monday update

SHORT TERM: rally continues, DOW +19

Overnight the Asian markets gained 1.8%, mostly Japan. Europe opened lower and lost 1.0%. US index futures were higher, and then lower, overnight. The market opened one point below Friday’s SPX 1887 close, dipped to 1882 in the opening minutes, and then started to rise. The rally was a bit choppy as there were several five point swings along the way. But nothing like the volatility we have seen in the past week or so. At noon FED governor Tarullo’s speech was released in a closed door meeting at the NY FED: Worth the read. Heading into the close the SPX hit 1905, then dipped to close at 1904.

For the day the SPX/DOW were +0.50, and the NDX/NAZ were +1.40%. Bonds gained 5 ticks, Crude dipped 5 cents, Gold rose $8, and the USD was lower. Medium term support rises to the 1901 and 1869 pivots, with resistance at the 1929 and 1956 pivots. Tomorrow: Existing home sales at 10am.

The market opened lower today, dipped to SPX 1882, and then rallied for the rest of the day. We did get a lower opening, but it did not dip below SPX 1878 as expected. As a result we updated the hourly SPX chart to display a Minor ‘a’ at 1898 and Minor ‘b’ at 1878. Minor wave c, to complete Int. wave A, should currently be underway. If Minor c = a, Int. A should end at the 1956 pivot. If c = 0.618 a, then Int. A should end at the 1929 pivot. Short term support is at the 1901 pivot and SPX 1878, with resistance at the 1929 and 1956 pivots. Short term momentum may be setting up a negative divergence, but no signs of weakness yet. Best to your trading!

MEDIUM TERM: Major A downtrend may have bottomed

LONG TERM: bull market


About tony caldaro

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270 Responses to monday update

  1. Wallstreet goons attempted a massive short squeeze and were successful but didn’t take into account all the sellers up here that they thought would be buying, they have put themselves in a corner.

  2. Hi Tony,
    What odds do you have that SPX 1821 was only Major 4 of P3?

  3. JK1987 says:

    I double the shorts right at the close at 1941.
    I did not exit the short from 1892 yet.
    Primary IV is not done yet.

    • uncle10 says:

      JK, u shorted at 1892 and you stayed in and now have added more 50 points higher? seems like a risky way to trade? good luck

      • perversionofthemean says:

        SoulSurfer scaled into his longs last week, so I can understand JK scaling into his shorts.

        I just lack the confidence, and am more likely to “fill my shorts”, if you know what I mean. I’ve missed many moves over the last 20 years of active trading/investing, holding out for top or bottom tick, or waiting for a gap-fill after a breakout.

        Had I scaled, perhaps I’d have at least made a buck or two. 😉

  4. magnus1234 says:

    HVN about here for ESZ4. Minor C or very near to it now. Just started to build my shorts from here. C’mon Tony… give me a C… 🙂

  5. I think we are in wave 5 of minor c or inter a……I think cheap short is on the way near 1943-1950……careful not to get blindside by the grizzle bear

  6. llerias7 says:

    Excitment on a roller coaster:


  7. uncle10 says:

    Thanks Mr. T. 100 plus handles in a few days. still a man market 😉
    sell at any price -buy at any price hehe

  8. mrgreen2010 says:

    No this wont end ugly…not at all…no up volume …NOV VIX calls looking well bid into this VIX weakness…VIX OCT jam job so VIX Call writers (banks/house) win again. This is too predictable and easy. I keep pinching myself looking for the gremlins….nope the casino is rigged… and as long as you understand that then to quote Ovid “….deceive the deceivers”

    • mjtplayer says:

      Yep, smash that VIX in play heading into tomorrow’s OCT expiration – the house wins again.

      SPX getting to within 1pt of an exact .618 retracement

  9. fishonhook says:

    Kudos to those who went long for B.
    this sure feels like a C panicky up just the drop to 1820 felt like the world would end.
    Not pleasant for those of us who ventured a bit short. A good two weeks of my trading profits have evaporated but at least I kept it small.

