Monday update

SHORT TERM: market decline continues, DOW -97

Overnight the Asian markets gained 0.5%. Europe opened higher and gained 1.2%. US index futures were higher overnight, but started to fade about 1.5 hours ahead of the open. The market opened four points above Friday’s SPX 2045 close, and that was the high for the day as the market immediately started to pullback. By 10am the SPX had dropped below Friday’s 2038 low, and hit 2023. Then the market tried to rally. At 11am the SPX hit 2036, then reversed and headed lower. A stair-step pattern took the market back to SPX 2023 by 3:30. Then the market rallied to SPX 2033 before closing at 2028.

For the day the SPX/DOW were -0.65%, and the NDX/NAZ were -0.95%. Bonds gained 16 ticks, Crude lost $2.50, Gold rallied $11, and the USD was higher. Medium term support remains at the 2019 and 1973 pivots, with resistance at the 2070 and 2085 pivots. Tomorrow: the Treasury budget at 2pm.

The market opened higher today, then immediately began to pullback. About 1.5 hours before the open SPX futures were +0.5%, and the DAX was +1.5%. Two hours later, about 1/2 hour after the market opened, the SPX was -1.0% and the DAX was +0.25%. Quite a decline in just two hours time. About 15 minutes into the open the SPX broke through the 2030 support level we have been noting. After hitting SPX 2023, the market rallied to 2036, then vacillated above and below that 2030 level for the rest of the day. Currently the short term trend appears to be in favor of the sellers. This is unlikely to change until the SPX can rally above 2053. Short term support is at the 2019 pivot and SPX 1992, with resistance at SPX 2053 and the 2070 pivot. Short term momentum was quite oversold at today’s low, and ended oversold. We removed the tentative green label, but still feel the market is in a wave 2 pullback. Best to your trading!

MEDIUM TERM: uptrend

LONG TERM: bull market


About tony caldaro

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268 Responses to Monday update

  1. Tony,

    Here is update from first weekend in June. spx closed 2058 . the high is 2093.

    Should the count be correct, we would expect the current uptrend to reach around SPX 2214. Then after a correction of about 5%, the market should then make new highs to complete Major wave 3. Then after a correction of about 10% for Major wave 4, Major wave 5 should take the market even higher. It would appear this bull market still has plenty of uptrends, and time, before it concludes.

    From the highs already correction -5 %

    What is your call right now? We going up or down from here?

  2. simpleiam says:

    Yep, KB Homes backing out of contracts here in Houston area. Hence OVERBUILDING. Lots of traders were going into Homebuilders. Seen this theatre before.

  3. herringjd1 says:

    Retirement from 100% cash to 100% fcntx. Let the crash begin.

  4. lunker1 says:

    49 pt range. wow

  5. simpleiam says:

    + div on 60-minute.

  6. torehund says:

    Importante: macd on the weekly bdi is hoocking up.

  7. gtoptions says:

    Consolidation before new highs is a good things. Being Objective. 😉

  8. simpleiam says:

    Some approximate retrace levels from todays pullback:

    38% = 2026
    50% = 2032
    62% = 2038

    Everyone should have made money today. GL All!

  9. travis01 says:

    Just gotta laugh. This market flips more than a Chinese acrobat.

    • tommyboys says:

      Remember we’re trading near Dow 18k…a couple hundred points means nothing more than one hundred at Dow 9k a couple years ago…

      • Tommyboys, Yes, correct, it is just 400 points on INDU over 18k level, it is not crash.

        My model turned SELL at 2017 SPX. SPX then further tanked to 2008. Usually, first SELL signal on my model is bought (as per past results of model). I am expecting rally tomorrow and that rally wont be sold.

      • tommyboys says:

        My point is that what feels like huge swings are really no larger than any historical swings in the market. Just seems that way as the numbers are bigger and watching them every minute of the trading day will make it feel that way. Percentages are percentages…

      • rc1269 says:

        which does beg the question, why do we only ever deal in percentages and completely ignore absolute values?

      • tommyboys says:

        We don’t thus the issue.

      • rc1269 says:

        i see. i guess i should rephrase that for those who like to hang on syntax : “why should we just pay attention to percentages and ignore absolute values?”
        it didn’t seem to be ‘an issue’ while we were going up

      • tommyboys says:

        Try not to read too much into my comments

      • rc1269 says:

        i thought i was just taking them at face value

  10. scottycj1 says:

    UNG needs 2 closes above 15.25 and CL 2 above 50 to turn their daily trends to up

  11. sweinv says:

    Lets wait and see but this could be a pull back down to fibo 23,6% (SPX 2009) of 1992-2065. Otherwise something bigger.

