Monday update

SHORT TERM: rally continues, DOW +26

Overnight the Asian markets gained 0.5%. Europe opened higher and gained 0.5% as well. US index futures were lower overnight, and the market opened two points below Friday’s SPX 2123 close. In the opening minutes the SPX dipped down to 2120, and then began to rally. At 10am the NAHB was reported lower: 54 v 56. The market continued to rise throughout the day, with small pullbacks, until it hit SPX 2132 at 3:30. Then it dipped to SPX 2129 at the close.

For the day the SPX/DOW gained 0.20%, and the NDX/NAZ gained 0.50%. Bonds lost 21 ticks, Crude slipped 10 cents, Gold was flat, and the USD was higher. Medium term support remains at the 2085 and 2070 pivots, with resistance at the 2131 and 2198 pivots. Tomorrow: Housing starts and Building permits at 8:30.

The market opened a bit lower today, dipped to SPX 2120, and then headed to all time highs in the SPX/DOW. The SPX also poked above the upper trend line of the diagonal triangle we have been tracking for Intermediate wave i. This short term count is beginning to reach its upside limit, which we believe is the 2131 pivot range (2124-2138). Should the market clear this pivot range we will be forced to look for an alternative short term count. For now we still expect this multi-month choppy uptrend to be topping out soon. Followed by a short-lived correction of about 5%. Project, monitor and adjust. Still an uptrend in a bull market. Short term support is at the 2085 and 2070 pivots, with resistance at the 2131 and 2198 pivots. Short term momentum hit extremely overbought today. Best to your Tuesday trading!

MEDIUM TERM: still an uptrend

LONG TERM: bull market


About tony caldaro

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138 Responses to Monday update

  1. uncle10 says:

    Thanks Tony.
    Classic Big Down set up.

  2. zepfan123 says:

    Well a day like today makes you want to not even look at the market for a couple of weeks. I see the Dow is green but it’s a very low quality rally with the S&P,Trannies,COMP in the red..among other indexes. I hope we haven’t already started a so-called summer doldrums period..but being Mid’s possible.

  3. sibyn says:

    DAX RCH goal 10158

  4. berniebaruch says:

    Now, would be a good time to start an afternoon leg down

  5. scottycj1 says:

    Trannies and NYA still RED

  6. stmro says:

    Have to say, i am very quickly losing conviction in the bearish case here.

    The Dax has blown through the daily 20 SMA, 50 SMA and major previous resistance / support levels in 2 trading days. With the ECB becoming even MORE accomodative, this thing is almost certain to run to ATH in the next few weeks.

    Given the above, i expect the US markets to tag along for the ride and blow through the 2131 pivot. What’s especially telling is that with a sharply higher dollar, we’re still holding gains on the day.

    Hope i’m wrong as i’m about to be stopped out of shorts, but it’s tough going fighting these CBs :).

  7. blackjak100 says:

    Anyone think we break out of this 4.88 pt trading range? If it holds, would be one of smallest % ranges of all time.

  8. $$$NEWBIE$$$ says:

    Funny Business- Possible Catalyst?
    Iran cargo ship headed to Yemen has ‘linked up’ with 2 Iranian warships, Pentagon says – @Reuters
    Pentagon says its monitoring Iranian ships ‘every step of the way’ – @Reuters

  9. GM all, ES, E wave potential, 2057-(21)(34)= 77, Some interesting numbers. They don’t even try to hide it anymore,,,

  10. Thanks TC; will be quite profitable if turn is correct. I didn’t like the action so I am out. Small profit but you can’t go broke taking a profit; or so I’ve heard.
    Buy above 2138.08 with Stop 2116.18
    Sell below 2103.10 with Stop 2124.95
    Sidelining it for now…

  11. berniebaruch says:

    Hope is both a great thing and a dangerous thing. RUT getting a little weaker. Possibility of a red spx day in the offing.

