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. mgccapital:
    Yes, price movement has primacy over indicator movement. But your analysis which states that the A-D line is always just co-incident with price movement is incorrect, especially if you look at Index price charts against A-D line charts over a period long enough to reveal a trend. Even on a daily basis, there have been occasions when the A-D change has differed from the price change in extent, although it is necessary to develop a definition of what constitutes that difference in magnitude.

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    • mcgcapital says:

      I’m not saying it just follows price, but that it’s more likely to when the % change on the indices is larger. If we’re up 1+%, odds of majority of stocks being up >0% is higher than if we’re up 0.2%. This market has moved straight down and straight up with most days being up or down big, so it’s not a surprise the A/D line is following. You’ll get the divergence if things slow down a bit and the daily range at the top narrow. That might not happen though as it can easily just go from big up days to big down again

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  2. An incorrigible abuser of the purpose of this site wrote this referring to Red China and the technology trade:
    “Doubt they implement what we demand and will not change our policy till there is evidence of such change. Stop trying to become a tech leader and stay in your place. How likely is that going to go?”
    It strains credulity that someone who claims to be brilliant at technology administration does not know the difference between China stealing technology and innovating it through their own creativity. Believe it or not, wizard, there is a huge difference between the two.

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  3. lml25 says:

    Watch the Trannies tomorrow and Friday.A drop back into the bear flag,below 9450,would be ominous.

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  4. Hi,thanks Tony
    don’t see any sign of a top yet,histogram is still ascending
    interesting crossover between NL and falling TL with MA55 aproaching
    https://invst.ly/9qruj

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  5. Thanks Tony. Happy to see you reduced your Updates to twice weekly. Daily was just too much. Hope you’re feeling well?

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  6. fionamargaret says:


    Thanks Chris Kimble

    https://stockcharts.com/freecharts/gallery.html?%24SPX

    Thanks Tony.

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    • fionamargaret says:

      Permutations are worked by using all data available to reach a conclusion..all things being equal…
      Well on the one hand the conclusion was 1850, then changed to 2750…what does one do with that.
      If changing to 2750 is the better option, why is DIA still down to 181, SPY down to 193, and yes $WTIC is still unmoved with its determination to go to 34.
      TLT is up to 143, GLD is down to 950, SLV down to 11.
      So much for the bright fluorescent numbers….

      Qui court deux lièvres a la fois, n’en prend aucun…..x

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      • xEVAx says:

        Tonys count says, “int a” at the low tentatively, B wave is under way with the little a done, b down c up….. Nothing looks better from here, maybe we see 2731 but I see Tony and more importantly the market seems to love 2656…. Looks like we’re going in 3’s so far all the way back to last years Jan blow off where the last real impulsive wave ended…. Big down or up needs an impulsive wave set up I think….. Maybe still alive here, note that SPX/DOW/NYA are on a slightly different count than COMPQ/NDX…. Wave 3 ended sooner on the the dow ect. but they bottomed in 09 with NDX ahead of the rest…. At the end of the correction they will be aligned…. NOBODY here seems to have a count that works but Tony but I try .)

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        • xEVAx says:

          If we keep going higher I’ll rule out the top count on SPX and go with the bottom count, futures are down though with king dollar down and bonds hanging in strong and gold up =)
          Maybe we see (and don’t laugh) the return of the bond and gold vigilantes??? The other alternative is about 2200 ish for wave 2 correcting this bubble and setting up 3-4-5 as in BIG 5 2009 to 2018 was 1 of an extended wave V UP, don’t ask how we get there though LOL

          Lets face it we have GOV gone wild….. That clown show last night was such a joke it could ALL end now though……

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      • Fiona:
        Thanks for the interesting RS chart from Chris Kimble. I wonder if mid-cap growth has the same RS pattern vs the SPX as general mid-cap? I will probably create such a chart using the Stockcharts.com tools.

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  7. Now things get interesting. The pullback tonight to 2665, broke the 61.8% long. Normally, what should happen next, is a counter trend rally of about 10 points to a 50% micro short. If that level is defended, we should see a lower low later on in the overnight session or by the NYSE open.

    BTW, China released it’s statement on the trade talks and it was a nothing burger. This does not bode well for tomorrow’s trading but I will trade the tape I get, not what I hope for.

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  8. Timeline for deep drops and new lows in market? Kind of easy now. Rosenstein leaving but not before Mueller report submitted. People in the know assume in next 2 weeks right before new AG is approved. I find it funny that when i started out using external events to tie into market drops everyone told me Tony’s Charts are the bible and no external noise can affect it. Loved that 60 point and 80 point swing on nothing. Impeachment rumors and reaction to report will be immediate. the report will be bullet proof.

