monday update

SHORT TERM: pullback continues, DOW -50

Overnight the Asian markets lost 1.2%. Europe opened lower and lost 0.6%. US index futures were also lower overnight, and the market opened two points below Friday’s SPX 1710 close. The market continued to pullback until just before 11:30 when the SPX hit 1697. Then from an extremely oversold condition the market tried to rally. By 2:00 the SPX had reached 1705. A pullback to SPX 1701 followed by 3:30, then the market bounced to end the day at 1702.

For the day the SPX/DOW were  -0.40%, and the NDX/NAZ were -0.20%. Bonds gained 9 ticks, Crude lost $1.35, Gold slipped $4, and the USD was higher. Medium term support remains at the 1699 and 1680 pivots, with resistance at the 1779 pivot. Tomorrow: Case-Shiller and the FHFA housing index at 9:00, then Consumer confidence at 10:00.

The market opened slightly lower today. Then declined nearly completely back to the recent pre-FOMC low at SPX 1695. All of the no-tapering FED announcement rally has been completely retraced, and then some. Thus far the uptrend is unfolding as expected: Int. i SPX 1662, Int. ii SPX 1641, Int. iii SPX 1730, and Int. iv may have just bottomed at SPX 1697. As long as the OEW 1699 pivot range holds, we should get a rally to slightly higher highs to potentially end this uptrend over the next week or so.

Short term support at the 1699 and 1680 pivots, with resistance at SPX 1730 and the 1779 pivot. Short term momentum hit extremely oversold this AM, then started to rise. The short term OEW charts dipped negative then positive with the reversal level now SPX 1702. Best to your trading!

MEDIUM TERM: uptrend

LONG TERM: bull market


About tony caldaro

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113 Responses to monday update

  1. Funny market. I’m still short.

    – You know who🙂 but you can call me “PX” for short

  2. Tony mentioned yesterday that Int. v’s are sometimes weak or fail. Tony, do you think it is happening now? Thanks.

  3. H D says:

    while everyone was watching the TF make new highs the DOW never cleared it’s previous 4th. silly, just silly. Good trades all.

  4. selhai says:


    Reference your earlier comment, in the UK, the main investor discussion boards routinely offer a facility whereby a user can place any poster’s name on ‘filter’ or ‘ignore’ (both terms are used). It surely wouldn’t be too difficult to arrange something similar on a blog such as this?? It isn’t rocket science.

    So, for example, if you don’t wish to read any posts from a parrot or a buffoon, you would click on the parrot’s or buffoon’s name and be offered the option of placing his/her name on ignore/filter.Simple – you’ll never have to read a post by any name you choose to block in this way.

    Personally, I would welcome being able to filter on this blog. But someone is going to have to pursue the idea…

  5. jackkendo1987 says:

    Nice ED posted on HD’s forum:

  6. Any one can up date gold
    Thank you

  7. pbnj123 says:

    Good afternoon
    Will this v up subdivide – or should it be one straight shot?
    Thank you

  8. radrian6 says:

    Hello Tony and all,
    As I write this, SPX is still struggling below resistance at 1706-10 while RUT is testing new highs. This decoupling of index performance certainly doesn’t help clarify the bigger picture.

    As I mentioned yesterday, the previous two RUT rallies were 12.2% and 12.8% so, assuming symmetry holds, we should expect RUT to reach 1135 or so by October OpEx. This target also coincides with the rising daily channel line. The rising weekly channel line could cap the RUT at about 1115 so be aware of that possibility.

    Of course, these price targets assume that RUT continues unimpeded which is a lot to assume, particularly with the SPX still struggling. Also, RUT tends to start mean reverting after three weeks of rallying and this is week four of the rally. But until I see some volatility, I will assume the path is higher and the targets will be met. When volatility does show up, it will be time to reassess.

