monday update

SHORT TERM: correction continues, DOW -223

Overnight the Asian markets gained 0.2%. Europe opened lower but gained 0.2% as well. US index futures were much lower overnight, but recovered as Europe rallied. The market opened three points below Friday’s SPX 1906 close, bounced to 1912, pulled back to 1897, then hit 1905 all by 10am. Then the market dropped to a new downtrend low at SPX 1891 by 10:30. After that it started to work its way back up again. By 11am it hit SPX 1903, pulled back to 1895 by 11:30, then rallied back to 1912 by 12:30. Then it started heading back down. Just after 1pm the SPX hit 1902, bounced to 1909 by 1:30, then continued lower into the final hour. Near the close the SPX hit 1874, then bounced to close at 1875.

For the day the SPX/DOW were -1.50%, and the NDX/NAZ were -1.55%. Bonds gained 25 ticks, Crude lost 70 cents, Gold rose $11, and the USD was lower. Medium term support drops to the 1869 and 1841 pivots, with resistance now at the 1901 and 1929 pivots. Nothing on the economic agenda tomorrow.

The market opened lower today, finished a small a-b-c down to SPX 1891, then rallied to 1912. While this was unfolding the trading day started to look like Friday. Check out the one minute chart. We counted the a-b-c decline as three waves of another seven wave Minute C. The rally to SPX 1912 is the fourth wave, and the afternoon drop is the fifth wave. Should a seven wave decline be enough to end Minute C, the downtrend may end as soon as tomorrow. The SPX has already hit our initial downtrend target of the 1869 pivot. If the current decline is only another part of the larger Minor C decline, it could extend further. Either way, we expect a low soon, a rally, then another low. Then we shall see where the technical are at. Short term support is at the 1869 and 1841 pivots, with resistance at the 1901 and 1929 pivots. Short term momentum is trying to display a positive divergence. Best to your trading on potentially turnaround Tuesday!

MEDIUM TERM: downtrend

LONG TERM: bull market


About tony caldaro

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278 Responses to monday update

  1. When the 60 ATR is as high as the typical daily ATR often is, you might have volatility. 🙂

  2. rc1269 says:

    hopefully today is not like 8/3/11. the setups are frighteningly similar, however. feels too 50/50 so closed out my ST trade long here on lack of follow through. just holding the intermediate term short now. GL all

  3. buddyglove says:

    Tricky here with Intel Q3 post bell…could spark an overnight rally or flush imho.

  4. blackjak100 says:

    Do I smell an expanded flat wave iv targeting 1912 which is the 38.2% retrace of wave iii 1970-1874?

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