Monday update

SHORT TERM: gap up and go rally, DOW +228

Overnight the Asian markets gained 0.1%. Europe opened higher and gained 1.3%. US index futures were higher overnight. At 8:30 the NY FED was reported lower: 6.9 v 7.8, then at 9:15 Industrial production was reported higher: +0.1% v +0.2%, but Capacity utilization was reported lower: 78.9 v 79.4. The market gapped up at the open to SPX 2062 and continued to rally. The SPX had closed at 2053 on Friday. At 10am the NAHB was reported lower: 53 v 56. Around noon the SPX hit 2077, pulled back to 2072 by 1pm, then moved even higher. Heading into the close the SPX hit 2081 and closed there.

For the day the SPX/DOW were +1.30%, and the NDX/NAZ were +1.25%. Bonds gained 7 ticks, Crude slid $1.00, Gold ended flat, and the USD was lower. Medium term support rises to the 2070 and 2019 pivots, with resistance at the 2085 and 2131 pivots. Tomorrow: Building permits and Housing starts at 8:30.

The market gapped up at the open today, on a pullback in the USD and rumors that the FED will take a more dovish stance on short term rates. The rally continued throughout the day with only a 5 point pullback at midday. With the SPX clearing the OEW 2070 pivot range in the afternoon, we updated the tentative green Minor wave 2 label to dark blue. Minor wave 3 should be underway. The question now arises; how do we count the SPX 2040-2066-2041 activity between Wednesday and Friday. Since neither the SPX nor the DOW made a lower low, even though the retracement was extreme, we are going to count that activity as a first and second wave. The market is then in a third wave, of a lesser degree, of Minor wave 3. However, the market is getting extremely overbought short term, so a larger than five point pullback could happen at any time. Short term support is at the 2070 pivot and SPX 2051, with resistance at the 2085 pivot and SPX 2104. Best to your trading!

MEDIUM TERM: uptrend

LONG TERM: bull market


About tony caldaro

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97 Responses to Monday update

  1. lunker1 says:

    c=a 2063 done

  2. lunker1 says:

    talk about being flat….
    closed right in between the EMAs
    which are themselves flat

    there’s a haiku for ya Lee 😉

  3. simpleiam says:

    Think there will be no immediate rate hike, but we get a hike later this year, should the usd fall back a little. Traders seem a bit less anxious this afternoon too. Don’t know if what seems to be an “urgent” feel is the media’s doing (probably), or The Fed wanting to normalize, even if they jump the gun a bit. Think we’re in the clear this time around.

  4. torehund says:

    BTK looking to roll up in a large gap, and this could happen soon. An opportunity that comes around not to often, and is not to be missed.
    Concerning currencies, NOK is extremely vulnerable, trading at 8,8 vs Euro. Euro could double vs NOK when it bottoms vs the USD. Chart posted at my blog.

  5. Page says:

    What is good DAX ETF or Stock to go long and short? Thanks

    • bhuggs52 says:

      Good question. I was curious the same.

    • asaraniti says:

      ticker symbol DXGE Wisdom Tree German fund…HEDGES FOR CURRENCY

      • Page says:

        oh here is the brave one who answered my Q. Thanks asaraniti.

      • simpleiam says:

        asaraniti, this is a currency etf, not a dax etf, yes?

        • bhuggs52 says:

          Good point, Simple. Here’s their prospectus: WisdomTree Germany Hedged Equity Fund
          seeks investment results that closely correspond to the price and yield performance, before fees and expenses, of the WisdomTree Germany Hedged Equity Index.
          The Fund employs an investment approach designed to track the performance of the WisdomTree Germany Hedged Equity Index. The Index and the Fund are designed to provide exposure to equity securities in Germany, while at the same time hedging exposure to fluctuations between the value of the U.S. dollar and the Euro. The Index and the Fund seek to track the performance of equity securities in Germany that is attributable solely to stock prices without the effect of currency fluctuations.

          • simpleiam says:

            Hmm. Not sure I’d want that kind of duplicity, but that’s just me. At least wait for a pullback.

          • asaraniti says:


            YOU GOT IT!

            FYI… There is an iSHARE etf ….HEWG Same as DXGE in terms of currency hedge. However, from memory, could be wrong, there is slightly more daily volume in HEWG, so it is better for day trading.

            I believe in terms of tax strategy, IShares are more tax efficient(?)

        • Simple I don’t think there is any DAX indice etf, the closest you will get are the DXGE and DBGR etf’s both “Euro-denominated” (hedged for currency) and the EWG USD-denominated (not hedged for currency)

        • asaraniti says:

          simple…. it is an equity ETF that hedges for currency fluctuations. See post below as yiu may want to consider the Ishares ETF which has a higher daily volume and is more efficient tax wise.

    • rc1269 says:

      i would go with HEWG; the one that simple mentioned

  6. DAX triggers SELL as per my model, SELL signal confirmed if DAX falls below 11900 even for a minute, (it will fall below 11900 and rise to 11960, that will be another sell)

    FTSE on BUY as per model as of close, it should touch 6884 tomorrow, and I will have sold that price, irrespective of model outcome.

    SPX touching 2065 not a good news, tomorrow, it should not go below 2057, if it goes, it is blind sell.

  7. ashram says:

    As of now, SPX has retraced a nominal .382 while forming an A-B-C.
    Monitoring closely:

  8. bhuggs52 says:

    So far looks to me like a normal pullback following yesterday’s exuberance. There could be significant support at the 2062-2066 region, as this area saw highs during M4 and last Thursday’s high. I’m waiting for the close today, and may well take a position long in anticipation of tomorrow’s return to patience at the FED.

  9. gtoptions says:

    Thanks Tony
    SPY ~ 3down C = .618 A @ 207
    Happy St. Patty’s!

