monday update

SHORT TERM: techs tank, DOW +44

Overnight the Asian markets lost 1.0%. Europe opened lower and lost 0.1%. US index futures were sharply lower overnight, then recovered heading into the open. At 8:30 the NY FED was reported higher: 27.5 v 14.7, but at 9:15 Industrial production was reported lower: -0.1% v +0.4%. The market opened unchanged at SPX 1986, then pulled back to 1978 by 10am. After a rally to SPX 1985 by 10:30, the market pulled back to 1979 by noon. After that the market worked its way to the high for the day at SPX 1987, before dipping to a 1984 close.

For the day the SPX/DOW were mixed, and the NDX/NAZ were -1.0%. Bonds gainedย 7 ticks, Crude rose 55 cents, Gold added $3, and the USD was flat. Medium term support remains at the 1973 and 1956 pivots, with resistance at the 2019 and 2070 pivots. Tomorrow: PPI at 8:30, Senate testimony from FED director Hunter at 10am, and the FED starts its FOMC meeting.

After the futures went sharply lower at the open last night, they spent the rest of pre-market rebounding. The market opened unchanged, but made a slightly lower low for the pullback at SPX 1978. In the mean time the NDX/NAZ were under selling pressure all day, as high multiple growth stocks were being sold. Selling to purchase BABA’s IPO this week? We did get that rally we were expecting as the SPX hit 1987. Next we would expect the market to rollover again into the OEW 1973 pivot. Short term support is at the 1973 and 1956 pivots, with resistance at SPX 2011 and the 2019 pivot. Short term momentum ended the day around neutral. Best to your trading!

MEDIUM TERM: uptrend

LONG TERM: bull market


About tony caldaro

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147 Responses to monday update

  1. Still at it T. You’re a frickin machine, don’t know how you do it. I love analysis, but you’re the frickin Sensei of analytical endurance. My 2 cents sees something around 2030 as the high, but WTF do I know. 909.3 X 1.50 = 1363.95 + 666.79 = 2030.74. You’re a good man T, I’ll do a few drive-bys. Take care T. Matt (Wife’s email-I’m flying under the radar) the web is too invasive for me to do the social media bullshit.

  2. Gary Lewis says:

    This move is just inter-week noise. I still expect the week to end around unchanged with the challenge of SPX highs occurring next week.

  3. Kevin M says:

    Never seen the market have a sustainable rally with $trin numbers the way they are now. it’s quite extreme!$TRIN&p=D&b=5&g=0&id=p83083657167

    Good luck either way….Just saying

  4. Who really thinks that the FED will be the trigger of the selling signal we are waiting for??

  5. Today the news is another Chinese liquidity injection following a heavy down day in Shanghai. This has turned risk on and handed the $USD its worst day for some time. Stocks gapped down first thing Sunday night making a the low for the move and immediately started to recover. Today the DOW has made a new all-time. Looking at the move from Sunday night’s low I can see 5 waves with wave 4 just failing to overlap wave 1. Therefore the question in my mind relates to the choppy action prior to this week on the DOW … was it a 4 with today completing a 5? Or is the DOW now starting 3 of 3 as per the alternate count? doesn’t appear to be any other major US index making new highs. And in Europe no major index is threatening fresh correction highs today either.

  6. Tony per my calculation market bottomed out today and should see a rally going into a “cycle” top date 10-17th October 2014.

  7. Tony

    I think we can stick a fork on today lows of Minor 2 as dow jones already near all time highs….. looks like minor 3 is next with FOMC and Scotland.

  8. gasman88 says:

    Simply amazing, how many times did the market look to be on a verge of a breakdown, only to reverse sharply, trap the bears and continue to march higher.
    And people still trying to short it?

    • hey gasman, this market is full of gas alright but its the type of gas after one eats a bean burrito. This market is not too be trusted.

    • mrgreen2010 says:

      I have to see this rally follow through for more than a day and so far not even a 1% move on any indices. Still flat short term. Damn glad I closed all my short term QQQ puts yesterday. Interesingly my longer term MU, NFLX and PCLN spreads on the puts have widened or gone up and my VIX OCT 17 calls are down marginally on such a strong up move today. hmmm? Last hour will be key.

    • FiveStars says:

      Short Squeeze has not even started yet.

      • You bulls are very complacent… Where were u guys at 700 spx, 1000 spx, 1300 spx? We are at 2000 spx, We are on verge of war, possibly another terror attack, Us economy is in the crapper, the US Dollar is on the verge of losing its supremacy, the Federal Reserve has pumped 4 trillion dollars into the system ( just to hold it up from implosion)- they are going to quit QE in a month. CNBC and Goldman Sachs are telling everyone to BUY BUY BUY,, if these aren’t warning sign, I don’t know what is.

