P&F to satisfy those wanting a chart….I really work with
          numbers/patterns/sequences….though use P&F for structure.
          I do like your ideas Jack…x

      • dwr51 says:

        Fiona I hope you are right however my calls will be sold at my stated objective and if it goes higher so be it, never went broke taking a profit

  29. Jack kendo says:

    wave C, like wave 3, is a crashing wave.
    Downside target for wave C
    C=1.618 * A

    cheers!

  30. I believe SPX is trading in wave 3 up with wave 4 down on deck (intermediate wave b in still in the back of my mind as my alternate count). Therefore, when the local top has been printed, I expect a 23.6% – 38.1% of wave 3. Leaning towards 23.6%. Watching /ES and /VX for clues for the wave 4 pullback.

    I’ll use the KISS analysis.

    1. /ES will decline to test 2583.43. If that level trades and is defended /VX will rally to new highs tomorrow.
    2. If /ES trades below 2583.43 I expect further decline to test /ES 2577.13 at a mininium.

  31. E says:

    Does anyone understand what is happening with the P/C ratio??? It is rising as we top rather than falling. I can’t say I’ve seen that before.

    • wanderer says:

      The high was 1.82 on Dec 20, 2018. The current value (as of January 10, 2019) is 1.13. So, the put/call ratio has been falling, not rising.

    • sixpack says:

      As we top? What makes you so certain its a top?

    • stockop says:

      this is completely incorrect. looking at a daily close has very little predictive power (a majority of the time). The main concern is the direction of the P/C trend. Which with today’s numbers the total, equity, and exchange trade products all marginally moved upward. This is generally a bearish indicator but needs much more than a single day of confirmation. The ETP was a little high to my likings today, but overall volume was relatively light, and with the excess of calls bought in late November i expect their to be excess in the opposite direction too. We hit no where near high readings in December (across the board, total PC got pretty up there).

      TLDR: in a bull market this type of behavior is bullish. In a downtrend a one day “high” reading on an up day (which at face value is bullish), is imo meaningless. October on practically every bounce had a total PC reading above 1.

      • fxaprendiz says:

        Stockop, I’m sorry, I saw your comment that you wrote to me weeks ago, only now. For some weird reason I can’t reply directly there so I’m replying in here.

        0.786 fib of 2529-2942 is 2617. When looking at potential harmonic patterns I allow a 5% leeway in both sides of the fib level. In this example that gives us an area of about 20 points above and below 2617. The 2603 low is within the leeway margin,that’s why that was my point B.

        Yes, Scott is too strict in many aspects, including the margin of leeway or tolerance. I read his application papers for a patent on one of his patterns and he only allows a 3% deviation for the fib levels not 5%. And he doesn’t acknowledge any other pattern outside of the ones he has written about. It’s a little bit like saying what Elliott wrote about
        EW is written in stone and nothing can be added to it or improved upon.

        Regarding harmonic patterns it’s better not to be so tight fist and have an open mind. I won’t ever forget eur/usd in 2008 when the pair topped. I didn’t allow back then for my now standard 5% leeway margin, and the eur/usd sank before I was ready to short it. It has never regained those levels ever since.

        • stockop says:

          I tend to not be able to see harmonics when one structure (X-A) in this case is so much wider than the rest. I see where you were coming from now. Thanks for the response.

  32. Page says:

    The indicators are sitting at such extreme level that SPX should have hard crash now but ……

    • xEVAx says:

      I think the little wave 4 up has done its job =) Lock Limit Down for wave 5 (of 3 of P1) in extensions and subdivisions an 62% SHORT and 38% LONG, blah….. No “support” (including PPT) is proven LOL Gap it down 200 and keep going .)

    • Maybe sooner, than you wish.-since the 2009 low.
      The SPX has never been this – in danger of failing hard.

    • wanderer says:

      I see exactly the opposite: SPX was so extremely oversold that a hard (mean reversion) rally was warranted, which is exactly what we got: from the ES low of 2317 on Dec 25, 2018, to the recent ES high of 2599 today, Jan 10, 2019.

