monday update

SHORT TERM: gap up opening then consolidation, DOW +24

Overnight the Asian markets were mixed. Europe opened higher and gained 0.4%. US index futures were higher overnight and the market gapped up to SPX 1767 at the open. The SPX had closed at 1762 on Friday. In the opening minutes the SPX hit 1768 and then began to pullback. At 10AM Factory orders were reported lower for August, but higher for September: +1.7% v -0.1%. The pullback lasted until 11:00 when the SPX retested Friday’s close. Then it began to works its way higher. Heading into the close the SPX hit 1769, then closed at 1768.

For the day the SPX/DOW were +0.25%, and the NDX/NAZ were +0.25%. Bonds gainedΒ 6 ticks, Crude dipped 15 cents, Gold slipped $2, and the USD was lower. Medium term support remains at the 1699 and 1680 pivots, with resistance at the 1779 pivot. Tomorrow: ISM services at 10AM.

The market gapped up at the open today, pulled back, then made the high for the day, SPX 1769, just before the close. Clearly the positive divergence at Friday’s SPX 1753 low has worked well. As the market has now had its best rally since the SPX 1775-1753 decline began. With the market only six points from its all time high, and no technical confirmation that Int. wave iv concluded at SPX 1753, the next couple of days should be quite interesting. Should the market break through short term resistance at SPX 1766-1769 it could be on its way to new highs. If not, Minor wave b would have concluded and the next move should be below SPX 1753.

Short term support is at SPX 1753 and SPX 1730, with resistance at SPX 1769 and the OEW 1779 pivot. Short term momentum ended the day overbought. The short term OEW charts remain positive with the reversal level now SPX 1763. Best to your trading at an other interesting juncture.

MEDIUM TERM: uptrend

LONG TERM: bull market


About tony caldaro

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94 Responses to monday update

  1. Caldaro do you sense A LOT of Complacency?? I don’t know why but something tells me things may change………

  2. elmer510 says:

    Minor wave c is not as strong as I would expect so far. SPX going from 1769 down to 1756 and now up to 1766 again. But to early to conclude.

  3. trade carefully all. remember when using pivots and counts that the market does not care what levels we watch or what we think. Bear case is all but completely over in my opinion. For what its worth one of the last perma bears I know has thrown in the towel. Normally that would mark a top but in the market its common sense. Tricky market to trade. Caldaro your a true pro.

    • ISINCODE says:

      “Bear case over” meaning the start of Primary IV ahead soon and subsequent correction? or “Bear case over” projected in early spring after end of Pri V and end of bull market? I am trying to understand whether your comments relate to short, med or long term projections. Thanks in advance for clarifying

      • Bear case over very short term. Meaning not enough to for me to be bearish for a 10 or 15 point move in S&P. Money is not really made during a chop. Maybe 1740 on downside if break 1759. Elliot not clear to me on US markets very tough to make money. Bond wave counts have worked. FTSE100 indicates we are in a correction. EURUSD looks bad. unable to snap back is bearish. For me and I am speaking only for myself the psychological element of trading has not been clear hence why I have stayed with just weekly RSI and Macd when it comes to US markets and they have kept me long. Some like Caldaro may have been able to navigate with wave counts but I know my limits and will not trade when not clear.

    • When in doubt get or stay out. patience = fortune πŸ˜‰

  4. I don’t do this often, haven’t done it before, and will not do it again. But, given all the talk about CBs, and how they’ve shaped our current bull market, if we may believe so, I can HIGHLY recommend reading the following book: “Tower of Basel: The Shadowy History of the Secret Bank that Runs the World.” Bank of International Settlements: BIS. It is the CB for CBers. Yes, you read it. “They” have their own CB… and it even has it’s own website;

    It’s older and more powerful than the IMF and it’s history dates back to WWI when Germany had to pay reparation (which, according to the book, it in fact never did, as it was a net 0-sum game; e.g. Germany paid Belgium, Belgium paid U.S., U.S. paid Germany…)

