monday update

SHORT TERM: gap down opening then recovery, DOW -48

Overnight the Asian markets ended mixed. Europe opened lower and lost 0.7%. US index futures were lower overnight, and the market gapped down to SPX 1972 at the open. The SPX had closed at 1978 on Friday. The market continued to decline until 11am when the SPX hit 1966. Then with the market slightly oversold it start to rally. Around 3:30 the SPX hit 1976, then dipped to 1974 to end the day.

For the day the SPX/DOW were -0.25%, and the NDX/NAZ were -0.15%. Bonds ended flat, Crude rallied 85 cents, Gold rose $2, and the USD was lower. Medium term support remains at the 1973 and 1956 pivots, with resistance at the 2019 and 2070 pivots. Tomorrow: the CPI at 8:30, FHFA housing at 9am, then Existing home sales at 10am.

The market gapped down at the open today and traded down to the lower end of the 1973 pivot range (1966). Then it rallied back over the pivot again in the afternoon. At the open we labeled Friday’s SPX 1980 high as Minute wave b of Minor C. When the market rallied 10 points off the low we were a bit surprised. No matter how much bad news has been thrown at this market, it has just sold off and then recovered again. From a wave viewpoint, it almost appears like it still needs to complete a pattern. We have been carrying a Minor 4 alternate count on the NAZ charts. Today we can see, for the first time, that possibility on the SPX charts as well at Thursday’s 1956 low. When this market breaks out of its trading range: SPX 1953-1986, we will get the uptrend/downtrend answer.

Short term support is at the 1973 and 1956 pivots, with resistance at SPX 1986 and the 2019 pivot. Short term momentum hit slightly oversold this morning then rebounded past neutral. The short term OEW charts continue to flip-flop, ending the day positive, with the reversal level SPX 1973. Best to your trading!

MEDIUM TERM: downtrend/uptrend inflection point

LONG TERM: bull market

CHARTS: http://stockcharts.com/public/1269446/tenpp

About tony caldaro

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100 Responses to monday update

  1. Tony

    Could we have made a Minor wave 5 top at today highs (truncated) or it is never possible ?

    COMPQ still weak and has not made new highs..

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    • tony caldaro says:

      During bull markets it is always tough to call a top, because the uptrend may extend.
      Correction lows during bull markets are not as difficult, because the trend will reverse up eventually.

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      • Ok – I just saw you mentioned minor 4 already in now. But to me it looks more like markets about toppy here with COMPQ failing to make new highs with NYA. Both weak and today candle looks like its a reversal candle to downside. Looks a bit weak to me…. so just wondering if minor 5 could be truncated with the little move higher than the previous high.

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      • tony caldaro says:

        a drop below 1980 might add to that scenario

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      • manunidhi21 says:

        Tony !
        I have seen that in Indian markets truncated 5, it just failed making a minor high..
        But liquidity is so high now that no level is sacrosanct..We in EW or OEW are also raising targets every six months..change is inevitable and its also the only constant thing in this world.

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      • tony caldaro says:

        correct
        the only constant here is change
        namaste

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  2. H D says:

    Major 5 has not given a proper ABC, we’ll know III is done when it does. Shorting B waves a risky move, we will need to reset. ii was irregular, alternation should prevent iv from some crazy B at ATH’s too. EW continues to be tricky. 1996 SPX becomes interesting and DJI double top trade. If ur not in, like me, time to be patient and wait for a better set up, either way. JMHFO

    More importantly, NFL starts in 2 weeks with the Seahawks beating broncos again.

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  3. mharrison60 says:

    Tony,
    Interested in your thoughts on FTSE count since May. Now only a 100 off the May high / big blue C top. Seems we are stuck in a trading range waiting for S&P to complete PIII.

    Thanks as always!

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  4. Tony,
    I am sure this is a dumb question but do minor 5’s fail more than minor 1’s and minor 3’s? And if so, is it possible since we made a higher high at 1986 that Pri III could be over? Thanks and I know it is a low probability.

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  5. jeffbalin says:

    If this is supposed to be int 4, I was expecting something a lot simpler, like down up down.
    3rd hit at 1985 now what

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