monday update

SHORT TERM: gap down opening starts the month, DOW -51

Overnight the Asian markets lost 0.8%. Europe opened lower and lost 0.5%. US index futures were lower overnight and the market gapped down at the open to SPX 2061. The market had closed at SPX 2068 on Friday. In the first 15 minutes of trading the market declined to SPX 2051. Then it started to rally. At 10am ISM manufacturing was reported lower: 58.7 v 59.0. The rally continued until the SPX hit 2060 around 10:30. Then after another decline to a lower low at SPX 2050 was reached by 11am, the market rallied to SPX 2059 by 1:30. After another pullback to SPX 2052 by 2:30, the market bounced to 2058 by 3:30, then dipped to 2053 to end the day.

For the day the SPX/DOW were -0.50%, and the NDX/NAZ were -1.25%. Bonds lost 5 ticks, Crude rallied $3.20, Gold soared $45, and the USD was lower. Medium term support remains at the 2019 and 1973 pivots, with resistance at the 2070 and 2085 pivots. Tomorrow: Construction spending and Auto sales by 10am.

The market gapped down at the open, then dropped to SPX 2051. On the drop we eliminated the Minute wave iii at SPX 2076, as this decline has overlapped the high of Minute i at SPX 2056. This leaves the short term count, from the Minor 4 low at SPX 2030, suspect. Minor 5 could be subdividing, or it could have ended at SPX 2076. The key level to watch going forward remains SPX 2040. A break below that and the uptrend could be over. The daily RSI dropped below overbought today for the first time in over a month, and the MACD did a negative cross. It certainly looks like it is time to be somewhat defensive about this uptrend. Short term support is at SPX 2040 and the 2019 pivot, with resistance at the 2070 and 2085 pivots. Short term momentum hit extremely oversold this morning, then rebounded to end the day just above oversold. Best to your trading!

MEDIUM TERM: uptrend

LONG TERM: bull market


About tony caldaro

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100 Responses to monday update

  1. johnnymagicmoney says:

    like I said Japan is in an expansion, Europe has solid growth, numbers here in the US have been accelerating, commodoties are firm globally, QE will continue to go on here in the states for some time, interest rates will not rise until at least 2021, Russia and Brazil are both in expansion, valuations have never been cheaper, and there is a ton of cooperation politically here in the states to get positive things done…………………that means we should hit all time highs just about every day for the rest of the year

  2. scottycj1 says:

    Near perfect .786 retrace

  3. buddyglove says:

    Hey All…Decent buy sigs today in Dow futs hourly imo. Dble bottom bear trap low with pos/div. Clean decisive break to new highs would measure a move to 18042/44. Good health/luck to all.
    Dow futs hourly :-

  4. fotis2 says:

    It looks as long as the $ keeps going up to the Yen S&P stays up.

  5. My model has triggered SELL on INDU, SPX (2065.1) and FTSE at present level, However, even if market rises 4 points on SPX, and corresponding level in INDU/FTSE, then signal invalidates. ATM, shorting only FTSE. With Draghi coming on Thursday, model triggering SELL is a surprise to me.

  6. gtoptions says:

    Thanks Tony
    SPY ~ WPP @ 207.29

  7. fishonhook says:

    all minor pull backs are aggressively bought. foolhardy to go long here and yet just daily punishment for shorts

  8. sibyn says:

    SPX Top today 2064 and now —>2029 short term. Big RCH —>1618. Cu

  9. Here comes the 50 point pullback!!! It can turn into much more be careful BULLIES…

  10. Lee X says:

    RE: Mr Crude
    Thanks Tony
    It takes a crude man to trade the crude market amigo.
    I wish all health and happiness

  11. tommyboys says:

    Could be an IHS on the RUT with a double bottom right shoulder now basing on the 200 SMA. If so it targets between 1230-40 range… 🙂

  12. a-b-c, a & b are done and about to start the c down targeting 2020- 2015

  13. John Arella says:

    Targets for major drop

    spx 2080 – not meet but hit top channel since 2009
    djia 18,000 – not meet
    nasdaq 4800 – meet and hit top channel since 2009

    Djia needs to hit 18000 before I will short this market, once meet the downside target is 15,500 on Djia which will happen very fast.