  12. Thus far, my US indices volume research reveals that volume YoY is up between 5% to 16% depending on the indice. With May volume running red hot between 10% to 38%. SPX having the lowest volume rise and DJT having the highest volume rise. And if you recall during earning calls al the WS said that trading volume was up YoY. Question is, is this a sign of accumulation or distribution? We know buyback have been running rampant for several month now, so are the corps buying their exec’s shares back so they can get out before the big drop?

  13. scottycj1 says:

    Corporate insiders make money exercising stock options. The higher the stock price the better. They don’t care what it takes to raise the price. They exercise, make fortunes then leave with their “Golden Parachutes”. The next group of executives gets stuck with the problems. All based on the US Congress model. Get yours while you can. There is no long term planning and no thoughts about the viability of the “Company” when they are gone.

    • robnaardin says:

      “Star light, star bright,
      The first star I see tonight;
      I wish I may, I wish I might,
      Have the wish I wish tonight.”

      I wish the world was run by competent sociopaths, instead of incompetent ones. HaHa

  14. Important points I think are the dollar is close to filling the second of two gaps (currently at 25.04 UUP) at 25.20.Also Transports rallied 200 points from a critical level(8520).Looking for reversals/and or breakdowns.
    The ECB coming in to manipulate gold down and the dollar higher and the DAX as well has panic written all over it.Why front load except to totally knock gold down from a breakout level.What gold does from here will be interesting , to say the least.Good luck all.

  15. zepfan123 says:

    Just saw the headline below on
    Economy-May 19, 2015 12:36PM GMT
    By Jamie McGeever

    Investors cut U.S. equity exposure to lowest since January ’08,driven by worries about a string of disappointing U.S. economic indicators and the strength of the dollar.
    Last week we supposedly added 223,000 jobs In April taking the unemployment rate down to 5.4%,back to the 2004 levels. Somebody is lying big time.

    • $$$NEWBIE$$$ says:

      Zep, be glad you are just seeing/realizing the lies NOW. I recognized this years ago and have paid the price.

      • zepfan123 says:

        Well I was short the S&P 2 weeks ago thinking we’d get at least a 10% pullback into June. Took a hit on that trade of course. But as I said yesterday,,no matter what the market does here in 2015,I won’t be buying anymore stock for a long time. They may be able to manipulate some stock prices higher still to keep the Dow higher here..but I see absolutely no bargains AT ALL out there based on fundamentals. So for the rest of 2015 anyway…I’ll either be on the sidelines..or trying smaller sized short term swing trades on the key indexes with stop/limit orders. And if we just keep mysteriously drifting higher for a year or two least some of my long term portfolio stock should go somewhat higher too. But thats the only way I’ll be participating on any rally action from here on.

    • mjtplayer says:

      Corporate buybacks are driving the market higher. Retail is disinterested, central banks purchases from the ECB or BOJ are overrated, they benefit those markets. It’s corporate buybacks that continue to push the market higher, just like the 1920’s. This is one of the reasons the great depression was so bad, companies used their cash to buyback their own stock plus take-on lots of debt to additionally buyback stock (sound familiar). When the economy turned and profits turned to losses, they didn’t have the cash to survive and the bond market collapsed due to defaults.

      Same story today? Perhaps, most of the cash on balance sheets is trapped overseas, US cash is being spent on buybacks and corporate debt issuance has exploded – to also buyback stock. If companies get in trouble, they’ll have to use cash from overseas to help support themselves, but that will be halved by taxes (39% Fed plus applicable state corporate taxes, 11% in CA for the tech companies like AAPL).

      Financial engineering helps to boost stock prices and the illusion of a healthy market in the short-term, it’s a lousy long-term plan.

  16. gtoptions says:

    Thanks Tony
    SPY ~ Pre-market gap up completed AB=CD target. Complete ‘e’ wave? Should find out soon enough. Pre-market gap & fades over the last several weeks have led to further weakness.
    GL all

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  18. rc1269 says:

    So let me get this straight. The ECB denies denies denies that there are or could be any liquidity issues in the markets they’re buying. Then they announce they will front load all their summer purchases into May and June, because… liquidity in July and August won’t be sufficient for them to do QE.

