monday update

SHORT TERM: market rally hits OEW 1036 pivot then fades, DOW -8
Overnight China eased it Yuan/USD peg currency policy. Asian markets were all sharply higher. Europe opened higher and closed +1.05%. US index futures were sharply higher overnight and the market gapped up at the open to SPX 1127. It had closed at SPX 1118 on friday. By 10:00 the SPX had rallied to 1131, within the range of the OEW 1036 pivot, and that was the high for the day. For the rest of the day the market pulled back in an attempt to close the gap up opening. Just past 3:00 the SPX did close the gap and then traded down to 1108, the OEW 1107 pivot, just before the SPX 1113 close. 
For the day the SPX/DOW were -0.25%, and the NDX/NAZ were -0.90%. Bonds lost 5 ticks, Crude gained 40 cents, Gold dropped $26.00, and the USD was higher. Support for the SPX remains at 1107 and then 1090, with resistance at 1136 and then 1146. Short term momentum hit overbought this morning then headed down for the rest of the day to end slightly oversold. Tomorrow, Existing home sales at 10:00 and the start of the two day FOMC meeting.
Today’s gap up opening carried the SPX into the OEW 1136 pivot range with the high of 1131. We expected this short term rally would take five Minor waves to make it to the OEW 1136 pivot. But it has only taken three thus far. As long as support holds at the OEW 1090 pivot we’d expect the SPX to finished out the Minor 4/5 within the range of the 1136 pivot. Should that support break it’s likely we advanced in an abc Intermediate wave A. Then after the Intermediate wave B pullback another abc Intermediate wave C rally should follow to complete Major wave B of Primary wave II. We posted an interim ‘green’ 3/a labeling at the SPX 1131 high. With an FOMC meeting the next two days the volatility should continue. Best to your trading!  
MEDIUM TERM: downtrend low at SPX 1041
LONG TERM: bull market

About tony caldaro

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27 Responses to monday update

  1. tony says:

    Alex,Agree, a bit concerned about Gold when reviewing the hourly chart.All three rallies from the Minor 4 low are overlapping. Either we\’re building for a crescendo uptrend finish, or forming a diagonal triangle.Tight stops suggested.


  2. tony says:

    C B,The EURUSD was overbought short term and is now at neutral.May get oversold before it rallies again. USD is the inverse of course.


  3. Alex says:

    Tony do you have a short-term count in Gold, as the wave action here is quite confusing?


  4. C says:

    Tony, how much of a bounce for the USD are you expecting? thx.


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