    • I don’t see the hard crash scenario, or the oversold indicator anymore. What I do see (SPX-D) is what might be a – div developing on the volume. I work only the cash mkt, and what MIGHT be developing, beginning Dec. 26, is a small H&S that IF it plays out, will take us down for a retest. I see a POSSIBLE left shoulder formed and the low of it on Jan. 3 at 2443.96. Then up to form the head, so far, high at 2597.82 today. If we get a small rollover starting tomorrow, or better, next week, becoming obvious, then it’s worth watching. Granted it’s small, but it’s almost dead even, and the bottom would be at the area of the most recent low. Possibly looking at later next week for small bounce to form that right shoulder. All I’m going to do is watch for a while, see what pans out. GL Everyone.

    • Shama Haque says:

      I am very new to this. I have been waiting for a lower low for some time now and now feeling very frustrated. This is just going up and up with not so strong and impulsive move. No one knows what is this a “C” wave or low energy wave 3.?

      • No one knows for sure what it will do. Human nature being what it is, people make a decision — informed, quasi-informed or otherwise — and go with it. And again, human nature being what it is, they have to rationalize and justify the decision to themselves and others, in the name of trading expertise, discipline, methodology or — as in my own case — a secret combination of mugambo and juju.

        If it keeps going up (generally considered unlikely by the natives, probably with good reason) the screaming and justification will increase. And markets live to do this, because such screaming is music to its ears.

        Given that you have waited and the overall picture is in your favor for the mid-term, your best bet may be to wait and not chase, so as to avoid whiplash. The thing to really avoid is that FOMO (fear of missing out) temptation. It is hard. That is why the remedy is called “sitting on one’s hands”.

        Because I am sweet and delicate, I practiced this for many years by siting on other people’s hands until I got the hang of it. Boy, the screaming! I could tell you stories.

        🙂

      • micky says:

        There is your first answer. NO Elliott waver ever knows for sure.
        Follow Tony only, regarding EW. He has the best method of them all,I only discovered that after years .Stick around .
        Find other methods to trade as well.

    • Anonymous says:

      You are correct. It will start falling, perhaps to new lows, but certainly a re-test of the recent lows. Lets see—when? My guess is after 1 PM tomorrow, or on Monday AM (watch the pre-market). First, the TLT needs to check out the 121 level tomorrow.

  33. phil1247 says:

    THE GRINDER

    can es keep grinding up all the way to all time highs ?

    yes it can

  34. Still long EXAS, GH, QDEL, IDXX, SRPT, and a couple of other diagnostic/life science names.

    They continue to act very well.

    • lunker1 says:

      Do you really need to mention these every day and often several times a day?

      • I believe that my post above is the first post of today that states that I am still LONG those names. I share this info with people here in case they are following me. Is that a problem?

          • These are some great trading stocks and in many respects…. GREAT investments given their game-changing technology and massive addressable market that they are facing. I’m almost sorry that I even bring them up. Weird.

            Maybe I should spend most of the day yapping about Jeff Bezo’s and whether or not he will remain CEO of Amazon…. because there are several posters here that don’t even have a position in the stock, but think that he could be removed as CEO (for poor judgement) and his divorce “will tank the company” ??? 😀

      • Valerie wapiti says:

        You stuck on a cruise ship suffocating from human presence and saturated fatty food? You sound kinda PMS grouchy.

        • Valerie, someone treated me to deep-fried Wagyu steak the other day, and it was the best I’ve ever tasted! Fried in beef tallow (not suet). OMG, it was fantastic! 2 minutes to med rare. I am so hooked now!

    • Jack kendo says:

      imho, the show is coming to an end.
      All these names are great short selling target right here.
      Tremendous downside for wave C to new lows.

      cheers!

  35. trejder74 says:

    Not so strong. Gap down tomorrow or?
    Neg diver.

