Monday update

SHORT TERM: Monday rebound, DOW +156

Overnight the Asian markets gained 0.4%. Europe opened higher but lost 0.3%. US index futures were mixed overnight. At 8:30 Personal income was report higher: +0.3% v +0.3%, Personal spending lower: -0.2% v -0.3%, and PCE prices higher: +0.1% v +0.0%. The market opened one point above Friday’s SPX 2105 close, dipped to 2105, then started to rally. At 10am ISM manufacturing was reported lower: 52.8 v 53.5, and Construction spending was reported lower: -1.1% v +0.4%. The rally continued until 11:30 when the SPX hit 2114. Then after a pullback to SPX 2109 by 12:30 the market rallied to 2118 just before a 2117 close.

For the day the SPX/DOW rose 0.75%, and the NDX/NAZ rose 0.90%. Bonds lost 22 ticks, Crude added 10 cents, Gold slipped $4, and the USD was higher. Medium term support remains at the 2085Β and 2070 pivots, with resistance at the 2131 and 2198 pivots. Tomorrow: Auto sales,Β then a speech from FED chair Yellen at 8:15pm.

The market opened higher today, dipped to unchanged, then rallied, except for one small pullback, for the rest of the day. Just before the close the SPX came within two points of its 2120 all time high, as the NAZ closed over 5000 for the first time in 15 years. The count posted over the weekend continues to look good. Today’s rally suggests Minute v, of Minor 3, is underway. All we need now is a SPX 2120 print to confirm. After that we would expect this rally to top between SPX 2120 and 2139, as noted in the weekend update. Then we should see a Minor 4 pullback before Minor 5 kicks in for new all time highs. Short term support is at SPX 2104 and the 2080 pivot, with resistance at SPXΒ 2120 and the 2131 pivot. Short term momentum ended the day slightly overbought. Best to your trading!

MEDIUM TERM: uptrend

LONG TERM: bull market


About tony caldaro

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121 Responses to Monday update

  1. lunker1 says:

    You’re quiet Tony. No a or b on the chart yet. Thoughts?

  2. gtoptions says:

    Thanks Tony
    The Bat Man worked pretty well. πŸ˜‰
    Possible it makes a LL with +div, but who wants to wait for that. Use stops to be safe.
    Projection Target range 212.69~214.86
    GL All

  3. simpleiam says:

    Look at the close on this b-t-h! What a teaser. I’m going to drink some wine and go to sleep.

  4. fotis2 says:

    Suprised it did not close the small gap at 2112

  5. llerias7 says:

    Could this be minor 4…down to oew2070…or just a minute iv b4 spx2130?

  6. reddragonleo says:

    I don’t know what the wave count will be but after 2130-2140 is hit I do see a move back to the triple top zone of 2060-2070 happening shortly there afterwards. Is that the minor wave 4 or some other count… I don’t know?

  7. fishonhook says:

    I think the Bots don’t care about 2104 as much as we do

  8. jeffbalin says:

    Until we break below 2103.75, I believe the primary count is in place. 2131 pivot is about the max before minor 4 starts so it should be a sort of rocky, quick up and down and up and down and up and then minor 4. Nothing out of line today so far that I see.

  9. sibyn says:

    bye bye 2102.

  10. bhuggs52 says:

    Felt slightly nervous late yesterday, watching futures, tightened the hell out of the stops on my UPRO position and woke up to the drop, with a slight loss, and commissions. Interesting game this, as I am learning how crucial the stops are. So one alternative count, if we’re in minor 4, with minor 3 done and shorter than minor 1, minor 5 can’t amount to much? Does this mean the spook is in from a looming Fed interest rate increase? And how will this market ever regain its footing without QE? Euro QE? Looking a little shaky. Thanks to Mikebanas for the top durations.

    • bhuggs52 says:

      Or rather, thanks to Ashram for quoting MB and providing the top durations.

    • JD C. says:

      bhuggs52, I was thinking about your trade this morning, did not want to comment on it without you commenting first. You said above you are learning how crucial the stops are, yes. But maybe even more important are the entry points. First take a longer view of this rally, is a 30 point spx move worth it after this run? Could be. Rely on your oversold indicators, whether 15, 30, or 60 minutes if you are trading short term, and rely on ew counts secondary. I’d rather buy low and dollar cost average into a position rather than buy high and always getting stopped out. Good luck. You’ll get this with time.

