monday update

SHORT TERM: pullback resumes, DOW -179

Overnight the Asian markets gained 1.0%. Europe opened higher and gained 0.3%. US index futures were lower overnight, and the market opened three points under Friday’s SPX 1842 close. Then it started to drift higher, and reached SPX 1843 by 10:30. After that the market started to pullback. The decline was quite steady, with only two-three point bounces along the way, as the market dropped to SPX 1816 around 3:30. At 2pm the Treasury dept. had reported a Budget surplus: +$53.2bn v -$1.2bn. Heading into the close the market bounced to SPX 1819 and closed there.

For the day he SPX/DOW were -1.15%, and the NDX/NAZ were -1.45%. Bonds gained 9 ticks, Crude lost $1.10, Gold rose $8, and the USD was lower. Medium term support drops to the 1779 and 1699 pivots, with resistance at the 1828 and 1841 pivots. Tomorrow: Retail sales and Export/Import prices at 8:30, then Business inventories at 10am.

The market started the week lower, rallied back to the recent SPX 1843 high again, then headed south. When the SPX dropped below 1832 it looked like Minute wave b had completed with that double three, and Minute wave c was underway. The decline was quite swift as the SPX broke below the Minute a low at 1824, and continued to 1816. Our two general targets for a Minute wave c/Minor 2 low remain around SPX 1814 or 1800. We are right about there!

Short term support is now at SPX 1814 and SPX 1800, with resistance at the 1828 and 1841 pivots. Short term momentum ended extremely oversold as we had been expecting. The short term OEW charts are now negative with the reversal level SPX 1835. Best to your trading!

MEDIUM TERM: uptrend

LONG TERM: bull market


About tony caldaro

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102 Responses to monday update

  1. mjtplayer says:

    Hey Tony,

    What probability would you place on an int iv count completed yesterday now in int v?

  2. torehund says:

    Input from several sources is an integral part of evaluating the general market direction and underpinning positions in individual stocks. So is wanderlust on internet, and one of the most enlightening sites besides Tonys blog is Martin Armstrongs contribution to individual investors.
    Not only does he provide lots of economical wave inspired models, but covers a vast area of para-ecomomic subjects including climate, philosophy and governmental interventions (and their often most lackluster effects). The foundation of his economic models is a 306 years phase of economic expansion subdivided in smaller cycles of 51 years and then further subdivided into 8,6 years which implies the bull could last until Sept 2015. As I interpret Tonys cycle analysis this will be the cycle wave one, if it ends this spring is maybe still possible, but seems more and more unlikely as the charts (time wise) will have a hard time maturing out.
    Martin forecasts a bear starting in 2015 lasting until 2018 accompanied by a further decline in real estate prices lasting 26,5 years and ending somewhere in 2033. Quite dramatic, and this decline would also fit nicely with gold ending the bear at that time.

    • kvilia says:

      RE decline contradicts Tony’s view. I can tell you, even I’m not economist, that if RE prices decline for 26.5 years, bear starting in 2015 will not end in 2018, and the whole understanding of modern economy will change – not happening imo, that looks like some sort of imbalance to me. I can see RE correcting somewhat from the recent rise but then the worst case scenario will be marching along with inflation rate give or take.
      In other words if Martin is right, then Prechter is so right.

      • torehund says:

        Martin has an excellent track record, but any long term prediction of course has to be monitored for its validity. Its an outcome that just has to slumber in our consciousness, for now.

    • mcmasoniam says:

      tore, the only way or cause I could see that would cause RE to stay so depressed for that period of time, is that all the investors that bought with cash in the last few years, actually bought at a high price, when they thought the bottom was in (Oops!). Thus, no more cash buyers, and can’t lease at a price that people can’t pay. Also, younger people these days seem to want to be a bit more mobile. Off course, they buy homes to raise families, but just not as many Youngers as there were when Boomers were ‘being birthed’ (as one farmer I know says).

      • torehund says:

        Cycles are long, and as goes for gold why shouldn’t it also happen for real estate ? We could be working on a reverse wave 2 up and the 3rd wave would stretch for a decade downwards. Thats what I hope gold will do; make a slightly lower all time high and then descend in a 3 wave for a decade.