    I’d say if you have to take the entire summer off from doing what you’re doing that’s a pretty clear sign that a) there in fact is not enough liquidity in that market for you, and b) in this case, you’re a liar

    gotta love central bankers

  19. ko68 says:

    Think too many are calling a top here at the 2130-area..

  20. Well we got the spike higher to take out the short stops, but I’m not that sure the bears flipped long.. Either way I’m looking for a short entry at 2135ES today, and think it should yield at least 30 points, but also has the potential to mark the summer high.. That would be be probable with a move below 2078ES from here.


  21. gtoptions says:

    Thanks Tony
    Great info on this board from all the posters. Won’t find a better place to learn about the markets the economy and investor sentiment and behavior.
    SPX ~ 1.272 Fib ext. confluence @ 2142, just above your Pivot range. Agree, price moves above this level and I would add a To The Moon (TTM) wave in their somewhere. 😉

  22. nardobeme says:

    Golly, guess I’m not a good trader as I did not take a position in $kre today… 🙂 Icahn will of course sing high praise of Apple as he has vested interest. Good grief. Yes, all stock traders short, mid, and long term make predictions. If they did not, their instrument of choice would never make any type of return. I exited my longs, ironically at the high. Guess I’m a top picker… Took positions in $vxx calls and naturally, $spy puts. I’m only looking for a pullback to the 2120 area at this time, as I dare not challenge the strength of Mr. Market… GL all.

  23. reddragonleo says:

    Hey Rabbit… you still around? I made a nice logo for you.

  24. torehund says:

    Thanks Tony, we are now prepared fully with all your updates, an emerging trend could develop, we just need the USD to continue like today…

    These bees contribute an amazing 30 percent to worldwide food production, are they prepping (leaving earth) for colder times to come ? Do they already know something that politicians don’t ?

    • torehund says:

      ..Just one more… Polish Zloty vs Euro. Look at that huge gap that screams to get filled..The idea of this trading opportunity I got from M.Armstrong, and the chart looks ripe down goes the Euro.

  25. bhupal777 says:

    Thanks Tony.
    Rest all – If you are a good trader you should have entered $KRE break out today with a defined risk. After seeing all the market predictions that people are making on this blog regarding top I have a feeling that market is slowly grinding up taking money from all the PUT buyers and depositing into traders who are long. No offense to anyone but ask any successful trader who traded more than 2 or 3 decades and his/her answer would be they have never made money by predicting the future. Good luck.

    • blackjak100 says:

      Thanks F..was well aware of the 161.8% ext off of 667 at 2138. What’s funny is from the c wave start @ 2086…wave i = wave v = 2137. However if this ED is going to have a typical look, I would like a high volume spike over these levels towards 2150ish. We should see this in the next couple of days if it’s a typical ED bringing P3 to an end.

  26. thanks tony.

    Everyone keeps saying this market is about to crash, what a load of crap.

    Did anyone see CARL ICAHN today.

    Have a look at this guy CARL ICAHN, famous US BILLIONAIRE in the US, his calls on the market have been killer and ridiculously accurate. See here. ==>

    He is saying we are about to ROCKET higher on APPL, and he knows a few secrets there!

    And to think I listened to those dummies from CNBC say the EARNINGS season was gunna be HORRIFIC!!! those buggers….I have been had yet again!! Pack of liars….pissed me off

    • reddragonleo says:

      Bold call there Gerald. I like it. August should be a very ugly month in my opinion, and possibly the month with the next “False Flag” created by our lovely government.

  27. Kazim K. says:

    Thank You Tony for an European Update
    I think in Short Time we will see something like that

  28. zepfan123 says:

    Tony..thanks for the historical 130 year Dow bull market data. An awful lot of of bull left if we keep going thru 2017..or even longer…but history shows it’s not impossible. And thanks for this forum and all your work.

    • pooch77 says:

      bouraq,no rut??

      • bouraq says:

        A bit rushed today sorry. Tomorrow definitely. It broke up the potential bear flag I posted in the weekend and forming an ascending channel targeting 1263.

        • 7dayyss says:

          That was roughly my target bouraq, 1261. I sold 70% of my position today and will see for tomorrow. Thanks for the continued charts.

