monday update

SHORT TERM: higher open then narrow range, DOW +5

Overnight the Asian markets gained 1.4%. Europe opened higher and gained 0.2%. US index futures were higher overnight, and the market opened three points above Friday’s SPX 1805 close. By 10am the SPX hit 1812, its highest level since it posted an 1814 all time high on November 29th. A pullback followed to SPX 1807 by 10:30, then the market tried to rally again. After a bounce to SPX 1811 by 1:30 the market started to pullback again. Just before the close the SPX hit 1807 again, then bounced to close at 1808.

For the day the SPX/DOW were +0.10%, and the NDX/NAZ were +0.25%. Bonds gained 6 ticks, Crude slipped 30 cents, Gold rallied $12, and the USD was lower. Medium term support remains at the 1779 and 1699 pivots, with resistance at the 1828 and 1841 pivots. Tomorrow: Wholesale inventories at 10am.

The market opened higher today, traded within two points of the all time high, then went into a narrow 5 point trading range for the rest of the day. At today’s high the market was quite overbought short term, so a pullback should have been expected. Thus far we see only three waves up from the recent SPX 1779 low: 1796-1783-1812. Should the market make new highs we will be forced to remove the “abA” pattern posted on the hourly chart. If not, we would consider today’s high wave B of an ongoing larger pullback.

Short term support is the 1779 pivot and SPX 1746, with resistance at SPX 1810, SPX 1818 and the 1828 pivot.ย Short term momentum hit quite overbought then droppedย near neutral. The short term OEW charts remain positive with the reversal level now SPX 1801. Best to your trading!

MEDIUM TERM: uptrend

LONG TERM: bull market


About tony caldaro

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138 Responses to monday update

  1. 16golfer says:

    Piker….good to see you are still around. Playing golf on the ice??? You are more of a die hard to me. I need sunshine…green grass and 70 degrees preferably. Guess I’m a wuss…..

  2. waddaguess says:

    1801-1808….range getting smaller. Lemme guess….bulls will win?

  3. bobhopium says:

    I smell bear entrapment here again, especially if we get a small flush.

  4. Not seeing any buying to protection. Vol futures not budging. Nobody expects any fireworks into year end. Good news will come out to keep us from going higher,. FED has mastered the media

  5. radrian6 says:

    Hello folks,
    RUT is flirting with 1120 which is right at intraday trend support — a decisive break could be trouble. If RUT breaks below 1111.63, a lower high will be confirmed and RUT may enter a downtrend. SPX is still holding above 1802 — if that breaks, keep an eye on 1796.

  6. H D says:

    they set up another pattern for sellers to look at, DT measures 30 so break would be 1750. W 10 handles in from HOD yest, we don’t want rallies exceeding 5. More would be rallies into OPEX/exp and ho ho ho. JMHO. The Bernanke celebrates his 100th Bday 12/23

    • H D says:

      cute little rallies aren’t they <5. I think we had a great year here. I'm going to slow down while everyone figures out the taper or not dilema. Be well. I'll be around.

      • Well HD the snow has finally made all lies unplayable. This past weekend I played what might be my last round of the year – it was a balmy 28* F and I had the pleasure – yes … the pleasure of playing my first ever greenside bunker shot of of ice … yes … ice. We had over an inch of rain last Friday and by sunday the bunkers were skating rinks! Good times, I’m telling ya’, good times indeed!

        And Tony, I found your BDI update quite timely as I am looking at EGLE Eagle Bulk Shipping and I like the current price action. I do not own it yet but I will likely own some by the end of the day. I think I’ll take another week or two off from the rigors of marathon market watching, but I’ll be back in the saddle in January.

        Merry Christmas and Happy New Year to all y’all … ๐Ÿ™‚

        The trader formerly known as CN.

        Oh, and the S&P triggered a Big Down today, having fallen 13 points short of its 11/7-8 Big Up target of 1826. But these Big’ns have been a tough play of late. Looking for 1775, but 1640 also would like to assert itself. I’m not sure of either one, but a Big Down is a Big Down. A close above 1814 would have me take my loss.

      • uncle10 says:

        Good to see you CN. I had a feeling we were going to see you today. Thanks.
        Happy Holidays to you and yours!

      • moo42 says:

        Good to hear from you Piker! Merry Christmas.

