Monday update

SHORT TERM: gap up opening, DOW +196

Overnight the Asian markets lost 0.3%. Europe opened higher and gained 0.3%. US index futures were higher overnight. At 8:30 Personal income was report higher: +0.3% v +0.4%, Personal spending was reported lower: -0.3% v+0.6%, and the PCE was reported unchanged: 0.0% v 0.0%. Just before the open the FED released this: The market gapped up at the open to SPX 2003. The market had closed at SPX 1995 on Friday. It then quickly sold off to SPX 1981 by 10am. At 10am ISM manufacturing was reported lower: 53.5 v 55.5, and Construction spending was reported higher: +0.4% v -0.3%. The market then rallied to SPX 2010 just before 11am. After that, on this volatile day, the SPX dropped to 1993 by 1pm, rallied to 2003 by 1:30, then dropped to 1991 by 2pm. Then the market took off to the upside, hitting SPX 2022 just before a 2021 close.

For the day the SPX/DOW were +1.25%, and the NDX/NAZ were +1.10%. Bonds ended flat, Crude rose $1.55, Gold dropped $10, and the USD was lower. Medium term support rises to the 2019 and 1973 pivots, with resistance at the 2070 and 2085 pivots. Tomorrow: Factory orders and Auto sales by 10am.

The market gapped up at the open, then was immediately sold off to the low for the day at SPX 1981. After that the market rallied to SPX 2010, pulled back to 1991, then rallied to 2022. Another a-b-c or a 1-2-3? Since we have not seen five waves up from the low yet, and the market did not quite reach the oversold level expected, we think there is another a-b-c down left in this correction. The fact that we are seeing a-b-c rallies, instead of one wave rallies, may suggest we are getting closer to ending this downtrend. Short term support is at the 2019 and 1973 pivots, with resistance at SPX 2042/43 and the 2070 pivot. Short term momentum displayed a positive divergence at this morning’s low and rallied about 40 points to barely overbought. Best to your trading!

MEDIUM TERM: downtrend

LONG TERM: bull market


About tony caldaro

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228 Responses to Monday update

  1. uncle10 says:

    Our CNN fear greed worked again… 😉

  2. Hi Tony
    thanks for the page reference on the NYA ,
    i dug through the pages and i have to say that after a few years of checking your site
    i did not realize the extent to how much you actually track the markets .
    very very good stuff you have on here and much more then i realized .
    thanks again .
    Joe Longwill

  3. berniebaruch says:

    The shorts in the decade of the 2010’s have been the Buffalo Bills of the 1990’s.
    Congrats to all who made 60 handles in the last 27 hours.

  4. simpleiam says:

    Out of my trading longs. Have to finish some chores. Will reload if need be. GL to All!

  5. fotis2 says:

    Looks like a DB break target 2073 on the hourly

  6. Peter Sliney says:

    It was a little hard to believe that the $SPX was going to be denied 2100.

  7. oh oh, is that a wedge forming on the 30 min chart…

    • simpleiam says:

      Guess I don’t see it yet… Rising wedge?

      • three rising peaks 2040, 2046 and current high

        • spindoc73 says:

          within the corrective move down you posted (inverted flat), which i had also following, the pattern has now retraced precisely 78.6 % at close (es, +/- 0.2). when momentum turns (-) on the hourly, a consolidation may suggest higher prices and a busted pattern, and a drop in the after session should put the next leg down back on the table. seems the outcome of this puzzle will be decided in the overnight session.

  8. Caldaro 500 points straight up since Fridays DOWNTREND. What do you want to do coach the Seahawks. Great game buddy no?

    • johnnymagicmoney says:

      dont worry truth there will be an uptrend confirmed at like 2065 or maybe even 2100 and then it will fall and go to 1973 a day after the confirmation…………….I am begining to think this is a Goldman Sachs blog =)

    • tony caldaro says:

      I would have ran the ball
      weekend update noted a potential downtrend low this week
      “Our initial thoughts would be for a 1973 or 1956 pivot low some time next week. Should the market reach one of those levels and is sufficiently oversold. We would then expect a five wave rally off that low to suggest a new uptrend is underway.”

      • 56rambler says:

        Sir, this is how I read it too – that you were looking for a possible low this week. Every to teeny, tiny positive divergence on the daily SPX chart. Between where you have the last two recent lows (1980.90 and the one near your little blue “a”) … the MACD was every so slightly higher on this last low. It’s wee, but it’s there.

  9. Both NG (natgas futures) and UNG are about to record a potential bullish Morning (Star) Doji trend reversal pattern which has a very strong success rate. And in case you’re wonder there is an IHS pattern, on the 1 hour chart, that is consumed by the three candlesticks that make up the Morning (Star) Doji.

  10. uncle10 says:

    Hey Dark, if ur out there nice call and chart on oil/erx .. When you get to 98% on the same side– when it turns it turns hard and fast doesn’t it? You like baba here?

  11. purplember says:

    tony, with 5 waves up, at what point do we say 1980 was wv4 low (complete) and we’re in uptrend now.

  12. simpleiam says:

    Interview with Ed Morse of Citi Commodities advised this pop in crude is just that, a pop. Unless something major happens in ME or other, I tend to believe him and so do the oil engineers I work with. Morse, I think, just gave a 20’s/bbl range? Didn’t catch it all. Anyone else hear all this interview?

  13. mjtplayer says:

    5=1 at 2,056-ish from yesterday’s low

    Open gap from 1/26 at 2,057.09

    Downtrend line of lower highs off Dec top is about 2,055-ish right now,

    SPX high 2,050’s seems like a sensible place to top out…

  14. Lee X says:

    Hey Tony

    What’s shakin amigo ?

  15. Did anyone take me up on my US Steel (X) recommendation?

  16. torehund says:

    Seems like we Will have the commodity rally that has been in the Cards for some time, and its hard to see this without it making a dent in the dollar. Either way for outlandish folks exposed to US equities it doesnt matter that much as some is weighted towards the stuff that we all need.

  17. mjtplayer says:

    What do you think Tony – was today’s intra-day pullback wave 4 an now rallying in wave 5 off yesterday’s low? If so, would 1,980 be the low in your count?

  18. uncle10 says:

    anyone follow me in for a tradable low in euro right around the announcement of qe from ecb. Amazing how the market works that way😉

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