Monday update

SHORT TERM: gap down opening, DOW -108

Overnight the Asian markets lost 0.3%. Europe opened lower and lost 1.6%. US index futures were lower overnight as well. At 8:30 the NY FED was reported lower: -2.0 v +3.1, and at 9:15 Industrial production was reported lower: -0.2% v -0.3%. The market gapped down at the open to SPX 2077, and continued to 2072 before rebounding. The market had closed at SPX 2094 on Friday. After the low the market rallied to SPX 2087 by just past 11am. Then after a pullback to SPX 2081 by 11:30, the market bounced back to 2088 just before 2pm. A pullback to SPX 2082 followed by 3pm, then the market bounced to close at 2084.

For the day the SPX/DOW lost 0.50%, and the NDX/NAZ lost 0.45%. Bonds gained 9 ticks, Crude lost 30 cents, Gold rose $5, and the USD was lower. Medium term support drops to the 2070 and 2019 pivots, with resistance now at the 2085 and 2131 pivots. Tomorrow: Housing starts and Building permits at 8:30, and the FED starts its FOMC.

The market gapped down at the open today, sold off to the 2070 pivot (2072), then rallied to the 2085 pivot (2088), before ending the session at 2084. Today’s decline was a continuation of the decline that started last Thursday at SPX 2115. It is interesting that the market sold off until it hit last week’s SPX 2072 low, and then rallied. Another temporary double bottom? Since today’s SPX 2072 low was followed by a notable reversal to 2088, we will count the low as wave 1, and the rebound as wave 2, of Minute c. When the SPX 2072 support is broken to the downside, wave 3 should be underway. Short term support is at the 2070 pivot and SPX 2058, with resistance at the 2085 pivot and SPX 2099. Short term momentum rebounded to just below neutral from quite overbought this morning. Best to your Tuesday trading!

MEDIUM TERM: downtrend

LONG TERM: bull market


About tony caldaro

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103 Responses to Monday update

  1. magnus1234 says:

    I have four words for this w2: Max pain for all.

    It will be higher than expected.

  2. fotis2 says:

    Decision time looks like 3waves done EW and resistance should be kicing in around this level technically Daily CCI close inside 100= swing long thoughts?

    • stmro says:

      The weekly middle band is around 2095 so it could halt here, but the move from the overnight low looks like one endless ramp to me. Doesn’t look ready to stop and turn on a dime. Maybe at 2103 – 2106, between the 50ma and daily middle band.

      Also read somewhere that every FOMC under Yellen bar one has been positive. Bearing that in mind, i think we put in a high tomorrow.

      • $$$NEWBIE$$$ says:

        a wave 2 before a wave 3 is to fool and get bulls excited and sucker them in and than you know what comes next- a no mercy wave 3 down!

      • blackjak100 says:

        If the market character has truly changed, a down market after Yellen will confirm it. I think it has a shot to drop quite a bit tomorrow. More so than in the past anyway.

  3. Peter Sliney says:

    I think the market is shaking out weak or over leveraged bears. Typical before a big drop.

  4. H D says:

    VIX, I’m not trying to be a guru, I could be totally wrong, people are doing technical analysis/ patterns on the VIX like it has buying and selling. It’s a math formula, not even priced in dollars, that gives less than 70% likely hood of a directional move, either direction, so SPX options can be priced,,,, and some complain about EW accuracy. Ok, I’ve said my peace. Carry on.

    • uncle10 says:

      The vix moves with the market ( inversely). If you know what the vix is going to do then you know what the market is going to do.( most all the time, every once in a while the vix may be up along with the market or vice versus but not very much). Its not better or worse to look at the chart or technicals of the vix because they move together. If you look/watch you will see this is true. Move together is not the same thing as price levels or percentages. I think price levels are obviously much more important on the market indexs than price level of vix. The few price levels I keep in mind on vix is 12 handle (low meaning careful on longs),15 handle ( medium risk), and 20 ( a hold above 20 is a fast risky market, when it gets back under 20 after being above is lower risk usually good time for buying the market/stocks).

  5. Took some profits after Dow rose 200 points since yesterday’s buy-in as posted here yesterday and the night before.

    Drew/stmro, sorry you’ve found the market tough to decipher but I gave you all the info in advance, anyone here could have made the same profits I just did. This is too easy lol.

    • stmro says:

      Give it a rest dude. I don’t want, or need what you’re selling.

    • uncle10 says:

      nice call FRB. keep posting and trying to help people.
      I read you are thinking about a sub. service. something to think about:
      on more than one occasion I have know people that had great system that worked most all the time and very soon after they started charging people for the info it stopped working.

      • Thx Unc, I’ve seen that too. I am highly confident that my indicator has broken through to what truly moves/determines nearly every market move of 300+ points but I know it could stop working some day, that’s why I’m betting and winning huge while the getting is good. Did you see the DIA & SPY calls last Wed and, since yesterday’s low? I love this game!

        • uncle10 says:

          Hey FRB, no i didnt see them. Which strikes and which expire? Did you look into futures? I think you would like them given you can buy or sell anytime. Say when you have a buy signal and futures are way down over night or am you could buy and not have to wait for the market open after they have recovered most of their loses.