      • mcmasoniam says:

        Thanks PX. Happy Holidays! M

  7. radrian6 says:

    Hello all,
    There is a potential cup-with-handle pattern visible on the SPX intraday charts but it would likely be negated by continued downside below 1800-1796. If SPX holds and breaks above 1813, the upside target would be 1845-48. RUT is struggling a bit and has broken down from a triangular pattern. There is no real concern unless it breaks below 1111.63 thereby confirming a lower high. I’m sure all the big boys and girls are aware of the situation and another “save” is coming … land of the free, home of the brave.

    • H D says:

      good eyes! any thoughts about the cupnhandle at the top rather than a low?

      • radrian6 says:

        This pattern is still developing and I don’t have any specific knowledge with regard to cup-with-handle patterns. To me, SPX would validate the pattern by staying above 1802 then curling up to 1812-1814 and pushing through. Obviously, there is enough selling pressure to create some doubt.

    • Nice radrian6.
      The perfect CH handle is at the 50% retrace level, i.e. SPX 1797. The goal of the pattern is often 80% of the depth of the cup. This would suggest SPX 1836.

      Interestingly, we can identify 3 waves so far, from the 1779 bottom recently. The first wave topped at 1796. If the present wave is a forth wave down, we have the “must hold” level at 1797…
      Even more interesting is the fibo 1,618 extension of the preceding downwave from the 1814 top down to 1779. This extension lands at 1835…

      Best wishes Sverker

  8. hucky2 says:

    My RM chart, which has admittedly been almost useless lately, has us bouncing a bit at about 1801 and next Monday 16th at about 1786 for a possible C wave low.

  9. tommyboys says:

    “The market is shrinking”. Today’s market is so different from the one just a decade ago let alone a century ago that using the same metrics may be futile. This article supports markets as “Complex Emergent Adaptive Systems”… and not chronically cyclically repetitive. Good observations by Santoli…–shrinking—despite-record-high-indexes-171141756.html

    • H D says:

      shrinkage? I prefer cyclical repetitive, Santoli will come around in the next cycle.

      • tony caldaro says:

        This time is always different right? ๐Ÿ˜‰

      • tommyboys says:

        Of course “this time isn’t different”… but EVERY time is a bit dissimilar… Markets constantly evolve. Maybe this time the bull ends today – or maybe this time it runs 7 years ? Maybe the next bear only lasts a month – or maybe markets never recover and capitalism is altered forever as we know it..,.?

    • uncle10 says:

      TB, no doubt there is a shortage of stock on many names. Too many buyers not enough sellers……… they certainly aren’t valued based on any logic. When all the math/computer progams/technicals/trend traders/ etc.. turn down— all those buyers will turn into sellers and there will be more than enough supply.

      • tommyboys says:

        I think his point is that there are considerably fewer stocks in the universe than several years ago and it is actually fact – and he sights the reasoning…

        As far as the markets being a CEAS…that’s my point and I believe more and more that this is what they are and do…constantly evolve. Was no QE a century ago, many more stocks a few years ago and constant replacement of names in the Indices etc…

  10. mjtplayer says:

    Uh-oh, no mo POMO.

    I hear talking heads discussing taper in Dec. Hmm, doubt it, but you never know. Eveyone expected taper in Sept, we didn;t get it. Virtually nobody is expecting taper in Dec, maybe we get it? Jan meeting will be a photo shoot, if no taper next week then we’re looking at March.

    • Thomas Crown says:

      Minimum taper is a given in December. Everybody expects it. Steve Liesman apparently just mentioned it and commented on how well the market is taking it. So there you have it. Tapering isn’t scaring anyone any longer, which actually makes sense since:
      1. it proves the economy is doing much better
      2. FED repeated ad nauseam that regardless of tapering, rates will remain close to 0% for the foreseeable (a very long time in FED linguae) future.
      It’s like an episode of the Twilight Zone where the financial world would be stuck in M3 of P3 forever !

    • mcmasoniam says:

      I don’t think taper is a ‘given’ at all. Liesmann and others can talk all they want; they did the same thing in August, to no avail. Just have to wait and see, but I don’t think so. M

  11. uncle10 says:

    Wondering if Paul Revere will make an appearance soon??

  12. mcmasoniam says:

    OTC trading just got halted… No TV here, so I have no idea why.
    Last post. GL All!