    • mcmasoniam says:

      It’s not out of the question, tore. In the 1980’s I saw homes and shopping centers, etc. stand vacant for a decade or more. Watching the close now. GL All!

    • jmoptions says:

      Please keep in mind Martin could be right when viewed in real currency terms, inflation backed out.

  3. JK1987 says:

    With SPX “2” label, “3” up should be the strongest toward OEW P3 target of the worse of 1869 or best of 1970.
    But DOW is so weak as retraced only 38%. DOW is the bell weather and “never truncate”.
    Something is not connecting well?
    I am happy with TSLA major 5 up, entered at $128 in late Nov. 🙂
    Sorry for the 4th post of the day as I am nervous on the new entry of SPX long earlier today with “2” label. And MIL indicator needs to be respected.

  4. magnus1234 says:

    RSI(5) 1h lower (11.7 v.s. 14,3) at the SPX low (1815). Typicall C behavior. Now a 78% (1837.5) retracement. I will load a full long @ 1824-1826 ish.

  5. lunker1 says:

    today a perfect backtest of the B wave ED….but is today only b of C?
    a of C 1815.51
    b of C 1837.41
    c of C where c=a to 1809?
    the impulsive down yesterday followed by impulsive up today would seem to indicate 1815.51 was a reversal but need to clear and close above the old ED support.

  6. kisshu2 says:

    is this a minute wave 2 pullback? anyone expecting lower than 1832 spx

  7. rc1269 says:

    boy this same daily trading pattern over and over is getting pretty boring
    expanding downward channel, culminating in one big down day that closes at the lows
    gap up and run up through the down channel the following two days and off to new highs
    rinse, repeat
    if i didn’t know any better i’d almost thing that machines were running the show

  8. very impressive move by the bulls. its just a buy the dip market like it has been for the last several years.

  9. gary61b says:

    Does Gold have one more up left in it, time will tell

  10. We will be going down to 1800 by tomorrow riding a 5th wave of C

  11. purplember says:

    only 3 waves up so far

  12. blackjak100 says:


    Here’s the count in simple terms using Tony’s chart with substitutions…

    Primary I = primary A
    Primary II = primary B
    Currently finishing primary C which must be 5 waves. This would give us a 3 wave up B wave as a ZZ from 2009. Tony’s count has us in major 5. I’m saying we are in minor 5 of int/major 5 of primary C. Tony’s count has us in int iii of major 5 I believe.

    • blackjak100 says:

      Preferably I think we’re still in an extended int fifth wave since Primary C > Primary A

    • mcmasoniam says:

      bj, okay, I see what you’re doing. There are a number of people that hold the ABC, instead of Tony’s count. I think for the entire Bull to end in 2 weeks is a stretch. However, I’m eyeing Feb. and forward for some downside. Currently have Tony’s count (preferred), a count that has us in minor 5 Int. 5 of major 5, and your count on my board. Will just have to wait and see. Personally, I really want Tony t be right! GL!

  13. pooch77 says:

    Looks to be a full moon low yesterday

  14. rc1269 says:

    credit spreads are not bouncing today, fwiw

  15. gtoptions says:

    Thanks Tony, Lee, & BlackJak
    SPY ~ 61.8% @ 183.10 ~ WPP @ 183.48
    AAPL breaking up from short term downtrend line.

  16. JK1987 says:

    Tony Thanks for the “2” label, I am in.
    Most important strategy I read from the Jan 4 weekend update:

    “the worse case scenario for a Primary III high would be around SPX 1869 and best case around SPX 1970.”

  17. JK1987 says:

    Wave 2 bottom in place?
    What will make you post the “2” label?
    Waiting for your “2” label to buy.

  18. gary61b says:

    Maybe will do some gap fill from this morning, then new lows? oil chart

  19. Lee says:

    Hey gto,

    Nice job with the recent high and yesterdays S2 low in SPY and your aapl play .

  20. ko68 says:

    Hi Tony!
    Any updated view regarding the correction in the BDI? Any targets?

  21. blackjak100 says:

    Morning tony! Not much to add and expecting a green day as a ‘st low’ was put in yesterday. Target of 1860-1890 depending how this wave plays out. Will narrow down in the next few days.

    gtoptions nailed the ‘low’ with his weekly s2 @ $181.34 posted yesterday afternoon. Great job gt!!!

