Monday update

SHORT TERM: sideways/choppy activity continues, DOW -79

Overnight Asian markets lost 0.4%. Europe opened higher and gained 0.4%. US index futures were higher overnight and the market opened four points above Friday’s SPX 2090 close. Right after the open the market started to pullback. At 9:45 the Chicago PMI was reported lower: 48.7 v 56.2, and at 10am Pending home sales were reported higher: +0.2% v -2.3%. Just past 10am the SPX hit 2085. After a rally to unchanged at SPX 2090 by 10:30, the market pulled back to 2082 by 11:30. Then after another rally to unchanged at 2pm, the market pulled back to the low of the day at SPX 2080 and closed there.

For the day the SPX/DOW were -0.45%, and the NDX/NAZ were -0.35%. Bonds lost 1 tick, Crude slipped 10 cents, Gold added $7, and the USD was higher. Medium term support slips to the 2070 and 2019 pivots, with resistance at the 2085 and 2131 pivots. Tomorrow: Construction spending, ISM manufacturing and Auto sales all around 10am.

The market opened higher today, reaching Wednesday’s SPX 2094 high. But just like Wednesday the market pulled back after having an opportunity to break through SPX 2100. Wednesday’s and Friday’s sideways activity was easily attributed to holiday trading. But today’s continuation of that activity can not. We are clearly seeing some choppy activity in the waves, and would not be surprised to see the OEW 2070 pivot range retested before the uptrend resumes. Short term support is at the 2070 pivot and SPX 2046, with resistance at the 2085 pivot and SPX 2097. Short term momentum is trying to setup a positive divergence, and ended slightly oversold. Best to your first day of December trading!

MEDIUM TERM: uptrend

LONG TERM: bull market


About tony caldaro

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143 Responses to Monday update

  1. Correction possibility of the Dow Jones by the waves of Elliott
    Index fulfilled the 5 wave and is now likely to come the correction waves.
    click on the link below to view the analysis

  2. simpleiam says:

    Looking pretty darned good, Tony. Thank you! Now, if we can get a gap up in the morning, it would be great!

  3. gtoptions says:

    NYA is on board with this rally. Giddy Up! 😉

  4. Tony Jordan says:

    Gold up a few bucks but gold miners significantly outperforming the metal today:
    Euro also off the floor. Wondering if the market is suggesting a top of some degree in the senior currency?
    Now a bird’s eye view of the CRB which at 182.54 is lower than 1999 & 2001. We have to go back to 1975 (yes, 40 years) to find a lower low in this index.
    What this chart of the CRB also shows is price is now in and around long term support and simply on this basis alone a rally of some sort should be in the offering. Interestingly the timing roughly coincides with an expected end of a 6+ year bull market in US equities. So what now, commodities up and stocks down? Has happened before but fleetingly and is the exception rather than the rule. Speculating only, but an escalation of the conflict in the Middle East may light a fire under the energy sector which has the heaviest weighting in the CRB.

  5. Huuummm Tony are we going to make it today ?

  6. hk1122 says:

    Hi Tony, can you enumerate the main differences between OEW and traditional EW?
    Thanks & Regards

    • tony caldaro says:

      OEW quantifies the significant waves during bull/bear markets.
      We just can’t put a label anywhere that looks right, or meets a preconceived notion.
      We can only put labels where there are actual trend reversals.
      In addition we have added many technical features that coincide with the waves, i.e. the pivots, asset cycles, RSI 5, the saeculum, etc.

  7. EL MATADOR says:

    The Oxford Economist Running the Fed’s Interest-Rate Machine
    Simon Potter is charged with implementing mechanisms that will raise interest rates when Fed policy makers make that call

    • mjtplayer says:

      Banks get sued and fined for manipulating markets, hedge funds/managers get sued and fined for manipulating markets or stocks, but the biggest market manipulator of all is praised for goosing asset prices and the politicians are begging them to keep rates at zero to keep the party (fraud) going.


  8. uncle10 says:

    Thanks Mr. T.
    Interest rates sinking as we closer to the fed rate hike….. 😉 hahaha

  9. mjtplayer says:

    7 days now of choppy, sideways, overlapping waves.

    The bulls are arguing that the sideways consolidation is healthy and we’re about to break-out. I would agree if this consolidation were at or above SPX 2,116, instead we’re consolidating BELOW the prior low – which could also be a sign the rally from 2,019 has run-out of gas.

    I have 3 counts that are probable and it’s hard at this point to choose 1 over another. This mornings strong open has fizzled and we have overlapping waves everywhere. Either:

    – We just completed int i this morning from 2,019
    – We completed minor b of int ii and about to drop in “c of c” to complete int ii
    – Or we have an int i,ii, minor 1,2, minute i,ii, minutte 1,2 count going (we all know how these embedded 1,2 counts pan-out)

    We’ll see, hopefully we get a catalyst, one way or another, with the ECB meeting, jobs report and OPEC meeting all on Thursday & Friday. This boring sideways action is untradable.

