monday update

SHORT TERM: gap down opening, DOW -130

Overnight the Asian markets lost 0.3%. European markets opened lower and tumbled 2.3%. US index futures were lower overnight, and the market gapped down to SPX 1506 at the open. The SPX had closed at 1513 on friday. In the opening minutes the SPX hit 1503, then bounced back to 1506 by 10:00. At 10:00 Factory orders were reported higher: +1.8% vs 0.0%. The pullback then resumed hitting a familar number, thursday’s low,ย SPX 1497 by 12:00. Then after a bounceย to SPX 1500 by 1:00, 1497 was retested by 2:00. Another bounce to SPX 1501 also failed by 3:00, then the market made a lower low to 1495 just before closing at 1496.

For theย day the SPX/DOW were -1.05%, and the NDX/NAZ were -1.65%. Bonds gained 15 ticks, Crude lost $1.65, Gold bounced $6, and the USD was higher. Medium term support drops to the 1440 and 1386 pivots, with resistance at the 1499 and 1523 pivots. Tomorrow: a speech by FED governor Duke at 8:30, then ISM services at 10:00.

The market gapped down at the open today for the first time since January 24th. But unlike 24Jan, which opened at the low and then rallied, this decline continued. When the market dropped below SPX 1500, turning the short term OEW charts negative, we changed the tentative “careful Minor 3” labeling on the hourly chart to its appropriate color dark blue. When the market continued down to SPX 1495 it generated the largest pullback since Minor wave 3 began at SPX 1398. That was a nice run.

Should the market indeed be in Minor wave 4 the pullback should be around 30 to 40 points. Our analysis, based on previous Minor 4 waves suggests support between SPX 1476 and 1484. With short term support at the bull market breakout range: SPX 1471/75, the low to mid-1470’s looks like a good area for a Minor wave 4 low. When it does conclude the market should make new uptrend highs during Minor wave 5 to complete the uptrend.

Short term support is now at SPX 1471/75 and 1462/64, with resistance at the 1499 and 1523 pivots. Short term momentum hit oversold today, had an afternoon bounce, then ended oversold. The short term OEW charts turned negative today for the first time since SPX 1420, the reversal level is now around 1500. Best to your trading!

MEDIUM TERM: uptrend

LONG TERM: bull market


About tony caldaro

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152 Responses to monday update

  1. HumbLEEd says:

    GUYS I THINK ITS A B WAVE LIKE TONY HAS MENTIONED….See the bee video was to …nevermind ๐Ÿ˜›

  2. H D says:

    I have seen this pattern on smaller timeframes as a broadening top. I have zero faith in my analysis right now though. I have to use the C word. confirmation

  3. H D says:

    Hey TG, we have enough light now for 2PM tee off. Not a bad idea. My natural flight is right to left and most of the courses are left to right. Just like my trades. Just do the opposite

  4. timing101 says:

    Once again, $SPX is the red-headed stepchild (just like me!). $INDU hasn’t taken out 14019.78 yet. Sell ’em all.

  5. tommyboys says:

    Looks to me like minor 3 ended last Wednesday – the 30th. We got an A down Thursday – the 31st, B up on Friday – the first and the C down yesterday completing minor 4. We’re now seeing the first wave higher of minor 5…

  6. llerias7 says:

    I am not sure of anything at this point…
    I have knowledge of targets at 1525 and even 1530!
    I think that is a “cash is king” situation.

  7. H D says:

    Tony would be unusual to similar 2 & 4?

  8. thebbliss says:

    What’s your take on the sub-wave structure of yesterday’s a-wave down? Do you count 5 or 7 sub-waves?

  9. CB says:

    its got to be at least abc of some sort, so 1495 1510 1508 ->>…risk/oppty is @ 1517 ,1523

    • mokiepon says:

      CB, it’s not even at 1514 yet. High is 1514.41. If it doesn’t make that, we MIGHT, JUST MAYBE, in the clear for 4C. M

      • Tom Green says:


        You can have an irregular correction, meaning take out the 1415 high, and still have the ABC intact. It’s just very tricky. That’s why Tony doesn’t like to short 4s in a strong uptrend.


      • CB says:

        M, thanks..we all agree C is coming ….think, once we cleared TL at 1511 though, it is open season ..for does’t have to look right, but would be nice if it did. and we have some time to kill..if everyone is short like we’re reading then.what are the bots to do but squeeze..till the EOD….i m sure that as soon as Im done typing this, I’ll be humbled …just trying something out idea whetehr it’ll work or not

      • mokiepon says:

        T2T, thanks for the reminder. Every once in a while, I need the thump on the head. But still like to short anything that has a probability of at least 25+ SPX points.

        CB, you’re right. Everyone and his sisterknows most are short. This too shall pass. M

      • mokiepon says:

        And, of course, as soon as I said something…. On the way to 1515.


