monday update

SHORT TERM: another gap up opening, DOW +119

Overnight the Asian markets gained 0.8%. Europe opened higher and gained 0.9%. US index futures were much higher overnight. At 8:30 the NY FED was reported lower: 6.3 vs 8.6. Then at 9:15 Industrial production was reported higher: +0.4% vs 0.0%. The market gapped up at the open to SPX 1701 and continued to rise. The market had closed at SPX 1688 on friday. In the opening minutes the SPX hit 1704, then pulled back to 1699 by 10:00. Another push higher took the SPX to 1705 by 12:30, which was followed by a larger pullback to 1695 by 3:30. The market rallied to close at SPX 1698.

For the day the SPX/DOW were +0.65%, and the NDX/NAZ were -0.20%. Bonds gained 14 ticks, Crude lost $2.05, Gold dropped $14, and the USD was lower. Medium term support remains at the 1680 and 1628 pivots, with resistance at the 1699 and 1762 pivots. Tomorrow: the CPI at 8:30, NAHB housing index at 10:00, and the FED starts their FOMC meeting.

Another gap up opening, the fifth in the last ten trading days, pushed the SPX over the OEW 1699 pivot. Then, for the rest of the day the market trading above and below the pivot. Today the SPX came with 5 points of its all time high, and the market had its first notable pullback in over a week. Quite a rally from SPX 1654 to 1705. Inflection point continues.

Short term support is at the 1680 pivot, and SPX 1658-1667, with resistance at the 1699 pivot and SPX 1710. Short term momentum hit extremely overbought today, then dropped back to neutral. The short term OEW charts remain positive with the reversal level now SPX 1680. Best to your trading!

MEDIUM TERM: inflection point

LONG TERM: bull market


About tony caldaro

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243 Responses to monday update

  1. phil1247 says:

    ok daking

    took my 20c and ran


  2. thoth8 says:

    I think will be NO Tapering tomorrow…and the day after too : )

  3. pio27 says:

    maybe best to share certain stock ideas since waiting for a correction is a joke. the market does not go down. as for the inflection point I think the market has already given us the answer.

    • daking66 says:

      i have…the only one w ideas supported by bullish charts…everyone else want to short for some reason…

      ARMH…is going to breakout … wait for it…cup and handle base.

      i already told u to wait for ULTA and FIVE pullback or for them to set up continuation base

    • andysingal says:

      i sold shorts, i think we see 176 before any meaningful correction

  4. phil1247 says:


    only 25% short now ..sold 1000 sqqq @ 21.23

  5. gtoptions says:

    Bearish candles turn to dust on less than average volume. The ending diagonal scenario, that has the structure of a leading diagonal (5,3,5,3,5) What? Looks like it will truncate here. IMO
    I will look to short after the FOMC melt up concludes on Wed. GLTA

  6. H D says:

    again, no trades. Only FED matters. SPX manipulated all day & priced for perfection.

  7. daking66 says:

    HLF….that hedge fund manager Ackman is going to get broken like Paulson in gold.

    dont mess with fading a strong chart.

  8. daking66 says:

    we just need other brave EWites to fade LNKD TSLA…lets throw in NFLX and GMCR too. like pouring gasoline on fire.

    dont forget ULTA (its overbought LOL)

  9. Emily Thorne says:

    There is so much complacency that we might even get an ATH BEFORE the FOMC tomorrow! Fearless people.

    • daking66 says:

      here is the scary part. your comment is subjective. the objective measure is the VIX. its not even at the level last seen at August high

      so there is a view we breakout and VIX collapses again

      • daking66 says:

        no reward for catching the top. just wait for distribution and/or fall below 50dma

        how simple is that?

      • fall below 50 MA, and wait for confirmation and the correction is over… always shoot for 50 MA when you are out there… then get out at 50 MA!!!!!

      • daking66 says:

        no … then it just the beginning if you really believe in your EW analysis.

        but in case you are wrong you can lean on the 50dma resistance. i said when we moved up above 50dma on INT B “UH OH!”

        now if you are wrong here…u get a breakout and you will be holding thinking “its way overbought”…remember if there is volume on the upside, overbought is meaningless so is divergence

      • daking66 says:

        at least wait for distribution like may high or gap down in early August.

        now you are shorting against short term and intermediate term and major long term uptrend

  10. daking66 says:

    alright who is still short?

  11. Fwiw…Just shorted Facebook @4482.3

    • daking66 says:

      the last time i heard that someone tried fading FB at 38 (ipo resistance?)

      have a fun time.

    • daking66 says:

      forgot to tell you i am long FB at 30.21…after earnings in AH trade.

      • what’s ur sell target? I am asking because IMHO, keep a close eye on $47, it’s the 1.618x extension of what is likely wave c of B up. Big A down from IPO day high of ~$45 to ~$17.5, then a of B up to ~$32.5 ($22), b of B down to ~$22.50, c of B: 1.618×22 + 22.50 = ~$47. Big C down would then target $17 again (C=A) or even as low as $2.5 (C=1.618X A..)…

  12. Tony

    Could you please outline in today post what you think will happend tomorrow if we broke 1710 – and what would happend if we broke 1680 to downside ?