  9. 777daimon says:

    Hi Tony

    Congrats on what you are making here! A great ‘Bravissimo!’ (you know italian , right?:) for you and the other great ones from here: Lee(not so tired, very energic IMO), CygnetNoir and HD.
    In fact all here are great, but those 3 are the one cherished by me.
    That’s my first post. In fact, I created this ID to post one idea for you to tell me pls your opinion on it.
    I discovered this blog 1 year ago and followed it. It has a good to very good level of forecasting of market (hope nobody here won’t kill me, it’s just my opinion)🙂. Out of maximum 10 points I’d mark your blog with a 8.25 -8.75 level. And that’s good to very good, believe me! I know some other guys that post on marketwatch and are very wel known as ellioticians and they don’t deserve more than 2.50-3.50 as evaluation degree (where 1 is lowest and 10 is maximum).
    Now that’s my idea: I know your OEW count, have followed it.
    now: What are the chances that from 666 low:
    Primary I ended at: 1370.58
    Primary II ended at : 1074.77
    Now we are in Primary III.
    As I see Primary III we’ve had:
    Major 1=1422.38
    Major 2 = 1266.74
    and than repeated (during 2012):
    Major 1′ =1475
    Major 2′ = 1345
    and than , after Nov 2012 low at 1345 we have Major 3/Int.1 (1345-1687) , after that Major 3/Int.2 as irreg. flat (zig-zag 1687 – 1627) and right now we entered in Major3/ Int3. with subdivisions (Minor 1 = 1627-1729) and (Minor 2 = 1729 – 1695, now) and next is Minor 3 of Major 3 of Int 3 of Primary 3.

    Could it be possible?
    Please take at least 1 minute to think seriously this count and tell me your technical opinion on it.
    The sentiment vibration (everybody expecting a strong wave down) signals for the opposite.
    The retailers sentiment is a good indicator for market’s maturity level.

    I’m not trolling here so please all here keep your potential non-technical agressive messages. I know Tony is a great guy and the best technician and I agree.
    All I want to hear is Tony’s technical opinion on this count (as much detailed as he can and as he wants to, of course). Or others (Leetired, HD, CN preferred but others with technical opinions also wanted!).

    Why this count could not be right?

    Under this count Primary 3 would project to 15 Dec 2013- 15 Jan 2014 at 1850-1950 points on SPX. The end of bull market (end of P5) would project at about 2600-3000 during 2015-2016.

    Thank you Tony .

  10. H D says:

    I know we’re “just trading it” but in a quest to find a pattern this is best I could ID, creative yes. 3rd extention terminal.

  11. Hi Tony,
    Any thoughts on why the Russell2000 is so strong? Thank you.

  12. I give it 75% that we are headed higher soon.

  13. H D says:

    SPX will b 5=1 1729 if that was 4th DT, 1706 SPX if funky zone though IMO

  14. rc1269 says:

    the Dow posted a shooting star topping pattern on the weekly candle last week

    • greenroger22 says:

      Hi Tony…you are requesting we do not post trades or stops? Did I misunderstand? No problem I can understand could be confusing to EW forum. Best of luck all..I wish you all well. back to retirement for me.. 🙂

  15. Thinking if Major Wave 4 ended at 14,760 on Dow Industrials, the measuring from start of Major 1 to end of Major 3 and calculating 38.2%, adding it to 14,760 projects min Wave 5 of 16,763, +8.8% from yesterdays close. When I look at NYA I see a large ascending triangle, that projects to 10,600 +8.9%. Getting to the same percentage move from 2 different approaches.

  16. H D says:

    10 handles, 98.25 had sellers yesterday. Was that 5 waves down?

    • jackkendo1987 says:

      post #3
      per HD rule🙂, 10 handles, took profits at 1705 at TL resistance.

      reporting to Tony:
      lunker1 made 4 posts, violate the posting rule.

      • Jack,
        I don’t think Tony intended on making you the board tattle tail either. Just relax man, please.

      • Look at his genius, touch his forehead and one’s cured of folly. The picture says it all,

        If anyone knows how to ignore a user, please share.

      • 16golfer says:

        Really jack? Change your navatar…maybe people will take you seriously. Shall we serve you cheese & crackers with your whine? This isn’t kindergarten….

