monday update

SHORT TERM: uptrend continues, DOW +7

Overnight the Asian markets were mostly lower, losing 0.7%. European markets opened lower and lost 0.2%. US index futures were relatively flat overnight, and the market opened slightly higher at SPX 1405. The SPX had closed at 1404 on friday. In the opening minutes the SPX dipped to 1402 and then started to rally. Just after the open FED director Killian’s congressional testimony was released: Then at 10:00 the NAHB was reported lower: 28 vs 29. The market continued to rally, clearing SPX 1407 around 11:30, and rose above 1410 to 1414 by 2:00. Then a modest pullback followed in the closing hour to SPX 1409, and the SPX ended at 1410.

For the day the SPX/DOW were +0.25%, and the NDX/NAZ were +0.75%. Bonds lost 18 ticks, Crude gained 90 cents, Gold added $3, and the USD was lower. Support for the SPX remains at the 1386 and 1372 pivots, with resistance at the 1440 and 1499 pivots. Short term momentum declined only slightly after a negative divergence, then spiked to extremely overbought again. Tomorrow, Housing starts and Building permits at 8:30. Then at 12:45 FED chairman Bernanke starts his four part lecture on the financial crisis.

The market opened about flat this morning then ralled through the first fibonacci resistance level at SPX 1407. At this level Intermediate wave five = 0.618 Int. wave one. The next fibonacci resistance level is at SPX 1448. There Int. wave five will equal Int. wave one and 0.618 Int. wave three. Prior to this level we have an OEW pivot at SPX 1440. With the SPX currently around 1410 there is little overhead resistance until it reaches the 1440’s. However, this current rally, from SPX 1340, has only had minimal pullbacks of 8 and 9 points respectively. Typically, during this uptrend, pullbacks that have marked notable waves have ranged between 11 – 20 points, or more. A pullback of this size can occur at any time. When it does, it will probably mark the end of Minor wave 1, of Int. wave five, with Minor wave 2 underway. Intermediate wave five should consist of five Minor waves. Short term support is at the 1386 and 1372 pivots, with overhead resistance at the 1440 and 1499 pivots. Short term momentum was extremely overbought, then declined towards neutral. Best to your trading!

MEDIUM TERM: uptrend new high SPX 1414

LONG TERM: bull market


About tony caldaro

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46 Responses to monday update

  1. DR CL says:

    Like H D sez
    HWB here in ESM

    Looks like everyones looking for a gap fill
    I doubt it …at least in reg hours
    S2 1391

  2. H D says:

    15 min of selling was prolly enough in the 4th but for 2 down would think we get at least a 2 day event or 3 waves. is that asking too much 😯 HWB shorts 1399.50

    • H D says:

      you see that, ruthless cannibals. got the full C=A treatment @ 1401’s

    • rc1269 says:

      yes, that’s too much to ask. c’mon, take your 16 points and be thankful you got that! haha

      • H D says:

        so 3 of 5 goes 1470? prolly. I can’t see past 5 points so I gotta go with what I’m seeing now.

      • DR CL says:

        H D

        I know of guys who could only see 5 points/handles and took em every chance they got. They did/do pretty well. Amaze ole Albert Einstein and compound it !

        I was a busy little elf in CL and ZC today.

  3. M1 says:

    Tony, Wave 4 from 1340 ?

  4. rc1269 says:

    So did we just witness wave 2 end at 9:45am, at 1397.68? -16.32 from yesterday’s high. biggest selloff in a while. wooo hoo

  5. rc1269 says:

    Just saw an interesting note from an EM trader. He’s seeing panic selling in Russia credit by locals right now. Their equity market also looks like it’s very close to rolling over at the moment.

    Not that the US markets seem to care what’s happening in the rest of the world anymore… but thought it was an interesting nugget nonetheless.

  6. valunvstr says:

    Beautiful IHS on Gold. I’d be a buyer here. Never bought a gold etf but I am going to pick up IAU. Head at 1523 and the two shoulders at 1804 and 1792. Target on neckline breakout would be 2000. 337 point on 1663 = 20% if this pattern does indeed complete and IHS.$GOLD&p=W&yr=2&mn=0&dy=0&id=t58535475394&r=4247&cmd=print

  7. The upward march rolls on as the indices push to another round of new highs today. We continue to see the potential for extended gains in this advance, based on the persistence of this up move, the recent breakout above significant resistance levels, the need for higher prices for this up leg to become impulsive overall, and the precedent set by previous instances that sported similar internals. However, a test of our location within the pattern may very well be near.

