Monday update

SHORT TERM: consolidation day, DOW -12

Overnight the Asian markets gained 0.4%. Europe opened lower and lost 0.3%. US index futures were lower overnight, but the market opened two points above Friday’s SPX 2108 close and continued to move higher. At 10am Existing home sales were reported higher: 4.88mn v 4.82mn. Just past 10am the SPX hit 2115 and started to pullback. At 12:30 FED vice chair Fischer’s speech was released just as the SPX hit 2109: The pullback lasted for the rest of the day, as the SPX bounced to 2114 by 2:30, then declined to close at 2104.

For the day the SPX/DOW were -0.10%, and the NDX/NAZ were -0.30%. Bonds gained 6 ticks, Crude rose 75 cents, Gold added $7, and the USD was lower. Medium term support remains at the 2085 and 2070 pivots, with resistance at the 2131 and 2198 pivots. Tomorrow: the CPI at 8:30, FHFA housing prices at 9am, then New home sales at 10am.

The market opened higher today, rallied to SPX 2115 just past 10am, then went into a choppy pullback mode for the rest of the day. The gap opening streak ended at seven days, and the alternation between up and down days looked like it was ending until the close. The short term wave pattern posted over the weekend remains the same. A notable pullback is underway, but the SPX will have to drop below 2095 to suggest Micro wave 3 ended at today’s high. Short term support is at the 2085 and 2070 pivots, with resistance at SPX 2107 and SPX 2115. Short term momentum ended the day oversold. Best to your trading!

MEDIUM TERM: uptrend

LONG TERM: bull market


About tony caldaro

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75 Responses to Monday update

  1. IMHO as I have said previous SPX 2120 is P3.

  2. Well, I bought at the close, Close enough to my 2088 level. See what tomorrow brings.

  3. All those, who followed my advice, have minted monies by shorting FTSE at 7054, and holding on to SPX Short positions. SPX breaking 2078 in next 2 days, all hell will break loose. .

  4. torehund says:

    Grrece is reentering the basket of worries, sell of in the euro towards April 20 ?

  5. arthurk says:

    According to TC, SPX drop below 2095 is setup for bigger correction as I still view this as a completed B wave. In particular, given the large sell offs following the last three job reports as stronger than expected, this may be a sell the rumor, buy the news. Before the jobs release on Apr 3, I expect to see a break down of the ED (below 2065), possibly between the 125 dma at 2030 or 200 dma at 2010. Result could be a huge bear trap if jobs report is weak due to oil-related layoffs – no rates hikes, more free money. Then rally to SPX 2150-2200 May-Jun before P4 into Fall.

  6. tommyboys says:

    VIX red with markets – generally a bullish sign – just as its bearish when VIX is green with the markets…

  7. zepfan123 says:

    Mr. Caldero..your short term targets of 2085..and maybe even 2070 look very possible this week.

  8. mike7x says:

    For only the second time since April 2013, the VIX:VXV ratio dropped below 0.78. Prior sub 0.79 readings are highlighted with a dashed red line:

    • mjtplayer says:

      Thanks Mike. I have a hard time seeing any sizable move higher in the VIX between now and late next week. With markets closed next Friday for “Good Friday” and “Passover”, one would have to imagine a quiet week next week, especially Wed and Thursday.

      I you’re thinking of going long the VIX, I would wait till next Thursday late in the trading day or selling puts in long VIX ETF’s (like VXX). I rolled down my weekly 26 strike puts to the 24 strike earlier today. I’ll either get put the position (which is doubtful) or just collect the premium, then sell next weeks.

    • fishonhook says:

      Good info.

    • lbhkinqa says:

      Good spot. I’m already long vol for this reason. It’s a lonely place at the moment! 🙂 That’s how I like it

      Let’s see how it goes.

    • Great chart and great information. Thanks! I’ve been studying periods before and after seasonal expirations recently, and last night averaged maximum gains post-expiration (3 weeks) versus maximum losses. The past two years, the average maximum loss has been 47 points, and the average maximum gain 26 (from the close of the seasonal expiration day and week). Overall, it just suggests that recently the periods after seasonal expiration have tended to present more risk than reward, just on average.

      I mention this because it sort of aligns with what you are suggesting in terms of the next few days and perhaps up to two weeks.

  9. mjtplayer says:

    For those of you keeping track at home, the SPY yesterday had 71.8m shares traded – that’s the lightest volume day of 2015.