    • kvilia says:

      I exited my long positions today with profit (XIV and DXRLX) and will stay on sidelines for now having just some NUGT and very small UVXY positions. Overall tech indicators are in overbought zone while markets have been sidetrading, so I read it as a negative sign. RUT is at the August break point and underperforming, SPX is mingling with 200MA again, so the move below 2065 could be very painful without a chance to recover for bulls. Be careful out there and have your trailing stops in place if you are a bull.

      • mjtplayer says:

        DOW up over 100, Treasuries are higher? Small caps are red? Something doesn’t smell right. I’ve been in cash for about a week and plan to stay there until we get some type of move to narrow the probabilities and get a better idea of which count we’re in.

  10. hk1122 says:

    My thoughts – We are in 5th wave from 2020.
    Specifically this morning’s 2098 was 3 of 5. now in 4 of 5 with 5 of 5 this afternoon to follow (with marginally new highs)

    • What a joke that guy is! Buying after a breakout above 2130? I would have already been long and selling at resistance, not buying the breakout. Another plant to mislead the sheep off the cliff in my opinion.

      We all here know that breakouts above any important level commonly retest before going back up… and that’s probably only half the time as the other half they are “false breakouts” that fail and rollover to go back lower. Listening to that guy would break me for sure.

      • chrisk44342 says:

        Well the truth is that if you buy on the breakout with your stop below prior resistance, the odds favor your stop being taken out. Why? Because everybody and his brother knows there are massive buy or sell stops at that level. If the price goes back down to that area, that’s easy money for someone to stop hunt. This is why I personally favor dynamic s/r

  11. quantmaven says:

    S&P 500 Roadmap Update:
    ES began a medium term bear phase on 4th November that is expected to last less than two months. It began by doing an inverted wedge for (A) of A. Today with the ISM Manufacturing at 48.6, there is just no catalyst to break the 2100 level and price has completed a wedge at (C) of B. Odds are this wedge is going to be broken on the downside in a near future. We can already draw the line that will govern this triangle as seen in purple below. As Tony mentioned, short term pivots are 2070 and 2045. We should test 2070, bounce and sink again to test 2046 for C. Then we will complete a D and E which will form a huge triangle as seen in yellow below. We might have a late Xmas rally closer to the end of the month. Until then, price action will be stuck inside this huge triangle and it will confuse most market participants. I have been advocating this scenario since the correction began on 4th November because the previous rally was a third wave… It only makes sense for a fourth wave to be either complex or a triangle and I think it was too premature for everyone to say the swift drop from 2010 to 1993 was all we would have, it just doesn’t make sense because usually fourth waves last much longer than second waves as well.

    Any comments?

    • quantmaven thanks but Frankly i have learned over the years that i never have to bet against fully Embedded stochhastics

    • quantmaven says:

      Erratum: swift drop from 2010 to 1993 should read “swift drop from 2110 to 1993”

      This scenario is invalidated in case price goes above 2099 in hourly. I would put the odds at 20% and odds at 80% for the triangle scenario. Afterall, October was one of the best month recorded by the S&P 500, we need time to digest those gains and this is why we are consolidating before moving higher. We most likely ain’t gonna explode right away.

    • gtoptions says:

      Something very corrective about this move, so I would tend to agree, more chop ahead.

    • chrisk44342 says:

      I will disagree. Not because you can’t be right, but because you draw a triangle where there is no evidence for one (yet). Sorry, but the practice of drawing predictive waves on a chart bothers me to no end. I feel like that has been fully discredited by now if you have followed any EW practitioners on line over the past 10 years. Tony deserves a boat load of credit for not falling into this trap of predicting things.

  12. Tony Jordan says:

    The gap up and go followed by the sharp 10am sell-off fits fine as a 1-2 how do you do. If so the market should soon make new highs above those already made today. With the bull very much in its twilight zone we should expect the market to be a little more unpredictable with sporadic selling hitting the market from time to time but with the bull remaining steadfast and recovering all its losses until the smallest last wave completes. Along this line we can see that although the 10am sell-off was healthy on velocity it appears short on waves. Without 5 waves its just a correction of the advance.

  13. Jim Guthery says:

    Any thoughts with the smack down at 2097ish

  14. Tony well on the positive side I like better DOW action and technicals The most important point is that the Dow has already full Embedded stochastics so it’s poised for a breakout soon SPX should likely follow Next wednesday!