          Thanks Tony and for all the special report updates! Was looking forward to the commodity update, will be interesting for a few years maybe.

        • pooch77 says:


  29. uncle10 says:

    Tony, you ever think about how much money is created everyday in the world? There is no way to know for sure and I think the estimates are too low, but either way the numbers are mind blowing.

    • tony caldaro says:

      Every time a bank makes a loan money is created.
      Every time a central bank buys a bond money is created.
      Every time we are in a bull market money is created.

    • reddragonleo says:

      Money isn’t created… only DEBT is created. MONEY was taken out of the system with the creation of the Federal Reserve Note, which ISN’T money but simply an IOU that you can use to pay a debt. Real money hasn’t been around for a very long time.

      Kennedy created a Silver Certificate Dollar just before they killed him… which was the primary reason for killing him in the first place (there were other reasons too). His paper dollar was real money as it was backed by silver.

      But the Bushes, Rockefellers, JP Morgans, and many other criminals wouldn’t stand for real money in the system as it would put them out of business (they controlled and created the Fed), so they murdered him.

  30. Since my pre-mature 2126 P3 top calling has been taken out, as promised below is my dart board, feel free to enjoy game of dart at your leisure.

    Nonetheless, I’m still of the opinion that a very significant trend reversal is within striking distance and will continue to accumulate more shorts to my short position from last week. As I mentioned before History is on the bears side.

  31. JeffMilano says:

    Thanks Tony, for your pivot. Works wonders. Newbie, as I read all the comments, we hope that the MKT goes down. You have lots of people that are with you. But when it comes to the MKT that does not matter. what matters is the tape. DO NOT FIGHT IT. IT COULD BE LIKE A KNIFE AND MANY OF US WHEN WE STARTED HAVE FELT THAT KNIFE. Tony can pull out a new count of whatever. So money management becomes key, however we are with you because I think most of the people on this board have a heart and are caring. Most people on this board are really good like TONY C, ABchart, Buddyglove, JIM D.C., uncle, matador and zep, jim x,KV,BJ100,. They are also very caring.

  32. uncle10 says:

    Thanks Tony. Sorry about all the post. I’m trying to help. Wall Street designs and sells stuff that helps no one and is of no use other than to get more profit and money from the unknowing public.

    • tony caldaro says:

      This is true.
      While leveraged ETFs are fun to day trade they move quite quickly in both directions.
      However, the lifetime expectancy of a 3x ETF is about 3 to 5 years. They are just money traps to nowhere. Especially the ETNs.

      • hkloon says:

        You mean after the 3/5 years no more value? Think tvix is etn… i looked at historical chart for 3x, it is good trade within a month or days… the trend needs to be strong enough to even trade… like last october… just studying them without any trade

  33. kvilia says:

    All bets are off. Tony has been inclined that SPX will revisit 2040 or a while, and although markets fought hard, they cannot beat the master. I will not get in his way either, so bet is on probability makes me short with major stake in RUT leveraged DSRSX and little UVXY in cash account. Cheers to all and special thanks to Tony.
    Newbie – are you ready? I told you a few weeks ago, around $8 or so was my view back then on UVXY.

  34. berniebaruch says:

    Is today one of those days when the vix futures get rolled over in UVXY as it is down 6 percent while the vix is up 3 percent?

  35. berniebaruch says:

    Curious minds ask “What is the catalyst to sell”?
    Lots of folks calling a top. Never that easy.

    • $$$NEWBIE$$$ says:

      who would’ve thought market could go almost straight up for 6 years? Anything can happen.

      • zepfan123 says:

        You know what the market did in the 1990 ‘s after the 1987 crash..right ?- Basically went straight up for almost 11 years straight making over 1000 new all time high closes before it finally topped out in 2000 for a while. Personally I hope you’re right about a big top being right around the corner..but never say never.

        • crazyworld2013 says:

          imo .. 1990’s was a totally different era, economy was growing, people had good jobs. can we honestly say the same is happening today???