    Same story in the QQQ’s, 17.27m shares traded yesterday; the 3rd lightest volume day of 2015. The last time volume was this low in the QQQ’s was late Feb/early March – the last time we had a slow-rolling top.

    This is not a wave 3 at any degree, not with volume this low and the daily trading range this tight.

    Today’s volume characteristics are almost identical to yesterday’s, a continuation of the consolidation, indicative of a wave 4 at some degree. I’d expect the market to trade sideways-to-higher over the next week+ as we head into the 3-day holiday weekend next week; with no volume and continued suppression in volatility. Then the rug get’s pulled out in April…

  10. lunker1 says:

    Watching SPY support

  11. GYN LAB says:

    Good morning! Since Micro 2 was a very deep pullback, alternation would suggest shallow Micro 4 – Possibly was done at yesterday EOD?

  12. sibyn says:

    VIDS 20150324


  13. Pingback: EOD Report | ClueLess8 Trading-Investment Website

  14. rabbittrader1 says:

    It is good to get the expected dip in the SPX over with, early in the week ,leaving the rest of the week to the upside . Gold has made its move to a bit over the expected 1188 to 1191 . It could move a BIT higher , but not much, before dropping to its next low at about 1050 to 1060 by mid APRIL ,or so, then (after a small correction). to 960 in early MAY. My long Crude oil is finally coming to fruition . Look for events to move WTI crude to $60 before the end of APRIL as EW wave 4 moves UP.. Sugar,: still a short into July. A few stocks that could make you rich: XON,EKSO, ZIOP, FCEL, SOPW, and of course a bunch of gold and silver stocks when gold gets to $960 .and silver to $10 ( If you want me to name them just ask me Rabbit

  15. GREAT UPDATE tony.

    Right now the stock market is very hinged into how the dollar trades – this should be key, THE SPX WEEKLY CHART has an errection …. see here. ==>

    Lets be honest anytime the dollar drops, markets tend to gain. That will key into (markets) until we get better economic reports. and you can see many people looking for a crash which again still has not happened. And we get more bullshit from the fed {yes fancy that}

  16. esvxm says:

    Thank Tony for the analysis!

    IBM, United States Steel Corp, JC Penney, Cummins Inc chart pattern and key levels to look for here:

  17. bouraq says:

    Today’s charts:

  18. bhupal777 says:

    Thanks Tony. Dipped my toes in Europe stocks today.

    Credit Suisse (CS) – I am seeing some kind of C wave or 3rd wave starting. On Friday price crossed 200 day SMA with huge volume. My Stop is at 23. No upside target yet. Planning to ride the trend as long as it continues. Think of year 2008, how US banks were beaten and what happened when FED started printing money. Same could be in the cards for Euro banks. If that won’t repeat I lose 0.5% of my account. But if goes well it is going to be a multi bagger. One thing is sure I don’t want to swim against central banks money flow.

    SPDR Euro Stoxx 50 (FEZ) – I see IHS break out then at the same time it crossed 200 day SMA with huge weekly volume. Stop is at 37 and Swing trade target is 44.

    • mjtplayer says:

      On Friday around 11am when spot VIX traded as low as 12.64, the spread between spot and the front month futures contract (April) reached -370bps (extreme complacency).

      It’s the mirror image of when the spot trades +300 or +400bps higher than the front month futures contract during times of extreme fear.

      Side note: Higher high’s in the SPX & DOW today, higher lows in the VIX. That said, I don’t think you’ll get much of a move higher in the VIX this week or next (holiday week); the real fun starts in April.

  19. lunker1 says:

    10 down from 10am

  20. tony caldaro says:

    that’s the current level

  21. torehund says:

    Thanks for the updateTony.
    The rsi dropped like an iron on the 60 min, With only a small pullback in price. I expect the big squeeze to happen pretty soon.

  22. fotis2 says:

    Thanks Tony so a drop bellow 2095 would mean a micro 4 play fits with closing the gap 2093 and 38.2 retrace if it reverses at that level suppose carry on minute iii.$ still on sell mode well tmrw should be interesting again.

  23. zepfan123 says:

    Thanks Mr. Caldaro. Agree with those support levels and I won’t be surprised at all if we saw the highs for the week about mid day today.

  24. lunker1 says:

    Thx Tony. Why 2095?

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