  10. lunker1 says:

    Hi Tony, could 2041 been a failed c of C and yesterday completed 1 and today is 2? Or maybe 1 is an LD from 2040 and this is D down?

  11. lunker1 says:

    4 into 1 on Dow…hmmm

  12. fotis2 says:

    Indecisive thus far could break either way.

  13. Page says:

    I think Gold, Miners and Oil about to rally today.

  14. chrisk44342 says:

    premarket (kind of?)

  15. Gold gone, 1128 excellent buy, DYODD. Fortunately, I went out for breakfast profits

  16. rabbittrader1 says:

    Think you have it right Tony . She drops patience for “extended period of time” the dollar starts to drop, the stock market goes up (Gold goes down anyway) But I do not think this causes EW. Instead EW causes Janet to say what she will say. “The music of the SPHERES). R

  17. torehund says:

    Thanks Tony !
    Sleeping well after SSEC broke through, from bottom is an A, corrected flat in a B and C awaits.
    Oil comps are the elephants in the room, Exxon has climed from facile 2 usd in 1985 to 85 usd something now. Is it about to rollover ?, normally the best companies succumbs late in a sector decline, watch out could get nasty…

  18. rabbittrader1 says:

    We have begun the week with the GAP UP opening predicted for Monday ( ) during early last week ) . With kudos to Tony for his help. WE should ignore any pullbacks, as we will end this week on the highs; with another strong week next week. As we continue ,generally higher into May 10th to a target of 2230 approx. Gold , as predicted, continues generally down. We have finished a small wave 4 and are now in a wave 5 down towards $1000 or lower by late April to early May (Page are you paying attention?). Sugar has dropped 2 cents since my short call and wheat about $1.00. both will continue DOWN. My call on oil has been wrong, HOWEVER ,I believe we have made a double bottom as the rig count will continue to drop in earnest I may switch to June UCO options and not worry whether my April calls work out. But I will hold the April $10 strike calls anyway. Of course I am holding long SPXL positions as well as long UCO positions (until $65 per barrel (unless we break $41 per barrel. ) The snow is finally melting here in SE Connecticut, but I have built a 9 foot Mayan pyramid of snow, in the back yard, for my Cinco De Mayo party , At which marguirittas, with fresh lime, and Arizona Barbeque will be served along with salsa and jaleopeno Poppers. Mexican music will be played (and maybe I will hire a couple of Mariachi,s Yours Rabbit

  19. bhupal777 says:

    Thanks Tony. Though the market looked so strong some reason my portfolio stocks didn’t move much today. Like KRE, TWTR, FB, VIPS etc….. But Biomedical stocks like NLNK compensated the lackluster action in other stocks. Though my portfolio did not had any drawdown I feel like I lost a major move on such a strong market action.

    I have a question for fellow traders. I went to http://WWW.FINVIZ.COM and used the ‘Screener’ to get a list of stocks that crossed 200 day SMA and I see that stock $GE in that list. But I went to and also used the other trading platforms like ‘Thinkorswim’ or ‘Fidelity’, all of them showing that GE actually did not cross 200 day SMA. Any idea what I am missing in using ?? Today is my second day in using, so I am sure that I am not using it correctly. Thanks in advance.

  20. esvxm says:

    Thanks Tony for the analysis!
    German DAX, S&P 500, NASDAQ, Dow Jones Industrial, Transporters and Utilities here:

  21. sibyn says:

    New big RCH edge 2039 Handle 2079,5 RCH goal 1974,5

  22. bouraq says:

    Today’s charts:

  23. Levels are dropping fairly substantially after hours..any news for that?

  24. Tony, I would count the “activity” as an abc or a IV wave. Given at the move down an 1-2, I, II, III completed and now completing the c of the IV….. I am afraid….

  25. Unfornatully, we had not seen yet a ema5 crossbelow MA50 at close. Need to see that for more confident move down.

  26. berniebaruch says:

    We are beholden to whether a large woman of suspect judgment includes a few certain words in a brief text this week. Oh, how I long for the return of normalized rates and free trading markets.

  27. jeffbalin says:

    Thank you Tony! Possible we are in micro 3 of minute 1 ( not minute 3) ?

  28. fishonhook says:

    Dovish- hawkish- dovish- hawkish. Danged Fed and their schizo games.

    • CB says:

      LOL … mind games 😛

      • fishonhook says:

        Exactly. Like they are playing with kids. Of course they are so beholden to Wall Street and the crooks there, that they are probably waiting for guidance from Goldman rather than vice versa.

        • CB says:

          Fish, it’s true, GS is one of the Fed owners and a big player. Yet, that’s the world we live in. They do provide a pretty aggressive trading environment & they make you work hard for your money.
          And, rule #1 – no mind games with kids please, it’ll only mess them up 😯

    • tony caldaro says:

      Do you remember when Bernanke tapered?
      He mentioned it, the market sold off.
      Retracted, the market rallied.
      Then he tapered anyway.
      Maybe Aunt Janet will pull the same thing to get the USD to drop some.

      • So you think that maybe she will not raise rates after all? Keeping rates low is what might bring the dollar down. Raising rates would cause the USD to strengthen more. Unless you are saying that higher rates would cool the US economy down, reducing it’s attractiveness to foreign investors, who would then buy fewer dollars.

      • fishonhook says:

        I remember it well. What a joke the Greenspan clan have been. Greenspan-Bernanke-Yellen. Cut from the same cloth (I don’t mean them all being Jewish in case someone takes me to task on that). I mean they make policy depending on what the market is doing. They say something- market drops, they retract, reassure. The economy is more than the daily gyrations of the casino OTWKA the stock-market. Give me Volker any day.

  29. simpleiam says:

    Thanks Tony! You had that Update ready to go…
    Have a good night All!

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