      • bhuggs52 says:

        Thanks JD. Excellent advisos, yours. I’ll take them much to heart. I keep learning. I think the greatest challenge is getting to know myself in this business. I tend to target moves late, with the feeling if the move’s confirmed, I’m good. But clearly coming in late has it drawbacks, including a limited potential for profit. As you suggest, learning to catch moves earlier, placing the correct stops and letting the profits run is optimum. Thanks much again. Cheers to the brotherhood and sisterhood of the OEW blog!

  11. fotis2 says:

    I was just thinking every time I get a trade right I’m like easy peasy man trading’s real simple.But let me get it wrong and now all the suspicions become reality all the conspiracies ring true and I am absolutely certain yes there is an unseen evil force that controls the Market and I should of read more of zero hedge…..

    • simpleiam says:

      fotis, IMO might I suggest you toss zero hedge out the window and concentrate first on support, resistance and fib levels, retracements. If you can get those down pretty well, then you move onto the next lesson. GL!

      • fotis2 says:

        Thanks simple just getting my head around this trading thing getting there slowly some days better than others strangely my best days always seem to be the ones when I totally ignore everything and just focus on the chart.Quite lonesome a traders lot..

        • simpleiam says:

          I understand fotis, that’s why I don’t normally day trade, but have solid core positions and do a bit of swing trading when the opp presents itself. GL to You!

    • robslob64 says:

      I followed ZeroHedge since 2009…cost me money through 2010 before finding this blog.

      It has always been well written bearishness focusing on only what is bad, fixing to break or already broken.

      Do yourself a favor and if you have to read it just understand it is CNBC in reverse…none of the information it provides will ever be “tradeable”…just like CNBC.

  12. manunidhi21 says:

    Namaste Tony
    Can it be a truncated v of minor 3 and we in minor 4..also wht will b d target of minor 4 ?

    • Truncations are very rare and should be treated as such. IMO, when your count is running into a truncated/failed fifth wave it is best to look for an alternate count.

      • I understand your point.
        I wonder though, how many times during this primary III wave that wave 3 was not the biggest wave. If that was also rare then does it give more credence to a failed fifth?

        • Wave 3 must be bigger than either wave 1 and/or 5. It cannot be the smallest of the three waves. Per my preferred (see post February 26, 2015 at 11:11 am), which differs from Tony’s count,
          W1 = 2051.7
          W2 = 2036.72 was an irregular flat
          W3 = 2119.59 is bigger than Wave 1
          W4 need to alternate so a zigzag (flat, triangle or horizontal channel)
          (Possible targets)
          β€’ Option 1: if retrace is 2xW2 say 0.4 Fib, then 2086 (34 pts, near 2085 Pivot)
          – Note c = 2*a = 2086
          β€’ Option 2: but if a 0.2 Fib similar to W2, then 2103 (17 pts)
          – Note c = a 2102
          β€’ Option 3: if retrace is say 0.333 Fib, then 2092 (28 pts, near upper zone of 2085 Pivot)
          – Note c = 1.618*a = 2092
          I don’t know how to explain spotting a truncated/failed wave with out getting into a lengthy synopsis but you will know it when it is coming.

      • simpleiam says:

        Hi Matador. Makes me wonder just how strong or week all of Primary 5 will be? I have a P5 count with higher % possibility than Tony’s count. Doesn’t make it so, but have to speculate just the same. Lots of stumbling blocks seem to be appearing in the last week or so.

        • Need to see where P3 ends first, but my gut-o-meter tells me that P5 will be very strong and that the looooooong anticipated “Escape Velocity” will be running on all cylinders during P5….

          Here are some interesting numbers though, Let assume that P3 ends near the 1.5*P1 = 2131 and since P2 retrace 0.42*P1 (0.4 Fib) then if P4 retrace same 0.4 Fib then P4=1826 (near the Inter 4 1821) and if P5 = 1*P1 = 2530 (at Tony’s lower P3 target).