    It was created by the governors of the Bank of England and the Reichsbank and it is protected by an international treaty, such that its assets are legally beyond the reach of any government or jurisdiction. Under Thomas McKittrick, the bank’s American president from 1940–1946, the BIS was open for business throughout WWII. The BIS accepted looted Nazi gold, conducted foreign exchange deals for the Reichsbank, and was used by both the Allies and the Axis powers as a secret contact point to keep the channels of international finance open…

    It’s rather eye-opening to read how each side was well aware of these financing practices, how big american (GM, Ford, IBM, Aldrich, Standard Oil, etc) business highly profited from the war, but nobody within the U.S. govern’t did anything about it, because both the Nazis and Allies knew that “The sinews of war are infinite money.”

    • tony caldaro says:

      The World’s power structure is in the shape of pyramid.
      And the BIS is fairly close to the top.

    • mcmasoniam says:

      soul, yes. Kind of reminds me of the number of Nazis scientists, etc. the various Allied countries wanted for their own use, squabbled over them, finally dividing them among the players involved . Each shielded their lot from trial and put them to work for their purposes.

      Since BIS doesn’t advertize it’s actions, it sort of sends it’s little CB’s to do that for them, and the media picks it up and runs with it.

      Dinner then set up for last couple hours trading. GL All.

    • H D says:

      QE, CB, BIS, DTF ?? I shall google, I know even less now, next to nothing about economics.
      I do know this range is starting to frustrate some.

  5. radrian6 says:

    Hello Tony and all,
    RUT has formed a potential IHS pattern on the 15-min chart –very clean with the neckline near 1108.60. If the pattern plays out, the upside target is near 1130. RUT is near 1103 right now so the pattern is unconfirmed. Obviously, the RUT can change course and head lower but the price action today does not look like a “c” wave. RUT would need to drop below 1097.35 to convince me that a “c” wave is in progress, otherwise, I will assume it is headed higher in a five-wave impulse.

    • H D says:

      agree, the DOW LL really hurts the bull case but SPX keeps showing 5’s off lows/ JMHO

      • radrian6 says:

        Things could get sloppy and flatten out as we approach November expiration but, for now, the patterns appear bullish.

      • radrian6 says:

        I can also see the possibility that the drop from 1109 to 1097 was Minute a of Minor a so a “c” wave may be in store after all. Tough call right now.

      • jparkins10 says:

        Either C wave or an ED for Int 5, IMO…..tough to tell which way it’ll go

  6. mjtplayer says:

    Another day, another BTFD

  7. What a comeback, if the job numbers on Friday are bad, then we are going much, much higher, but IF they are better than expected then watch out!!!

    Now or not-until-Friday, if there is a drop.

    • mcmasoniam says:

      Actually more concerned w/what ECB does on Thursday than US Jobs on Friday. Euro is in a mess if Draghi and others don’t take some bold actions. CU all later. GL!

      • Wrong Actually, don’t fall for ECB’s move, it will be a head fake… JOBS in US, You’ll see.

      • If Job numbers are good, which shouldn’t but “IF” I said.

      • mcmasoniam says:

        Hi surf. Nobody watches Jobs more than I do. Ask Tommyboys, we get into this almost every month. 1.2M 1st time claims per month, still & monthly Jobs can’t begin to replace or keep up. However, to call something a ‘headfake’ is in my view along the same lines as saying, ‘a fake rally’. A rally is a rally. Since I don’t know what you mean by headfake, all I will add is that this particular ECB meeting might have a bit more importance, since by their own admission, Euro and Europe, in general, is getting hit by deflation pretty hard; leaders even using The ‘D’ Word outright. I will also watch Fri. Jobs, as I’m trading it, so guess I’d better, huh… GL to you.

    • current price action should tell us what the markets want to do then.

  8. "Old fogLEE" says:

    If it’s just a ruby opening I apologize in advance.
    Beauty day, enjoy it.