  15. buddyglove says:

    Thanks Tony and greetings all, Fwiw here are my current thoughts.
    No change of opinion from me, and still Bullish on Dax and S&P and have open positions in both, with stops trailed up and locking in profits.
    A lot of faffing about at current levels, but I believe this structure to be bullish and will eventually resolve hard to the upside. Good health/wealth to us all.
    S&P futz 24 hour continuous

  16. Watching the DXY chart which has been making higher highs with lower RSI for weeks.Selling off some today.Today is all about positioning for Draghi.The dollar is definitely in a spot to be sold.Gold is in a spot to go up–all things being equal-which when it comes to CBs…almost never happens.No change in my thinking.If Draghi kills the Euro tomorrow (and gold most likely)with QE,I ll add to buying GDX.Good luck all.
    BTW I thought Denver/NE was well officiated.I had Denver +3 1/2…lol.The kid QB Oswiller can throw can t he?Peyton has his bags and his commercials packed I hear for the broadcast booth next year.He can always be high pitched Peyton and rejoin the singing quartet for income…lol.He has nothing to hang his head about.Great career.

  17. gtoptions says:

    Thanks Tony
    SPY ~ Once again testing WPP @ 208.98
    > Higher < Lower ~ That should cover it! 😉

  18. GYN LAB says:

    Pretty big reversal near 2100 – Maybe this is end of int i? Looking for mPP & 200dma test at 2070 pivot before higher!

  19. simpleiam says:

    I know how much everyone hates it when someone says something like this…, but I don’t think The Fed is going to raise rates this month. Think they might wait until January, or even later. Think Fed might have to consider whatever ECB does this week… Of course, I’ve NEVER been wrong! 🙂

  20. Panic buying and soon after panic selling! Can you call it manipulation? Well the fact that SPX has not been able to hold 1993 (for now) is a concern by the way ES didn’t break 1998 Nov.26 high (as action is mostly in ES these days)

  21. ABchart says:

    May be new incident in Syria:
    Two Russian helicopters have lost contact with the command in Latakia, Turkmen area near Turkish border.

  22. EL MATADOR says:

    my gut-o-meter still telling me this is still part of a corrective structure some that looks, feels and smells like an irregular flat, no?

  23. aahmichael says:

    I haven’t posted here in a couple of weeks, because I’ve been traveling out of the country, but I’m back at work now, and thought I’d offer my view. It looks like this morning’s open completed an a-b-c from 2070, and the odds are high that it completed an a-b-c-x-a-b-c from 2019.

  24. blackjak100 says:

    TC, if this is 3 of 3 how come you marked 2099 already on the 60 min chart?

  25. fotis2 says:

    Well that’s that don’t know ’bout you guys but this move took me by suprise looked ripe for a move down but hey that’s trading..2100, round number, too close..

  26. gasman88 says:

    Let’s assume that Santa will be good this year and we will get the v of 5 of V before the year end, did any bull market make its final top in December?

  27. gasman88 says:

    So what is the reason for s&p gaping up today? just because we were down yesterday and too many were looking down?

  28. fishonhook says:

    Now we know why the Shanghai index reversed for no reason from a 3.5% drop to close green two nights ago. Why the FXI and GXC were up big when the market was down yesterday.

    because last night the IMF included the Yuan in it’s basket of reserve currencies. There is always a reason for these inexplicable rises. Usually it is insider corruption. You can just imagine the IMF Board running out of the meeting to tell their pimps of the decision so they could buy. the pay-off comes with large consultancy fees in the futures. just like bernanke gets now. The old goat thinks he is worth 200K an hour!

  29. Jim Guthery says:

    GDX has been dropping off of $14 down to $13.35 level last couple of weeks.

  30. CampFreddie says:

    I saw the Coca-cola truck advert on tele last night, that’s my signal to start buying stocks, works a treat every year 🙂 glta.

  31. torehund says:

    Looking at the weekly Baltic dry index, it becomes apparent that the starting line is just around the corner…. I have previously posted charts that anticipated a top around 36 000, and I still stick to it…..yes its a Mad prediction. The Chartish reason behind it is the 2 motive waves that has marked the 7+ years of flatlining on the MACD, the second wave on price is a bit subdued as the MACD has been a bit further submerged below the zero-line compared to the first one.
    If one bears over with the latter, a wave 3 could emerge, which would be the greatest in history if played out at a positive MACD, (just look at the proportions of the 2s).

    Fundamentally there are ample triggers for a perfect storm:

    1) Urgent and unfulfilled need of housing for maybe as much as 4 million new immigrants in Europe.

    2) Impending War escalation in the Middle east.

    3) Extreme pessimism in the whole sector.

    4) Rolling over of global temperatures (bottom 1900, peak 2000), escalations of natural hazards like quakes and volcanoes.