  12. johnnymagicmoney says:

    I am just laughing. Maybe tommorrow Yellbitch says “we might kinda hope to maybe if this happens but eventually not always but sometimes if ever” and the market says “OMG she said, we might kinda hope to maybe if this happens but eventually not always but sometimes if ever”!!!!! and the market goes up 14% to new highs but at least for the time being a punch in the bull’s stomach is quite entertaining. Baby bull is on the floor saying but every dip is bought is it not, I don’t understand”.

  13. rc1269 says:

    it was around 7/29-8/2 or so, of 2011, when i very distinctly remember Tony making a comment to the effect of, “be careful, this might be something different”
    we were looking for an extension of the rally heading into that moment, if i’m not mistaken
    Tony – any thoughts on where you’d start to get more cautious here?

    • Ryan Parker says:

      Hey RC,
      I remember TC leaning bearish back then. Or at least much more cautious than now. Agree with you that something doesn’t feel quite right here. I’m thinking that for the 3rd cycle in a row the second year of the presidential cycle may have pulled the performance of the normally strong 3rd year forward to the second year (2006-2007, 2010-2011, and now 2014-2015? 1986-1987 an example of the same.
      The weak start of trading to this year and the extreme weakness of the XLF since we got into 2015 are definitely suggesting trouble may be afoot at the Circle K.
      #1 question in my eyes is whether the sideways action in small caps for the past year has simply been a consolidation or a giant topping pattern. Get the answer to that question and I think it will tell you where the rest of the market is headed.
      Cumulative advance/decline lines were all strong going into year end 2014. Only one that didn’t confirm a new high was the Nasdaq Composite and I don’t rely on that one very much. There was also a surge in new highs at the end of the year.
      I was personally expecting the market to run into April and then have a large correction over the summer. Sell in May and go away hasn’t really worked since 2011. Seems due.

      • uncle10 says:

        Thanks Ryan. When I look at the small caps ( IWM) I see a long sideways consolidation and then a break out, followed very quickly by a break down. USUALLY that spells trouble – at least the medium term, often long term.

      • rc1269 says:

        “#1 question in my eyes is whether the sideways action in small caps for the past year has simply been a consolidation or a giant topping pattern.”

        agree completely

      • simpleiam says:

        “…#1 question in my eyes is whether the sideways action in small caps for the past year has simply been a consolidation or a giant topping pattern. ”

        I agree also.

    • tony caldaro says:

      Not seeing anything unusual, except the persistent selling on rallies.
      Will take a look after the close.

  14. scottycj1 says:

    I think today was a truncated c of wave 2

  15. Stay objective, folks …

  16. Tony – I think it’s time to go with the irregular Major 4

  17. simpleiam says:

    This pattern from Jan. 1 to today looks very much like that of Oct. 1, 2013 to about Oct. 11 or 12. IMO. Watching 1992.

    All the Oils (and others w/questionable earnings) really getting hit hard.

  18. 1953 then 2003 then 1880 My 2 cents

  19. gtoptions says:

    SPX ~ If 2022 breaks there is a possible Bullish Bat target .886 at 2000.
    CCI momentum stalled at todays high, just as it did on 1/8. Chart will be posted later.
    GL All.

  20. mjtplayer says:

    Wow, market just went red. That must be very disappointing for the bulls after the big a.m. ramp, if I were long I’d have a tight stop at yesterday’s lows…

    I’m not long or short presently, mostly cash, so please don’t paint me as a bull or bear. Just saying, keep tights stops for sound risk management…

  21. rabbittrader1 says:

    Been short since 2093. today we started minutte or minor wave 3 of this first wave down (minor) of a very long C wave to complete in late 2016 or early 2017 at 535 SPX (maybe less). IMVHO R. Bought UCO April 15 calls Str5ike $10 for 61 cents this AM.

  22. Bulls when will we bounce?

  23. uncle10 says:

    uh oh

  24. magicianme says:

    Left shoulder formed yesterday. Head formed today. A nice little right shoulder and we could be targeting 1970 or lower.

  25. That’s how bear markets are – they very often open strong and then …

  26. iamwhoiis says:

    Did somebody hit the wrong button?

  27. Peter Sliney says:

    Can this bull say night night.

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