    • afarsid says:

      Just heed Tony’s advice and you will be fine!! I love how everyone is all bullish again, let’s jump on the bull bandwagon like nothing ever happened! I think tomorrow there will be a slew of mixed earnings on the table that will help us fill that gap today and then some for the beginning of minor b of Major B

    • Gary Lewis says:

      I’m just keeping my focus on my downside target of 170 on SPY and am anxious to continue buying more puts on each new handle higher.

    • cmucha68 says:

      Don’t worry. On the next soon coming downturn you get it all back and some extra bonus.

      • cmucha68 says:

        What shall I say. Bought calls at ES 1887 and sold them too early at 1912 but went short now from 1935 to 1941 if you look at SPX. Perhaps it works out for a small gain on a pullback. However I’m trying to save my gun powder for the next big leg of the C wave below 1800. I suppose it will also be taken out within a week when it starts.

  10. gtoptions says:

    GTO says;
    October 15, 2014 at 12:15 pm
    Thanks Tony
    SPY ~ IntC = IntA * 1.618 @ 182.41

    I bought calls at 193 & Sold them just now. Happy Times. GL All!

    Now ~ SPY 61.8% @ 194.24

  11. thecustomer14 says:

    Tony, are we at the point now where Major A on the SPX chart can move from the tentative green label to a black label?

  12. mike7x says:

    Anyone confused yet? Can we hit Tony’s 1956 pivot today? Only 7 pts. to 1949!

  13. johnnymagicmoney says:

    I love listening to CNBC because it gives me a feel for what dumb does…………….I think they have run 147 Apple pieces today – don’t you guys get it? Apple is the global economy …….like literally the entire Global GDP is really how many Iphones are sold ……..its that simple. Disregard IBM, Coke, or McDonalds. They mean nothing

    • tony caldaro says:

      Someone got on CNBC and said KO and MCD are out of touch with the current economy.
      Guess drinking a coke is out of date, we should be drinking $5 lattes.
      And children do not want kids meals anymore, they want to go to Chipotle.
      Are corporate profits so important, that companies are forced to lay off people and raise prices time and time again?
      Is providing good service/products at a good price, and employing lots of people suddenly un-American?

    • mrgreen2010 says:

      I expect the Dow to be up over 200 so the CNBS clowns can be orgasmic in their “look the Dow is up over 200…correction over BUY BUY BUY!!!!”

      • 16golfer says:

        At least Maria Bartiroma isn’t there any longer in her sexy, breathless voice exclaiming “you just can’t keep this market down”….Now they have Michelle Caruso-Cabrera. Fox Business has Liz Claman to stir up the male hormones

      • tony caldaro says:

        Liz does what =)
        Nor sure Michelle does that either 😉

  14. berniebaruch says:

    Sold half of long SSO at the opening and remainder at 1937. I need to step away for a few days.
    It has been an unbelievable run down and up. Thanks for everyone’s input. We need an address to forward a beverage of choice.

  15. I think Market Crash of Huge Dump as soon as tomorrow! If you are holding over night after a 120 point run up on s&p over a few days in the current economic climate we are in, you deserve to lose all your money.

  16. johnnymagicmoney says:

    1940 I am going short here

  17. mrgreen2010 says:

    The last of the bears should be throwing in the towel into the close when it should be the bulls closing…classic…the number of extended longs and short set-ups at resistance…too many…just picking the juicy ones for now. Closed the last of my longs this morning and converting the houses money into NOV puts. Was looking to close my CMG puts since it complied with earnings poop, its IV did not and since now the weekly looks like crap I will hold them.

  18. Gary Lewis says:

    Didn’t we just have one of these 2% up days a week or two ago? Will we have the same next day effect tomorrow?

  19. lunker1 says:

    Hi Tony, why is Major A still green?

  20. These markets are going no where without RUT and INDU

  21. mrgreen2010 says:

    This rally has exceeded 1914 and 1929 pivot and now 1956 looks like a chip shot from here but volume is anemic at best, unless volume shows up soon this could be reversed on a dime tomorrow. New ATH extremely unlikely given sentiment was starting to lean bullish yesterday and today index call premium (dumb money) is way overly bid OTM relative to puts. Todays P/C numbers should be interesting to say the least. VIX showing divergence from SPX here. Added more NOV VIX calls and IWM puts.

