monday update

SHORT TERM: gap up – new highs, DOW +76

Overnight the Asian markets gained 0.3%. Europe opened higher and gained 1.7%. US index futures were higher overnight, and the market gapped up to new highs at the open: SPX 1997. The SPX had closed at 1988 on friday. As the rally continued New home sales were reported higher at 10am: 412k v 406k. By 11:30, when Europe closed, the SPX hit 2002. Then it started to pullback. At 1pm the SPX hit 1996. Then it drifted higher to end the day at SPX 1998.

For the day the SPX/DOW were +0.45%, and the NDX/NAZ were +0.40%. Bonds gained 3 ticks, Crude slipped 20 cents, Gold dipped $5, and the USD was higher. Medium term support remains at the 1973 and 1956 pivots, with resistance at the 2019 and 2070 pivots. Tomorrow: Durable goods at 8:30, Case-Shiller and the FHFA at 9am, then Consumer confidence at 10am.

The market gapped up at the open to SPX 1997, then continued on to 2002 just as Europe closed. After that it pulled back some, but nothing meaningful as of yet. For the past couple of weeks this market appears to be following Europe. Not perfectly day to day, but in the general direction. Suspect ECB’s Draghi will announce something big on Sept. 4th. If not, both Europe and the US are likely to be quite disappointed. We labeled friday’s SPX 1985 low as Minute iv right after the open. Maybe SPX 2002 was the Minute v high, maybe not. Should the market drop to SPX 1993 it would increase the probabilities that it was the high.

Short term support is at SPX 1985 and the 1973 pivot, with resistance at SPX 2002 and the 2019 pivot. Short term momentum displayed a negative divergence at today’s high. The short term OEW charts turned positive with the reversal level now SPX 1996. Best to your trading!

MEDIUM TERM: uptrend

LONG TERM: bull market


About tony caldaro

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80 Responses to monday update

  1. buddyglove says:

    Its tempting to try a little short here, but then again I might just lie down until the feeling go’s away.
    S&P hourly :-

  2. Not sure where this is at on the SPX but on the NYA we should top around 11,330 (per a FP I got emailed to me), which could come late next week? Maybe we hit it on September 4th before the ECB talks? We are certainly getting close to a very important top it feels. This chart doesn’t have much more room up to go I think.!GT20SPX&p=D&b=3&g=1&id=p18930922334&a=349546011

  3. gtoptions says:

    Thanks Tony
    The SPY has two gaps to fill before it can move on. IMO
    Test of the 199.06 breakout is just above the 23.6% fib from the minor 2 swing and minute iv resides at the very nice confluence of support. Its all guess work. But it looks good on the charts.

  4. pcskier says:

    Sell/short on AZO at open today. With stop at yesterday high. Keeping my eye on fxy and vxx, waiting for buy sign to be given(if given for vxx). High yield in general hitting double top right now. In 1929 top was hit tues after Labor Day, thanks for sharing 1987 aug 25 date. 200% up from lows for sp 500, everyone is full on bullish.

  5. mjtplayer says:

    With this morning’s high it looks like a nice clean 5 waves up from the minute iv low; minor 4 down to begin at any moment….

    • lunker1 says:

      From minute 4, wave 5 = 1.62 x 1 = 2007.

      Also, what if this move up from minute 4 is only micro 1 of minute 5? If there’s a retrace need to see what it looks like.

    • jeffbalin says:

      I’ve got us in 3rd wave from minute 4 Spx, I had us in the 5th but 4 never confirmed. I don’t want to believe what I’m seeing but that what I got.

  6. pcskier says:

    Will consumer confidence complete the hat trick for disappointing data today?

  7. ko68 says:

    Commodities: Investors should consider that commodities could be the next opportunity from a technical point of view. The CRB-index may have found a bottom: Barrons

    • torehund says:

      A bear market rally is nice too, agree !
      India has announced to ban certain coal and ore mines from beeing exploited. And due to the drought in Brazil, (hiked cofee) there is scarcity of water in the dams supplying the power turbines, therefore it doesnt pay itself to produce aluminium at current prices…also NorWay goes hard against Europe choice (resorting to cheaper coal rather than Our clean nat gas). Its like the home fed agri products; its a splendid idea if someone else buy them for twice the price:)

  8. 8in8 says:

    Thank you
    Blog fantastic
    Good luck

  9. jeffbalin says:

    Counting the Spx in the 4th wave of minute 5, with 5th wave higher high coming, then minor 4……