          Alternate: P4 would mean that it retraces 1/2 P2 Fib so say 0.2 Fib P4 = 1978 (near Major 4 1981) and you know where P5 is heading to the Moon.

  13. scorp100 says:

    Hello Tony, can you please share your thoughts on BABA? There is hardly any positive news and its making lower lows pretty much everyday.

  14. lunker1 says:

    Minor 3 is done at 2120?
    5 up from 2042?
    2071 2058 2102 2085 2120

    if so…Minor 4 targets
    38% minor 3 = 2090
    Prior 4 = 2085

  15. Lee X says:

    As it’s been discussed before the great thing about trading now is if u want to trade a bull market u can and if u want to trade a bear market u can….just a key stroke or mouse click away.
    There is always a bull/bear market somewhere

  16. lunker1 says:

    Regarding your herd mentality article….is it going to make money?

    In September 2009 Schiff said that he foresaw gold at over $5,000 an ounce in the next couple years, and that the stock market rally which began that year was a “rally in a bear market”

    His US fund has underperformed the S&P by over 40% since March 2012

    Just like you, someday, some year, he may be right. Until then price has not broken support and it’s a bull market.

  17. jparkins10 says:

    Interesting open today, was yesterday b wave of minute iv & now seeing start of c down, or are we in the 2nd wave of minute v?

    • gtoptions says:

      Agree jp. SPX hit the .886 retrace at Monday’s high. Looked like 3 up. Could be a w2 or a end iv as a flat.

    • lunker1 says:

      3 up from yesterday low.
      iv into i 2102

    • Yes, both potential options JP. Off Friday’s late session lows it appears to me INDU & NDX had 5 waves up to yesterday’s late session highs. SPX however looks like 3 waves up on the same move. What’s interesting about that is INDU & NDX put in ATHs yesterday whereas the SPX did not. This opens the door to yesterday being a SPX b wave or something even more profound. We would have to see lower lows than Friday’s lows fairly quickly to confirm. CAC,DAX & FTSE all seem to be breaking some trendlines today to the downside. Nothing major just yet … a work in progress but another factor for US equity bulls to bear in mind.

  18. Closer to top than bottom. Model again flipped to BUY on Monday Close. This will be 4th time in last 24 days, model came to close to give SELL signal and didn’t

    • Why is the stock market doing so well if the overall economy is not?

      Well, the truth is that stocks have become completely divorced from economic reality at this point. Wall Street has been transformed into a giant casino, and trading stocks has been transformed into a high stakes poker game.

      NASDAQ coming dangerously close to doubling the peak that was hit just before the last stock market collapse.

      And one of the ways that we can tell that a stock market bubble has formed is when people start borrowing massive amounts of money to invest in stocks. Margin debt is peaking again just like it did just prior to the last two stock market crashes.
      the cyclically-adjusted P/E of the S&P 500 Index

      Last week, the cyclically-adjusted P/E of the S&P 500 Index
      surpassed 27, versus a historical norm of just 15 prior to the late-1990’s market bubble.

      Advisory bullishness (Investors Intelligence) shot to 59.5%, compared with only 14.1% bears – one of the most lopsided sentiment extremes on record.

      Equally important, our measures of market internals and credit spreads, despite moderate improvement in recent weeks, continue to suggest a shift toward risk-aversion among investors.

  19. says:

    One of the axioms that is true with markets is that it NEVER gives you very long to buy the bottoms or sell the tops. There is always very little volume at the absolute top and bottom. The S&P is near its prior highs AGAIN so I have to think higher still to go.

    • CB says:

      So true about the speed of the market, Mike. And please correct me if I am wrong about the volume aspect, I think it increases quite a bit at any bottom. The volume was huge in October, wasn’t it? That’s usually a good sign at any bottom, right?

    • ashram says: says:
      March 2, 2015 at 10:35 pm
      One of the axioms that is true with markets is that it NEVER gives you very long to buy the bottoms or sell the tops.

      The top in 1981 took approximately nine months to form.
      The top in 1987 took seven weeks to form.
      The top in 2000 took almost six months to form.
      The top in in 2007 took about five months to form.

