monday update

SHORT TERM: gap down opening, DOW -44

Overnight the Asian markets finished mixed. Europe opened lower and lost 1.0%. US index futures were lower overnight, and the market gapped down to SPX 1980 at the open. The SPX had closed at 1985 on Thursday. After a brief dip to SPX 1978 the market rose to 1982 by 10:30, then headed lower. Around 2:30 the SPX hit 1975 for the third time and tried to rally. Heading into the last hour the SPX hit 1978 and closed there.

For the day the SPX/DOW were -0.30%, and the NDX/NAZ were -0.55%. Bonds gained 6 ticks, Crude slid 55 cents, Gold slipped $1, and the USD was higher. Medium term support remains at the 1973 and 1956 pivots, with resistance at the 2019 and 2070 pivots. Tomorrow: Consumer credit at 3pm.

The market gapped down at the open for the first time since mid-June. It then continued to decline until it achieved the first significant pullback since SPX 1945. The 6 point pullbacks, noted in the weekend update, should now be considered just noise. Minor wave 5 rose from SPX 1945 to 1986. Since Minor 5 made new uptrend highs, today’s pullback could be considered the start of a new downtrend, or Minute wave ii of Minor 5. Should the market continue to lower, dropping below SPX 1962, or fail to make new highs during the next rally and drop below this pullback’s low then SPX 1986 probably ended the uptrend. Should the market rally to new highs soon, then the uptrend continues.

Short term support is at the 1973 and 1956 pivots, with resistance at SPX 1986 and the 2019 pivot. Short term momentum declined below neutral after Thursday’s faint negative divergence. The short term OEW charts turned negative today with the reversal level now SPX 1977. Best to your trading!

MEDIUM TERM: uptrend

LONG TERM: bull market


About tony caldaro

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109 Responses to monday update

  1. Hi Tony,
    What are the chances that the high in the SPX was a B wave of minor 4 and now we just saw C for minor 4 and now we begin Minor 5?

  2. H D says:

    1959 pivot S into R 1967 HWB SPX. sellers there and squeeze above IMHO

    Is Lee on a global lawn mowing tour or something?

    • manunidhi21 says:

      Hi HD…
      where I could learn all these what you wrote in one line..not lawn mowing

      • H D says:

        Tony has the pivots on his charts, S=support, HWB is 50% fibonacci(days range) R=resistance. Squeeze is when R is taken out and people cover short positions.
        Thanks for asking, I didn’t think anybody read my gibberish :mrgreen:

  3. This rally should end at 1973ish If NOT then we go to 1989.

    Assuming 1972ish ends this rally, tomorrow should b up day followed by two down days. Should touch 1946 this weekend

  4. blackjak100 says:

    Tony, the one big problem I’m seeing is the rise from 1945-1986 counts best as 3. I’m struggling to see how it counts as a 5. So, could an irregular flat be unfolding for minor 4? The problem there is the B wave is longer than the avg B wave. C= 2.618*A gets us to the 1929 pivot which you would label int iv instead of minor 4. Either way, they both suggest 1929 pivot is next.

    • tony caldaro says:

      My attempt at counting those small waves during rise from 1945-1986 did not work out.
      Since there were not any significant pullbacks it was just one wave in an uptrend.
      One waves in an uptrend are fives.

  5. JK1987 says:

    AAPL quietly made a new record high.
    3 questions:
    Is it still black wave b?
    What’s the max for wave b?
    Is blue wave V cycle degree?;

    • tony caldaro says:

      AAPL’s high was on Sept 21, 2012 @ $100.72 adjusted for the split.
      Stockcharts is notorious for providing inaccurate data on dividend paying stocks.

  6. this feeling more like Minute ii of Minor 5

    Minute i = 1985.59
    Minute ii = 1959.46 ??? (0.618xMi)
    Minute iii = Underway ???

    Anyone else agree?

  7. soulsurfer says:

    tony, what are in your opinion the probabilities of the current decline was minute ii of minor 5?

  8. the selling of the VIX futures seems to be underway preparing for the run up at 330.

  9. soulsurfer says:

    Ha, maybe my intuition was right last Wednesday when I suggested “Maybe we’ll get a repeat from late December last year [and we may get a minor 5 peak tomorrow before another major holiday… !?] The market then peaked for iii of 3 on 12/31, and then Major 3 only made a marginal new mid-Jan…?!?” So far so good, especially when seeing a green intermediate iii on Tony’s charts.

    Anyway, the AI gave a sell signal today: we may get a minor 5 peak tomorrow before another major holiday…
    It identified minor 3 and 4 earlier, so why not minor 5 too!?!?

    IF intermediate iv underway, then I expect a 4-6% retrace which should hit around the 1929-1901 pivot.

  10. Kevin M says:

    Just like Int 2 did, IV will most likely test the 1985 range for some sort of B wave and then continue lower.

    Why do I say this? The TRIN#’s are extremely oversold here, which indicates a short term bottom has occurred today.

    Straight down is NOT going to happen here. We can save that for the FALL TIME FRAME.


  11. Fighting ON at 19885-19900 INDU level. Now, if some BULL hits (0.1% on all index stocks and buys one go, equivalent to 19920 INDU), then we have NEUTRAL close for the day. Next 30 min Movie is important.

  12. Tony
    You expect int. iv as an A,B,C down with this being a down , then a b up coming after before c down to end int. iv ?

