Monday update

SHORT TERM: gap down opening starts week, DOW -24

Overnight the Asian markets gained 0.1%. Europe opened lower and lost 0.6%. US index futures were lower overnight and the market gapped down to SPX 2052 at the open. The market had closed at SPX 2061 on Thursday. The market continued to decline until it hit SPX 2044 around 11am, and then it started to rally. At 2pm the SPX hit 2057, dipped to 2052 by 2:30, then closed at 2057.

For the day the SPX/DOW were -0.20%, and the NDX/NAZ were -0.10%. Bonds gained 3 ticks, Crude dropped $1.35, Gold slid $8, and the USD was lower. Medium term support remains at the 2019 and 1973 pivots, with resistance at the 2070 and 2085 pivots. Tomorrow: Case-Shiller at 9am, and Consumer confidence at 10am.

A gap down opening to start the New Year’s Eve week took the market right down to support at SPX 2042 (2044). Then after getting sufficiently oversold short term, the market rallied to SPX 2057. This sets up an interesting juncture. We can count five waves up from last week’s SPX 2006 low and now a pullback to anticipated support. Should the market hold the SPX 2044 low it should resume its rally, adding conviction to an uptrend. Should the SPX 2044 low be breached on the downside a retest of the recent lows is likely, adding conviction to the downtrend continuing. This looks like an inflection point for the market. Short term support is at SPX 2042 and the 2019 pivot, with resistance at the 2070 and 2085 pivots. Short term momentum hit oversold after Thursday’s negative divergence and rebounded. Best to your trading this holiday week!

MEDIUM TERM: up/down trend at inflection point

LONG TERM: bull market


About tony caldaro

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112 Responses to Monday update

  1. So is this 3 waves up or 5? I can see it either way.

  2. blackjak100 says:

    This would be a nice spot for a quick 13-15 pt pullback so everyone can add to their long position or get in. Right at top of upper bull flag trend line.

    • tommyboys says:

      If true wave 3 market will not allow a “load up” pullback. Will just keep grinding or screaming higher forcing shorts to chase.

    • simpleiam says:

      Thanks BJ. That RSI2 works like a gem most times. I need to learn not to doubt it too much, but I have a thing about balance. Hope it’s up from here. GL All!

  3. timmy321 says:

    Tony, did the uptrend fire?

  4. budfox9450 says:

    this chart (not mine), might of use to
    some of you.

  5. fionamargaret says:

    “Interesting” bid/ask on TMF – 75.42…76.24

  6. SPX close today 2023 according to my math

  7. blubrd67 says:

    Tony, I don’t know if I missed it in all the notes… but is there a specific uptrend point at which you will remove green label (b or i)?

  8. pooch77 says:

    Looks like we have a little problem with this rally called small caps

    • h66h says:

      Definitely in a resistance band here. Clearing 1157 (.38 Fib of Sep-Nov range, and .50 Fib of Nov-Dec) and 1161 (immediate resistance) will give it a chance at Nov. highs.

  9. simpleiam says:

    RSI2 below 20 and steady. Oversold, or as I like to say, “Underinvested”. Wonder if SPX will go higher into the close? GL All!

  10. OneAndOnlyUniverse says:

    OneAndOnlyUniverse says:
    December 14, 2015 at 8:00 am
    was sir darkness
    Great place to start shorts on dgaz ( 4% vig margin ). me, 1st of 5 lots. added oil , 2/5 dwti.

    Taking in $dgaz shorts here +12.35 or 48%. See 41.40- 42.20 on wti

  11. Looks like Tom Lee did the honors.

  12. blackjak100 says:

    Based off RSI, I would think 2005-2076 completed 5 waves up…minor 1/int i. however, this would not fit daily chart as it would look like a 3.

  13. manunidhi21 says:

    It must close abv 2076.72 today to clear the least not blurry

  14. purplember says:

    could yesterday drop to 2044 be wv4 of int I and today is wv 5 of Int I vs 2067 being all of Int I

  15. jeffbalin says:

    Tony, in your oew work, does moves happening in light volume or high volume matter at all? Thank you.

    • tony caldaro says:

      actually I never look at volume

      • h66h says:

        I think that’s wise. If you have enthusiastic buyers and reluctant tightly holding sellers, price will rise quickly with little volume. This is bearish according to classic TA, but I’ve never understood why. I think it’s bullish.

      • jeffbalin says:

        Ok, it didn’t appear to matter with with your work. Then with oew, I won’t worry about it either. Thanks Tony!

  16. torehund says:

    3 of 3 on Rut started ?

  17. gtoptions says:

    Thanks Tony
    Sun, Stars, Moon, Earth and Oil must be in sync. 😉
    SPY ~ WR2 @ 207.89 ~ WR3 @ 210.27
    GL All

  18. blackjak100 says:

    TC if an uptrend is confirmed, do you always start with int degree waves and then move the labeling down if it subdivides? I’m actually thinking 2006-2067 was minor 1 of int i.

    • bhuggs52 says:

      BJ, I’d agree with your suggested count, as long as Wave V extends as Tony has indicated might be the case without a more recent new ATH. And this morning’s open, if it follows through and breaks out of the down channel and leaves the bull flag behind, yeah, we’re on our way here. I’ll take a long position in UPRO. Cheers and thanks as always for your cogent posts.

    • tony caldaro says:

      not always, depends on degree
      usually wait for the market to lead the way

  19. Thanks tony, this year gone fast!

    The PMO chart here => suggest this rally is not done year, and santa [or what is termed by the professional traders on WALL ST each year] is still coming!!!

