Monday update

SHORT TERM: gap up opening starts week, DOW +104

Overnight the Asian markets gained 1.4%. Europe opened higher and gained 3.1%. US index futures were higher overnight, and the market gapped up to SPX 2123 at the open. The market had closed at SPX 2110 on Friday. At 10am Existing home sales were reported higher: 5.35m v 5.04m. The rally continued until 11:30 when the SPX hit 2130. Then it started to pullback. The pullback lasted until 1:30 when the SPX hit 2121. The market thenย bounced to SPX 2125 by 3pm, then dipped to close at 2123.

For the day the SPX/DOW were +0.60%, and the NDX/NAZ were +0.70%. Bonds lost 27 ticks, Crude added 20 cents, Gold dropped $15, and the USD was higher. Medium term support remains at the 2085 and 2070 pivots, with resistance at the 2131 and 2198 pivots. Tomorrow: Durable goods at 8:30, the FHFA housing index at 9am, then New home sales at 10am.

The market gapped up at the open today for the third time in the past four trading days. During the rally the SPX past 2127, then continued on to 2130 before pulling back. This suggests to us, after months of choppy action, the market is impulsing off the recent SPX 2072 double bottom low. Should this be correct, we should get an uptrend confirmation quite soon. Short term support is now at SPX 2109 and the 2085 pivot, with resistance at the 2131 and 2198 pivots. Short term momentum hit overbought earlier today then backed off toward neutral. Best to your trading!

MEDIUM TERM: uptrend likely underway

LONG TERM: bull market


About tony caldaro

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100 Responses to Monday update

  1. I’m starting to wonder if the main reason why the Fed is advocating rate hikes at all is mainly because they are becoming concern that the market is going to force the Fed to raise rates eventually, and therefore, by advocating “Rate Hike is Coming” the Fed wants to look like the rate hiker leader rather then the follower. Nonetheless, the Fed will continue to hold off on the First Rate hike for as long as the market can allow them to wait. Just speculating here.

  2. mjtplayer says:

    Can’t believe how light the volume is, crazy. Yesterday was extremely light volume, today is even lighter and on pace to be one of the lightest volume days YTD in both the SPY & QQQ.

    Testing the highs, yet again, on absolutely no volume both yesterday and today.

  3. berniebaruch says:


    UVXY at 32.60.

    Buy, Sell or Hold (or have you sold)?

  4. llerias7 says:

    Tony, it seems that DAX and Eurostoxx had just entered in the Int.V of major 5?! Right?;

  5. fotis2 says:

    DT confirm on hourly target gap 2114

  6. I know that some of us are starting to sound like a broken record. However, now we are hearing about 2 interest rate hikes this year. At this point, bears don’t even need the Greek deal to fall through for the market to go down. Even if they come to a deal it will go down. If I may dare to say we have topped yesterday. IMVHO we have started Wave 3 down. Other reasons as well including no fear factor.

  7. nardobeme says:

    Cautiously short since 2124; target would simply be to fill yesterday’s gap should supply/demand warrant it. Also, picked up some puts on $FB at 87,50 for quick play. Taking a look at $AAPL charts this am, it’s possible it needs to target the 124 area before a substantial rally unfolds.

  8. H D says:

    2121 SPX big price level, IDK if it’s as significant as the VIX or Greek news but SPX is trading same prices for months now, 6 year bull market may need 6 months of distribution. 2134, 2121, 2115, 2110, 2104, 2094, regardless of any indicator, news or dancing bear GIF’s… :mrgreen:

  9. zepfan123 says:

    Ugly sloppy weak looking market up here just under all time highs(SPX 2130.82) for about the 20th time in the last 6 weeks.- I guess we still have to see if the greek debt garbage getting a spit & chewing gum short term resolution will get us up over the current ATH of 2130…which it might..but I won’t be a bit surprised if this turns into a “buy the rumor-sell the news’ situation.-But I’m not throwing on any new trades here..long or short with “this” look. I’m giving the chance for new highs the benefit of the doubt a couple more weeks just in case.

