monday update

SHORT TERM: SPX all time high, DOW +106

Overnight the Asian markets lost 0.2%. Europe opened lower but gained 0.6%. US index futures were higher overnight, and the market opened four points above Friday’s SPX 1836 close. Right at the start the market started to rally. By 10am the SPX had already made an all time high by one point. By noon the SPX hit 1859 and then started to pullback. At 1:30 the FED: issued this. The pullback continued throughout the afternoon until the market closed at SPX 1848.

For the day the SPX/DOW were +0.65%, and the NDX/NAZ were +0.65%. Bonds lost 4 ticks, Crude rose 40 cents, Gold rallied $14, and the USD was lower. Medium term support rises to the 1841 and 1828 pivots, with resistance at the 1869 and 1884 pivots. Tomorrow: Case-Shiller and the FHFA housing index at 9am, then Consumer confidence and a speech from FED governor Tarullo at 10am.

The market opened higher today and just kept on rallying, with only one three point pullback, right to an all time high at SPX 1859. The NDX/NAZ both made new bull market highs, but the DOW was still about 300 points shy of a new high. As a result of today’s action we dropped the Minor a labeling on the SPX in favor of the Int. wave ii low at 1738. The DOW charts will maintain both labels until it gets into gear and joins the rest of the market, or rolls over and takes the market with it.

Shorter term we still count five waves from SPX 1738-1848, then a pullback to 1825, now four waves: 1846-1836-1859-1848 so far. This second set of waves could be the second set of five waves within Minor 1. Or, the early stages of Minor 3 with SPX 1825 as Minor 2. Short term support is at the 1841 and 1828 pivots, with resistance at SPX 1851 and the 1869 pivot. Short term momentum hit quite overbought before the afternoon pullback to below neutral. The short term OEW charts remain positive with the reversal level now SPX 1842. Best to your trading!

MEDIUM TERM: uptrend probable

LONG TERM: bull market


About tony caldaro

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76 Responses to monday update

  1. Lee says:

    Show em who’s boss !
    Thanks for all the counts gents bull and bear

    • simpleiam says:

      jobjas, I don’t know if P3 is complete or not, but get the distinctn impression that this uptrend is in danger. Knowing my luck, it’ll probably go way up tomorrow & continue upward.


    • perversionofthemean says:

      I think you’re the only one sticking with the idea that P3 is done. Maybe that is telling in and of itself?
      I’m too new to EW analysis to have much of a clue. I have to rely on other clues:
      1) It’s tough for me to envision how Investor’s Intelligence readings could get to 60%+ bulls and 14% bears around New Year’s, and move to 40% bulls and 15% bears during the Jan decline, but never recycle back to a traditional spread under 10% (and preferably negative).

      2) Could be just a coincidence, but the trend channel on the Dow from the ’29 peak to the ’66 peak, and extends to become the support that halts the ’87 crash, has the exact same slope as the one from the ’00 to ’07 to ’14 highs. The Dow has yet to close above this parallel channel line. (semi-log)

      3) How can you tell that a failed 5th isn’t a failed 5th after all, but instead is really the b-wave of the A wave of a new ABC down following an upward ABC you thought was a 5-wave impulse? (Asking based on the chart you posted.)

      4) Tony’s monthly SPX shows that the last P III we had was from ’82-’00, roughly 18 years. To me, it seems that the top of P III should be a dozen-plus years from now. In fact, if you look at Tony’s monthly SPX, the rally from the P II low in ’82 to the M3 ’87 high was just 3 major waves, and even a greater percentage than our bull since ’09. Respectfully, can you help understand why the waves then were major, and now they’re primary?
      As usual, thank you!

      • tony caldaro says:

        Cycle [1]’s last about five years, and Cycles [3] and [5] last about 30 years.
        Cycle [5]: 1976-1982-2000-2002-2007 these were the Primary waves.

      • jobjas says:

        The reason we label charts is to make some sense to seemingly random price movement that is the scart to an untrained eye.more importantly it is to make money in the market irrespective of the wave terminology we use. My count is different from Tony’s (see my first chart of Feb 19) .Immaterial of that there is across the board agreement that major 4 (or some significant wave 4) ended at 1610ES. From that point I projected wave 5 as 61.8 % to get 1852 . I have a 5 wave completed at 1858. One should exit once one complete a 5 wave move. since I believe this is end of P3 I expect a 200 point drop and therefore I am short.

  2. 777daimon says:

    dirty ending diagonale pointing down on 5 min chart spx 500 …in it’s final 5th wave LOL

  3. waddaguess says:

    1826-1810-1847-1825-1859 is what it looks like from 1743. There is overlap in SPX none in NYA.