      It therefore depends upon the definition of “very long”.
      Highs in the stock market are usually a process rather than an event.
      It is likely that the top of this bull market will feature a prolonged distribution pattern during which time shares will be transferred from the predators to the prey.
      How else will the oligarchs be able to short profusely at the highs?
      After all, Goldman Sachs will require considerable time to unload its entire inventory of equities upon its valued customers immediately prior to the next equity bloodbath.

      • CB says:

        Brilliant analysis, ashram. It’s so nice of you to share your expertise with us. You’ve explained so well why tops take lots of time. Thanks, ashram!
        True, GS cannot unload all of its holdings in one day, without disrupting the markets, while our individual trading /investment positions are just a drop in the bucket, so we(individuals) are tempted to try to “catch” tops. Can be a tricky proposition, though (investor psychology).
        I wouldn’t necessarily use the, somewhat pejorative, term: “oligarchs” as those entities objectively need time to perform their market function. It’s a technical aspect related to providing liquidity, securing orderly markets etc…so as far as the topping process is concerned, they’re not “evil oligarchs,” they just need more time due to their “size.” And it’s our job not to get caught up in a collapse. We still have the system based on fundamental freedoms , where everyone is responsible for their actions (or inaction). We’re not victims, we’re participants. Also, the SEC is not going to save anyone from crooks as we all know. It’s always about personal responsibility.

  20. berniebaruch says:

    Bulls are bullish. Bears are Bullish. Who is left besides newbie?

  21. bhupal777 says:

    Thanks Tony.
    For all the bears out there if you are really want to go short, why not short weak names like CYBR and SPLK rather strong names like AMZN, FB, TWTR or for that matter I wouldn’t even short the index etfs like XLK. Trade what you see. Good Luck.

  22. jobjas says:

    Has US Real Estate completed 5 waves ?

  23. tommyboys says:

    Ok whose gonna roll the dice on LL?

  24. lunker1 says:

    Hi Tony what do you see for an INDU 60 minute count from 17038 and 17685? Thx

  25. gtoptions says:

    Thanks Tony
    SPX ~ 2007/2009 1.618 Swing Extension just happens to be 2138 +/-

  26. pooch77 says:

    When does the ECB actually start qe?

    • tony caldaro says:


      05/03/2015 Governing Council of the ECB: monetary policy meeting in Cyprus
      05/03/2015 Press conference following the Governing Council meeting of the ECB in Cyprus

  27. fishonhook says:

    This never ending/extending P3 is getting tiresome. Hope to see some change of trend one day, if only for a trade.

    • Gary Lewis says:

      I’m way beyond bored. I don’t even watch it during the day anymore, much less take any positions.

    • bhupal777 says:

      As more people are waiting for P3 top it gets delayed even more. From Tony’s preferable count it doesn’t even happen this year. I know Tony is projecting the probability and market can do what ever it wants. But one has to take Tony’s count into serious consideration because the trend is up. It will eventually bend but I am not the one to catch that bend. It is stressful to be waiting for that turn if the trend continues longer than what everyone is thinking. So that is not my sport at all.
      I don’t know who said this it goes something like this………”The market just likes to inflict pain on as many participants as possible”. As we all know 90% of the traders lose money (including me, this is my 4th year of part time trading). But some day we will reach there with good discipline and hard work. Good Luck,

  28. JD C. says:

    Tony, thanks for the updates, much appreciated. Good investing/trading to all.$SPX&p=D&yr=4&mn=0&dy=0&id=p19029023310&a=368833404&r=1425334597239&cmd=print

  29. bouraq says:

    Today’s post:

  30. bhuggs52 says:

    Thanks El Matador for the book reference on stops. I’ve recently finished reading Van K. Tharp, who offered some hands-on methods for setting stops. I’m definitely going to look at Edwards-Magee. I’ve see their Technical Analysis book often recommended. Every little bit helps. What I’ve seen already for the short term, set tighter stops.

  31. fotis2 says:

    Thanks Tony shelving the excitment for today lets see what tmrw brings this thing must get going already tricky to day trade with the range so tight.

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