      • fbender7 says:

        surfingwavers – what seems to work well in ignoring someone or something, is to give it no energy – neither positive energy, nor negative energy. Without energy, even the Energizer Bunny would stop going and going. This is different, and better, IMO than assuming a dismissive mental posture toward someone. Having said that, variety is one of the things which makes this blog go ’round. It’s sort of like entering the Creature Cantina of Star Wars, you never know who, or what you’re going to find inside:

  17. rc1269 says:

    must be about time for that next rally huh

  18. lunker1 says:

    Posting my view…not posting my trades. Pos D on 60min RSI5 also see Tonys MAs on 60min and Daily chart at 1694 ish

  19. pbnj123 says:

    Funny – LOD (so far) 1694 and the EMA(89) where – 1694
    Good enough for a iv – possble

  20. torehund says:

    One should focus on nasdaq, sp 500 looks sick…

  21. jackkendo1987 says:

    One day at a time, time to reload the long at 1695.
    People are refraining from posting: three or less

    jackkendo1987 says:
    September 23, 2013 at 1:46 pm
    Is there a limitation how many posts per day?
    All my posts are market related.

    tony caldaro says:
    September 23, 2013 at 2:09 pm
    most are aiming for three or less

    tony caldaro says:
    September 23, 2013 at 1:22 pm
    For the past nearly 24 hours the comment section has quieted down quite a bit.
    Maybe some have left. Which is fine, posters come and go to whomever has the hot hand.
    Two posters, in particular, have created a lot of noise over the past several weeks.
    They have even changed names, one several times, to create more noise and confusion.
    We have a really good group of professional traders here.
    In an attempt to keep this blog going in a positive fashion: helping others.
    All personal insults to anyone, or anyone’s approach to the markets, will not be tolerated.
    Those that choose to do this sort of thing will be marked as spam.
    If they continue, their IP address will then be blocked.
    In the 8 years doing this blog I have never needed to block anyone.
    Guess popularity has its drawbacks.
    If anyone notices a post that is out of line please bring it to my attention.
    If we all monitor the comments it will be a better place to share ideas.
    best to your trading!

  22. manunidhi21 says:

    Namaste Tony !
    First time S& P and Dow in parity :0

  23. kloutt says:

    30min ES chart sports a nice 5wave structure down….. a 5legger down suggests a retrace to about 50% 1707ES and then another 5legger down to TGT of 1.618xwave1 = -58 ES pts

    not sure if this jives with tonyC but it looks good to me …..not jumping in long look for 1707 but will scalp an ABC pattern to the upside

    • gokalg says:


      do u mean we retrace to 1707 still before next wave down or decline has started

      • kloutt says:

        yes gokalg

        bounce tgt is ES1707 and should be ABC pattern off the 1688ES lows

        sell stops getting hit and once market takes the sell stops the muzzzaK will stop and market will freefall imo

  24. lunker1 says:

    Dr Ed sez fundamentals still good.

    • mcmasoniam says:

      Mornin’ lunker. I remember Ed when he was at ML in the 70’s and had no gray hair. If memory serves me correctly, he was perpetual Bear then, so might consider him somewhat of contrary indicator. Have a profitable day! I’m in Futures trading Boot Camp the rest of this week. Tah, M

  25. 16golfer says:

    Piker…..enjoy your golf round. I played Saturday, which was a very nice fallish 77 degrees. Shot 82 and was pleased with that since I hadn’t played in a month. Golf is in my blood, like the market. Ever thought about writing a book on trading? You have a gift with words….