  13. mcmasoniam says:

    Tony, an over-simplified question (my favorite), if you please:

    if there is NOT a taper announcement, do you think most Stocks and Commodities are to the moon, while Bonds and USD fall through the basement floor? M

  14. bobhopium says:

    I’m feeling the urge to short here…perhaps I should lie down until the feeling go’s away.

  15. gauravsuri17 says:

    tony sir what could be the effect of tapering on gold

  16. torehund says:

    Bulking is getting hit and a flatliner like GNK is smashed. Think it will retest bottom and DRYS test the 50 mda. Waiting…

  17. Looks familiar, GM BOT’s and all. *1808 retrace on the Bears win.

  18. bobhopium says:

    Does Gold know something we don’t ? …I smell a rat and am getting defensive now.

  19. mcmasoniam says:

    If The Fed is to announce taper in Dec., someone had better tell The Big Boys: USD down & WTI is up; nice pop! GL to All. M

    • RDC says:

      Since markets are expecting taper so this will be Feds 2nd opportunity to taper, I think it will be $10B taper and Markets will respond positively and Gold will be crushed big time.

  20. $SPX $SPY $UVXY TSLA $FB $GOGO $DRN, mkt update and trades for tuesday:

  21. torehund says:

    Looking at TAN there seems to be 3 large waves up to the top. After the correction completes there could possibly be 3 more to go, a correction and then maybe 3 more(3-5-3-5-3-5). However its advised to see it finding a bottom as it currently rakes off some week hands.

  22. Floated this last week and revisiting again just for the sport of it. On SPX, last week the market produced an equivalent modest pull back to the one it produced at the same point in the rally back in February. If you look at the two rallies on the weekly chart, week 10 (w/e 8 March) in the previous rally was a 40 point up week following three weeks of sideways chop, similar to the three weeks we’ve just experienced. This is week 10 of the rally from the October low. A 40 point range to the upside this week would take us up to the weekly upper bollinger band which is currently at around 1843. Have the last three weeks been marking time while those bollinger bands spread and price gets itself ready for that next move like before. Curious to see how much longer the analogy holds up…

    December to May rally – Following debt ceiling issue can kick
    31/12/2012 1398
    26/02/2013 1531
    57 days 133 points
    22/05/2013 1687
    85 days 156 points
    289 total points rallied

    October to Present rally – Following debt ceiling issue can kick
    09/10/2013 1646
    04/12/2013 1813
    56 days 167 points SO FAR
    27/02/2014 2015
    85 days 202 (projection)
    369 total points rallied (projection)

  23. Tony, Big Financials (XLF) and Regional banks (KRE) didn’t get a follow through day today after massive rally on Friday. But still looks encouraging.
    Thanks for the update.

  24. Hey all, TSLA having an interesting setup. Setting up to confirm a new uptrend off a tight consolidation the last week. A move over 145 would confirm a new uptrend is in play. Would be either a C or 3 wave, take your pick. 50% retrace of the downtrend would be 155.30, which just happens to be the prior support area and probably now resistance. A breakout over 145 would also complete an inverse head and shoulders on the daily. I would estimate a potential target of 173.9 if the breakout equals the size of the head and shoulders depth. .618 retrace is 164.55. Lots of patterns in play here. Can’t even rule out a double top in this market.

  25. Jennifer says:

    Thx Tony!

    U.S. stocks closed high in a slow trade, S&P 500 hit a record closing high:

  26. torehund says:

    Bob, there were many, many euphoric startups going into the year 2000, they are now giving off their fruits after much struggle. And you find them in the RUT, and at some point their effort will be appreciated. It could be now.

  27. gtoptions says:

    Thanks Tony
    Observation of closing weekly candles on the majors and sectors from last week. Mostly Bearish doji’s and hammers. Just listening to the charts.
    Enjoy the week.

  28. Bulls please don’t attack me…… but Last Friday for the first time since August there was a Hindenburg Omen.

    Hindenburg Omen consists of:

    1. The daily number of new NYSE 52-week highs and new NYSE 52-week lows must both be greater than 2.2% of the total NYSE volume for the day. Other analysts uses 2.5% or 2.8%;

    2. The NYSE 10-week SMA is rising;

    3. The McClellan Oscillator is negative on that same day; and

    4. The new NYSE 52-week highs cannot be more than twice the number of new NYSE 52-week lows.

    • buddyglove says:

      imanew, Not attacking you, but you may find it more useful to find blogs that challenge your position, rather than looking for blogs that back your view and offer you comfort.

