Monday update

SHORT TERM: quiet morning then afternoon pullback, DOW -86

Overnight the Asian markets gained 1.1%. Europe opened lower but finished mixed. US index futures were relatively flat overnight, and the market opened three points below Friday’s SPX 2116 close. By 10am the SPX rallied back to Friday’s SPX 2118 high, then started to pullback. At 10:30 the SPX hit 2111, bounced to 2116 just past 11am, then headed lower again. Also at 10:30 the FED released their FOMC schedule for 2016: Around 3pm the SPX hit 2105, bounced to 2110 by 3:30, then dropped back to 2105 at the close.

For the day the SPX/DOW were -0.50%, and the NDX/NAZ were -0.35%. Bonds lost 29 ticks, Crude slipped 10 cents, Gold slid $4, and the USD was higher. Medium term support remains at the 2085 and 2070 pivots, with resistance at the 2131 and 2198 pivots. Tomorrow: a Budget surplus is expected to be reported at 2pm.

The market opened slightly lower today, bounced to Friday’s high, then dropped below Friday’s SPX 2106 low, ending the day at 2105. Despite the 13 point decline, the first pullback from SPX 2068, it was  relatively quiet day. Not much new to report: long term indicators remain negative, the medium term chart pattern continues to look like a leading/ending diagonal triangle, and the market remains in its seven month trading range. Short term support remains at the 2085 and 2070 pivots, with resistance at the SPX 2120’s and the 2131 pivot. Short term momentum displayed a negative divergence at today’s high then declined to slightly oversold. Best to your trading!

MEDIUM TERM: still an uptrend

LONG TERM: bull market


About tony caldaro

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107 Responses to Monday update

  1. blackjak100 says:

    If we close red, still can’t rule out a lower low 2080-2085 tomorrow.

  2. berniebaruch says:

    Market does seemed to concerned about Greece…Markets do what markets do.
    I just cant see a real world way out here. There comes a time when you stop throwing good money after bad and the shit hits the fan. The enablers are tired of enabling. Is there any good scenario for Greece, not necessarily the market reaction.

    It would be a breath of fresh air to get closer to “free markets and free men”

  3. jeffbalin says:

    That was a picture perfect bounce off Tony’s 2085 pivot. Those pivot’s are great.

  4. berniebaruch says:

    These Bollinger bands are as tight as my 36 inch pants 2120upper/2080 lower

  5. zepfan123 says:

    Well if we all live to be a 100 years old,we’ll never see a market worse than this again. The wait for a true breakout..up or down may be longer than we think.

  6. one hell of a tug of war going on. Rope has to break eventually

  7. fishonhook says:

    Kudos to those who are trading these markets successfully. I know it is unusual to admit one isn’t 100% successful but I have been stopped out both ways.

  8. looks like it tried to go positive. let see if it rolls over now

  9. mjtplayer says:

    It’s been a nice oversold bounce in copper (and other metals) over the past few months, but formidable resistance lies just ahead at about $2.97 – $2.98/lb. The upper TL of the 3yr downtrending channel:

    Also, if copper can tag that upper TL around $2.97+/-, it would also set-up a huge -div on the daily.;

  10. mjtplayer says:

    Everyone see this? Greece couldn’t scrape together enough money to pay it’s 750m Euro debt payment due today, so they accessed an emergency IMF account to help pay.

    Greece borrows money from the IMF, via an emergency fund, so that they can pay the IMF debt payment. Can you say Ponzi scheme?

    • tony caldaro says:

      Have heard of people that do that with credit cards.
      What happens when all the cards are max’d out?

    • torehund says:

      It would be normal for the bondholders of Greec debt to take a haircut, not starve out the hands that have the bower to nill them out. Greed of bondholders is misplaced, and in the end thats favorable for Greece, as it makes a BK justifiable in the opinion of the world community.

  11. stephenk1980 says:

    Looks like the final wave of the B wave up may have been completed. C = 2*A for dow and C= 1.5A for SPX.

    Not certain yet, but possible.

  12. blackjak100 says:

    Since the move to 2086 looks like one wave, can’t rule out a lower low to complete this ‘b wave’ which must be a three. I believe we’ve retraced about 50% decline already.

  13. Come on bears, you going to let them push you around like that?
    Buy above 2117.98 with Stop 2096.33
    Sell below 2083.38 with Stop 2104.97
    Currently neutral having closed ES and bought back the calls during the drop this morning. Given the numbers, I would consider a long above 2104.97 as that would be quite the stick save. 😉

  14. fotis2 says:

    Its made a DB close above 2095.27 confirms

  15. $$$NEWBIE$$$ says:

    Absolutely no volume on this move up

  16. HW says:

    Could the market stay kind enough to gift us with an abc for e-wave with standard .618 retrace? (2068-2118-2086-2136??)
    .618 of 2068-2118 is 2087, within 1pt is accurate enough for me!

  17. fotis2 says:

    Holding 2085 hmm decision time…

  18. H D says:

    2 day impulse to 2121, 2 day impulse to 2115, ES -34 at 2085pivot

  19. Tony

    Regarding your oil chart. Is it possible that this rebound from 42 is just a wave 4 before another wave 5 to downside ? The oil rally seems rather weak compared to the sell off last year.