  32. ABchart says:

    ES 30 minutes. May be one more leg down, with à higher low than yesterday. Before 2118. Remember, 2118 is still the bullish imbalance from one week ago.

  33. xela0 says:

    SBUX topped out ahead of XMas? Microcount would suggest one more wave up, why the “no doubt” blue V?

  34. fishonhook says:

    Pug having called and reiterated this scenario

    Now says the TNA will shoot up $20

    Which will surely mean significant new highs for the S and P and the top was not in in May

    So which is it?

    • tommyboys says:

      Oh the art of predicting the unpredictable…and for a fee! She’s a fickle b*tch 😉

    • EL MATADOR says:

      Well Fish, if you read his tweets you should know by now that PUG is calling this entire rally a C2 B-wave whether it make a new ATH or not.

    • budfox9450 says:

      Actually, it appears the TNA is already up $20 off the $55 low.
      And is the twitter feed, and offical platform, for his website?
      But, given his chart has not changed, I will not take to seriously
      the TNA call….imo

    • CampFreddie says:

      Fish, agree to criticize PUG and I have never understood the high accolades poured upon him, Mr “C” and others here are far superior. Well done for continuing to highlight some of the so called “Gurus” who claim to have a better success rate than most, as when scrutinized they certainly do not.

    • tommyboys says:

      All relative…while 5.6% loss is large for a PF, it’s not the end of the world and could very well bounce back over the coming couple months. More reasoning for – in this case – Asian funds finding their way to US markets.

      • EL MATADOR says:

        Where have you been, govt type foreign fund inflows into US equities is nearly complete man. Don’t believe it, no problem but you hear it here first and I’ll remind you during the Mid-Cycle 2. 😉

  35. Vox Zeit says:

    Is it possible to consider that Intermediate-i completed at 2094 with a truncated Minor-5; and hence, the current decline from 2094 is Intermediate-ii ?

    • tony caldaro says:

      failed 5th?
      possible, but unlikely

    • jeffbalin says:

      I don’t like the looks of the RSI daily Spx-Dow, I have 2 possibilities on the table, minor 2 still in progress and at least 2070 will be hit, or major 4 still in progress. I am ready for either and I’d like a nice whoosh down, if it’s time. Thank you Tony for explaining that int 2 is unlikely.

  36. Sandra Dons says:

    Why the futures are so strong green?

    • Gary Lewis says:

      There was a huge volume spike at the close in SPY, maybe like 8 million shares. Perhaps this is a distribution rally before going lower??

    • simpleiam says:

      Tomorrow is the first day of Dec. Probably Fund Mgrs. & others having to place some money. Don’t know how long, or if it will last, but COULD BE the start of a nice rally. Will have to wait and see. GL!

    • asaraniti says:

      Just before the close, the Emini’s successfully tested their daily 61.8% extension long. High probability that the Emini’s and by definition the S&P 500, will retest today’s high. Will reassess at that point.

      BTW, on the MOC, there was over 3 Billion to sell. So that was absorbed as well.

  37. pooch77 says:

    There is/was an imminent terrorist attack issued for U S.,so why are futures rocking up? ?

  38. budfox9450 says:

    COST – has a definable – double price top…signal
    Not a Bullish signature….Bud

  39. Correction possibility of the Dow Jones by the waves of Elliott
    Index fulfilled the 5 wave and is now likely to come the correction waves.
    click on the link below to view the analysis

  40. Tony Jordan says:

    Thanks TC. Even though we had an additional move down to take out the earlier intraday lows I still think the action the last few days has been corrective only and likely done on the close. My trading system, which generally tracks the cash market very, very closely (certainly within 1 INDU point) was a full 10 points above the cash market at the closing bell. Never seen a discrepancy of that magnitude before and I would have to say that is a bullish indicator. Sure enough 50 minutes after the close the INDU cash equivalent is now +63 (17783). Long way to tomorrow’s opening bell but at this point in time I’m definitely leaning toward a Minute 3 of Minor 3 rally.

  41. fotis2 says:

    Thanks Tony getting a bit tricky quite a few of the posters looking for some deep reversal Hmm decisions decisions…..

    • budfox9450 says:

      Decisions, I agree. The SP500 BoYu
      went on a sell signal, late this afternoon.

      • kevinm76 says:

        LOL!…..I’m going to respond to you like every other robot here. THANKS BUD!!!!

      • fotis2 says:

        Daily techs still on strong buy small gap 2080.45 closed with a valid DT to 2072 price action AH has thrown a spanner in the works keeping in mind one can’t tell much AH trading.Cross roads for me longer term.

  42. llerias7 says:

    Thank you, Tony. Can this (re)visit of 2070 pivot be labeled as Int.II ?

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