          • zepfan123 says:

            It was a different time with different circumstances for sure…but still most analysts that were respected back then thought the ’87 crash was a return to normal valuations after the froth of multiple new all time highs up to a nose bleed ATH level of Dow 2700 back then..which would go back in trading range for the next decade well under that level. Sounded logical to 99% of the public back then. Horribly wrong.- Nobody at all thought that huge crash of about 40% would actually be a huge springboard taking the Dow up almost 5 times higher that it had ever been before in only about 10 years time.I wasn’t old enough to trade yet..but I had relatives that were in the market and after the Dow hit new ATH’s at Dow 3000 and 4000 in the early 90’s,most analysts called for a top almost daily for several years to come..all the way up Dow 12,000 when it finally really did top our for a good while.- And I m not predicting we are in anything like that now…but the market can foll traders a lot longer than they/we ever think is possible. I don’t know..2 weeks ago I pretty confident we were on the cusp of a 10 to 15 correction soon. That scenario isn’t looking too likely to me right now with the Dow,SPX and COMP right in new ATH territory.
            But whatever happens here..I certainly won’t be buying anymore stock in anything for a long time to come.

          • tony caldaro says:

            Can introduce one comparison. Throughout the entire 130 year history of the DOW there have only been three bull markets that have lasted longer than 5 years: 1921-1929, 1987-2000, and 2009-2015 so far. The most likely time target is 2017 for this bull market. The next would be 2022. We have not seen any euphoria like the late 1920’s and late 1990’s yet. Until that occurs many will be calling a top on every correction. When the last top caller capitulates and dives into the market only because its going parabolic then it will end. Until then it’s a bull market.

          • JeffMilano says:

            GREAT TONY. AMEN

          • Tony, what was the main liquidity driver of the 1921-1929 Bull Market? I have not done my research on the 1921-1929 Bull Market but my guess is that it was the public’s massive cash hoarding vaults during WWI where unleashed on the market soon after the war was over, no?

            IMO, the 1987 – 2000 and 2002 – 2007 Bull Markets main liquidity driver was Mom and Pop 401-k participation mania from 1984 to 2006 as participation rocket from 7.54M participants with $91.75B in assets in 1984 to 50M participants with $2.7T in assets by 2006.

            Also IMO, I think the 2009 – TBD Bull Market main liquidity drivers are CB’s QE/govts sovereign funds/Corp buybacks/Pensions/Insurers.

          • And in those eras, how many of them in the 6th year of there bull run had 0-1 percent GDP growth for the 1st half of the year. What was Germany’s 1st qtr GDP withe qe .7.
            In my opinion qe did what it had to too stop the collapse. Alls it’s doing now is making the stock market go higher. I’m sure most analyst would not have predicted the economy to be this slow back in December, nor china. Will this bull last until 2017 and go to 2600 for P3 then even higher, can’t see it, but doesn’t mean it won’t.

          • tony caldaro says:

            some new fangled thing called consumer credit was the driver in the 1920’s

      • for what its worth, If the market chops up thru 2065-2070 without a correction under 2000 over the next few weeks, I think your right and P4 will start. If we head lower from hear tonys right and will target 2000-2020. A 5-6 percent pull back and then off to new highs.

    • CB says:

      funny thing is that some people may actually start buying right here (or after the OB condition is eliminated) because of this,PWTADANRBO%5BPA%5D%5BD%5D%5BF1!3!!!2!20]

      • robnaardin says:

        Or maybe this, CB…

        • CB says:

          Nice one, Rob….well, let’s face it , the $TRAN is looking now a bit like a guy walking down the street with a giant boa constrictor wrapped around his neck.
          BUT this market knows how to squeeze (almost anything) higher 😛 , doesn’t it? So…
          I like your twins also (the $Nasi and the $Nysi) .. ..looks like they’re still climbing the wall of worry as well… 🙂 but we’re OB, and Janet is speaking on FRI, right?

  36. CB says:

    Thanks Tony

  37. fotis2 says:

    Thank you kindly sir interesting day ahead tmrw lets see and GL.

  38. Thanks Tony. Bought some SPY puts today at the 2130 pivot.

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