  9. pooch77 says:

    Chicago Bears win and futures continue to go down…go figure

  10. A good portion of the buying enthusiasm the last few days came as markets began to realize that still tepid global growth will make it hard for central bankers to back off the monetary stimulus.. Its steady as she goes as the FED still matters. I myself am being very careful in trying to trade chops as the big picture is still up. I think Caldaro said it best when he mentioned almost nothing has derailed this market even when other markets were in confirmed downtrends. Also a great point as he stated Fear is hard to find. Nice work Caldaro. Of course keep in the mind the market does not care what anybody thinks and this can end a lot sooner rather than later.

  11. ukmark62 says:

    Hi Tony,

    Are you still expecting the next bear market to be approx 50%?


  12. elmer510 says:

    According to futures, SPX will start downwards today, and minor c of intermediate IV of major 5 is possibly just around the corner.

  13. 777daimon says:

    next might be 1747…. but don’t fall in love with the bearish side here….
    getting bearish in a bull market is as dangerous as getting bullish in a bear market.
    and this is a crystal clear bull market.
    I’m expecting 2050+ in spx until the end of the year, so….
    maybe you should all forget about shorts for some years ….

  14. cwallace90 says:

    Hello All,

    On Friday, November 1, 2013 I had the honor of interviewing Elliott Prechter and Tim Wood.


  15. blackjak100 says:

    I’ll keep it very simple tonight and talk about the very near term. Either way it looks like we should see downside movement tomorrow. I see five waves down from 1775 to 1755 for an ‘a wave’. An expanded flat ‘b wave’ completed at today’s high. We still need a c wave/iii down. a=c=1749 or c=1.618*a=1737.

    The biggest time & price square-out of the last decade still remains at 1778 on 11/26 where Primary A/W (667=1370) = Primary C=Y (1075-1778). Regardless if you think this is a bull market or a cycle b wave, it’s worth keeping on the radar.

  16. RDC says:

    Thanks Tony.

  17. Jim Hancock says:

    Hi Len,

    I’ve been setting up my own trades based on this guy’s closest resistance and support levels as entry points. I usually go a bit above or below based on the charts and then set 5 point stops and 10 minutes into the session just like Cadbury used to. And I’m only trading one contract until I build some profit.

    I’ve had several entries, but have been stopped out within a few days because the market has been fairly choppy. I got a current entry at SPX 1757 a few days ago though …hopefully this one runs for a while.

    I have not really checked out the guys in the other e-mail though.

    I did restart my Timers Digest subscription again a while ago, but hadn’t found any systems I like yet, which is why I started doing my own trades.

    How are you doing? I’m still looking for my next gig …plenty of interviews lately, but no offers yet.

    Cheers! Jim

  18. Secular bull, the secular bear ended March 2009 on an ABC 61% retracement of the 1974 bear lows to 2000 bull highs…. only finishing up major 3 of Primary 3… LOTS of room to run yet in this Secular Bull cycle… top callers will continue to be wrong for awhile yet

    Major 4 will be relatively shallow 23% of Major 3…. 115 points plus minus…. not a big deal.

    Steel, Coal, Natty Gas and others moving sharply higher, rotation is all… its still a healthy bull with rotation

  19. mjtplayer says:

    Total NYSE margin debt is currently about $400bln, surpassing the 2007 nominal high of $390bln; the inflation adjusted 2007 record high would be about $440bln. In Sept/Oct, we also surpassed the 2000 inflation adjusted high in margin debt at $385bln.

    Since July 2012, NYSE margin debt has been increasing at about $10bln/mo on average. At current pace, we’ll eclipse the inflation adjusted all-time high in margin debt within 3-4 months.

    Matches-up well with Tony’s wave-count. It’s getting bubble-icious!! Twitter IPO later this week, media is crazy, more signs of “irrational exhuberance”.

    • lunker1 says:

      I think increases in margin requirements will be a major factor in the timing of this topping process.

  20. Pingback: Risk-Reward Market Report – 2013.44 | The Risk-Reward Report

  21. llerias7 says:

    so…IF we get a new high that will be a new iii/c top on the chart, right?

