Monday update

SHORT TERM: gap up opening starts the week, DOW +165

Overnight the Asian markets lost 1.2%. Europe opened lower but gained 0.5%. US index futures were lower overnight and then reversed. The market gapped up at the open to SPX 2084, dipped a couple of points, and then continued higher. The SPX had closed at 2079 on Friday. At 10am ISM manufacturing was reported lower: 50.1 v 50.2, and Construction spending was reported higher: +0.6% v +0.7%. The market continued to rally, with only a 4 point pullback, into the afternoon to new uptrend highs. At 3:30 the SPX hit 2106 then pulled back to close at 2104.

For the day the SPX/DOW gained 1.05%, and the NDX/NAZ gained 1.30%. Bonds lost 10 ticks, Crude slid 45 cents, Gold dropped $7, and the USD was lower. Medium term support rises to the 2085 and 2070 pivots, with resistance at the 2131 and 2198 pivots. Tomorrow: Factory orders and Auto sales at 10am.

After being down about 8 points in overnight trading, futures rallied into the open and the market gapped up five points from Friday’s close. By late morning the SPX made a new uptrend high at 2095 and continued to rally into the afternoon. With the new high the Minor wave 5 rally from SPX 2059 is starting to look better: 2085-2063-2094-2079-2106. It could be an ending diagonal, or subdividing into 9 waves of its own. An ED would suggest a 30+ point pullback would be next. A subdivision would suggest SPX 2120 should be hit this week. The key level is now SPX 2093. Should the market hit that level Minor 5 has probably completed. As long as the market holds above that level Minor 5 can continue to work its way higher. Short term support is at the 2085 and 2070 pivots, with resistance at SPX 2120 and the 2131 pivot. Short term momentum was quite overbought, after Friday’s oversold, and ended there. Best to your Tuesday trading!

MEDIUM TERM: uptrend

LONG TERM: bull market


About tony caldaro

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205 Responses to Monday update

  1. argento1 says:

    Don’t fight the trend, those waiting for a big pullback just going to see her grind higher….weakness early morning with a green close, shouldn’t be different today!And if we do it will only be after we hit the previous highs!


  2. torehund says:

    Thanks Tony

    Think the big wave es 3/4/5 ahead to 38 000 is in the cards, doesn’t have to much churn down here at this stage.
    A topping there around and a strengthening currency means Japan is saved. However at 38 000 and additional currency weakness and the whole country may end up into the vicious circle of hyperinflation biting all asset classes. Remember that hyperinflation of this sort means extreme and all engulfing deflation and loss of confidence in government..

      • torehund says:

        YES, Nikk testing all time high for a double top at 38K, currency driven that is. And 10 000 on the Shanghai, also currency driven. Here in Norway we will be making plastic toys for the kids in China, ouch we all know what will have to happen to the NOK. I just hope for the sake of the world that the dangerous Hyper-infl will not happen, although many will be screaming IT. And if so should happen, there will be a lot of grief and suffering, hardships. However its up to the population to man themselves up to the task, especially here in Europe. Firstly accept a living standard that matches the real effort they put in vs the Asians, cut bureaucracy and readjust to the standards of 1950. Thats a tough medicine, where did I put my flip-flops ?
        One way to avoid the aggression of “a hoard of folks in a downturn” blaming everyone but themselves is to move to places where it can hardly get any worse (materialistically). In these places you still find folks with a big heart, so what did the excess stuff really do to our mentality ?

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