  10. mjtplayer says:

    Spot VIX just pierced the lower BB and has been compressed as much as one can imagine, now in the low-mid 12’s. This is only the 3rd time over the past 8 months that the VIX has broken down into the 11’s (early Dec & late May), both of the other instances marked the low in the VIX. Also, this is the first time since early Dec that the VIX has noticeably pierced the lower BB.

    Not sure what will spark the VIX, but the set-up is there for a rip higher in the VIX.

    • VIX also closed a gap up from a bit more than a month ago too, while (so far) holding the earlier May lows with the S&P (so far) holding the May highs. They tend to hit highs/lows the same week, or else the VIX hits lows 3-4 weeks before S&P hits highs. That’s held true for 18 months or so at least.

      • mjtplayer says:

        If the Greece deal goes through and the Supreme Court doesn’t throw-out Obamacare subsidies, then I could see the VIX smashed into the 11’s heading into the July 4th holiday weekend. That said, if either of these issues don’t go as planned in the days ahead, then there’s your VIX spike.

        • I’m told there is another much older gap in the VIX in the 10s from something like a year or two ago. I think that’s a bigger target for bulls.

          • mjtplayer says:

            Yes, 10.82 from July 3rd, 2014.

            If all goes as planned with Greece and the Supreme Court, then it’s possible to tag that level as the spot VIX is always smashed to crazy low levels heading into holiday weekends. Year in and year out, you typically see the lows in the VIX on or around: the Friday before Memorial Day weekend, July 3rd and X-Mas eve.

            If the VIX were to be smashed down to the level, it’s a buy all day long. I’m going long VXX right now, for a short-term trade in case we get a VIX spike in the days ahead, but I will not hold it into the weekend, just a couple days.

          • zepfan123 says:

            Back in 2006 and 2007 during the big rally the VIX spent a lot time in the 9’s. Then it got all the way to as high as 89 once during the 2008 correction period.

          • H D says:

            what causes a gap in the VIX?

  11. GYN LAB says:

    Good day Mr T and all!
    w5 from 2109 was cut short at 2130, if that was Minor 1 of Int iii, I am looking to go long around 2101 (.500) or 2094 (.618), also considering DAX long at 11211 or 11111 as these fibs should offer low-risk entry points which could have big rewards!

  12. Thanks TC!
    Bears running out of time here given proximity to July.

    Long from 18JUN
    Stop 2107.26/2110.67
    Optimal Target 2155
    Longer term Target clustering at 2200

    • zepfan123 says:

      Maybe..but we are going to have to blast through to some serious back to back new all time highs for it to be meaningful this summer. But your SPX 2155 target by the July 4th weekend would probably qualify in my book.

      • True. But we could just chop around range bound as well. And if TC’s numbers hold sway, then that seems more likely to me (or there’s some serious stuff on the horizon which could necessitate a new QE; and that would be a sight to behold and my long term calls would keep me in Guinness Stout for quite some time). ๐Ÿ™‚
        I don’t go too far out in prediction land as that is not what my system allows (or at least hasn’t been too successful at).

  13. fishonhook says:

    We are living in a CB driven end of a cycle madness.

    Some people say there is no euphoria. Well the Nikkei has gone up 5% in two sessions on Greece’s temp bail-out.
    China opened down another 4% due to weak PMI numbers and then the rumour spread that the CB would encourage stock speculation to help prop up the economy. They already have a couple of Triillion on margin and they end up over 2%. A 6% swing in a day based on rumours.
    Lunacy. But not a market one cans tay short for long

  14. The NYSE Highs – Lows index looks as though it wants to go vertically up to new highs. It is noticeably stronger than the NYSE A-D line. I usually think of of the H-L index as a lagging indicator to the A-D line, but now it is either leading the A-D or it will have to come back down fairly sharply so that it will at most just “coincide” with the A-D.$NYHL

  15. blackjak100 says:

    Trade above 2130 suggests we completed a 1-2-1-2, but the futures suggest this is not a third of a third starting. I still think we need to see trade to 2100ish to complete second wave expanded flat before third wave begins thurs? We must close red today if this scenario is playing out. If we continue to chop sideways without taking out 2130, I have count for that too.