    • Seems the neg. Divs are all getting washed away.
      FED interview with David Rubenstein was as probing as “Tonight Show with Johnny Carson”
      Sleeper here is the deal with Pres. Xi.
      I think Trump is gonna deliver a four bagger.
      When was the last time you heard from the guy from North Korea?

      • David Rosenburg the perma-bear or David Rubenstein co-head of the Carlyle Group?

        PS. The North Korean guy (Kim Jong Un) has been busy visiting over in China with Xi.

        http://time.com/5496396/north-korea-kim-jong-un-china-trip/

        🙂

        • You are one argumentative dude

          • tommyboys says:

            The super leftists are destroying the democratic party. These guys will never admit what great job Trump has been doing keeping more campaign promised than any Prez in modern times. History will shine on his accomplishments for Capitalism and the middle class. MAGA/2020

            • nsteve24 says:

              I am a super leftist, also known as educated. Trump is a conman, to publicly acknowledge one’s support for this oh-so-obviously bullshit charade demonstrates a complete lack of awareness and emotional intelligence. You are advertising to the world that your judgement is questionable and you aren’t particularly concerned with facts/evidence/data. You are an embarrassment not just because of your beliefs, but because you do not know when to keep them to yourself.

              • mcgcapital says:

                +1.. I’m not even a leftist but some of these folk have difficulty with logical reasoning. The posts are repetitive and embarrassing, not to mention irrelevant to anything

              • Facts and Data clearly don’t matter to Trump supporters!

                I’ve often wondered just what it is that Trump has been able to accomplish in his first 2 years, besides jacking up the budget deficit to $1.0 Trillion with massive corporate tax cuts and re-packaging NAFTA into USMCA, which is 95% the same as NAFTA according to long time senate Republican Chuck Grassley.

                He’s also been eager to appoint members of the oil, gas, and coal mining “Swamp” to head up the EPA and the Secretary of the Interior…. rolling back all sorts of environmental protections on clean air, water, and even taking the Grizzly Bear off the endangered species list.

                We’ve alienated just about every trading partner and Allie that we’ve ever had, including Canada…. and there have been over 40 senior staffers that have either resigned or been fired. Never mind that our current acting Defense Secretary is from the Swamp (Boeing) and has never ever served in the military. Never mind that Trump called the CEO of the largest oil company in the world, “lazy as hell” and “dumb as a rock”.

                You just cant make this stuff up!

                And I’m a middle of the road political guy that voted for Ronald Reagan as my first President while in college at the University of California at Berkeley.

                LOL!

              • valunvstr says:

                Well you certainly are a leftist. Looking down your nose at half of the country that voted for Trump. Yeah yeah, sorry, high 40’s. So nearly half the country is uneducated. Based on your comment only leftist are “educated” and this is exactly why the country revolted nationally against the left (yeah yeah popular vote, right. Ex-California Trump won which means he actually won the total popular vote in the other 49 states. Yes, CA counts but the point is without running up the score in CA, the county preferred Trump…but I digress). You arrogant and think you’re smarter than the rest. I love how we hear about the “uneducated white” vote that Trump won. Ok, how about the uneducated Hispanic and Black vote that Clinton won? No, CNN and MSNBC leave those stats out. It doens’t fit their agenda. My parents are teacher. You know, EDUCATORS and voted for Trump. My brother is a very successful and educated Financial Advisor and voted for Trump. My wife is an attorney and voted for Trump.. Gosh that a lot of dumb, uneducated people that voted for Trump. The left has their pulse on their own little world and can’t see outside of their bubble. And dare to engage in debate. No, let’s shut it down because as we know, the fact always get in the way of a good story.

            • scorp100 says:

              Tommy, you are sick, son. You need help.

          • riderbobo says:

            Banned from Danerics numerous times and reappears under multiple sock puppets.

            About 5 years ago he would operate under several a day, often talking to himself.

            True story!