  22. 777daimon says:

    3rd comment for today:

    considering that we started already the earnings reporting period, that’s a good tool 🙂

  23. torehund says:

    Interesting day, and finally the day of the dogs, NDDN up 10 percent rosg up 18 percent and combo matrix has added 20-30 percent as well. But the prize goes to iso ray up 75 percent and would you believe it Rexahn, then most hated of all bios vent big too. Well more breath behind the RUT…say no more. The two former I don’t own.
    Other stock Mela, I hope will be the one next out, looks ready to launch from a flat platform..

  24. 777daimon says:

    very simple positioning:
    bullish count :if this downside from 1st January ’14 is a 3 waves move, it’s target is in the 1810 area (+/- 2 points).
    bearish count: if this downside from 1st January ’14 is a 5 waves move, the target of 3 and 5 are in the 1781-1784 area, all values in cash.
    today’s counter-rally will make the difference: if 1834.90 is taken strongly and held as support, the welcome to 3’rd wave (compliant to Tony’s count). If 1830-1834 area proves strong R, then …welcome to Primary IV with a potential finishing moment during end of June/start of July 2014.

    All simple! All clear! 😀

    • 777daimon says:

      of course, big players could give a “gift” to the market , a foolish image, by “painting” not an a-b-c but a full 5 waves downside (1780’s) and after that ….no Primary IV and up, up, and away …. but that’s another story 😉

  25. market update for monday and strategy for tuesday (within remarks sect.):

    see the new penny stock watch section

  26. blackjak100 says:

    I know this sounds weird, but I’m expecting the bull market to end within 2 weeks as minor 5 of Int V of Primary C takes us to 1860-1890 for the bull market top. Call me crazy but I’ve favored this count for awhile. However, I never gave a firm price target until now. I said I would get extremely bullish above 1892 since the B wave would be more than 138% of the A wave. It’s ironic that the max length minor 5 can be is 1892 assuming minor 4 ended today.


    • mcmasoniam says:

      bj, I don’t think you’re crazy, I just don’t understand how you arrived at the count you’ve got. If Earnings aren’t generally good, we could have a bonafide correction, but no, I don’t get your count. Off to the chatroll now. GL!

    • 16golfer says:

      I’m leaning the same way blackjack….

  27. ewtoriginal says:

    Thanks Tony. Good work as always. However, for me,if you are correct and this marked a bottom, barely a soul would be trapped. Standard and safe buying of the dip with no pain. Not sure I agree as I have stated since November. And in that time, not much progress in price but lots of opportunity for those who missed the ride up to hop on board. Sentiment will still be my guide as to the reason I expect lower prices,possibly a lot lower.

    • lunker1 says:

      EWT, you posted your count Minute iii of minor 1 of inter 1 of major C but lost me a bit. Major C down?…of Primary what number up? What was Major A? Thx.

      • ewtoriginal says:

        Lunker, I see the entire rally from the 2009 low as a B wave. I am looking for the start of Primary C, a much larger down move that may only go 1100, but that will be determined in years ahead. It has been my thesis from the start of QE that it is the Fed , and ONLY that source of funds which has propelled this market higher. With the conclusion of QE, which will be debated whether or not that actually occurs, or the forcing of the Fed’s hand by some other party, ie China or ??, this market will NOT stand on its own. We can argue all we want over that but only retrospect, or tradesmart123 currently, will have that answer.

      • lunker1 says:

        So 1100 or lower is a few years down the road and then what? A new bull?

  28. pooch77 says:

    Anyone thinking to long if we drop to 50 MA

  29. Rais Sone says:

    Hi Tony. Just looking at risk scenarios on the downside. Could the entire move from interim Jan 2nd low 1828 – Jan 13th high 1843 be a complex 2nd minute wave (first minuette being an irregular flat)?

  30. Rais Sone says:

    Hi Tony,
    Just watching risk scenarios on downside. Could the entire move between Jan 2nd low 1828 and Jan 13th high 1843 be a complex 2nd wave with the first 3 being an irregular flat?

  31. fishonhook says:

    Good call Tony

  32. Jennifer says:

    Great call, Tony!!