  4. bobhopium says:

    Hi All…For my own trading purposes, here is how i am looking at Dow…maybe of use to others.
    Possibly one more slightly higher high (50% prob @16330/60) but looking for a swing below 15600. As always will monitor and adjust…GL to everyone.
    DOW-daily continuous :-

  5. lunker1 says:

    wondering if everything since Feb 19 is a 335 running flat. the C=A target would be 1836. might try to pierce the 1835.60 low to run the stops before reversing upward.

  6. lunker1 says:

    reached C=A target down from 1853 high today and also the .618 retrace from today’s lo to hi

  7. uncle10 says:

    Afternoon all. Got my hand on the trigger to buy some Vol and short the market. GL to us all. 😉 lol

  8. tommyboys says:

    Here’s a good reminder for those fearing taper that markets rise. fall and go sideways during rising rate periods…

  9. torehund says:

    Uranium miners are taking off..

  10. 777daimon says:

    I say we ended a descending sequence in SPX 500 (proof: in cash and in futures -ES 4’th wave registered a 39.1 % retracement at the open, and after that a truncated 5th wave).
    new highs are next – we are in 3 of 3 of 5 (of III) now.

    we will not see 1827, that is a fact.
    1870’s next, maybe higher after …. up to 1890’s-1900’s.

    • xela0 says:

      Intresting how perceptions work. Because the bounce today from 1840 looks like an ABC to me and the move down from 1853 has a 5 wave look. Previously the moves were always nicely impulsive, not today (IMO).

      • Kisshu2 says:

        the ascending triangle this morning squeezed shorts then mkt returned to breakout level and is consolidating for a move up or down they take shorts and longs today; maybe dow could manage to push up to 78% retrace? i’m staying out

    • ” a fact” Seriously? Do you have some divine information that you wish to share?

    • simpleiam says:

      A ‘fact’? Hmm. Okay, would rather see it up than down.

      kiss, I’m holding cash after this morning also. Have no idea yet what I want to do. GL All.

      Over posting limit here.

  11. llerias7 says:

    Tony, acording to your charts the XLV – HCare sector is in a bull wave 3. If we consider w3=1.5w1 we get a minimum price target around 70 for the etf. Can you confirm this considerations?
    Thank you.

  12. lunker1 says:

    backtested the pivot and neckline

  13. GM all, what an open! 10 Am and 1841 pivot? last weeks hit was 23 points

  14. lunker1 says:

    also per chart….yesterday did not have a 4 into 1 violation of the 5th 1846.13. if it does today still could have nested 1-2’s if 1835.60 isn’t broken.

  15. Looks like the beginning of the end of Bitcoins is underway. Computer viruses are targeting users and stealing the virtual currency. Massive thefts are reported from two different exchanges, Mt. Gox exchange is shut, possibly with everything lost. Headed to zero?

  16. Two more major equity indices tangling with critical long term resistance/breakout level (like FTSE, NYSE, DJIA, DAX, RUT, NDX)

    How about this Nikkei. 83 months, top to top… to top?:

    All of the major stock markets have crucial inflection point setups in play at long term resistance levels. All these indices are sitting on big negative divergences.

    Are we going to see equity markets break out globally? Or, is this the moment where their bluff is called? Everyone knows they are rallying not on global growth prospects, but on belief in central planning (or however you want to phrase it) – the worse the news, the bigger the rally. Is it now a case of, ‘ok, you believe equities are this valuable and you want to keep on believing, then show me!’ For me, they’ve reached the limit of their bluff and the received wisdom that ‘markets will never go down as long as central banks print money’ gets a road testing.

    • Everything you’ve said has been going on for several years. What do you think will cause the markets to pick this particular moment to top?

      • Going on for several years? The Nikkei has not been at the symmetry point of putting in a top, exactly 83 months after the last top that came 83 months after the top before it, against major long term resistance for ‘several years.’ It has only just done that, right now, in Dec 13 and Jan 14 and so far it is doing what it has done twice before, and that is breaking down.

        All of these charts make one specific point: many equity markets are now positioned up against major long term resistance and on significant negative divergence and against a background of similar inflection points taking place in other markets from bonds to commodities and currencies. So, not events that have been ‘going on for several years’ but specific coincident setups that are here now in this moment.