    Thank you

  13. pio27 says:

    just an observation . judging by how the are crushing the front mont VIX futures I think we know which direction the market will go tomorrow.

    • rc1269 says:

      crushing? i show oct futures down 15 cents to 15.40. and spot is green at 14.60 +0.22. don’t see anything meaningful here one way or another

      • pio27 says:

        yes but contango is 1 dollar apart from spot nobody is expecting the market to roll over anytime soon.

      • pio27 says:

        sorry i should have said supressing the vix futures.

      • rc1269 says:

        the degree of contango says next to nothing about potential volatility for tomorrow. the fact that it’s in contango at all, for a non cost of carry market, implies that vol is expected to be upward sloping in time or that short term interest rates are expected to rise. or, as the case may be these days, there are just a lot of vol-tracking etfs that have skewed the vix futures market. not sure about that one
        but might want to hit the books on this one if you think it’s saying anything about tomorrow. just a suggestion. cheers

    • pbnj123 says:

      VIX has been green all day

    • rc1269 says:

      see above re vix futures.

  14. phil1247 says:

    NQ close to .618 retrace and looks like wedge on 5 min

    it should collapse here if it is ending diagonal

    if not 618 should be surpassed and 3213 tested

    still holding 50% short from yesterday but profits are getting slim

    and im gettingready to TTMAR

  15. 7dayyss says:

    So, tomorrow afternoon, inflection resolved? Still inclined to see the beginning of C, but this has been one tricky wave/s!

  16. torehund says:

    Its all in the perception, if we DO perceive the economy to be fixed it is fixed. The illusion is right as long as we all progress into do believing so….However, when we all believe the economy is fixed without beeing able to recruit any disbelievers, then the economy will soone r rather than later start to suck…Thats how the universe is constructed.
    Pessimism is Our fuel and our airbag, and just that….

    • torehund says:

      and truth is plastic, molded and recreated every minute…What we can do is just not to resist the change.

    • perversionofthemean says:

      Yeah, similarly, my experience over the last 25 years is that markets are a blend of a pyramid scheme and poker game. I see technical targets established (fib, geometric mean, and geo mean of 1st derivative), and suddenly markets ignore fundamentals—just up until price targets are reached. At that time, the masses are “on board” with the trend, believing whatever CNBC/WSJ spews, because they attribute the day’s results to the day’s news (cause and effect). At the target, the great unwind begins. You’ll hear phrases just *after* the top like, “It’s such a great company! If you liked it at $90, then you’ve gotta love it down here at $70”. I’m not the best day-trader (understatement), but there were technical targets for the ’00 top, ’02 bottom, and ’09 bottom. (fwiw: I couldn’t get a good read on projecting the ’07 top; I just knew that after it was reached would come a decline that matched that of ’00-’02, or down 50% on SPX. In essence, ’00-’02 was A, ’07-’09 was C, and A=C, although I don’t proclaim much insight into EW, and this is not congruent with Tony’s view of the ’02-’07 rally.) At these turning points, most people believed the state of the economy was enduring, when the opposite was so. Their collective beliefs did little to thwart the inevitable reversals.

  17. ewmarkets says:

    As many have noticed, SPX weekly RSI certainly looks a lot like past major turns. However, if the RSI trendline is broken to the upside, then the similarity would end. And we won’t know if the trendline on RSI would hold or not until a week or two later.

    • daking66 says:

      number one mistake among traders is going against overbought and oversold situations

      the second is negative and positive divergence. always focus on weekly charts for divergence and you must see distribution first in bull markets to act.

      i wouldnt worry until u see distribution. and even then that only guarantees a pull back to the 50dma thats all..

  18. budfox9450 says:

    Gld and SLV are looking especially interesting….
    You can see a Bullish setup….Bud

  19. lunker1 says:

    yesterday’s SPX low bounced of the old support TL from July 16, 26 and Aug 13.

  20. Put/Call ratios continue to show so much complacency.

  21. pio27 says:

    I must say i never shorted this market until recently. Its no fun lookin for reasons for the market to go down. charts, news, jobs, all seem to mean nothing. I always said the FED wants higher stock prices I should have listen to my own advice.

  22. Tony

    If we broke 1710 recent highs , what would the major wave 5 target be ? 1780 or ?

    • traderdicks says:


      • bcm52 says:

        1720-1725 fits right into a rising wedge chart pattern. If it holds and reverses could be severe correction. If one was to short, seems like that would be a good time to enter.

      • tommyboys says:

        May get some bumpiness between now and the first week or so in October but after that – IF we even get it – this market is going way higher by EOY – doomsayers notwithstanding…

  23. daking66 says:

    growth stocks continue to act well.

    teflon stock TSLA holding 20dma and tightening in fact alot of big growth names holding 20dma trend line

  24. selhai says:

    I don’t want to appear alarmist, but the FTSE slid a bit for the final 90 minutes or so and ‘they’ also took a few more points off during the closing auction. Given the way trading is closely coordinated across the water, this MAY perhaps be an indication of what COULD happen in NY later today??? Forewarned is forearmed…

  25. torehund says:

    Couple of positive price divergences in NUGT, but I do it naturally geard through smallcap miners. Starting to look good.

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