  10. Hi Tony,
    Famous August 25, 1987. Does that ring a bell? For those of us around long enough it does. It was the date of the high that preceded the famous stock crash of October 19, 1987. Not that I see very many similarities to today’s market, however, it may not be a coincidence since we are possibly counting the 5th of a 5th of a 5th of a 3rd Primary Wave of Cycle 1 of Super Cycle 3! Either its time to back up the truck on shorts or do the opposite and go long on the alternate count of the DOW and ride Major 3 up to I don’t know where maybe 1.62 of Major 1 or around 19,267 on the DOW. The fed seems to have the backs of the longs covered. On the other hand, geo political risks abound and history has a funny way of repeating itself. Its a very tough choice.But, I just can justify putting fresh money to work at this stage of the game. Its too risky. It seems the market will take us as far as it takes to get shorts to capitulate. It may have happened today. The main reason I feel we are going down though is that I can’t find a single reason why it should. Best to your day, week and month (Lunar month begins today)

  11. mkt. update for monday and new trades for tuesday (within blog’s comments sect.):

  12. lunker1 says:

    Roadmap Update

    Minor 1 = 1945 = 40
    Minor 2 = 1928

    Minute 1 = 1964 = 36
    Minute 2 = 1942
    Minute 3 = 1995 = 53 = 1.47 x 1 (near 1.414)
    Minute 4 = 1985
    Minute 5 calcs
    Minute 5 = .5 x 1 = 2003
    Minute 5 = .62 x 1 = 2007
    Minute 5 = 1 = 2021
    Minute 5 = 1.62 x 1 = 2043

    Minor 3 calcs
    Minor 3 = 1.62 x 1 = 1993
    Minor 3 = 2 x 1 = 2008
    Minor 3 = 2.236 x 1 = 2017

    2000 = 2.00 ext of Minute 1
    2001 = 2.38 ext of Minor 1

    Intermediate V:
    V =.62 x I = 1995
    V =.764 x I = 2017
    V = I = 2050


    is the 2000/2003 cluster enough to end Minor 3?

    Micro 1 of Minute 5 started 1985 then retraced 61.8% in Micro 2.
    if Micro 3 ended 2002, the 61.8% = 1993.
    below 1992.26 is 4 into 1
    a break below 1992/3 could mean Minor 4 has begun.
    a move below 1987.60 would rule out nested 1,2’s and confirm Minor 4.
    watch for a lower low to 1993/95 w +D on 15min RSI5

  13. CygnetNoir says:

    I thought that SPX 2002 was about 75% probable and 2013 about 50%. I’m just thinking out loud here: I would think that the RUT won’t roll over ’til it goes overbought on the weekly, and it is not there yet (needs a strong weekly close to get there – or a decent rally with a close in the upper 50% of the week’s range). So I’m somewhat expecting to se that SPX 2013 this week, and then roll over next week (not to be confused with rollover). I think if the market does confirm a downtrend before the small caps make new highs that we will be seeing a high of some significance.

  14. mjtplayer says:

    Thanks Tony! Looks like minute v & minor 3 topped today or one last poke higher tomorrow a.m.

    This morning I went short SMH, almost went short IWM but held off; will see how it acts during SPX minor 4 & 5. Looking to short EWG too, but not yet.

    I think you hit the nail on the head Tony, if Draghi disappoints next week, look out below. It could be a perfect “P4 storm” come Sept/Oct: no ECB QE, Fed ending QE, holidays & summer are over and Putin is still lurking. Sept, Oct & Nov puts all cheap right now, almost time for Putin to load-up?

  15. On the SPX hourly chart, it looks like minute v (and minor 3)topped today, based on the negative RSI and MACD divergences. So Primary III top may be near.

  16. soulsurfer says:

    thanks Tony! so far everything is going like planned! fantastic. 🙂 thanks for keeping us on the right side of the trade.

    As I promised during the weekend update and prior, please find the link to my SPX Essay below:

    August 25, 2014
    “TWO NUMBERS!?!? Soul must have gone nuts.” I hear you say. LOL, yes maybe I have, but trust me this is amazing. It may really takes two numbers to predict the upcoming market top, the large looming market correction off 13% that will follow, and the subsequent surge to new All Time Highs (ATHs) to complete 5 waves up off the 2009 low from SPX 666. So that’s the first important number: 666. Now throw in the mix 2 combined Fibonacci (Fib) numbers: 3 and 8 to form 38, and you’re good.

    To read more, please go to the following link:

    ENJOY FOLKS! I look forward to know what you think of it.

    • Excellent Soulsurfer. Could you please re-post the charts on a white background because I can’t read most or the notes due to the black background of the charts. Thanks in advance for all your work.