  14. bouraq says:

    Gold bugs are raging:

  15. pooch77 says:

    Looks like correction over if thats what you want to call it for the dow.The new norm is daily chart only go 1/3 of way and correction over

  16. blackjak100 says:

    Here we go again…the first HO signal triggered yesterday so need another one within 30 days for confirmation. New Lows at a high level again. Top at end of week above 2075? I think so.

  17. ABchart says:

    Hello. Thank you for the update.

    DAX: I think that today and tomorrow the DAX will make an intermediate top near 10040/50, and will decline by about 3/4% from Thursday. This will be quick (2/3 sessions). But then it goes up to about 10200 to Christmas. This will be a major top followed by a decrease of 7/10% in early 2015.

    S & P: I think the next target will be 2000/20 area (2/3 sessions from thursday), before 2100 (christmas), then a drop of 7/10% in early 2015.

    Sorry no graph at the moment because my WordPress blog is not ready yet.

  18. fotis2 says:

    Im thinking of a short but looking at the 5hour bollinger im not that sure rather be wrong by a small margin than a large one it looks like we may have one more up leg.

  19. As per my model (as of close of 01 Dec);
    SPX: SELL intraday but at close no confirmation
    INDU: Sell? Not yet.

    There is divergence in all three indices, therefore, it will follow main trend, which is Bullish. SPX turns bearish today if it breaks yesterday’s low and INDU also same. If we get SELL today, on both these indices, then Draghi will be disaster on Thursday

  20. rabbittrader1 says:

    CB I appreciate your interest in my love life ,however . I have no need of virtual Girl Friends. Last time I was on NANTUCKET for a year, I had TEN different LADIES I dated (and Bedded ) in one year – Most were 20 to 25 years younger than me. R.

  21. rabbittrader1 says:

    Why did we not make a new high today? Why did we not fill in the settlement gap at 2067 SPX. ? Why did we fall 14 SPX points? For the last Month or so I have been informing this SITE that the 9.2 year STOCK MARKET CYCLE,combined with the 41 month cycle (inverted) was due to make a TOP in November 2014.. I thought it might top in early November,but it waited until the end of November. So ,there we are! I believe that the MARKET will drop into late DECEMBER, with a target of 1693 to maybe 1725. After that a rally (SLOW) to early MAY 2015 to the low 1800,s. Then a sell until we reach 666 in 2017. Hope all had a nice Thanksgiving . Rabbit.

  22. soulsurfer says:

    Going forward with the KISS principle, here are some simple long term trendlines on the NYA, and price reacted beautifully to these:

    For those who missed it, I also wrote a small Holiday essay on gasoline prices over the weekend, in light of the “oil spill” 😉 that happened on Black Friday (how appropriate that name is):

    Just a good read.

    ps: I predicted oil prices would bottom at around $70 already 2 weeks ago. so far so good. just a bounce from here IMHO

    • joecthetruthteller says:


    • scottycj1 says:

      I think it’s great how you took Tony’s count and put it on your site…SoulPlagerizer
      Brilliant creativity…………

    • fotis2 says:

      Thanks soul.

    • You pick important topics to explore and your charts have clear descriptions accompanying them. They are thorough but not cluttered and difficult to decipher. I wonder what it is about the composition of the NYA that has made it weaker than the other broad indexes (other than the R2K) such as the SPX and Wilshire 5K? At least the NYA halted it’s decline at the major uptrend line. That’s an important technical fact.

  23. Walter Crane: Thanks for the offer of additional information on the gold salvage operation, but I don’t want to publish my e-mail address on a public site.

  24. The failure of the weekly NYSE A-D line to decisively break above it’s H & S pattern correctly foretold this decline, especially with respect to the daily A-D line which posted a -1728 Monday. The “speculative” indexes, the R2K and the Nasdaq, as they often do, fell in tandem with the NYSE A-D line. The Nasdaq’s own A-D line recorded a -1530. The Dow Transports, which tends to be an aggressive index, was down 2.71%, starting to correct it’s recent sharp advance. Here is the link to the $NYAD:$NYAD

  25. M1 says:

    Thanks Tony.
    What support should be taken to confirm a short term correction on NAZ ??

  26. torehund says:

    One of my deceptful nanocaps, market cap just 40 mil usd and a phase 3 readout approaching on a possible game changing cancer drug. Normally there is a 17 precent success rate at phase 3. If approved it could become a 100 bagger. Risky as always and no recommendation to buy, however chart is looking better by the day.