    I hope not because I am try to find a good (re)entry point to ride the fifth…

  22. Caldaro great work . I enjoy your read. I look at this very frothy bubble climbing with not much hedging going on and the basis being the FED and no alternative but to put money to work. You seem to be someone without bias which keeps you on the right side a majority of the time and you have done a wonderful job. I look at both sides of this market both bull and bear case. My question and I hope you can answer truthfully sir is If you were a Bull what would keep you up at night? Caldaro thank you in advance for you reply.

    • tony caldaro says:

      Am a bull =)
      But not as bullish as some posters here.
      Actually very little outside of this country has impacted the US market this year.
      Even when the majority of foreign markets were in confirmed downtrends, traders in the US just shrugged it off.
      If you look at the SPX, we have really had only one 5+% correction in the past 12 months.
      Hard to find any fear anywhere

  23. bouraq says:

    Trading channels: #SPX #DJIA #GBPUSD #AUDUSD

  24. Jennifer says:

    Thanks Tony,

    Interesting day today with Blackberry merger collapse and Johnson & Johnson fraud settlement:

  25. bobhopium says:

    Thanks Tony…

  26. radrian6 says:

    Hello Tony and all,
    RUT has staged a strong rally from the 1087 low and has retraced nearly 61.8% of the correction. The pullbacks along the way have been negligible. On my 15-min chart, there is the possibility of an IHS pattern if the RUT pulls back into a right shoulder — the neckline would be near 1108.60. If RUT generates any more upside, I would assume at least a retest of the recent high near 1123. The 15-min chart is overbought but I don’t see any signs of an immediate reversal.

    JParkins — if you’re out there, my RUT 40-day cycle topped near the end of October and is heading lower so the strength of this rally is surprising me — the 40-day cycle has been dominant since April. On my daily chart, the recent two-day pattern for the RUT looks very similar to October 9-10. Any thoughts?

    • torehund says:

      could be good breath on a rebound. indexes often hide weakness that I see in some individual smallcaps.

      • I notice the speculative market leaders like TSLA that have fallen recently were bought up strongly. Will be interesting to see how that develops. This wave of shorts in TSLA may get the squeeze, but I am willing to bet the next wave of shorts gets the cheese.

    • jparkins10 says:

      Oct 9th was the last day of Int ii, Oct 10th the first day of Int iii, similar weakness on 9th, but 10th was a much stronger day….so somewhat similar if today was the start of Int v, and not the b wave of iv.
      I guess we’ll know tomorrow, Oct 11th was also a very strong day up.
      I was expecting 1108 for the b wave of Int iv, then down to 1070 area in c. Likewise, if we’re in Int v, I’d expect to see a slightly higher high, up to 1129 area.

      • radrian6 says:

        We are very much in sync with our expectations for the Minor B wave — I was looking for 1105 (50% retracement, then down towards 1168). The RUT has moved a bit higher so 1108 and 1173 are more in line with my expectations. You are correct, however, we may be already be in Int. v in which case a pullback for Minor 2 could set up the right shoulder for the IHS and launch the RUT higher in a wave 3. The last two sessions also look a bit like Sep. 30 and Oct 1 — just before the drop into October 9. On October 1, my 40-day cycle indicator looked very similar to today.

        All we can do is wait for the result. If RUT makes a higher high, it will probably hover in that area until November expiration then correct afterwards.

      • radrian6 says:

        I failed to mention that RUT overlapped the top of Int. 1 on this correction so if we are advancing to a new high, it would be a wave “e” rather than a wave 5.

  27. torehund says:

    Interesting day for gold too, it looks weak while the miners rallied strongly. One is right, however miners have declined a lot comparatively. Tough Call but for now I still tilt towards a further decline as late declines from oversold are often the most spectacular and at minus 60 there should be futher downside for the yellow metal.

  28. Secular bear or bull:

  29. micheletonon68 says:

    market going to bore everyone….

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