  16. $$$NEWBIE$$$ says:

    where would market be trading if it didn’t gap up 90% of the time?

  17. And so the pattern again worked as charm

  18. fotis2 says:

    Thanks Tony awesome! what a sneaky Market.Daily CCI (daily close bellow +100) on Friday sell trigger did not work was hasty and shoulda waited for a gap out and close back bellow +100 for a more sure thing.Ok no train smash will catch it next time right now no setup.Again lesson learned for the upteenth time:Don’t Sell Highs.GL and hope everyone is in the green.

  19. mjtplayer says:

    tony caldaro says: June 22, 2015 at 7:44 pm
    “weak close?
    rallied 20 points from Friday, closed seven off the high”

    DOW up 103 today, S&P up just over 12 and 7 pts off the HOD (giving-up 1/3 of the gains). Was that it? That was huge relief rally on a Greece deal – up 0.6% on mediocre volume? Supreme Court decision on Obamacare subsidies is the next event, unless a Greece deal falls through the cracks…

    My point is, since the market didn’t sell-off on worries over Greece, the relief rally is muted, everyone knew that a deal would be done – no? The real fight is in Aug/Sept, as we’ve discussed before, this last 7 billion Euro tranche of the bailout fund allows Greece to pay their bills/debt payments for a few months, we’ll be right back in this Greece mess by late summer when Greece runs out of money yet again and comes back hat-in-hand to the EU & IMF – only then the bailout fund will be empty and the IMF emergency line has already been drawn. So then what? That’s when I think the Greece situation could actually get more interesting, there’s no political will in Germany to create yet another bailout fund for Greece, not after they’ve just blown through 240 billion Euro’s in less than 5 years and the European taxpayers must know they’ll never see that money again.

  20. wavediver says:

    For those still eyeing the possible LD, 2142 is .50 of the first leg up. It is also the exact intersect point on the upper trend line for this fifth leg.

  21. I’m having a real hard time looking at your weekly SPX chart, Tony, and seeing how you decipher that green 3 to 4 and now this supposed extending 5. It seems like a big stretch to call that itty bitty green wave 4 a complete wave. Now don’t get me wrong. I’m not trying to call you out. I just think there’s a bit of confirmation bias going. Or fitting things to fit.

    I’m purely a standard technical trader and use EW only as a backdrop and I am having a real hard time seeing this as bullish. But I guess we’ll see. None of know anything, right?

  22. Here s something for everyone to ponder…Google:S&P Zone of Death.Synopsis is a chart that shows year over year percentage change in the S&P on a monthly basis.There are percentages that indicate, as in 2007-2008 when we break a certain percentage, the bull market is over.That number is 10%.We are currently at 7.3%.However we were at a similar spot in January and the market bounced 5% in 3 weeks.Other lesser percentages of 6% were also buy signals.We could actually see a quick jolt up in stocks based on this.The author was warning if we dropped below—probably 2000 to 2020 S&P it would be all over for the bulls.But my view is unless that actually happens…it s a buying opportunity of possibly 5% gains from here minimum.Good luck all.

  23. mjtplayer says:

    Tony, are you surprised at the weak close today?

    For weeks the US stock market hadn’t been worried at all about Greece, same with the VIX. With a potential Greek deal, the reaction was muted since there was no sell-off to begin with? The VIX was smashed into the mid 12’s and tagged the bottom BB. It certainly feels like the good news is now baked-in, that was it.

    Now, all eyes on the Supreme Court decision on Obamacare subsidies, which looks to potentially be on Thursday.