          • I cant find a recent interview of David Rosenstein talking about the FED. Was simply trying to clarify that you didnt mean David Rosenburg.

  36. Where did my drop go? Always too early. If we hit over 2600 Tomorrow at close I will double up on my Put bets for next week. So much great news out there i can’t imagine over the weekend doesn’t create extreme buying pressure. Thought 2695 was the target but obviously not. 2616 or bust!.

  37. Derek P. CT says:

    Tony… I count 5 up from the 2346 low as of a few minutes ago…. can you confirm or deny on you side. Thank you.

  38. phil1247 says:

    gary

    es 2601 target looks good
    need to blast thru to get to 2615

  39. Dex T says:

    Investors ask how the Bezos divorce will affect Amazon

    “Prominent short-seller Doug Kass, however, who runs hedge fund Seabreeze Partners, said he sold his stake in Amazon on news of the divorce. That was after initially buying a stake in late December and naming Amazon among his “best ideas list.”

    Robert Bacarella, portfolio manager of the Monetta fund, said that while he is not changing his investment in Amazon, he expects other growth-focused portfolio managers may trim their stakes due to concerns about the divorce’s impact.

    “This is such an over-owned company and this gives them an excuse to say ‘Maybe I’ll trim some back because it adds a new question mark’,” he said.

    Thomas Forte, an analyst at D.A. Davidson, said questions about the future of the company due to the divorce are legitimate due to Jeff Bezos’ outsized influence on its value. Should he leave the company for any reason, its shares would likely immediately fall more than 10 percent, he said.

    https://www.yahoo.com/news/investors-amazons-future-bezos-announces-divorce-180512842–sector.html

  40. mcgcapitral:
    Your explanation of the relationship between large daily point changes and A-D line changes is clear; indeed I have posted here making note of what I felt was a discrepancy between the two on particular large point change days. However, if your theory were true in a broad sense, the A-D line would have the appearance of a “random walk” since say, Oct 3 or so. But what we actually see is distinct trends in the A-D line lasting at last a few weeks at a time.
    Is this only happening to me, or is everyone having to log in each time they make a post?

  41. elmer510 says:

    The momentum upwards looks quite strong now.
    Does it mean we now have seen the bottom at SPX and have started Major 3 ?

    A look at 2015/16 shows IM B looked a bit impulsive. I’m not sure about this.
    Tony wrote something about >13% increase at SPX could imply the bottom is settled.

  42. phil1247 says:

    riderbobo

    what exactly is The Twank ?

    • riderbobo says:

      His last name is Wagner and he was known for years as Wanker. More recently he got the monikor of Twanker and now The Twank.

      He is a passive aggressive a-xxxx.

      I have come to this blog for many years but seldom posted.

      I am going to try and not respond to him here anymore and may cut back on my posts entirely.

      My advice is to ignore him.

  43. vivelaamo says:

    Tony what happens if we get above 2656?

  44. gary61b says:

    ES does have attractions all the way down to the 2525 level, just in case it gets tired up here.

  45. The stock market is a pyramid and will never be allowed to fall again. 2002 and 2008 will be the last.50 percent plus crashes we will ever see. We may drop 30 percent in a Primary 4 but we will never crash again..Fed and banks wont allow it.
    SP 500 from 667 9 years ago, up over 300 percent. The world panics on a 20 percent drop of 600 points. CNBC specials ETC ETC. The feds job used to be to manage inflation and jobs. Now its main focus is to manage the stock market at all cost. We will be up 10 percent this week, if up another 10 percent we all have a big party. If down 10 percent next week and another 10 percent the week after. the world panics and central bankers around the worlds all step in.to save the beloved stock market. Days of free markets are long gone. Young people should be very happy,to know the beloved stock markets around the world will never ever crash again. there 401 K will grow as tall as Jacks Been stalk in the future.So that being said, Hurry up and jack it up over 2600 already so we can romp it up again on free money Friday. Geez stop screwing around just go straight up

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