Monday update

SHORT TERM: gap down opening, DOW -115

Overnight the Asian markets lost 0.5%. Europe opened lower but finished mixed. US index futures were lower, and the market gapped down to SPX 1979 at the open. The SPX had closed at 1989 on Friday. Before 10am the SPX hit 1966 and then started to rally. Just before 10am the Chicago PMI was reported lower: 54.4 v 54.7. The market rallied to SPX 1986 around 11:30, and then started to pullback again. The pullback continued until 3pm when the SPX hit 1967. Then after a rally to SPX 1978 in the last hour the market dipped to close at 1972.

For the day the SPX/DOW were -0.75%, and the NDX/NAZ were -1.15%. Bonds lost 8 ticks, Crude rallied $3.30, Gold added $1, and the USD was lower. Medium term support drops to the 1956 and 1929 pivots, with resistance at the 1973 and 2019 pivots. Tomorrow: ISM services, Construction spending and Auto sales all at 10am.

The market gapped down at the open today for the 9th consecutive gap opening. During the first half hour of trading the SPX hit 1966. Then it rallied to SPX 1986, before retesting that low in late trading. Thus far, we still see five waves up from SPX 1867 on price swings alone. But we can only quantify three waves up, and now three small waves down. There is still a chance for this rally to turn impulsive. But thus far it is looking corrective. Short term support is at the 1956 and 1929 pivots, with resistance at the 1973 and 2019 pivots. Short term momentum continues to decline after Friday’s negative divergence. Best to your trading this volatile market!

MEDIUM TERM: downtrend may have bottomed

LONG TERM: bull market


About tony caldaro

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214 Responses to Monday update

  1. gasman88 says:

    Is Newbie still around, the biggest bear not scoring these days?

  2. rc1269 says:

    if i was a day trader – which i’m not – looks like a cheap long about here

    • zepfan123 says:

      Well a long is sure a lot cheaper than it was this morning..thats for sure. A 60 pt one day drop on the SPX/ES will do that.

    • uncle10 says:

      nice call! maybe you should give a shot. its a lot of fun 😉

      • rc1269 says:

        perhaps someday when i retire from my real job. for now, somebody pays me to have access to all the toys, market data and research i can get. i do well enough just trading my PA on a little longer timeframes. feels like a win-win.

        • uncle10 says:

          sounds like a win/win to me.
          or you could be a night trader. With the vix at 30 there is some good night trading to be had! starts at 6 pm done by 11. 🙂

    • tommyboys says:

      We fell into a strong(er) support area here (1895-1915 cash). Will she hold or slice through it like jello into the next zone?? We’ll know tomorrow.

    • thecustomer14 says:

      Could be… once the S&P hit the 1901 pivot range I was out like bandit on my shorts. I still think we’ll retest 1867 and wouldn’t be surprised to see us go lower than that in the coming weeks, but I’m not sure if Major B is still in progress. I’ll wait and watch…

  3. I think FRB’s “never wrong”, “free money” algo, might need a bit of tweaking.

    • uncle10 says:

      to be fair he did say today but that it could be Wed. I think tomorrow will be a gap up and go day and he will be right. if tomorrow is down then I agree this signal call will be chalked up as wrong. lets see what happens tomorrow by the close to judge.

    • fotis2 says:

      He did say could rally either today or tmrw.

  4. zepfan123 says:

    Looks like we’re going back to 1867…at least.

    • Dex T says:

      Indeed. So much for “buying the dip” and the V-Shaped rally!!

      • tommyboys says:

        On a longer term chart – even a daily – it can screw around down here for several weeks – make a higher low or even a lower low – and still appear as a V recovery. May need a double bottom here (retest)…OR a possible W bottom if it holds above 1830ish (ES)…at least it ain’t boring for a spell.

        • Dex T says:

          That’s possible-we’ll have to wait and see. But the comparisons’ to October 2014 need to end. This market rally is clearly trading differently.

  5. Just an input here …

    going by Gann … the move up from 666 low on the S&P at the rate of 240 points … the monthlies all closed below 2106 … going – 240 from the 2133 high ….
    2133 – 240 = 1893 … we broke that line .. so another – 240 .. I think we will visit at 1653 on the S&P at some point during this downtrend.. to test out that level.

  6. gtoptions says:

    Thanks Tony
    To continue the SPX analog of 2011
    SPX ~ .786 @ 1895
    Just Buy The Dip. 😉

  7. blackjak100 says:

    TraderJoe’s large 4th wave triangle still very much in play. It would have a decent look if this ‘b wave’ within triangle bottomed at 1901 pivot. Looking to buy there for bounce if setup exists.

  8. mjtplayer says:

    Too may people trying to “buy the dip” on this blog and others. Trader’s and investors just don’t seem to get it – we’re in a correction. The low last Monday was a temp low, major A – IMO. But with the recent complacency and all the dip buyers and falling knife catchers, perhaps the SPX 1,993 high last Friday was all of major B; certainly a possibility.

    The market obviously needs to drop a lot more from here to really squeeze all these dip buyers and to change the psychology. I know “buying the dip” has worked over the past 4 years and old habits are hard to break, but if/when the market drops another 10% from here in major C down and these dip buyers are puking-up their longs and nobody is posting that they’re buying the dip, that will be the low. But that’s not here and now…

  9. rc1269 says:

    just reading the posts here it sounds like buyers outnumber sellers 10:1 here at these levels

    gonna go out on a limb and say that doesn’t sound very capitulatory…

  10. Page says:

    No Comments. (may be this will make market move higher) 🙂

Comments are closed.