    • The guy with unlimited funds to absorb unlimited losses is back. 😀
      Let us know when your website is up with a track record (longer than a week) of verifiable results (i.e. audited showing gains and losses). Until then, just another dude on the web. 😉

      • Funds not unlimited but growing nicely. Losses very rare. A week? I know you’re fairly green here but I’ve been here a while. Verifiable – just look back at my past posts, all in real-time and BEFORE the predicted move, why fight the facts? Wish you the best but no need to settle for small returns, this is a game that can be (has been) beaten consistently if one simply knows how to correctly decipher the markt’s data.

    • reddragonleo says:

      FRB, I can see another push up as I do think nothing will be said about raising interest rates tomorrow after the FOMC minutes are released. But I think we’ll top out closer to your 500 Dow points up then the 1000 points up. Most likely we’ll be just under a double top later this week.

      • Very possible Red, I too am leaning toward +500 vs. +1000 this time around but will let my indicator do its thing and wait for the next Sell signal. Tomorrow should be fun.

  6. $$$NEWBIE$$$ says:

    Seatbelts on, market is about to Drop VERY hard! Best of luck to all!

  7. uncle10 says:

    Hey TBoys. I saw you posted that CNN fear/greed index yesterday. That thing is going to nail the bottom again!! 😉

  8. mjtplayer says:

    SPX & DOW have now both tagged the 50% retrace – both on very light volume.

  9. uncle10 says:

    Thanks Tony.
    Everyday usually more than once per day, there is a stock that goes up a lot based on false and untrue news report from one of the major news outlets. Someone or more likely a group of people are making a fortune on this little side game.

    • tony caldaro says:

      up and down
      did you notice Avalanche?

      • uncle10 says:

        I dont think that fall was due to a false and untrue news story. looks like a bad trial for a drug they working on? Im talking about during the trading day a stock flies up and gets halted for volatility and it is because a major news outlet reports an untrue false story about someone that is going to buy them. Happens everyday. Who ever is doing it knows how to not get caught.

  10. Hi Tony!
    Is there a pos RSI(5) divergence in Dow daily?

  11. fotis2 says:

    This slow grind up must be a bit unnerving for bears.

    • Nothing different then the last 6 years. Greece will default interest rates will rise in sept. Yet Bulls Jack it up. Par for the course. Good luck. Over 2003 as a bear I would be concerned

  12. INDU, SPX, DAX & CAC all look to be in 5 of C of this wave 2. Then wave 3 down. Now for the curve ball. What if the correction ended overnight or in the cash market yesterday? Daffy DAX made it down to 10798 earlier today which is not that far away from a host of targets in the 10600-10700 area and is now back above 11050. The Greek saga has not improved yet the market doesn’t appear to care today and therefore why should it care tomorrow. INDU made a lower low yesterday. The SPX did not but a marginal failure of a C wave is not extraordinary. 5 waves down is 5 waves down and maybe that completed the whole decline. The market could be in a wave 3 as part of an impulse right now instead of a corrective wave C. Food for thought. In either case the market will have to drop back when the wave is complete. The nature of the drop will give us our clues.

  13. Okay, first gap filled. Next one at 2107’ish. Hmmm…

  14. $$$NEWBIE$$$ says:

    wave 2 finishing up here withing the next handful of points, soon wave 3 will start target is 2010 on s&p

  15. stmro says:

    The US markets have been incredibly frustrating to follow over the last few months. Breaks out of one range only to fall into another. Compare and contrast that to the DAX, which moves 6-7% in one direction with barely a pit stop – a swing trader’s dream.

    If this is what a QE-less market looks like, they need to turn the spigots back on. I want epic bull rallies and equally epic corrections!

  16. stmro says:

    2070 held for the 3rd time today (in overnight). We’re heading for 2103 next. Whether we break up or down might be event driven.

  17. mjtplayer says:

    Another day where someone forgot to tell the Greek bond market that we’re rallying. Greek 2yr notes up over 100bps today at 29.92% and now testing the critical 30% area from April’s high.

    I’ve mentioned several times that the 30% area is critical resistance, as there’s nothing but “open space” and uncharted territory above 30%. The exact high from April was 30.01%. Today’s intra-day high: 29.983%

  18. MR C what do you think of Trump? He sounds good…he s got the Perot style down pretty well.

  19. budfox9450 says:

    The DJ30 is up 84, the DJ20 is down 32.
    What’s wrong with this picture?

  20. rc1269 says:

    boy, what if the Fed raised rates tomorrow. i wonder…

    • tommyboys says:

      Sure hope they do rc but I doubt any move until fall. We need the uncertainty of – an uptick in rates = certain market demise – taken away. History shows the first few moves higher are bullish for the market, it’s just those last couple that screw everything up. The last couple are likely a few years down the road – jmho…only the best to all!

  21. mjtplayer says:

    All eyes on the Fed tomorrow and EU Finance Ministers meeting on Greece Thursday. Unless there’s a surprise headline or statement, today should be relatively quiet.