    U.S. stocks dropped on U.S. monetary policy uncertainty:

  33. alexhartley1 says:

    Morning – I expect a bounce into into the 15-17th to relieve the market from it’s short term oversold level. I am looking for the market to sell off into the 24th.

    Thank you

    • pooch77 says:

      Can anyone explain how the rut seems to make a comeback the last 30 minutes almost every down turn,at times it moves up 3 points in last 2 minutes at he end of day,cant believe it short covering time and time again ,the 1 minute chart always tops out day after day into the close.Alex sure hope your right on a low on 24th

  34. hi,Dow reached the target of the diamond top formation at 16255 and retraced 38,2%

  35. oneandonlyuniverse says:

    Hey Tony,
    1)Can you comment on Gdx and gold what type of wave structure you would see on the upside. 2) I understand your 1460 spot gold price over 3-8 months( gdx 31-34 ?????) 3) Lastly, do you get confirmation for bottom ?


    • tony caldaro says:

      GDX is in a confirmed uptrend, along with PLAT and COPPER.
      Silver is close, and Gold not that far away either.
      Would expect an ABC pattern up since it is a bear market rally.

      • oneandonlyuniverse says:

        Thank you Tony.

      • torehund says:

        Lets hope coal joins gold and softs follow, something has to travel in those darn bulk carriers….Two rather large toppings on bid, if they together constitute a wave 2 the correction may last for a while before a beauty of a 3..

  36. danteallemis says:

    Thank you Tony. Today we saw little buying power. More importantly we saw selling without big news to attribute fear to. So the proverbial wall of worries run out of worries to overcome. This bull market might not be over for quite some time. But today it learned how to end it. Lets see if the bulls can stop the selling this week.

    I would like to add two observations:
    -The June low at 1560 seems to me more important than the August low. The preceding decline has had a clearer wave structure and was deeper.
    -The run up since that August low at 1627 to the recent 1849 in your count still lacks the Minor 3 of Int 3, Minor 5 and all of Int 5. With at least 3-5 more uptrends to come, the bull market time and price target had to be adjusted.

    Following these observations, I would like to suggest a count:
    Int 4 of Major 3 of Primary 3 ended at 1536 in April
    Major 3 of Primary 3 ended at 1687 in May
    Major 4 of Primary 3 ended at 1560 in June
    Int 1 of Major 5 ended at 1710
    Int 2 of Major 5 ended at 1627.
    Int 3 of Major 5 subdivides.
    Minor 1: 1730
    Minor 2: 1646
    Minor 3: 1775
    Minor 4: 1746
    Minor 5 and Int 3 of Major 5: 1814
    Int 4 of Major 5: 1768
    Int 5 and Major 5 and P3: the recent 1849.

    Comments are very welcome, as I am new to OEW. Best of luck to you all.

  37. elmer510 says:

    Thank you for the good work Tony.

    With SPX extremely oversold at the moment, do you think wave c will move even lower, or was this conclusion of minor 2 ?

    BDI is falling rapidly these days, some say it’s as expected in Q1 caused by lower iron import to China. Any thoughts about a possible bottom ? We all go for shipping this year 🙂

  38. Also my JNPR FEB 23 calls worked great today. 3 weeks back when it broke out at 21 out of nice base, I bought FEB 23 calls. Thanks to Edwards and Magee also Stan Weitein’s books.
    It should at least target 30 in next couple of months. See the chart below. GL all.

  39. mcmasoniam says:

    Thank you, Tony! Truly a great, great call!

  40. Thanks Tony. Friday looked so bullish with so much buying before the close. But your count just played out as projected. Great call on Minute wave c. Made a quick day trade profit on EEM short. But it has showed so much resilience because of other emerging markets strength even though China is so weak. May be it is time to go long on EPI and short on FXI.

    • I am with ya Peter. Great call By Tony on this decline. Friday even had me fooled (which is the whole intend of a b-wave aka “sucker-rally” according to Elliot himself). Calling corrections correctly is the hardest part of (O)EW, everybody can count 5-waves up so to say, but forecasting overlapping abc’s that’s what separates the men from the boys. I sure was in the boys league on this way on Friday.

    • tony caldaro says:

      guess Frida was buy on close orders afterall

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