      • lunker1 says:

        Keep trying newbie you’ll be right someday. Meanwhile it’s a bull market until it isn’t

      • Lunker, you are right but if you are holding LONG the night before the plug is pulled…. well your toast and in my opinion there is no slow walk down from up here, when its time to go down we will have a nice headfake UP like the one we are seeing today followed by a monstrous down on spx in a snap of a finger. They will hold no mercy on the bulls who have sucked on their nipple for the last 5 years straight when the time comes for them to drop this Ponzi.

      • tony caldaro says:

        During the stone age us older people used to listen to music on records.
        Occasionally, someone would hit the player by accident and cause the needle to run across the groves creating a scratch.
        Then when the record was played again, it would hit the scratch and repeat the same thing over and over again as it was stuck in the same groove.

      • Yep, If your implying I’m a broken record, I agree… but this broken record will eventually play through the scratch and everyone will be in awe and amazement when the song plays flawlessly. Many will say how is it possible, how did this happen, how? ๐Ÿ™‚

      • tony caldaro says:

        It will happen eventually …

  9. rc1269 says:

    as my former head of HY trading used to scream aloud on days like today…



  10. fishonhook says:

    Took some shorts. A bit early and paying for it. Stops a few S and P points from here.

  11. buddyglove says:

    โ€ฆTime for a Cigarโ€ฆ

  12. Tony

    If today marked minor 2 and we have minor 3, 4 and 5 to come – that could take us into mid October correct ?

  13. H D says:

    just to be objective, There is 5 waves down from 2011 for potential LD in wave A. Swift deep retrace follows. 2011 defines.

  14. Hello tony,
    Is uptrend confirmed???
    the dow jones is pushing?? what sould we attend??
    waiting for your reply

  15. Hi Tony, what is the critical point to confirm a new uptrend? Thank you

    • tony caldaro says:

      Guess you mean an extension
      We have been in an uptrend since early August.
      No specific point, but best rally since the pullback began, broke out of a decending channel, and 20 points in three hours certainly looks impulsive

  16. Is everyone bullish, sure looks like it.. now the Fed can say something and kaboom to get primary 4 underway,,

  17. If it looks like a cup-with-handle and acts like a cup-with-handle, probably is a cup-with-handle. Mentioned this possibility on weekend update.$SPX&p=60&yr=0&mn=3&dy=0&id=p57513301822&a=367419147&listNum=9

  18. selhai says:

    New ICM Poll, for The Scotsman, due to be published around NYSE’s closing bell – tweet from the newspaper. Expect another half dozen prior to Thursday’s voting!

  19. Tony

    Could today low be end of minor wave 2 ? It looks like dow Dow Jones up 2 days in a row it could be.

  20. alexhartley1 says:

    Morning Tony. Could the 2011 high be a B wave high with a C Wave to follow for Major 4? Perhaps not breaking 1905 on the way back down and then leaving us Major 5 to run on through the rest of the year. Thanks, Alex

  21. 16golfer says:

    Do as he says………..CN goes days without posting, so on average he’s way below quota. We like hearing from him as he is market saavy. What have you contributed that can compare to him? I’ve seen nothing.

    • CygnetNoir says:

      Thanks golfer. Some folks you just can’t reach. Not much to say most of the time – but a few times each year we get a day like to today where there is learning to be done. Like you said, I save my 3 posts/day for days like this ๐Ÿ™‚ Now I have to run … golf course calling my name ๐Ÿ™‚

      • H D says:

        very nice work CN, I chickened out, flat choked. Was staring at an 8 day sell off 34 points and stating thinking. That never works well. Enjoy your round. We are socked in with tropical rain storms, most courses went dormant, ready for winter seeding. The good stuff.

  22. Hi Tony

    Looks like today low was the low of the move at 1979 – is that good enough or you need to see it lower ?

    Dow jones acting strong today

  23. sibyn says:

    Goal now SPX test 1973. DAX 9545.

  24. CygnetNoir says:

    As Big Up’s go, this one has been more than a little truculent as the SPX has traded below the stop level on each of the two days following the long entry, while managing each day to save the trade by closing above the stop level (stop level is a close below 9/10’s low. The 50 day MA is just below 1973 today, and add to that Tony’s update that “Medium term support remains at the 1973 and 1956 pivots,” and thus a visit to that level may be what the market voodoo doctor has prescribed. In other words, if 1973 or anything close to it trades, I’d expect to hear someone say “Cheap long, cheap long” ๐Ÿ™‚

    Big Up stock watch for today: SXLP, SM, AAP, and honorable mention CAR (has all the ingredients for a Big Up except for yesterday’s close being lower than the prior close).

