Monday update

SHORT TERM: market remains quiet, DOW -15

Overnight the Asian markets gained 0.6%. Europe opened lower but gained 0.3%. US index futures were lower overnight, and the market opened at SPX 2086. The market had closed at SPX 2089 on Friday. Right after the open the market started to rally. By noon the SPX hit a marginal new high at 2094, then started to pullback. At 2pm the SPX hit 2090, bounced to 2093 by 3:30, then dipped to 2091 to end the day.

For the day the SPX/DOW were mixed, and the NDX/NAZ were mixed. Bonds gained 11 ticks, Crude dropped $1.10, Gold slid $11, and the USD was higher. Medium term support remains at the 2085 and 2070 pivots, with resistance at the 2131 and 2214 pivots. No economic reports tomorrow.

The market opened lower today, looked like it was going to have a decent pullback, then turned right around and rallied. Short term nothing has changed from Friday, except the market made a higher high by one point. Short term support remains at the 2085 and 2070 pivots, with resistance at SPX 2100 and the 2131 pivot. Short term momentum is still displaying a negative divergence, and ended the day at neutral. Best to your holiday trading!

MEDIUM TERM: uptrend

LONG TERM: bull market


About tony caldaro

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72 Responses to Monday update

  1. manunidhi21 says:

    Namaste Tony!

    thanks for the what is expected micro 4 ? 20-30 points

  2. So far the Santa Claus Rally is materializing as I’ve been anticipating.
    Phase 1 – Xmas Rally Dec 15th (+/-2 days) to Dec 24th…… Nice Santa came and left town
    Phase 2 – Xmas Hangover Rally Dec 26 to Jan 6th (+/-2)….Now we are witnessing Naughty Santa dumping lumps of coal down the chimney…..

  3. For Lunker,
    You ask my thoughts for 2015 as I just had this talk with an old friend of mine. rises to . I Would be long companies like ABX at 10.90 as I write. I would say the market Gold rises in the face of deflation. I would think the DOW touches 14,000 next year.

    • lunker1 says:

      Oh ho ho…it’s not that easy truth. What primary, major, intermediate, and minor wave are we in now? When will this uptrend top and at what price range? Dow 14,000 next year is what wave? What happens after that?

  4. klopharmd says:

    Doesn’t this uptrend have to hold 2079 and change? Prior high.

  5. llerias7 says:

    Buying the deep today or tomorrow?

  6. afarsid says:

    Pmsinvestor, do you only trade once a month and hold positions for a week?! 🙂 Hopefully theyre light “volume” weeks

  7. pbbilly says:

    Hi Tony. Nice to see the rally in Gold. Does Patrick have a minimum target for the top of Primary B?

    Thanks and Happy New Years.

  8. fotis2 says:

    Well bought the dip 2083 lets see where she goes unbelievable this index the european guys buying SPX i think

  9. reddragonleo says:

    Not sure if we’ll make it to the 2070 support but the 2085 level was a good call Tony. Possibly we rally up the rest of the day and dip one more time tomorrow to 2070 though…

  10. afarsid says:

    Pullback time?? I think bulls should put their money where there mouth is and buy this dip!! ;p I closed out my long at 2091 and bought vix calls yesterday.

  11. ZBH, 30 yr bond, triggered a Big Up on Friday, and it looks like it is putting the finishing touches on a cup w/ high handle. It is trading 144’17 right now, and 146’19 is the high of the “handle.” I have no idea if it is going to break out or not, or even if it is going to get to 146’19 for an attempt. I took a small long at the pit open today at 144’09 and for now I’m just using 144’05 as my stop. I’m going to treat it as a day trade, and I will add on minor pullbacks. I mention it because it is probably worth watching the relationship between the bonds and the $SPX, especially for any changes in that relationship, and also because it is an interesting chart pattern that is often (mis)identified.

    • And it is always possible that my post coincides with the top tick of a 3-5 bar counter trend bounce in an early bear move lol 🙂 A cup with HIGH handle means that the top of the right side exceeded the high of the left side. These are more prone to failure than a cup with handle where the high of the handle is at least HWB the decline from left to bottom of cup, but lower than the high of the left side. For more on this, crack open your William O’Neil’s How to Make Money in Stocks.

    • rc1269 says:

      changes in the relationship? (between bonds and stocks) that relationship has been out of whack for a while now. so are you looking for a change back to them being in sync?

  12. ufa123 says:

    Happy holidays to all and hopefully a prosperous 2015.

    Many thanks to Tony for giving us a road map, but as we all know there are many forks and bumps in the road.

    I don’t know if you follow DJUA but someone has been buying the sector just like they did in January 2014. I have also noticed that someone is also buying TLT. It looks like we are due a pull back.