  24. Getting above 2138 this week would remind a bit of the 2011 megaruns (up) for a few reasons. One is the big fib at 2138 folks have been watching forever.

    The other is, bah dum dum, from my studies. The most up in any first post-seasonal expiration week since 2011 has been 28. and even today’s 20 has been on the high side since 2011. The biggest were 28, 27, 22, and 20 going back to the previous thirteen.

    The biggest problem for shorts this week would be if this was like the post-expiration week in December 2013 where you never had a chance to sell below the expiration close (the market chopped around above the 1818 close for three weeks without ever getting back down to it).

    So if above and staying above 2138, I’d lean definitely towards labeling this as some sorta third wave,

  25. Tony,
    Do you think this mornings pop was all of 5 or just 1 of 5?

    • torehund says:

      Thanks Bouraq: a look at the Euro, not much of a convincing bounce from very oversold levels. In my time as a trader, stocks that looks like this chart does, has never performed well, and I have owned a few ๐Ÿ™‚ Getting rid of a slimmed down Greece could be a major mistake, with implied huge costs, but politicians also knows how to sell the bottom and the herds get their will.

      • bouraq says:

        You may be right of course Torehund. I would exit my longs if it drops 50 pips from the current levels and see what it will do next. But for now, I’m long expecting a break out.

  26. torehund says:

    Is China, Russia and Greece the Dean-ish emergers ? Europe the aging Aristocrat.

  27. CB says:

    Doji today, eh? Maybe it means that the “sideways Hindenburg Omen” continues.. ๐Ÿ˜‰

    Thanks Tony.

    • Supposedly at least according to some HO experts, we ve gone above zero on the McClellan Oscillator…and that cancels the HO alert.Others say no, it s still in effect.If we go down 2000 points tomorrow I guess it ll be due to I thought the initial HO held no matter what for 30 days and I counted 2 of them (back to back days).Good luck all.

      • blackjak100 says:

        A HO signal can only occur when mccllean is negative. However, we got a confirmed signal last week (when mccllelean was negative) which stays on the clock for 4 months I believe.

  28. gtoptions says:

    Thanks Tony
    That Gap up wasn’t unusual at all. ๐Ÿ˜€
    Clean five up looks good to start some trendy action. Opa!

  29. zepfan123 says:

    Well another milk-toast finish considering the impressive 18 points the futures were up before the open.With the DAX up 400 pts I was thinking we might close up between 200 and 300 pts today with a new SPX ATH. Not even close. I guess we really are being held hostage by this stupid Greek debt debacle. If were not well into new ATH territory well over SPX 2130 by the Tuesday after the July 4th weekend(July 7th), I say find some serious index shorts with an Aug expiration. for a swing trade. Thats certainly what I’ll be doing if thats the case.

    • wildmick says:

      zepfan, an unrelated question since youre a fan. what does “zoso mean?

      • zepfan123 says:

        From my understanding ZOSO was a symbol for the planet Saturn used by a 16 century Italian mathematician, physician, astrologer and philosopher named Gerolamo Cardano. Saturn is the planet that rules Capricorn..Jimmy Page’s astrological sign…which he adopted of course for his Zeppelin identity. ZOSO has been used as various other occult symbols for other hidden meanings over the last few centuries as well though.It certainly helped create a mystique for Page and Zeppelin.

        • wildmick says:

          thanks zepfan. thought it was occult related, but wasn’t sure exactly how with regard to Page. been playing zep all evening long here.

  30. torehund says:

    Thanks Tony.
    I feel a whiff of fighting spirit emerging around the world, maybe a little James Dean-ish from both Greece and Russia. The latter 2s, feels like fresh salad, crunchy ๐Ÿ™‚

  31. JeffMilano says:

    Thanks Tony, for the uptrend confirmation does it have to clear S&P 2135 or must it go higher.

  32. mike7x says:

    Turn-around Tuesday tomorrow?

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