    And just a reminder, y’all should READ Tony’s updates – all the kool kids do ๐Ÿ™‚

    • CygnetNoir says:

      SLXP Big Up long at 149.64 fill

    • There is no SXLP on

    • uncle10 says:

      All this talk of big ups had me closing my short this morning. didn’t go long though :(.
      You like those big boy stocks eh CN? move it move it…… ๐Ÿ™‚ thanks.

      • CygnetNoir says:

        I trade just about anything that moves, Uncle. TRN and CELG are setting up Big Ups today. I bought some TRN and about to get filled on CELG (buy stop 91.15).

    • buddyglove says:

      CYgnet…Thanks for sharing your trade ideas with us and goodluck.

      • CygnetNoir says:

        Thank you, and you’re welcome:) Print some screen shots of the daily charts of the tickers I posted today. Even if all of these particular long trades were to sour (unlikely – though occasionally a mass failure will occur if we are at the end of a primary wave – which is, of course, a possibility at the moment) the fact is that this set up works far more often than not, and is easily learned and recognized by those of open mind and open eyes, and here is a special hint: it often happens en masse when the general market is trying to find support within the range of one of Tony’s OEW pivots – shhhhhh … don’t let the rest of the intewebs here us ๐Ÿ™‚

      • CygnetNoir says:

        Ummm … “don’t let the rest of the interwebs “HERE” us”? ๐Ÿ˜ฎ What am I, a frickin’ idiot?

  25. Great update.

    Looks like its all about the FED, and alibaba IPO’s for this week ey? Or will Yellen, lift up her skirt this week, and reveal all her goodies. ๐Ÿ™‚

    Even if they do start lifting rates soon, good profits can be made, no one realises this!!! here is one really cool idea. ==.>

  26. perversionofthemean says:

    ISE sentiment closed at 122 yesterday. As a call – put ratio, it shows 22% more calls being bought. Catch that knife!

  27. mrgreen2010 says:

    Futures like me are now flatter than a pancake. I expect chop tommorrow. I might just sleep in. I got a potential small H&S top developing on 4-hour SPY/SPX w/ falling neckline @ 198.5/1982. Just feels like chop until later this week or after FED. OPEX MAX PAIN has moved up to 96.5 in the Q’s and is unchanged at 196.0 in the SPY’s. With PCLN looking good for a bounce soon and since it seems to lead, along with AAPL I closed all my Qโ€™s puts but am looking to add some long term $RUT or IWM OTM puts..DEC or JAN this week on any strength but even though IWM MAX PAIN is at 115 I doubt I will see much strength in the small caps from now on as they are increasingly looking like small craps. I am long 2 VIX 17 OCT callsโ€ฆjust in case. To recap, full disclosure…except for some puts OTM 2-3 months (4-DEC 270โ€™s NFLX, 2-DEC 850โ€™s PCLN and a decent laddered amount of OCT-DEC MU 17-26 strikes puts).

  28. M1 says:

    Tony, what is going on with silver ? When should we see the rebound or the new leg up ?

  29. Greenlander says:

    Expecting either sideways / downside before FOMC. Dumped longs put on on Thurs/ Friday as the bounce didnt materialize.

    Posted charts on Comments always welcome!

  30. torehund says:

    Thanks Tony.

    Discussed the EW pattern on Friday and then some almost unbelievable trigger may drive it, company is all about cancer but it bougth a company way back for treating myocardial infarction that now saves apes With Ebola…crazy.

      • torehund says:

        Thanks again Tony, I just learn bits and pieces moving along. This year it has been all about appreciating X-Waves, how they they have to be subtracted from the count. They are sometimes tilted positively or negatively but mostly With level legs like a box abc up, flatlining and abc Down retracing fully. They delay decisions when the Stock just can not decide for either a motive move or a corrective move. And they wear out any trader…puhh. If I get it right this time it Will make it tingle Down my spine…

  31. blackjak100 says:

    Tony, so you were expecting a rally and then one more new low to complete a double three…otherwise known as a double zigzag?

    • tony caldaro says:

      did you read the weekend update?
      If we count 1991-2000-1983 as wave a of โ€˜cโ€™, 1997-1986-1998 as wave b of โ€˜cโ€™, and 1980 as the beginning of another three wave sequence for wave c of โ€˜cโ€™. We should see a small rally early next week, then another decline to lower lows.