    • imanewbietrader your right now bearish blogs and no bearish counts. Maybe best to forget EW for now. With the exception of Caldaro most EW are expecting a real correction. Caldaro simple enough knows it aint happening.

      • Sorry let me be more clear. EW paper traders are looking for a correction. People with Big money are the line are not going to short this market. they will chase it higher

    • mcmasoniam says:

      newbie, I think Hindenburg has more merit should several of these signals occur very close together, time wise. Thanks for making note of this one, and let us know should another occur. (It’s tough wading through the blogs, huh? Nothing beats decades of experience, which is why I ask Tony.) M

  29. elmer510 says:

    I won’t say much about what kind of wave that’s underway – there’s a whole lot of suggestions right now and who’s right and wrong will be proven as time goes by. So far the main rule has been; if you’re in doubt, stay bullish.

    With SPX reaching 1812 today, just 2 points below all time high, it’s difficult to see this should be the beginning of a larger pull back. I think more negative news about QE tapering is needed for a stronger decline to occur.

  30. radrian6 says:

    I’m not a wave counter but I did notice that SPX rallied from 1646 to 1811 and 1811 is the 161.8% Fib extension of Intermediate 1. Is it possible that 1811 is the top of Int. iii? It’s probably just an interesting coincidence.

    • radrian6 says:

      As for the RUT, the only new observation I can offer is the fact that it has not been up to the top of its channel since early August and has not been down to the channel bottom since early October. It seems that buyers and sellers are eating into both sides of the price action to keep RUT in a rising triangle. I don’t know enough about ending diagonal patterns to say whether RUT is in such a pattern — if it is, it may need one more move higher for completion.

      • bobhopium says:

        Rad…have you noticed the really nice cup and handle on the Rut …I’d be very surprised not to see new highs very soon…Gl to us all.

      • pooch77 says:

        Waiting for daily to bottom out to establish a position,just imbedded now taking its time

      • radrian6 says:

        The only cup-with-handle pattern bottomed at 1079 and had a neckline near 1120 — a 41-point pattern that theoretically should reach 1161 but may have played out at 1147. I am not putting any new money to work in the RUT — it is showing exhaustion on its monthly chart and is very close to the bull market target area of 1149-1187.

    • pooch77 says:

      radrian6,appreciate your post on small caps as that is what I trade,hope you stay here with your insight

      • radrian6 says:

        Thanks Pooch. The RUT was a bargain when in bottomed at 764 last November but it’s gone linear and uncorrected for nearly 400 points — the risk-reward is shot to hell. The RUT typically sends clear-cut signals before it tanks and I don’t see any of them yet. However, we may get one of those slow bleed corrections like we had towards the end of 2012 — there was no warning ahead of that.

        Anyway, the RUT is richly valued with a PE ratio of 84.5 — it was only 29 a year ago — and about 20% of the stocks don’t have any earnings at all. If RUT gets clipped for 12-15%, it might be worth a position but at these levels it’s a pig with an attractive shade of lipstick.

      • pooch77 says:

        Thanks Radrian6,been hearing that rich PE

      • mcmasoniam says:

        ra6, thanks for the info. When it comes to rut, you seem to be pretty attuned to both positives and negatives, and present both. I appreciate it very much. M

    • fbender7 says:

      I’ve noticed the 1.618 fib relationship too (at 1811), and wonder if 1814 was the top of Int.iii, as opposed to Int.i or Int.v. The recent shallow pullback may then have been all of Int. iv. In that scenario today could even have been a truncated Int. v top.

    • Bob, Speaking of cup and handle, take a look at FB, TSLA, KRE, FMER and STI on a daily charts. Beautiful cup shapes with handles. IMHO there needs to be a really bad news for this high speed train to stop. I am not really buying market top idea until I see real big 5 waves down on a daily chart with all the red color marked on it, until then look for individual stocks which are nicely consolidating. Last but least BIDU broke out of cup and handled today. As per My EW count it is 3rd of 3rd wave of next leg. GL with your trading.

      • bobhopium says:

        P.G. …Thanks for the tickers above, I will have a good look through them this morning.
        Agree on the runaway train thing, either get on board or step out of the way.

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