  22. Tony,
    In the weekend update you speak of Pri IV being close to Pri II and say 15 to 20% down. What did you mean when you say it might be higher but probably not lower? Thanks

  23. 30mtradermom says:

    All of my indicators are screaming for this to come back and re-test the low BEFORE heading higher… then there’s price. Sidelines for now. Want to share a chart… how do I attach? In the meantime, notice we are head bumping on the daily DT (use Price or RSI(5)).

  24. YEah, this is not how B waves go people. This is a clear Primary 5 or some type of 5 off the lows for sure. Apple at or nearing highs, Facebook nearing highs, GILD nearing highs… and on and on…

    ABC correction ended in IWM ETF (small caps at 103.xx) ina zig zag from July top 120

    Correction worst seems over at 9% for the large caps…. April gap filledi n at 1840 range in SP 500 chart too with big candlestick

    NASDAQ doesnt go up 2.2% in 1 day several days into a B wave….

    Get long

  25. rc1269 says:

    curious that rates aren’t selling off much, if at all, given the supposed risk-on tasty goodness

  26. 30mtradermom says:

    All of my indicators are screaming for this to come back and re-test the low BEFORE heading higher… then there’s price. Sidelines for now.

  27. blackjak100 says:

    The Fib Queen who nailed the bottom via timing is suggesting 1935-1944 is a very big hurdle. We shall find out soon! I’m now watching to see if we get a Zweig Breadth Thrust as we are actually very close with still half the time remaining before it’s invalid. They are rare occurrences which usually kick off big uptrends. It looks like we will need to head south fast to avoid it.

  28. johnnymagicmoney says:

    people are doubting Tony thats what they are doing ……………all I know is this whole thing will end badly one day and the tunes being sung will sound just like today – that all problems are solved with the genius of central bankers……………what blows my mind is Central bankers these days have massive effects on the equity markets but not so much the economy anymore and one day the “street” will start pricing things based upon that very truth and when they do this thing will be over and Ill laugh

  29. fishonhook says:

    Interesting how the posts on this blog have moved from Bearish, “yes this is just a backtrace B” to “we are shooting for all time highs and P4 is over.”
    I guess we wont know until the week is over!

  30. perversionofthemean says:

    Who shorted 38.2%back ? Who shorted 50%?
    Now coming up on the 61.8% retracement of the entire move down from ATH.

    Glad I have a day job, but missing out on all the fun.

  31. John B says:

    rising so slow that the resistance are now rising too into the 1940,s

  32. blackjak100 says:

    Tony, with all due respect I’m not seeing how this B wave resembles the one in 2011 like you mentioned earlier. In 2011, I show from 1258….(1299-1263-1356). a of B is acting like c of B right now but that’s about the only comparison I see.

  33. pooch77 says:

    Weekly charts have bottomed and are turning up,iam putting a fork in PIV

  34. playitkool says:

    Bounced off of and now above the 125 EMA that the buy the dipper’s where taunting people here with 2 weeks ago. Trading beyond this level could bring in new buyers if that mindset is still intact.

  35. Anyone recall the trendline backtest level on the DOW?

  36. rc1269 says:

    anybody placing odds we get a repeat of the July – Oct 2007 playbook? Ramp right back up to new highs and then call it a day on this bull? stranger things have happened

  37. rc1269 says:

    a decent place to lighten up some of those trading longs, IMO. if you happened to add any recently.

  38. lunker1 says:

    JK you still short?
    You didn’t post exit.

  39. lunker1 says:


    Daily 34EMA=1942
    Weekly 13EMA=1949 (bottom 1956 pivot)

  40. cmucha68 says:

    We may hit the upper range of the 1929 pivot at 1936 today and then a pullback to around 1920 before higher. Let’s see.

  41. kvilia says:

    Out of XIV and will be out of RUT at COB. Awesome A of B, no need to be greedy. Depending on where Int.B dips, may pick up some longs for a quick trade but wont really trade Int. B. Thanks, Tony again.

  42. playitkool says:

    Tony, with a move like this with no major pullbacks since 1877 yesterday it’s hard for me to count abc’s. Not calling this a 5 wave here but is it possible to use this mornings gap as a measuring stick to calc. out a possible end of this c wave? Specifically could the middle of the gap be the middle of c with end of c around spx 1946ish ? Thank you.

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