  26. budfox9450 says:

    The majority of the stocks/indices I follow.
    Are not exhibiting Bullish patterns, right now.
    However the SP500 BoYu remains,favoring
    the Bullish camp……Interesting divergence…

  27. $SPX $SPY $AAPL $NUGT $UVXY, market update for monday , a shortened format (within remark’s sect. of blog)

  28. torehund says:

    Many of the candle stick patterns are showing signs of the ever more reluctant bull, and a hessitant bull do run fast and With convicting once he sees that the rest of the herd give signs of a bullish revival. The ever present fear for the future is beautifully exhibited in the market these days, Stocks beeing pushed Down to the brink before advancing just a little bit, the inhibited bull….
    The Bernanke gap has been eaten away and the pyramid now rests on two feet. All in all its up to us the traders to decide for elevating the market to a degree where the debt burden is being perceived as manageable, and do we really have any other Choice….Plunging into deflation even from where we stand now would be devastating and effectively abolish many Companies that holds the key to future progress in Medicine as well in Renewables Giving them room to survive and even thrive for a moment or two is in accordance with natures, and finally also Our own intent.
    Fear creates humility which nowadays is even mirrored in politics, Obama isnt dragged out of some western Movie and Putin the ironman is showing a New face towards the world. Furthermore even Iran melts like butter in front of the human cathastrophy in Syria. lets hope it is a trend.
    See you all tomorrow.

  29. Big Up! says:

    Hi Tony,

    I’m happy to see that the blog has settled down, more or less, and has once again become a place where families can hang out and enjoy a meal together🙂

    As an aside, it seems as though something has gone awry with my wordpress account, and I am stuck on “Big Up!” I am thus retiring cygnet noir, CN, et al of its iterations. Starting tomorrow, when I sign in to post, it will be under a twitter account, and the handle will be some iteration of Piker, a name that I shall wear proudly!

    For those watching from home, I am still short the ES from 1722.25. The way I generally play these trades is to watch for what price does when it reaches a support level, e.g. a previous high, pivot, etc. As I am short, I would stop and reverse if I see a Big Up indicated at a support level. In the current case, I will be keeping one eye on the 1687 level. Yes, there are lower levels, but we must take them as they come, and not hold out for those lower levels irrationally if price indicates it has no intention of visiting those levels at this time).

    I also keep an eye on the midpoint of the swing from high to low, aka the 50% retrace for you fibfans. In the current instance, as I write this, the 50% bounce point is right around 1708-1708.25 ESZ. I don’t put a hard stop there, but if price gets above and looks to keep going, out of the trade I go. My current hard stop is 1719.75, but I generally pause its execution during the overnight. Depending upon what I wake up to tomorrow, my hard stop will possibly be lowered to that 50% level if it is still current, or to a few ticks above today’s 1707.50 high.

    I also continue to fan what is properly termed a supply line (as opposed to a trend line) and a break of the supply line elevates the significance of a test of the 50%retrace level, aka, the midpoint of the swing, aka HD’s HWB.

    FWIW, we have a gap betwee 84 – and 88 ESZ, and, though I am not a moving averages kind of guy, I always try to to keep myself apprised of where the daily 20 ema is, because so many traders use that level as some kind of gauge of value. Currently, the 20 day ema ESZ is at 1680 or so. It should be passing right through 1687 on the cash SPX for tomorrow. If this is int. iv, then it should find its bottom tomorrow during the NY session, unless the overnight futures traders decide to put it in all by themselves. Otherwise, if the 1680 pivot lets go, then 1660-50 would seem to be in the cards.

    Thanks for all you do for all of us, Tony!

    – Piker, The trader soon to be formerly known as CN🙂

    • student8888 says:

      cn, it would be great if you would send out a tweet or some posting when you go short or long. i’m sure many here value your input and trust your skills in analyzing the price action. so if you do go long tomorrrow at 1687, it would be great to see a post from you. thanks.

    • H D says:

      It’s like retiring a hall of fame’r jersey CN. But I am superstitious so if things turn ur gonna need to take that jersey outta a retirement. Nice trade again. Like u hate stops overnight. Little gremlins seem to find then regardless! 3 days down in a row, turn around Tuesday?

    • lunker1 says:

      Lose the pike CN. It ain’t you.

    • 16golfer says:

      Thanks Piker! Is your hard stop of 1719.75 the 61.8% retrace?

      • Big Up! says:

        @golfer: The stop is a tick above the 9/20 ESZ high. I only use fibs to identify potential areas where support or resistance might develop. I do not use fibs to set stops or to blindly enter a trade. All entries are based on price action giving an indication of the direction price is most likely to move off of a S/R level. I use prior highs and lows or developing price action to manage trades.

