monday update

SHORT TERM: gap down opening, DOW +12

Overnight the Asian markets lost 0.2%. Europe opened higher but lost 0.8%. US index futures were lower overnight, and the market gapped down to SPX 1958 at the open. The SPX had closed at 1965 on Friday. In the first half hour of trading the SPX hit 1951, the low for the day, and then began to rally. At 10am Pending home sales were reported higher: +0.3% v -1.0%. By 11am the SPX had rallied back to 1965 to close the opening gap. Then after a pullback to SPX 1956 by noon, it rallied to 1964 by 1:30. Then after a pullback to SPX 1958 by 3pm, the market bounced to close at 1962.

For the day the SPX/DOW were mixed, and the NDX/NAZ were +0.10%. Bonds gained 4 ticks, Crude dipped 25 cents, Gold slipped $3, and the USD was lower. Medium term support remains at the 1956 and 1929 pivots, with resistance at the 1973 and 2019 pivots. Tomorrow: Durable goods orders at 8:30, Case-Shiller at 9am, Consumer confidence at 10am, and the FED starts its two day FOMC meeting.

The market gapped down at the open today, for the first time since this rally began about two weeks ago. The down opening took the SPX to 1951, but the market quickly recovered to close the gap at 1965. After that it traded within that opening range for the rest of the day. While the US market has recouped nearly 73% of the recent downtrend. Europe has barely retraced 50% of their downtrend, and was down 0.8% today. Europe led lower during Primary II, and is doing so again during Primary IV. Throughout this rally, which is now in its eight day, every day had produced a higher high and high low from the day before. Except today. Today the SPX only matched Friday’s high (1965), and made a higher low (1951). A reversal in this trend may help in determining the Major B high. Short term support at the 1956 and 1929 pivots, with resistance at the 1973 and 2019 pivots. Short term momentum dropped to neutral after Friday’s negative divergence. Best to your trading!

MEDIUM TERM: Major wave B uptrend probably underway

LONG TERM: bull market


About tony caldaro

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333 Responses to monday update

  1. Jordi Güell says:

    Tony, if tomorrow NDX breaks his recent highs, then , is the NDX on wave V?


  2. This squeeze that I am feeling right now…i know i have felt it in my bones b4 when short…n the opposite when i was long and market went against me…..i also know that i capitulated and make some silly day trades to recoup losses and feel better and instead ended up losing more..and on occasion blew up the trading account, when the brokerage liquidated my futures position right when the market was about to turn in my direction…

    I feel that right now…the gut wrenching…puking all over myself …feeling. I know with the intuition of having traded through the last 7 years, that this means a significant turn is around….this time since i m trading with options rather than futures, so been able to hold through the last 20 pts against me….

    I hope to be able to record this emotion and keep it with me for the rest of my life…i think this is what the best of traders are able to do…hold through the noise and through the irrational exuberance of the market…b’cos most people smart enough to type on a computer, can do technical analysis, and call market direction in the short term based on charts, but it’s another thing to be able to trade successfully….

    I realize that i might be squeezed for another few days or so…but being short here and being uncomfortable is the right thing from my recollection of the previous times.

    And so i hang on ..n just added to my short right here….

    Get busy living…or get busy dying!! – Shawshank redemption!!!


    • vivelaamo says:

      I hope it works out for you but how high can you let it go?


    • You are Rocky, Damnittt!!!! You will be victorious, now get back in the ring and knock Mr. T Out!!!!


    • mrgreen2010 says:

      That is the advantage of options….sometimes getting stopped out ment getting lottery tickets that will pay out rather than being stopped out and having to recommit later and barring time decay 1 payout could equal 10 scratch trades. I used to trade currency (stiil do sometimes) before that hit and run trading and swings using momentum courtesy of Jeff Cooper before the great bull began. Options are not easy but prefer them to everything else. Just do not over do it relative to the account size. 2 % normally to 8%Max. For now watching my VIX calls decay but can still hold because it was the houses money since Sept 22. That was an easy top. I am waiting for the FED again before I commit my original stake again, one way or the other. Sentiment and me lean short though.


  3. FiveStars says:

    OK now we have oversold condition so go figure 🙂


  4. rabbittrader1 says:

    For the world is like an olive press, and men are constantly under pressure. If you are the dregs of the oil you are carried away through the sewer, but if you are true oil you remain in the vessel. To be under pressureis inescapable. Pressure takes place througgh all the world: war, siege, the worries of state. We all know men who grumble under these pressures, and complain. They are cowards. They lack splendor. But there is another sort of man who is under the same pressure, but does not complain. For itis thefriction which polishes him. It is pressure which refines and makes him NOBLE.” St. Augustine, First Archbishop of Canterbury, Seventh Century , A.D.


  5. Thanks Tony….

    So even if we hit 2000, this is one massive B-wave…with a C down to come. It seems to me that the more painfully higher the B waves goes, C is going to be as bad for bulls as B was for bears……”Market can remain irrational longer than most can remain solvent”…so all bears would have capitulated by 2000, while all bulls would capitulate by 1700…

    Not sure if u are going to consider an alternate count, and if so at what point do we start entertaining one?




  6. CB says:

    new sig on P& F charts today ….this is a LT charting system, not a day-trading instrument…so it doesn’t predict prices for the next day or so…just a reversal signal to keep in mind..


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