    After rallying a hefty 6% over the past nine sessions, the indices now sport a near-term up leg that appears to be nearing completion. If it is and price pulls back, it will provide notable clues regarding our exact location within the move off October’s lows. Specifically, we should get a much better idea regarding the early-March pullback, and whether it was a 4th wave or something smaller. And that will help determine the juice left in the overall up move.

    What we know is that if this is the breakout it appears to be, significant work to the upside is still on the way as the move becomes a five-wave pattern. In the meantime, our goal must be to determine exactly where we are so that we can better understand where we’re going.

    • H D says:

      Nice update Tony ! I’m sure glad you don’t use ‘if’ very often ‘if’ ever. :mrgreen:

      • Igor says:

        Tony is the best elliottician I’ve ever seen. Only, because he doesn’t promote himself aggressively, we see other guys on TV. I don’t think, it bothers Tony too much, however. As we see, TV popularity and consistent right predictions are incompatible 😉

  8. DR CL says:

    Hey H D
    Just saw the weather out by you.. Yikes
    The low volume press is on tonite ES CL GC

    • CB says:

      Lee, can you help? ..what does :”low vol. press in CL” mean? Thank you.

    • H D says:

      I’m at 2600′ they say we might get some white stuff tonight. Back to 80’s this weekend.

      ZW triangle still looking good as it’s within a couple from lower TL. Will trade that #. GL

      What’s up in ur neck of USA!

    • M1 says:

      1. what if 1414 is surpassed ?
      2. what if 1340 is broken ?…what should we expect ?

      • 5wavemodel says:

        Hi M1,
        If we surpass 1414, but stay below 1422, it is possible that 1414 is wave1 of a 5 wave sequence from 1340, or even from 1075. If we surpass 1422, I would go back to my original count, where wave 5 terminated at 1378. The drop to 1340 would then be wave 1 of an inverted, or semi-inverted corrective sequence, that would probably take the market much higher.
        My model doesn’t give good projections this early in a sequence, but breaking 1340 would probably mean we would be headed quite a bit lower.

  9. M1 says:

    I am impressed with the market. But I am not bullish yet, but very close to. Perhaps in less than 2-3 days.
    I have been almost 4 weeks on the sidelines/neutral. Missed abt 50 spx points. =(
    NDX looks in the way to hit the target at 3100. (SPX =1630).

  10. cloudblu says:

    Hi Tony,
    Been a lurker here for quite a while. Thanks for sharing your knowledge freely.
    What do you think gold is doing? Is the action still normal for bottoming consolidation? What about the HUI? Do you have any counts for that? The miners look like they might be a bargain but I don’t want to catch a falling knife.

    • tony caldaro says:

      welcome Kristal, Gold does look like it’s bottoming.HUI still needs to do some base building before it rejoins the gold bull.

      • cmparis says:

        It will be interesting to see what happens here – Volume continues to be heavy on the downside. It seems like there is potential for testing the lows.

  11. DR CL says:

    Thanks Tony
    Guys I’m only being selfish and self serving in looking for some volatility.
    Congrats to you position traders in Equities who have been long from sweet spots.
    I wish you no harm 🙂
    Classic .. Thanks for your posts !

  12. bolderbob says:

    You must think the market is efficient….it isn’t.
    People are lazy, they don’t read they react

    • CB says:

      that’s so true Bob…or, what’s that old saying?…fundamental news doesn’t matter until “privileged” parties can first position themselves in the markets so that they can benefit from the news…Laws of physics are great, Newton was a genius, and yet in trading one would have to agree with T. Edison : “hell, there are no rules here, we’re trying to accomplish something.” 😉 yep, life is not fair, so what else is new..

  13. rc1269 says:

    Here’s why I will never understand equity markets…

    BAC stock sells off into the close, on a rumor that they might do a secondary equity offering. Now, when the Fed released the bank stress test results last week, the numbers included prospective changes to bank equity capital based on each company’s capital plans for 2012. BAC’s capital plan called for their capital ratio going from 5.7% to 5.9%. The increase in equity capital implies… an equity offering. It’s no mystery there. This info has been out there for days. We’ve been discussing it in my office for days. The stock just sold off 4% on this ‘rumor.’

    I just don’t get it

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