monday update

SHORT TERM: OPEX pullback continues, DOW -107

Overnight the Asian markets lost 0.6%. European markets opened lower and lost 0.5%. US index futures were lower overnight, and the market opened lower at SPX 2006. The SPX had closed at 2010 on Friday. The market continued to pullback, and at 10am Existing home sales were reported lower: 5.05mn v 5.15mn. The pullback continued until noon when the SPX hit 1992. Then after a bounce to SPX 1997 by 1:30, the market headed lower again. At 2:30 the SPX hit 1991, bounced to 1996 by 3:30, then end the day at 1994.

For the day the SPX/DOW were -0.70%, and the NDX/NAZ were -1.05%. Bonds gained 12 ticks, Crude lost 85 cents, Gold slipped $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: a speech from FED governor Powell at 9:20, then New home sales at 10am.

The market opened lower today, then pulled back to SPX 1992 before it even had a five point bounce. Even though we had posted short term support at SPX 2000 and SPX 1993, this was a bit more than expected. Thus far we have had a rally from SPX 1979 to 2019, and now a pullback to 1991: 40 points up, 28 points down. So far it still looks like a Minute i to 2019, and a Minute ii to today’s low.

Should we get another day like today the Minute wave short term count will probably fail, and the next logical support level would be the 1973 pivot range. Still no damage to the uptrend as the market could still be in an irregular Minor 2: 1979-2019-1979+/-. Currently looking for some sort of bounce/rally off the slight positive divergence on the hourly chart. Short term support is the 1973 and 1956 pivots, with resistance now at SPX 2000 and the 2019 pivot. Short term momentum hit extremely oversold today, and now displays a slight +div. Best to your trading!

MEDIUM TERM: uptrend

LONG TERM: bull market


About tony caldaro

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160 Responses to monday update

  1. elmer510 says:

    SPX -it’s falling very fast, already at 1979 level for a third time.
    The speed downwards looked quite “impulsive” in a negative way.
    So I concider just throwing my long cards and forget minor 3.

    Sverker had a good comment yeasterday about today’s development.
    But i don’t know his view for the next days.

  2. trondack says:

    BABA say, you OEWers rode market up on my yuan, I get my yuan back. I say, BABA better hit 100 or OEWers throw BABA off Three Gorges Dam.

  3. John B says:

    i got 78/80 area support that may give a nice bounce

  4. buddyglove says:

    I don’t like the way it looks and I’m flat now….Setup fail imho. glta.

  5. infantguru says:

    I mentioned the cup and handle pattern during its formation and had gone long immediately just before the day it broke out. However in the following couple of days I noticed a distinct bearish inverted hammer on DOW along side a dropping summation index. I bailed out immediately. One of those few good calls as we headed south the next day.

    With the break below yesterday, the c&h appears to be a failure. Even if there is an uptrend, its likely to be a weak one and wouldn’t reach its target of 210+.
    With the MACD poised down on daily, I am not sure if we can expect a credible upshot yet.

    Am sitting on the fence Mr C.

  6. Every dip is a buy. If one traded by this rule then he has made some use of this torturous bull else one has just lost money trading while this market keeps making new highs. Btw FB made new ATH today, does it look like a significant correction is around the corner. NAH!!!

    • uncle10 says:

      yep that is for sure the only way to make money in this market. ahh the internet. The land where everyone knows everything.

  7. Soulsurfer: Thanks for answering my Bollinger Band question. I think that your answer implies that in periods of market price constancy, the 20-day SMA tends to be horizontal for that period and the standard deviation for that period shrinks because it is a measure of average variability, and variability is decreasing for that period. Per your request, I did post an analysis of the NY McClellan Oscillator. It is the 4th post above your original Bollinger Band post.

    • Gary Lewis says:

      George, I work with standard deviation a lot in my analysis. If you’ve ever seen a Bell Curve, a representation of a Normal Distribution, this is pretty much what the Bollinger Bands represent. The bottom line is that The bands are at +2 and -2 standard deviations away from the moving average. Statistically, 95% of observations fall within the +2 and -2 standard deviations. So normally, there is only a 2 1/2% chance that prices will move beyond the +2 or -2 levels. That is NORMALLY. There has been a lot of research disputing that the market is normal. We see big moves often.

      My rule of thumb is when the size of a unit of standard deviation is getting bigger, you want to stay with the trend. Like if you look at the daily Bollinger band now, you will see that it is getting wider. That means that the standard deviation size is getting larger and momentum is growing. After some 25 + years of working with this, I have found that prices usually bounce when they hit the bands on a daily basis. On a weekly basis, when the standard deviation size is getting bigger, the move will be more sustained and you want to stick with the position until the size of the standard deviation begins shrinking.

      When I write my blog at, I usually add a chart and discussion of the Size and Standard Deviation. It is my primary tool.

  8. lunker1 says:

    from 2019 5=1=~1984

  9. H D says:

    The turn around Tuesday crowd has left the building. They don’t ring a bell at the top but if you’re lucky they might do the largest IPO in history.

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