  13. fotis2 says:

    Looks like turnaround tuesday.

  14. I’m just full of fun stuff tonight. Also, anyone who rolls their eyes at the connection between astrology and the market just needs to go back and look at the Bradley dates and connections to major market turns. Enough said. I don’t have a clue how or why it works, it just does to some extent and it’s proven. Last year alone bears it out. Keep an eye out for May next year. Something bigtime about May 10 and the 24.

  15. Remember this post — Oil is crashing for one simple reason – the same as all other commodities: the carry trade is getting destroyed. This one chart alone will be the thing that sends the market crashing early next year and will require the Fed to do QE4 to kill the dollar rally.$USD&p=D&yr=1&mn=6&dy=0&id=p56670881123&a=382567225

    Notice the near perfection in inverse symmetry? The dollar goes up, oil and every commodity crashes. All those dollars borrowed now have to be paid back as it strengthens. Even the stupid Saudis are getting hurt here. This oil crash is going to create a major crisis one way or the other if it continues. The Fed is the only central bank on the planet (being that they are the only ones that control dollars) that can stop this. I’m wondering about the timing too. There are many that are calling for a major bottom in gold. Gold will only go up if the Fed steps in and does something to bring down the dollar. The job losses being announced due to the oil price is going to be just the beginning.

  16. Jan setup for TNA is getting very interesting. This looks like the makings of a large ABC. If so, $93ish should be the target early next month. Then watch out below. After that corrects, who knows. One trade at a time.

    • shark says:

      Since reversing the false breakdown of the widely advertised H/S top in December, RUT has had nine consecutive trading days of higher lows. This action reveals the folly of all these anecdotal examples regarding “rampant bullishness”. The RUT chart confirms that just two weeks ago traders were heavily short, and that they are now trapped. Bears are using every RUT intraday pullback to cover losses, resulting in the index going vertical. When the opposite happens – when there is a false breakout followed by day after day of lower highs – then there will be tangible evidence that excessive optimism has infected the market.

      Successfully shorting the stock market currently requires surgical precision and iron discipline, whereas being long merely requires having a pulse. That paradigm will eventually invert, but until it does leave the top picking to the kamikazes.

      • bhtrade says:

        I actually agree with what you wrote – spot on

      • torehund says:

        Yes, thats how it goes. I was just 2 weeks off hitting the gold top on a short, sold it out. If I had been keeping it gold would have still have been rallying 🙂

      • Not so sure that’s what’s going on. You’re assuming most professional traders are stupid and ‘trapped’ short. The $RUT has probably had one of the most bullish setups of all coming into Dec. I’ve shown numerous times that weekly chart’s monster bull flag going back basically all year. Now it’s breaking out. Classic technical breakout. Add in the seasonality for the $RUT and you got what you’re seeing. However, on the daily as I show above, it looks very much like a large ABC. So looking more and more like a fakeout breakout.

  17. chrisk44342 says:

    Hi tc. I am on vacation but just wanted to say how effective oew continues to be in quantifying trends. I am amazed and appreciative. I recall a couple of months ago questioning how an impulse you were counting was possible with an apparent minute 3 that was the smallest. Once again, oew proved its value at a time when subjective EW theory is constantly called into question. Good job and happy new year.

  18. bouraq says:

    Gold is looking for direction:

  19. fotis2 says:

    Oversold is quite staight forward but overbought thats a different kettle of fish just seems to go on and on and on..

  20. As said (predicted) a week before, FTSE will initiate SELL on my model by 31st December. My model is saying “it is going to be different this time..” I never thought that I will be served “Ben’ QE theories” for breakfast in the first week of January.

    • mharrison60 says:

      Hi Shrihas, what are you expecting eg big drop with reference to different this time? Thanks

      • I am saying “different this time” because (as said), my model is saying.

        Certain parameters aligning (in the past), this model (during back testing) said “different this time”

        Model has failure rate of about 1 in five

      • lunker1 says:

        is this the previously highly touted but then abandoned fractal model?

        Did you get the Model of The Month Club for Xmas? 🎅

      • Lunker1, Not sure if you saw my posts. This is new model.

        Fractal was not model. During 1880-1900 level, fractal was just one of many reasons. It failed. This is typical example of what happens when Someone with bearish approach fails. He survives for one more attempt.

        But once BULL fails, there are only 2 options, live in misery or end life.

      • simpleiam says:

        Oh, both of you, get a grip!

        Shrihas, to think that bulls or bears have no other alternatives but to be miserable or die is STUPID. I’ve been buying on dips and selling on rips for a couple of decades and there are ALWAYS alternatives.

  21. simpleiam says:

    Thanks Tony! Always interesting.

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