    Time will tell. Keep up the good work.

  20. JW says:

    Huge CPCE ratio aligns with massive NYAD/NYMO strength– expect (hope) to see strong move up starting tomorrow

  21. tommyboys says:

    CPC daily here shows 1.31 today. Was higher in Septber and August. Weekly (click on Gallery View at bottom) only about .90. Not really high at all compared to recent.

  22. blackjak100 says:

    Equity Put/call ratio came in at an incredible 121% which does not favor bears. Highest reading in over 5 yrs I believe. If someone can disagree with me please do as I’m not 100% sure on that.

  23. joemal97 says:

    Just one of your many sideline observers. I just wanted to say thank you to all who contribute to this forum and say how I appreciate your analysis and your commentary. I am not an adept at EW, more of a casual observer but I have learned a great deals from reading all of your posts. I look forward to the daily updates and all the comments. Thank you Tony, and all who contribute here. Happy holidays and may we all have a blessed 2016.

  24. gtoptions says:

    Thanks Tony
    2015 has been one big inflection point!
    Maybe 2016 will be a trending year, up trending that is. 😉

  25. fishonhook says:

    Thanks Tony.

    Didn’t get a chance to reply to my nemesis fishonhoof…

    “If it weren’t Trump it would be some other carnival act because when people are relentlessly betrayed they lash out in rage”

    Are things really that bad? At least pick a carnival act who has some self integrity. getting a deferment from Vietnam for heel spurs was the ultimate rich boy escape and to then Say McCain wasn’t s hero was pathetic.Smells of “AWOL Bush” saying Kerry didn’t deserve his Vietnam bravery medals despite 3 tours and 3 wounds received.

    It’s a;ways the cowards who criticize the records of others to divert attention from their sorry slate. Remember it was Bush’s invasion of Iraq which had nothing to with 911 that led to these barbaric SOBs ISIS growing out of following chaos. God knows what will come from The Donald’s actions.

    Vote as you will but get ready for a circus if you get Trump.

    • vorfahrt says:

      Trump is Hillary’s best asset. He’s separating any sane voter from the Republican party. There are enough sane voters to carry the presidency and inflict enough damage downballot. Keep trumping Trump and shooting yourself in the foot, Folks!

    • Gary Lewis says:

      “Give me control of a nation’s money and I care not who makes it’s laws” — Mayer Amschel Bauer Rothschild.

      It was true then and it’s truer than ever today. Neither Donald, Jeb, Hillary, et al, will be in control of the money. It matters not who wins.

    • Kerry 3 Tours in Vietnam???? Whatever your news source, you should perhaps consider an accurate alternative. I served in 5th Special Forces.

    • purplember says:

      how can anyone sane pound the table for Hillary when she is a clone of the worst prez in USA history. failure in all avenues and dividing nation. Hillary is liar and americans can’t trust her (she did it to herself). As a christian, i feel Obama is fighting harder for muslims or illegals than most americans. Trump could be failure as well but voter anger is real and people want a Non-politician in office. GOP are now democrats and democrats are socialists. both parties suc !!! they don’t stand for anything and none of them vote /do what they said they would do.

      for 16 yrs we’re starving for a leader and someone who has integrity & loves this country. Our nation is going down a bad path.

      • LarryH says:

        You may want to point your finger at the republican controlled house where nearly any Obama backed bill was stopped by the republican majority. The ‘dividing the nation’ – a worn out accusation or smear – is more appropriately directed to the republicans and any fair minded individual will agree.

      • fionamargaret says:

        ..well you all know I think Obama is the most fair-minded, decent politician we could have – maybe change the constitution…!!

      • could not have said it better purple……..Trump 16!!!

    • Thats laughable……its been a circus for years….actually much worse than a circus…….Will Trump live up to his promises……perhaps not. There is NO other choice The others have already deceived and abused us. The others are owned and continue to betray the people. Cant get much worse than a Muslim president

    • Kerry was in Vietnam for 1/3 of one tour, or 4 months, not 3 whole tours, which would be 36 months.

      • fishonhook says:

        Four months! Where do you get your info from Fox ;news; channel? Check out the wiik link for the exact dates of his injuries and action he was involved in and shame on you for buying into the coward’s BS who denigrate our hero’s records for political reasons, yes including McCain’s, when they have not set foot outside the country to serve one single day!

  26. fotis2 says:

    Thanks amigo.

  27. Tony Jordan says:

    Thanks TC. Daffy DAX futures today retraced 38% of the 370 point rally that started 12/22. More than 50% of that retracement has now been won back. Similar story INDU/SPX futures. Possible 1-2 to the downside set-up but leaning more to unfinished business to the upside. Good luck everyone.

  28. xuwu992000 says:

    12/28: W-1/2 completed today; tomorrow the entire day will be W-3’s show

  29. vorfahrt says:

    Natgas rallying sharply, IMO the lows are in for commodities. Even if it is just a bear market rally.

  30. My vote is for “adding conviction to an uptrend.” El Mat said it best, “BTD.” I don’t have a very good track record at predictions, so I won’t bother to say S&P 2,160ish by Jan 8th. GLTA.

  31. bhuggs52 says:

    Thanks Tony. If we had five waves up from 2005 to 2067, isn’t it possible to have a Fib .50 correction down to around 2036, which leaves room for yet another small leg down, before resuming the uptrend?

  32. llerias7 says:

    Thanks, mr. TC

    What do you mean for “an inflection point” ? In case breaks down 2044 should (re)visit 1993 or lower (end of M2) OR we should realise that a bear market (C2) is at work?

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