        @lunker: I figure I’ll try it on for size. Besides, I have a little project I’m working on for a friend, and “piker” just happens to fit so well at the moment given the situation with which I am trying to help him.

        @HD: I’ve had so many internet names both here at Tony’s and elsewhere when I was active on the trading boards that changing one for another means little other than me serving my own whims. “A rose by any other name …,” don’t you know. And of course, what matters is the markets, and I don’t care about HFT, bots, buy/sell programs, etc. and so on, the old saying that “the more things change the more they stay the same” certainly applies to the markets!

        @student: I may not be opposed to such a thing as I have often posted my entries in real time here. But I would emphasize that what anyone here reading this blog should be doing is trying to put together a trading plan. Having someone feed you pivots or entries and exits will not get you anywhere in the long run, especially as neither price action or OEW yield a “mechanical” trading system such as “buy on green” or “sell on red”. And besides, I am not always able to post what I am doing. This afternoon, for example, I will be on the golf course, and my trading will done from a hand-held that does not let me get to the internet🙂

        Piker, the trader formerly known as CN the Piker!

    • pooch77 says:

      Thanks for the post Piker

  30. Overnight, Europe was up on German election results, while ES rose on stronger China flash PMI data. This morning, traders took a tepid open to sell ’em straight down nine handles in sixty minutes. After a three handle relief bounce, a five-handle flush in thirty minutes (10:45-11:12) exhausted the bears. An oversold bounce took the SPU’s up seven handles, before holding printing 1702 into the close. Before the relief rally today, $SPX had sold down in a straight line twenty-handles over sixteen hours with no more than a three handle bounces. Today’s relief rally of seven handles in under three hours, represented the biggest bull move of the past twenty-four regular trading hours.

    Significant levels of the day were the previous all-time highs 1709/1710, at the open. 1700 was the area in which we bounced, and was the FOMC Announcement low of the day. The closing print of 1702 was where we gapped up on the FOMC announcement.

    For the Bears, they covered the FOMC gap. For the Bulls, they bounced where they were supposed to. During lunch, I commented on the Weekend Update that the bulls want to test lower. They printed green twelve of fourteen days. My thought is if the bulls want to take out all-time highs, they need to back-test the downside gaps. If they take it straight up without retesting lower, the bulls will run out of oxygen. So rather ironically, I view further correction in the short-term as bullish intermediate-term.

    Below us is the Larry Summers gap at $SPX 1688, which is the 38% retrace of this month’s move up. Below that is 1660, the 50% retrace, and the retest of the Jobs Friday gap reversal. Above us, is the previous all-time high of 1709, and above that is air until 1718/1720, the intra-day FOMC day retest area.

    So, I have three scenarios. A. If the bulls try to take it straight up from here, without retesting lower, they’ll run out of oxygen by the time they get to the all-time high. B. If the bulls let it run down to the listed gap supports, they have a chance to push it up and above those highs. C. The bulls get close to all-time highs, and a news bomb provides a gap and go up above the high towards Tony’s longer term target. Any news bomb would do: a Yellen nomination/Bernanke third-term announcement, congressional extension of the debt ceiling.

    I don’t believe disciplined bears are adding positions thirty points in the hole: only a short-term buyer’s strike can drift us lower. What I am looking for this week is a one-and-a-half day spike by under-performing PM’s on the back of unexpectedly good China CPI/official PMI date to push basic materials, miners, and shippers higher in a spectacular fashion. We’ll see if the bears take their chance on that, or if the bulls run them over. We’re only five days out from quarter-end, so the clock is running out those out-of-the-money in the bonus pool.

    So what this mean for the count?

    Let’s look at time and then price. Int i-ii took place over ninety minutes and could be classified as sharp. If int iii-iv is the opposite, that would project a flat or steady drip. The current move has occurred over three days, and could be classified as a steady drip. Now let’s look at price. W5 i-ii is drawn at 1661-1640 for 21 handles. The current move is 1729-1698 for 33 handles, or 1.5x greater than the length of int i-ii. So, while the slope of the correction looks correct, the amplitude troubles me.