  20. Hi Tony

    With ECB QE – it looks like DAX has started a correction (even with QE).

    What do you think target of this correction will be on DAX? (We already -10% from top) so I guess some kind of confirmed correction ongoing?

  21. lunker1 says:

    TLT C=A 117.25

  22. torehund says:

    The dollar strength is a primer for the coming growth phase in the US, as lowered profits overseas forces the larger companies to reinvent and importantly pushes forth merger and acquisitions. You can’t sleep very log on your business success due to all the piggy back forces in the economy.

    • torehund says:

      …a brief look at Spx vs Rut and there has been no premium holding the latter post 2010. Reflecting the around Zero growth state.

      • torehund says:

        ABC up on crude oil, and on the weekly chart macd is still submerged below zero, waterfall decline is in the cards (and macd hist is already starting to roll over), might be a bit early still as with the dollar. But we can see the contours of whats ahead. Index -wise it gives biotech and other sectors lots of vacant space.

        • hkloon says:

          You mean biotech and other sectors would constitute more weightage on the index in place of energy?

          • torehund says:

            hkloon: Yes, seems like biotech flowers up when the USD runs and commodities fall. Dollar run is also a sign at this time of relative economical strength, and hopefully some growth. Biotech and the Usd has been correcting in syncronicity lately.

  23. JeffMilano says:

    Newbie, happy to see that TVIX is going higher. Today should be OK.

  24. fotis2 says:

    Thanks Tony! CCI reversed back down at 100 on daily so 2085 looks good.Could bounce on 0 line back up at gap 2090 it did just that on the 17th and 30th of last month.May be decent long at 2085 2090 level.

    • blackjak100 says:

      agree, but obviously my wave count was wrong. Five up completed yesterday so this should be a ‘b wave’ pullback. I will be going long 2080-2090 probably more than once as I always do. GL & Cheers!

    • torehund says:

      Lunker when expectations of inflation is nill sentiment wise, thats at least an interim rate bottom. It could be now, and not even Yellen can lure folks into bonds, maybe another oil plunge/dollar hike will stall the ascent. Piggy back mechanisms at work, but the trend may already have changed.

  25. nardobeme says:

    Thanks Tony. Went short in am, covered and went long near close. Pure excitement 🙂 An attempt to make/break to new highs soon is still in my books. IMO $RUT simply had to “catch-up” today. Worth noting… the $CPCI was off the charts today–closed at .35, which tells me a strong move up is coming. GL all.

  26. uncle10 says:

    Thanks Tony. Great update on the currencies. You were right on with your view of a strong US $!!
    I have a feeling the US stock market is going to have a rough summer.

  27. mjtplayer says:

    My guess is that a potential spike in volatility in the months ahead is caused by Greece, but that’s just a guess.

    Greece is the process of making it’s 750m Euro IMF debt payment, due tomorrow, but they had to rob local cities and towns and raid all means necessary to do so. In June, Greece has over 5b Euro in IMF & bailout fund payments – there’s absolutely no way they can make these payments without the final 7.2b tranche of bailout money. But here’s the real problem, even if Greece gets the final bailout payment, most will simply go to making the June debt payments with a couple billion Euros left over for July’s payments – then what? The 240b Euro bailout fund will be empty.

    Even if Greece can make the July debt payments, what about Aug? or Sept? This won’t end until Greece defaults or the Trioka restructures (forgives) some debt, but that will be political suicide for politicians like Merkel. This is getting close and really coming to a head, whether it be June or later this summer/early fall, something major is going to happen soon with Greece. Either another 2010 or 2011 event, where they get close to defaulting, only to be given more money to survive a bit longer, or perhaps the EU finally lets them go (or Greece leaves on their own and walks away from the debt obligations).

  28. Well Greece somehow came up with 750m and is making its payment.Where they got the money is “unknown”.Mr C did you open up on a loan office in Athens by any chance? Common sense would say there should be a relief rally.The bad news is now Greece has to come up with more $$$ to pay its pensions on June 1.The can isn t being kicked as far as it used to be is it?.Good luck all.

    • blackjak100 says:

      gerald, are you suppose to trade in the opposite direction of the arrow? If we had done that for the last 1-2 weeks, all of us would be rich!

  29. mjtplayer says:

    The news in the volatility world today was 4 massive upside VIX call contract blocks purchased today, each over 130k contracts in size. The trades were focused on the VIX June 17 strike and the July 23 strike. There’s no telling if the 4 trades were collectively 1 institution and/or fund, if they were then the 4 trades totaling over 520k call contracts would be the largest 1-day VIX option trade ever. The premium cost of these call options: $99m

    For a VIX spike like this, you’d need to see the Fed raise rates in June and/or Greece miss/default on a debt payment between now and then.

  30. alexhartley1 says:

    Looks to me more like we’re on target for a potential ‘e wave’ throw over by the 18-20th next week before starting an intermediate wave 2 down into mid-June. We’ll see how it unfolds.

  31. $$$NEWBIE$$$ says:

    Bull is venerable.

  32. blackjak100 says:

    Thx TC! Pullback had the looks of a wave iv which is complete or very close. Pullback looks like 8th wave and ‘a wave’ must be 5,9, or 13. Maybe 2068+55 = 2123 to complete ‘a wave’.

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