        What that means to me is that I am on red alert and looking for other clues. Clues like yesterday’s attempted breakout and reversal candles. SPX, DJIA, NYSE, RUT, NDX closed around their daily mid points. SPX, NDX, NYSE back below their prev highs. An unconvincing way to kick off breakout. What did the market do? When the market had the perfect opportunity to breakout, it just ran all the stops and anyone buying it got sold. If they had closed on the highs I would have had to change my theory.

        Look for the clue of the FTSE closing its weekly candle back inside its long term resistance trend line (see weekend post). We have the luxury right now of having many specific clues that will resolve one way or the other by the end of this week.

        I’m of the belief that this February monthly candle will probably be the critical tell, certainly near term and then we see where we get to. So to me, that means that this week is the critical week. I’m expecting Monday high to Friday low, closing below the monthly mid point to confirm the bearish tone. If we don’t get that, well, until we do get breakouts, these setups are in play, right now, not several years ago.

    • torehund says:

      Bobby some stocks are down to one hundredth of their value since 2011(CBMX), and on improving news only, and the bear sheds all stocks without mercy. As I think many stocks has to retrace a bit of the decline from 2000 and 2011, its hard to decipher a situation where an all decline will happen just now fundamentally and technically. But its spooky up here, thats why we all are chronically worried.

      • simpleiam says:

        tore, noticed your last entry on your wordpress site was pretty long ago. Understand if you don’t have time. Please post a link here when you update it at some time. Ok? Mucho thanks!

        Simplify. (Last post)

    • simpleiam says:

      Bobby, I appreciate your ‘flags’, so please keep us informed. Thank you!


      • torehund says:

        M: I changed computer as the old one broke down and this new one doesn’t have any drawing options, at some time I will have to find something an app or so…and internet conn is not good here in the outskirts of Mexico. Coming back later with the blog.

  17. lunker1 says:

    I’m bullish but keeping an eye on the wave from 1738 might be finishing soon. looking ahead I’ve drawn the fibs from the 5=1=1875 target (also Tony’s pivot area) and the support areas line up well at the important .382/.447/.618

  18. blackjak100 says:

    Thx Tony!

    Things could get interesting with a drop below 1835ish. The close was weak and not indicative of a third wave. I realize it doesn’t matter until it does. However, a marginal new high followed by a weak close is indicative of a B wave top of an expanded flat. All that means is a new low below 1738 is next. Need to see continuation to the downside tomorrow to confirm.

    • budfox9450 says:

      This is a real possibility….
      Good work…

    • bhtrade says:

      So many things have to come together to even hint at a test of 1738. I don’t see it happening to be honest. I’d be content with a chance to buy 1800 again

    • Hi Blackjack,good post but I have to disagree. I see the daily 20,2 Bollinger Bands in the major indexes indicating expanded upward movement. I’m tracking the DOW most closely at this time because the catch-up trade is in play, and I’m expecting the NAZ to top out a couple of weeks prior to the DOW as the move rotates into more defensive stocks. This is not happening yet. Small caps and the Naz are leading the move up. Eventually they will stall and the DOW will surge, at least in my experience. I see things currently as being in minute ii of minor 3 of Int iii. Minute iii of minor 3 of Int iii will be starting soon, and I am looking for a strong surge lasting the next couple of weeks at least, followed by the NAZ giving up the lead to the DOW as the move gets into it’s later stages. Minor iii in the DOW should be at least as big as minor i, which would put it at 16,891 at least. Easiest money I see out there right now is riding the DOW to at least a slightly higher high. That is my target for minute iii.

      Best wishes!

  19. Is there a reason the negative divergence in daily RSI is not marked, i.e., is it invalid in some way?

    Many thanks,

  20. gtoptions says:

    Thanks Tony
    CBOE unleashed a short term vix (VXST) for days like this. 😉

    • simpleiam says:

      Thanks jobjas. Great reversals for trading today, but I’m somewhat concerned with that close.


      • blackjak100 says:

        Me too Mason! Anytime I see a new high by a small margin followed by a weak close, I think B wave.

      • simpleiam says:

        bj, a few days ago, I posted about a fork bottom and fork top (double bottom/double top), as it gives the appearance of a snake’s tongue. Just my own weird TA lingo, but regarding the B wave, agree today’s action is indicative of it. This market has been so unpredictable, I’d hate to place any money on anything at these levels, other than a day trade. Still holding longs bought years ago.

        Really like your postings, BJ. Appreciate you’re being here.


  21. torehund says:

    Macd hopefully hocking up on the long term SPX chart, its skimming a bottom. Charts looking good, nutting more to add.

  22. What do you make of the fact that SPX pierced and then closed below the all time high?

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