  27. Tony, the bearish reversals doji’s that the indices have been printing and confirming are suggesting that this decline will run deeper then most traders are anticipating. Minimum anticipated length of correction ranges from 7-10 trading days depending.

    Indices bearish reversal doji’s are as follows:
    RUT: Engulfing Doji printed on Wednesday and confirmed on Friday
    TRAN: Bearish “Inverted Hammer” printed on Friday and confirmed Today
    SPX: Dark Cloud Cover printed on Friday and confirmed Today
    COMPQ: Shooting Star printed on Friday and confirmed Today
    NDX: Evening Star printed today.
    INDU: Evening Doji Star printed Today

    • tony caldaro says:

      R2K now in a downtrend … leading?

      • Tony, in my post above I should have said “pullback” in lieu of “correction.” And yes I agree that the RUT is in a downtrend and on the brink of a serious breakdown, better yet meltdown. However, I’m not betting on a complete meltdown just yet. Typically during the holidays the Market experiences 3 rally’s:
        1) the “Thanksgiving Rally” which we got heading into the Thanksgiving,
        2) the “Holiday Effect Rally” (due to start of holiday shopping season) which looks like we are not likely to get this rally this year due to unimpressive start to the holiday shopping season, and
        3) the famous “Santa Claus Rally” which typically ranges from December 15th to Jan 6th. In the red corner we have Santa and in the Blue corner we have the Grinch hence the success of this rally is yet TBD

        The anticipation of the Santa Claus Rally is very likely to put a lid on the strength of pullback we are currently witnessing

    • mjtplayer says:

      DOW 200-day EMA in 16,800’s – possible downside target? That would be roughly a 50% retrace of the entire move from mid Oct.

  28. bolderbob says:

    Tony…I know I must be confusing the count. Are you saying now that if 2040 does not hold then the odds favor that Primary 3 has topped at 2075 and that PIV is likely underway? Sorry to be so dense!

  29. torehund says:

    I think market looks splendid, look at the daily SPX rsi chart, loosing lots of ground in a short time, and just modest price decline. So far so good.

  30. soulsurfer says:

    thanks tony!! It’s been a wonderful 4-day weekend allowing for lots of catching up on reading market-related articles, blogs, letters etc. What struck me is the high expectancy of the elusive “Santa rally.” Funny, since not many (of those) could even predict today’s outcome… 😉 And it seems as we’ve all forgotten, that at the October low ALL gains for this year were erased and then some…, And thus that the market is now up YTD only because of the past 6 weeks of which the first 2.5 weeks of those brought it back to where it ended in September to be exact. The next 4 weeks then only added a marginal 50p (2-4%). So all YTD gains in less than a month… Hmmmm, I am not sure if that’s healthy, unless the SPX symbol has now been listed on the OTCBB?

  31. Thanks Tony,
    If the uptrend ended then what would the count be? Again, thanks.

  32. Hi Tony good evening thank you for all your job.It’s an important thing.
    that i forgot to do this morning ,maybe because i’m a “desperate short”…

  33. torehund says:

    Its the big question still, has oil bottomed.
    One indication telling of further downside is Petroleo Brasileir(PBR), after an abc Down from recent 20 usd dollar top, it seems like it wants to end With a DE Down testing 2002 bottom at 2,7 usd before all is said and done. Suffering from bonanza induced corruption charges in large scale; mankind never learns.

    • No, I think the big question is if we are now in P4. Seems likely the answer is yes.

      This morning I bought XOM, SLB, and ERX. Sold all in the PM.

      If the $SPX goes down, OIL will not diverge..

      • torehund says:

        Anything is possible, but I still only see two motive Waves finished on this primary 3. It takes a loupe to see more than that, if you dont count in the corrections of the resective waves and add them into the euation. And if that holds, 1000 points added to the spx in a swoop isnt out of the question.

  34. Tony,
    Some clarification if you would please. You mention above, 2040 as the low for minor 4, but as I look at the chart you have minor 4 at 2030 and change. 2040 looks like the bottom of minute ii.

    • tony caldaro says:

      typo, corrected
      This leaves the short term count, from the Minor 4 low at SPX 2030, suspect. Minor 5 could be subdividing, or it could have ended at SPX 2076. The key level to watch going forward remains SPX 2040.

  35. fotis2 says:

    Tony thanks hmmm.. decisions decisions.

  36. dirtypino says:

    Tony – could this not be an ending diagonal for minute wave 5 due to the overlap between waves 1 and 4?

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