      • drwarmington says:

        Don’t quite understand โ€ฆ you said “We should see a small rally early next week, then another decline to lower lows.” Today is Mon. what do you expect for the rest of this week?

      • tony caldaro says:

        You all can save us all some time by reading the updates, i.e. today:
        Next we would expect the market to rollover again into the OEW 1973 pivot.

      • blackjak100 says:

        I read it but never saw the term double three used. Anyway, I think we both agree the decline from 2011 is a series of abc’s.

      • Lee X says:

        Reading is FUNdamental !

    • Triple three/zigzag (TZZ) BJ….I’ve first hint about the TZZ in last Tuesday’s update and then re-iterated about the TZZ again in last Thursday Update. Credit still goes to Tony, since it was with the help of this daily updates that allowed me take notice of TZZ pattern unfolding. The ES shows it best IMO.

      • blackjak100 says:

        I don’t follow ES only cash like this entire blog. In reality a TZZ is rare, but this counts nicely as a DZZ and yields the same result. It looks like an incomplete double three with one more down way to go.

        w = 1990-2008-1983 (not same as Tony)
        x = 1997-1986-1998 (same as Tony)
        y = 1978-1987-1975ish? (not same as Tony)

      • BJ below is how I have labeled the TZZ.

        Minute W = 1990 ( same as Tony’s Minute a) ……. 1990 ESU4
        Minute X = 2008 (same as Tony’s Minute b)……… 2008 ESU4
        Minute Y = 1983 (same as Tony’s Micro a)………… 1982 ESU4
        Minute X = 1998 (same as Tony’s Micro b)………… 2000 ESU4
        Minute Z /Minor a = 1973 +/-3pts (same as Tony’s Micro c at 1973 pivot)………………………………………………….. 1972 ESU4, 1964 ESZ4

        the reactionary wave ‘x’ can take the shape of any corrective pattern although zigzags are the most common pattern.

        I’ve been short since 2007 near the high of the first wave X. By predicting a TZZ per my labeling count has help me stay short and keep my cool throughout this choppy ZZ action.

  32. Gary Lewis says:

    Volatility has fallen dramatically over the last week or two. So much in fact that even less than a 1 point decline in SPY tomorrow would put it in oversold territory. This coincides with Tony’s 1973 level. Recommend taking appropriate action in anticipation of a test of the high on 9/26. Almost every time, we’ve blown through and made new highs. I’ll position myself accordingly but still expect a cycle low at the end of October.

  33. soulsurfer says:

    thanks tony!!

    I traveling this week so no time to check much, but I managed to squeeze out a peak at the NYSE, DOW and WLSH5000:

    While the NYSE could be counted as 5-waves down instead of an ab-abc to complete a abc, all the other indices are so overlapping that they don’t support this imho. And even if it were 5 down, then that means we’ll get 3 up now…

    INDU and WSLH5000 are both also in side-ways to down-ward sloping channels nothing pointing down hard (yet). May all change tomorrow, but…

    • Thanks for the charts. They would be easier to use if you eliminated 2/3 of the trend lines you have drawn on them and emphasized the most important ones.

      • lunker1 says:

        George did you notice that the parallel sets have the same color? Therefore each color defines a channel. The channels are defined by the highs and lows. Sometimes channels are clean and just have a high and low or sometimes they have multiple lines because of intra channel highs and lows. Not too complex.

      • bouraq says:

        Lunker’s description of my channels is spot on. You know what they say: make it as simple as possible but not simpler. This is as simple as it gets.

    • William Joel says:

      Don’t go changing to try and please George
      You haven’t let us down thus far.
      There is no need to revise your charting
      We love you just the way you are.

      • I guess I just wasn’t willing to put in the time to understand what all the trend lines meant. But if other people find them useful, then I will just have to use other tools that convey info in a form that I find less confusing to process. I have told Andre Gratian on Safehaven that he, too, uses so many trend lines that identifying them correctly is by itself a big chore.

      • bouraq says:

        I won’t change a thing. No worries. Thanks William ๐Ÿ˜€

    • pimacanyon says:

      what William said!

  34. blackjak100 says:

    Tony, why do you expect it to roll over again to the 1973 pivot? I thought you were looking for one more lower low into that pivot which is exactly what we got today.

  35. afarsid says:

    Thank you Tony as always for the great updates. So the expectation is that the S&P will go down a bit more to hit the OEW 1973 pivot to complete the minute c of minor 2, correct? How do you determine the range for which it needs to be in to satisfy “hitting” the 1973 pivot and could you share what it the range is?

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