    Oversold conditions getting burned-off with yesterday’s intra-day rally and today’s bounce. The VIX is acting very well, closing near the highs yesterday with the SPX up over 10pts off the low – that’s excellent price action. Market up slightly today, but the VIX is flat and holding in the 15’s.

    This is the best price action I’ve seen in the VIX in months

    • H D says:

      The vix is only measuring the price of index options (making puts expensive). During OPEX week, I’m not sure there’s much to interpret at 15%? pricing 2100 or 2168 $SPX
      What’s your take?

      • H D says:

        *2000 (not 2100)

      • mjtplayer says:

        My comments on the VIX weren’t exactly focusing on the level, but the price action. 15% is relatively low, but not over the past 3 months of suppressed volatility it isn’t. Each and every time the market has rallied, even intra-day, the VIX has been smashed. Put buying drys-up and traders come-in and buy calls.

        Yesterday and today have been different, the SPX rallied over 10pts off the morning low, but the VIX not only remained near the highs of the day but actually closed there. Same story today, a morning rally in stocks but no sell-off in volatility, it’s just hanging in the 15’s as put buying continues through the market bounces – quite different behavior than over the past few months.

    • ariez5 says:

      MJT, Always good info from you. Thanks.

  22. I find it interesting that the 2099 resistance level is right at the 61.8% fib level. Might be a good short entry point.

  23. Thanks TC; I would like to see 2040 and perhaps even 2020 to help me establish another position. Come on bears, get to work!

  24. They can t break support so it must go up….have a profitable day everyone.Amazing how important 2070 must be to the algos and their programmers–the Central Bankers.

  25. 90 minutes before the US open the US futures again find themselves in the red. What’s more the 1st wave down could still be play. Yesterday’s bounce was only a 40% retracement on the SPX and whilst there’s no reason why a wave 2 can’t be only 40% it simply doesn’t look right having halted at the prior 4 and being relatively short in time duration. So in my eyes either the market has finished wave 1 overnight and is in wave 2 up or its dancing around in yet another 4 (4 of 5 of 1) which, if correct, means yet another lower low before sucker rally wave 2 can make it’s move.

  26. Dow Jones fulfilled our primary target. So today if respect the support ……..
    complete analysis on the link below

  27. ABchart says:

    Thanks Tony and all posters!


  28. I m going with the theory of a bullish last part of triple witch week…back over the 50d and slightly past our previous high.Then–more fun to the downside.All pretty well contained right now unless Yellen presses the sell button by mistake…

  29. Posted Wed & Thur that I took some profits after the big pop after my Strong Buy signal at last Tuesday’s close. Posted update here yesterday saying I’d be buying back in at Dow 17750-17700, low of the day was 17698.42 – closed nearly 100 points above the low at 17791 … like I said, easy money.

    Drew/stmro, go back and read my past comments, all posted in real-time, BEFORE the move, rarely wrong. The facts speak for themselves. Don’t resent/envy it, BENEFIT from it while you can.

    • reddragonleo says:

      Good Calls FRB…. I could see one more dip tomorrow morning and then another rally into FOMC and probably topping on Thursday or Friday. I’m not sure how high but I don’t think it’s ready yet to make a new “higher high” of any significance. Probably a low high but enough to scare the bears and get the bulls all long.

      Next week is a very bearish week and I do think that will start our move down to take out the 2040 low by some amount. Best guess is 2020 area but it’s all about how many bulls’ buy stops are below 2040 I think… as well as how many bears they can get short. They need a full bus of bears if they want to then squeeze back up to a new higher high into mid-July I think. But one day at a time…

  30. Food for thought on Top of Primary 3

    If you look at Tony’s big picture SP 500. 666 to 1370-1 1370-1074- 2 and 3 is 1074-xxxx right?

    Well at 2130… that is 150% of 1…. and it stopped cold in the tracks there right?

    Was that it for Primary 3?? Or will be do a 161% which is about 2207??


    • hooloo1957 says:

      I thought you thought that the October 2014 low was primary 4?

    • blackjak100 says:

      I think it stopping cold in the tracks at the 161.8 % extension of the 2007-2009 decline is more important than the 150% of 1.

  31. esvxm says:

    Thanks Tony for the analysis!

    S&P 500, Dow Industrials, NASDAQ 100 and the German DAX next key levels and the pattern formation…

  32. Alan Eckert says:

    A similar setup occurred in early Aug. 2007 and it fell below support then but within a few days rallied off that low. I still think right now we should drop to test SPX 2020 at the gap and breaking below the 200 SMA. Then it would be a matter will it rally to 2150, or continue a bit lower and then rally to a lower high? It is likely to rally to 2150, so we wait and see.

  33. It looks as though the A-D ratio may want to fall to it’s March 10, 2015 low of 98, 500. It is currently at 100, 600.$NYAD

  34. Possible double bottom on the daily Dow Jones.

    chart link

  35. Interesting. We double bottomed in March around 2039 then April 2049 and May 2099 every time we rallied. Is today 2072 different?

  36. fotis2 says:

    Many thanks mr.T so bellow 2070 short.looking for swing long once daily CCI closes above 100.GL to all

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