    Would love to see the market crawl out of this bear as impeachment talks and full disclosure of Mueller Report is discussed. More importantly Trump is no Nixon. he has no bounds and will cause 10 times more havoc than Nixon did.

    in conclusion there will be no bottom seen until impeachment gets fully resolved. Any rally from here till that time is a gift to the Bear. Happy hunting. BTW please don’t put much stock in the PPT. Not during wild events like this. Panic will stampeded the PPT as it has with the mortgage debacle. People always look for a divine intervention. Oh yeah, i was told impeachment will NOT AFFECT markets. Anyone still sticking to that? I am excited because i can once again target my PUTS accordingly.

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    • https://www.bloomberg.com/news/articles/2019-01-10/trump-poised-for-battle-with-his-own-party-on-trade-war-powers

      As I speak Trump asking GOP to give him unlimited power to place tariffs on such things as autos. market immediate dropped from this report. republicans are slow witted in self preservation but will NEVER give him this. Trump wants to attack our allies now. Just when you thought the market was settling for the PPT rally. An imploding Prez. Mueller about to report. Watch the wild and crazy antics. just getting started.Hint: Remember my assessment of the man way back when? This market can’t compete with the worlds most powerful leader off the rails. After 2 years of dictatorial control he is losing it as Pelosi spanks him. Watch him become more bizarre if that’s possible. yet another reason Mueller will present his report very soon.

      I suspect the futures will recover for a glorious opening. Will not last however. Place your PUTS. Bumpy ride.

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      • But wait there is more. Getting ugly folks. Seems the GOP let go so many nefarious events that this new congress is going to be so busy trying to undo 2 years of daily criminal activities. This stinks to high heaven. Imagine a Russian oligarch and his businesses sanctioned over direct involvement with election tampering and lifting it right before the GOP lost their power? Munchkin is as clean as the rest of Trumps picks.

        And now that the silly hopes and dreams of trade war easing is gone up in smoke we have trump attempting to add the EU in tariffs on autos. Told ya trump is a man i know well. betting the man and you can’t go wrong.. How many days has the new congress been here? Silly me. I get emotional. Must not because it clouds the analytical side. Too bad I say. Ugly next 2 months for the delusional many that saw this nation rise up with promises of a new dawn and saw that happening for the past 2 years. Look up how popular Hitler was. We are a species easily duped. I guess i over stepped my allotment of trump bashing and will get spanked for it. so be it. I await tomorrows action..

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        • purplember says:

          yea Gary we needed Hillary in there because she’s squeaky clean. uranium one, to stupid to have secure server with most important information in the world and let’s not forget the 100’s of millions to clinton foundation

          Gary how come millions aren’t coming into the clinton foundation any more ?

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        • kingfrogcash says:

          The market is up 10% since President Trump said to buy the dip. While you have been wallowing in fake news. You sir had been duped. The great chartist’s on this blog just follow the tape. Wake up!

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          • CampFreddie says:

            King – Well said Sir.

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          • 2016 was the granddaddy of all bears. deep dark place. I, not following the holly chart sad the exact opposite. I use common sense which seems lacking in the USA. I love the analogy to Hillary. GOP does a great job of demonizing. They did it with Pelosi also. As for Hillary the simple fact that one dozen separate Republican investigations into Benghazi was only intended to brainwash you. Look at the fact that the most disgusting irrational corrupt administration ever is being indicted fired and quitting with treasonous behavior from all the top level people ans this president uses hate anger scapegoating and lines his own pocket at the same time. Yes this genius will go down in history questioning his sanity.

            Hillary is a private citizen. the server incident is the same as trumps daughter. Oh yeah his daughter is just an ambassador to the world with no real position yet top security clearance. Flynn had top security clearance and used it the collude with Russia and Turkey. Selling out this country and you divert and blame others. Why Hitler was’t so bad. His problem was that the German people had been subjugated and lost many wars. he was only trying to boost their moral.

            Try talking to the people writing the history books. Shame and embarrassment will be left after reading it. But hey, i said the same damn thing 2 years ago and was told I was biased. I guess i still am.

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  9. fxaprendiz says:

    I just posted my first update on the “Business Cycle and Recession Watch” that I’m planning to post twice a month or so in here. It went into moderation limbo, probably because I posted too many charts, 6 of them. I’ll try next time to either post less of them or make the report into a 2 articles series.
    Tony or anyone else, at how many charts/links the “awaiting moderation” gets triggered? Thanks in advance for any reply =)

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