    If last year’s Bernanke QE3 announcement is an anagram; the FOMC Announcement put in a top and we trade flat: a fifty point range until quarterly earnings before falling over. In price, this is in-line with what Tony has called for, in ending the uptrend in the next week or so. But in the timing, we differ.

    With Congressional Follies threatening to do less than nothing, and the quarter-end markup, we’re setting up for fast-moving two-way trade. As Dennis Hopper said in Hoosiers, ‘don’t get caught watching the paint dry.’

    ** Previously, I had called for the DOW to under-perform S&P. This was based it being more yield-oriented and thus more closely related to the ten-year. On Friday, the DOW added three and subtracted three names from the index. General consensus is that this makes it a more growth-oriented index relative to what it previously was. Going forward, we’ll have to see how the DOW reacts to events before making a call on its relative performance to other indices.

  31. Hi Tony,
    Wondering if you have a tentative target area for Major A yet. Premature?

  32. mjtplayer says:

    I wonder if Mr. Market will fool the bulls like he did the bears last month? Those of us who were short looking for that int c wave of major 4, only to not get it as Mr. Market had other ideas.

    Now, with a rally to new highs on the no-taper news and fund inflows recording their largest weekly jump on record last week, I wonder if Mr. market will now fool the bulls looking for that last int v up and instead head lower into primary 4?

    BTW: stocks, PM’s & commodities have retraced all their respective no-taper gains, but bonds are holding all their gains and the Dollar is holding all its losses – very interesting and curious.

  33. Hi Tony,
    What do you think are the percentages for a truncated wave 5 here?

  34. fionamargaret says:

    Thank you Tony.

  35. valunvstr says:

    Finally, time to go short with a new high…TRIX, RSI8 and STOCH all have steep divergences on the weekly charts. The chart below indicates the need to raise cash or short the market on the next rally. I’ve mentioned several times in the past that it only occurs once a year, sometimes once every several years. We are finally there…would love to take out the 1729 area first if possible!$SPX&p=W&yr=3&mn=0&dy=0&id=p25946461301&a=306044109&listNum=1

  36. hucky2 says:

    3 down days in a row = trend change warning.
    Int W5 may not happen!

  37. instigator928 says:

    Thanks Tony. EOD TNA print is for at least one more down day (and maybe more).

  38. Jennifer says:

    Thanks for another thorough update. Her’es more info about today’s European markets movements:

  39. radrian6 says:

    Hello Tony and all,
    RUT retraced back to its August high of 1063.52 and immediately launched 10 points higher. RUT has done everything it has to do to facilitate higher prices. The previous two rallies were 12.2% and 12.8%, so … assuming the RUT continues unimpeded and if the symmetry holds, RUT should climb to 1025-1035 by October OpEx. This isn’t a market call — it’s just a calculation that assumes the rally continues without pause. There are a number of technical issues that stand in the way of a continued rally so we’ll have to see if it’s enough to cut short this potential wave 5.

    • greenroger22 says:

      thx hanging on to my rut short..came close to closing today…106.77 my stop …must hold for 7-10 min…thx best of luck…in the interest of limiting postings..thx Tony 🙂

      • radrian6 says:

        Hello Green,
        The recent RUT price action has fit the 60-min Bollinger Bands very well. The Bands suggest that we might level off between 1066 -1080 while the market decides what to do next. The longer-term indicators are still lagging the current rally so Tony may be correct with his wave count.

      • greenroger22 says:

        Yes I agree..the 60 bb looks perfect…Im watching the daily, mac, his, rsi 9 dma…all looking like they rolling over..1040ish m-bb…if Im wrong ill take what it gave me..thx again r6

    • student8888 says:

      Bouraq, how high do you anticipate this upcoming bounce to go? I see you have three blue channels (lower, middle and upper). Thanks.

      • bouraq says:

        Somewhere between 1708 and 1712 should be a good level to short Student. If you wanna go safe wait for the bounce to finish and come back to these levels.

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