Monday update

SHORT TERM: market rebounds, DOW +238

On Friday the 13th there was a terrible series of terrorists attacks in Paris. Our prayers go out to our fellow brothers and sisters in France. Overnight the Asian markets lost 0.7%. European markets opened lower but gained 0.2%. US index futures were sold at the opening on Sunday night pushing ES down to the equivalent of SPX 2004. Then overnight, as foreign markets opened, the futures rebounded. The market opened four points below Friday’s SPX 2023 close, and then began to rally. In the opening minutes the SPX hit 2034. Then after a three wave pullback to SPX 2024 by 11:30, the market started to rally. At 10am the NY FED was reported lower: -10.7 v -11.4. Heading into the close the market hit SPX 2053 and closed there.

For the day the SPX/DOW gained 1.45%, and the NDX/NAZ gained 1.30%. Bonds gained 6 ticks, Crude rose $1.30, Gold added $1, and the USD was higher. Medium term support remains at the 2019 and 1973 pivots, with resistance at the 2070 and 2085 pivots. Tomorrow: the CPI at 8:30, Industrial production (est. +0.1% v -0.2%) at 9:15, then the NAHB at 10am. Also there is a speech by FED governor Powell at 1:15, and a speech by FED governor Tarullo at 3:30.

The market opened right at the 2019 pivot this morning, rallied, pulled back some, and then rallied for the rest of the day. It appears traders were encouraged by the relative strength in the European markets. Today’s rally: 2019 – 2053 is by far the best rally since Major wave 4 began. This suggests either Int. wave a or Major 4 ended at today’s low. Until the market reaches the 2070 pivot range we can not completely rule out a retest of SPX 2019 to complete Major 4. For now, since all of our oversold parameters were met for the end of Major 4, we believe the 2070 pivot is next. Short term support is at SPX 2040 and the 2019 pivot, with resistance at the 2070 and 2085 pivots. Short term momentum hit quite overbought after Friday’s positive divergence. Best to your Tuesday trading!

MEDIUM TERM: uptrend

LONG TERM: bull market


About tony caldaro

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177 Responses to Monday update

  1. EagleSeagle says:

    Mr. Caldaro, just want to take a moment and thank you…I have been trading UVXY/SVXY with tremendous success using your guidance to assist. All the best my friend…

  2. mjtplayer says:

    2,048 = .382 retrace. Beyond that and it’s probably int ii and not minor 2 or minor 4.

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