      • soulsurfer says:

        Sure will do. FYI: I use black backgrounds since I am color blind (luckily I know the difference between green and red 😉 hehehehe). It enhances contrast which I need.

        That is why, if any may have noticed, I always use the “colorblind color scheme on charts)

    • Excellent report. Thank you for sharing. We shall see if 38 are the magical numbers.

    • jeff1student says:

      Thanks soul for putting this piece together. The first part is the calculation based on EW guideline. I got it. The second part is just pure magnificent beauty of numbers/symmetry. Let’s see how it pans out. GL

      • soulsurfer says:

        Hi Jeff. Correct. The EW guidelines and numbers/symmetry align, hence why I thought it was important and should be shared. It’s a road map and not the absolute truth.

    • FiveStars says:

      WOW! Nice work Soul. Wouldn’t be something if it all plays out. Thanks.

    • wildmick says:

      hello soul! fantastic piece of work! you must have had quite a brainstorm and was able to see the forest for the trees so to speak. a couple of questions.

      1. “Assuming the 0.764x extension, minute v should then bring the SPX to 1986 + 0.764×36=2014. That will complete minor 3. As with the 5 minute waves, we still need 2 more minor waves to complete intermediate iv: minor 4 and 5.”

      Did you mean to reference intermediate v: minor 4 and 5?

      2. Noticed that you have P4 down from Sept 2014 into Jan. 2015? It would be highly unusual to not have a Christmas or year-end rally. am I reading your chart correctly? is this what you meant to convey?

      3. Can you approximate how long C2 might last, which I translate to be an upcoming bear market?

      this is such a nice essay and well thought out. thank you so much for allowing us all a free glimpse of the future. I will also post these questions at caldaros so everyone will see them


      • soulsurfer says:

        Hi Wildmick,

        Thanks! Much appreciated constructive feedback! Please don’t consider this as set in stone. Please remember Tony’s alternate count possibility. IMHO it all hinges on Draghi next Thursday…

        Anyway, to answer your questions:

        1) yes I meant intermediate v: minor 4 and 5

        2) and 3) please don’t use the time scale for my future predictions. I simply worked with the space available. I should have mentioned that. Sorry about that. But, regardless, time is always secondary to price. It’s hard enough to get the price right already ;-), so please do not read into the time line. It’s illustrative only. Price level is all that matters. Hence, unfortunately I can’t answer your questions. We’ll know when, when we get there.


    • buddyglove says:

      Great work Soul thnx

    • A great deal of analysis obviously went into your work, Soulsurfer. Congratulations on the great work. We’ll all be watching your magic numbers. 😉
      Thanks, Tony, for OEW, which is the bedrock. 🙂

      • soulsurfer says:

        thanks jedi. 🙂 not sure if it are “my” magic numbers. just thought i’d share the observation of several numbers, oew-count, and fib-extensions coming together at almost the same price levels in the spx. who knows!? and yes, thanks tony for providing this amazing platform.

    • gtoptions says:

      Thanks Soulsurfer, very interesting study. Your work is always intelligent and appreciated.

  17. hucky2 says:

    My trend line ‘reversal magic’ also points to Sept 4 as possible minor reversal.

  18. Tony: In response to a question I asked on Friday’s blog, you suggested that Minute 3 could extend if Monday immediately reversed to the upside and continued higher. Has anything happened to change that opinion such as the mediocre performance of the $RUT and the A-D line today? I am including my Friday post and your response for convenience.

    georgeschaeffer says:
    August 22, 2014 at 4:22 pm
    Is it mandatory under OEW that the 10 point drop to 1985 means that minute 3 topped out and that a rally on Monday would have to be minute 5. In other words, is there any possibility that minute 3 could go higher?

    tony caldaro says:
    August 22, 2014 at 5:24 pm
    If we immediately reverse from here, yes could extend

  19. pcskier says:

    Last 3 trading days, last 30 minutes of the day have been high volume(for the day) and red candle. That usually is not bullish. High yield closed strong today. If high yield breaks out to new highs I guess equities will follow. But if high yield rolls any time soon equities will also follow. Maybe volume will pick up tomorrow, next week Tuesday should bring volume back.

  20. purplember says:

    Tony, do you anticipate P4 being an ABC similar to P2 with apprx 22% drop or less of a drop with flat or triangle ? P2 was ABC so would P4 be the opposite ?

  21. Tony,
    If the high we made today was a possible minute v high, what do we have left before Primary III is over? I got a little lost recently. Thanks.

  22. bouraq says:

    Restless bulls:

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