  10. If this is a B wave, please remember that B waves can extend to 1.23x or even 1.38x the length of wave A (according to Frost and Prechter)… they’re real suckas in other words…

  11. Tony, meant minor 3 or minor 5

  12. Tony, this looks either minor 4 or minor 5?

  13. fionamargaret says:

    …think it is a little too soon to short – SDS more in the 39’ish range might prove more fruitful.

    Thanks Tony.

  14. rc1269 says:

    looks like the bots need to clean out all the brand new shorts first

  15. HumbLEEd says:

    See yas on the other side of the rainbow

  16. alright then; shorted this pop… bought SDS @48.10. Wish me luck, ’cause shorting a smaller down trend in a bigger uptrend is tricky.

    • mokiepon says:

      Hi surfer. Yes, it’s tricky, but if spx gets to 1480’s, or down to 1474, it should pay off. Nobody knows. Will just have to wait it out. M

    • HumbLEEd says:

      Sure is
      I think were all short here now. I used the lightly traded and seldom used ES minis

      • Tom Green says:

        Hey all

        4th waves in an uptrend are very tricky. Yeah we are all looking short here, including wa.
        Lee, get the bots going for another ten in a different direction. If your playing craps you can’t make money hanging out on the pass line. You got to have some numbers and hope the holder of the dice can roll for about 15 minutes before crapping out.


      • mokiepon says:

        Hi T2T: If this is a 4B as Tony says, I would think it should be done sometime tomorrow, if not be EOB today. M

      • mokiepon says:

        One does have to wonder why with a 4B like this, it was even necessary to have a pullback yesterday. Spx has recovered virtually everything (index wise) lost. M

  17. rc1269 says:

    1509.83 = 76.4% back and the 1/30 intraday high (aka left shoulder…)

  18. Tony, does it look if we are still in minor 3 or B wave of minor 4?

  19. hooloo1957 says:

    Tony how did you come up with the 405 number on Apple? Thanks Gre

  20. HumbLEEd says:

    ESH R1 @ 1504.50

  21. mokiepon says:

    Morning Guys! Waiting to see if spx will retreat from this pop. Good trading to Everyone! M

  22. H D says:

    What no easy button this morn? 10 points to HWB

  23. HumbLEEd says:

    some nice R/R this a.m
    Trade em !

  24. Tony, euro’s gone straight down since it hit 1.37, any thoughts on it? Is this a buyable pullback? Thanks ๐Ÿ™‚

  25. HumbLEEd says:

    C B
    RE Soybeans
    Today they successfully back tested the11/08 breakdown @ the days high with a -div on a 4 hr chart
    I see a series of higher lows and higher highs since the mkt pulled back .382 on 1/24
    If you’ve been long from last week or earlier theres a TL that comes in @ 1473 ish that should be respected.. In other words I m not sure LOL but I think it pullsback

    • CB says:

      Lee, thanks very much for taking the time to look at it in such great detail. I really appreciate your help & it’s great to be able to learn from you how to analyze those set-ups. Unfortunately I’ve been wasting time with coffee for a few days but it looks like the axe will fall on that pretty soon so I’ll be watching for a pullback with those parameters you’ve described. Thanks Lee! Gee, I need to ask you for help a bit more often, so I don’t get manhandled like I just did, first short, now long. I need a bear strategy.. ๐Ÿ˜ฏ warning, this will waste 2:04 min of you time, guys..

  26. conannca says:

    Hi Tony
    Noticed you labeled $405 on your Apple Chart. Is that a downside target still within “never ending” Wave 4.

  27. mokiepon says:

    Great Update! Thanks Tony. I hope indices drop a bit more, at least to the named 1471-75 area, just to make it official, then I’ll put my cash to work in a couple longs. I sold uvxy way too soon, but, I’m at work and can’t hold that position w/o constantly watching it, so, had to set a sell. M

  28. andysingal says:

    any chance we are still in wave 3 if we get a strong rally tomorrow, thanks

    • not IMHO. today’s low pretty much invalidated all possible “we’re still in a 3rd wave count”. This is likely a wave A of and ABC -assuming we get a standard ABC correction. The rally you suggest should be the B wave, which in fact can be 1.23 or 1.38x the length of wave A… yes indeed top the 1514 high. Great to suck in all the bulls and then pull the rug away in the C wave, which will suck in all the bears, who’s rug get then pulled away… Gotta love these market games. But, 4th waves are often complex, not necessarily though, and we may well get some sort of messed up ABCD triangle P.O.peeeeep. I prefer to stay out and load up in the target zone Tony has tentatively identified.

      So, IF you are still long, which you post in a way implies… (right!?) then you can still minimize your damage/max your profits in the B-wave up….

    • tony caldaro says:

      anything is possible, but odds would suggest a B wave of Minor 4 if we do rally

  29. tony caldaro says:

    That’s all my grandson talked about on saturday … plus his race car games ๐Ÿ˜‰

  30. H D says:

    Thx Tony, Finally found ur MA89. Ground hogs day ended right on schedule this year.

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