  13. Tony

    We can now stick a big fork on mkts and say it topped 1986.

    Where would you think Minor wave 4 goes down to ? 1900 pivot or 1929 ?

  14. lunker1 says:

    60min RSI5 at 17 isn’t low enough for me to go long without +D so would like to see a 8-12 point bounce and then a lower low to set up +D.

    or if no bounce here then would want to see RSI5 near 11 like it was at 1925 and 1814 to think about a long, but RSI5 could go as low as 3 like w 1862.$SPX&p=60&b=2&g=0&id=p17308303253&a=311732111&r=1375898285007&cmd=print

  15. rc1269 says:

    starting to smell a little funky here

  16. JK1987 says:

    Intermediate iv here probable?
    I am “guessing”, SPX is into the Intermediate iv range, maybe 1964.386 is the low of Intermediate iv, hence action time.
    Minor 4 has 24 points, Intermediate iv has 21 points so far. The correction just getting shorter and shorter.
    I am also “guessing” your mention of 1962 is to match 24 points of Minor 4’s 24 points. Is that it?;

    • mjtplayer says:

      Yeah, this drop seems a bit sharp for a minute ii or iv, I’m thinking int iii is in and we’re dropping in minor a of int iv

    • tony caldaro says:

      Trend reversals often occur around holidays.
      Agree, looks like a downtrend has started.
      No bounces more than 4 points during this 20+ point decline.

  17. manunidhi21 says:

    Namaste Tony!

    When will you put Int iii on charts ?
    below 1962 closing or even intra-day crossing?

  18. lunker1 says:

    the “H&S” on SPX target ~1963.

  19. Pre-market, DJI is 20 points from retesting the June triple top: 16978/16970/16969.

  20. cmucha68 says:

    There is only one thing that counts: fast movement in this sleepy market. Remembering the good old days when we had 30-40 points daily swings in the S&P and that for weeks ? Where are they ? This market is only manipulated. Better the Fed starts sooner and stops engaging in the markets.

  21. scorp100 says:

    Any ETF to short Indian market?

  22. pcskier says:

    UK joins Germany in noticing a slowdown in manufacturing, it is crazy that the pundits blame this on currency strength when the real reason is the global economy is hitting stall speed. I believe the global QE experiment will end for good with JAPAN economy falling back into recession in early 2015 concurrently with their massive QE program. the BIS(bank of international settellments ) will be proven correct again. The globe increase debt by over 50% in 5yrs, without massive inflation the world will not be able to service the debt(default) with massive inflation we will get massive social unrest(emerging markets). It’s going to start in Brazil and South Africa but what happens to Japan will be the game changer for the developed world.

    Bullard tipped the markets what will be in the fed minutes 2 weeks ago but but MR market ignored him, increase in taper on deck, end of QE here by OCT meeting, NO MORE QE in NOV and first ratre hike 6 months after QE ends!!! Should be a high volume tuesday, looking for sp 500 to join $rut to close red on the monthly charts by close.

  23. bouraq says:

    Still bullish but…

  24. [Free Index/Futures Forecasts] S&P, DOW, NASDAQ, S&P E-Mini, Nikkei, FTSE and DAX Futures 7.8.14

  25. 16golfer says:

    Why is the $RUT not labeled like the $SPX & DJI?

  26. ocaj2000 says:


  27. torehund says:

    Lots of axc x 2 tooday and downturn on the top on RUT also a 2 x AXC. lets see, feels ugly.

  28. mjtplayer says:

    Thank you Tony!

  29. SuperWorm says:

    What if this is the ii of minor 5, what would be the target range

  30. blackjak100 says:

    Tony, what happened to the one small pullback and then a new ATH to complete int iii from the weekend update? Today, you’re suggesting a minute ii pullback?

    • lunker1 says:

      I get it. A small pullback is less than nine points. Because this is the first pullback since 1945 of greater than nine points this could be minute 2.

      • blackjak100 says:

        Ok makes sense, but I’m convinced minute iii ended at 1986 because of perfect 2.618 fib ratio to minute i

    • tony caldaro says:

      The 6 point pullbacks, noted in the weekend update, should now be considered just noise.

  31. Lee X says:

    Thanks Tony
    See yas @ DJIA 14k ish

  32. rc1269 says:

    Thanks amigo. Can’t ask for a clearer roadmap. cheers!

  33. radrian6 says:

    RUT posted the worst day since mid May — down over 21 points. The rising trend line from 1083 is still in tact but it wouldn’t take much to break it down — another five or six points would do it. The internals were gloomy with declining issues leading advancing issues by about eight to one.

    The 60-min trending energy is near exhaustion so RUT may move sideways a bit before deciding what to do next. Also, the 60-min RSI(5) is about 9.4 which is quite oversold. There is close support near 1183 and the daily BB midline is near 1182.

    RUT has dropped 27 points from the peak of 1213.55 which makes this the largest pullback of the uptrend and a candidate for a more serious correction. So, what’s the line in the sand? My feeling is that a strong break of 1183-82 will put the RUT in a negative bias. If RUT gaps or impulses toward 1180 and can’t recover to close above 1182, the uptrend will be in serious jeopardy.

  34. tony caldaro says:

    All the important pullbacks during this uptrend have hit certain parameters.
    The current level of an important pullback is 1962, which could indicate an uptrend high.

  35. lunker1 says:

    Hi Tony, what’s the significance of 1962? Thanks

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