Monday update

SHORT TERM: market pulls back, DOW -31

Overnight the Asian markets lost 0.2%. Europe opened lower and lost 0.4%. US index futures were lower overnight but the market opened unchanged at SPX 2089. In the opening minutes the market bounced to SPX 2093, then dipped to 2088 by 10am. At 10am Existing home sales were reported lower: 5.36M v 5.55M. The market then rallied to SPX 2096, one point below Friday’s high. After that it started to pullback. The pullback continued until about 2:30, when the SPX hit 2081. After that the market rallied into the close to end the day at SPX 2087.

For the day the SPX/DOW lost 0.15%, and the NDX/NAZ lost 0.15%. Bonds gained 3 ticks, Crude was flat, Gold dropped $9, and the USD was higher. Medium term support remains at the 2085 and 2070 pivots, with resistance at the 2131 and 2145 pivots. Tomorrow: Q3 GDP (est. +2.1%) at 8:30, Case-Shiller at 9am, and Consumer confidence at 10am.

The market opened unchanged today, bounced around a bit, then resumed the pullback that had started on Friday with the short term negative divergence. At today’s low, SPX 2081, the market had pulled back 16 points from Friday’s high, and did get sufficiently oversold for a short term low. As a result of the recent market action we are labeling SPX 2097 as Minor wave 1 and the recent pullback as Minor 2, of Intermediate wave iii. This was covered in the weekend update. Short term support remains at the 2085 and 2070 pivots, with resistance at SPX 2116 and the 2131 pivot. Short term momentum hit oversold during the decline and bounced into the close. Best to your trading!

MEDIUM TERM: uptrend

LONG TERM: bull market


About tony caldaro

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144 Responses to Monday update

  1. Dex T says:

    There you go! The Europeans will have it SO good that it will spill over into the U.S.! The bull will continue for a long time… probably forever in BOA’s opinion

    Bank of America: The Search for Yield Isn’t Dead, It’s Just Moved to Europe

    “Spillovers from Europe will be the key factor facilitating the outperformance of U.S. over European investment-grade debt in 2016, asserts BofAML, despite the divergence in monetary policy between the Fed and European Central Bank.”

    Meanwhile, their European counterparts will suffer from too much of a good thing, according to Head of European Credit Strategy Barnaby Martin, with spreads widening by 10 basis points.

    “Technicals are tough: yields have become ‘too low’ to excite retail, supply risks are high (as well as the risks of supply ‘tourism’) and we think market liquidity has deteriorated under negative rates,” he wrote.

  2. blackjak100 says:

    TC had the 2070 pivot, Demark had the 2071 pivot (no range), and Gann had the 2071 pivot. You can’t make this stuff up!

    • EL MATADOR says:

      64K question is, is this a 3rd of 3rd or something else? My guts tell me it is something else

      • GYN LAB says:

        2070 pivot support is now LIS for the answer!

        • EL MATADOR says:

          LIS = low-income subsidy 😉

        • simpleiam says:

          Wed mkt will be interesting because it could be a bigger day than many of us think; not saying it will, but what if people are scared to stay long over Holiday, fearing that ISIS will get nasty again? Sell-of Wed. Then, there are the pigglets out there who want to get ahead of the crowd and buy in now. I know it’s not a technical opinion, but if Mat is allowed his gut, then, I’m allowed mine.

          • tomasso60 says:

            gut = intuition – which in my books is to be listened too. its like not doing something that others are doing and then you find something bad happens to that group.

          • Dex T says:

            Entirely possible. Tomorrow is an incredibly low volume day historically and many people will be checked out and traveling. The algos will be in full control.

          • simpleiam says:

            I tend to agree that many underestimate their intuition.

      • Lots of respect for your charting and analysis, but hoping your gut is wrong. $ signs in my eyes seeing 3rd of 3rd.

      • blackjak100 says:

        Looks like a minute ii correction right now

      • jeffbalin says:

        That’s fine, but what is the accuracy rate of your gut indicator? Have you back tested it at all? Do you have charts and stats to back up the accuracy level?

        • simpleiam says:

          LOL (Snort!) You’re so bad balin… 🙂

        • EL MATADOR says:

          LOL….Jeff….nice one 😉 ….just don’t interpret my gut-o-meter to imply something overly bearish. What I am trying to imply is that if you look at the wave structure, those that believe this is a 3rd of 3rd then this M5 should target Tony’s the upper range of 2198 pivot at minimum. Wave structure so far continues to lean in supporting a lower target.

          It’s very rare when I make a gut-o-meter call on here but as to my gut-o-meters track record I think last I check it was approx. 2/3 in favor of.

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