Tuesday update

SHORT TERM: gap up and go Tuesday, DOW +193

Overnight the Asian markets gained 0.4%. Europe opened higher and gained 1.6%. US index futures were higher overnight, and at 9am Case-Shiller was reported higher: +5.5% v +5.5%. The market gapped up at the open to SPX 2070 and continued to rally. The SPX had closed at 2057 yesterday. At 10am Consumer confidence was reported higher: 96.5 v 90.4. The rally continued until 10:30 when the SPX hit 2077. Then after a pullback to SPX 2072 by noon, the market moved even higher. Just past 3pm the SPX hit 2082, then pulled back to close at 2078.

For the day the SPX/DOW gained 1.10%, and the NDX/NAZ gained 1.40%. Bonds dropped 21 ticks, Crude added 70 cents, Gold slipped $1, and the USD was higher. Medium term support rises to the 2070 and 2019 pivots, with resistance at the 2085 and 2131 pivots. Tomorrow: Pending home sales at 10am.

The market gapped up at the open to a new rally high, then after a small pullback moved above the mid-December SPX 2077 high. Holding above the SPX 2042 support level yesterday and clearing the 2070 pivot range today, are both positives for this potential uptrend. The next objective, of course, would be to clear the 2085 pivot range (2092). Short term support is now at the 2070 pivot and SPX 2042, with resistance at the 2085 pivot and SPX 2104. Short term momentum rose from yesterday’s oversold condition to quite overbought today. Best to your holiday week trading!

MEDIUM TERM: positive response to inflection point

LONG TERM: bull market

CHARTS: http://stockcharts.com/public/1269446/tenpp

About tony caldaro

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132 Responses to Tuesday update

  1. lunker1 says:

    gto spy losing R1 bad? back to wpp?

  2. Gary Lewis says:

    I marvel at everyone trying to pick a bottom in oil. I used to be a professional commodity trader for a bank in the late 90s. The one thing that I learned very quickly is that commodity trends run for much longer than anyone can imagine. Never trade against the trend. That being said, good luck to you all.

  3. blackjak100 says:

    Did the $SPX just kiss its 200dma?

  4. simpleiam says:

    Why stop there, Dex? I’ve seen WTI at $10, so why $22? Wascally Wabbit with $26?

    FACT: Nobody knows how low it will go. It’s the most volatile of all the commodities traded.

    Even scarier, I met a guy who bought XOM at $1 per share! Co. savings plan, he showed me the statement. Too bad he didn’t sell over a year ago!

    • rabbittrader1 says:

      Rabbit says $26 but then final drop to $22 . Gold usually tracks oil. Looks like “abandoned Baby” formation on the close of today . Not a good sign IMVHO.Anyway Happy New Year to All, (More money can be made FASTER on the short sude of gold, crude oil and the SPX than on the Long side,

  5. Dex T says:

    I have my doubts about Iran being able to produce oil for only $1 per barrel but there is no denying that they are rapidly approaching entry into the market! Iran’s Minister of Oil is expecting oil to trade around the $40 for 2016- about the range it is now.

    “ExxonMobil, Shell, and BP can no longer hope to compete with Saudi, Iranian, or Russian companies, which now have exclusive access to reserves that can be extracted with nothing more sophisticated than nineteenth-century “nodding donkeys.” Iran, for example, claims to produce oil for only $1 a barrel. Its readily accessible reserves — second only in the Middle East to Saudi Arabia’s — will be rapidly developed once international economic sanctions are lifted.”

    “The Telegraph reported that Zangeneh said he would cut prices to bring exports back to pre-sanction levels. The Houston Chronicle’s oil blog said new Iranian oil could wipe up to $15 more off the current price of oil, bringing it down to about $22.”

    “But Zangeneh also said last week that he expected the price of oil in 2016 to be about $40.”


    • Dex T says:

      The Saudis, meanwhile are cutting subsidies and increasing their “defense” budget- no doubt in anticipation of greater instability at home and in the region due to low oil prices. They recently aren’t betting their domestic policy on an oil price “rebound”.

      “Confronting a drop in oil prices and mounting regional turmoil, Saudi Arabia reduced energy subsidies and allocated the biggest part of government spending in next year’s budget to defense and security.”

      “The collapse in oil prices has slashed government revenue, forcing officials to draw on reserves and issue bonds for the first time in nearly a decade. The government recorded a budget deficit of 367 billion riyals ($98 billion) in 2015. That’s about 16 percent of gross domestic product, according to the National Bank of Abu Dhabi, but below the 20 percent forecast by the International Monetary Fund.”


    • rabbittrader1 says:

      So who do you believe? The Houston peop[e or the Iranians? The E.W.Wave says $22 to $25 per barrel. .

      • Dex T says:

        I believe “some” of what the Iranians are saying. I think they are minimizing the price of their oil production or maybe only some wells can produce it that cheaply. But, there is no denying that they have vast reserves and are going to pump vast and strong. Cheap oil is to their benefit since they need to establish market share immediately.

        I believe that Oil is going under it’s 2009 low. I think it will get to $22 and lower in a few years but not just yet.

        • CampFreddie says:

          Dex, Interesting info on oil, thnx.

        • simpleiam says:

          Why stop there, Dex? I’ve seen WTI at $10, so why $22? Wascally Wabbit with $26?

          FACT: Nobody knows how low it will go. It’s the most volatile of all the commodities traded.

          Even scarier, I met a guy who bought XOM at $1 per share! Co. savings plan, he showed me the statement. Too bad he didn’t sell over a year ago!

          • Dex T says:

            I’m not stopping there. It was simply the price point that rabbit mentioned from Elliot Wave so I used it as a reference in reply to his post.

            I’m looking mainly on a shorter term basis. Right now it’s trading over $36 so I’m not expecting under $30 in the next few days. When it breaks it’s
            s 2009 low of over $33 I will reevaluate.

          • simpleiam says:

            I read ya, Dex. I’ll let you in on a not-so-secret secret:

            1. The Iranians are lying about that $1 oil.
            2. The Russian equipment is in bad shape because they don’t know how to repair it. They do some $h1tty rig repair job and it falls apart. They have to send for Houston People to do repairs. I know, because I send Houston People to Sakhalin Island all the time. You can forget Russia doing anything on their own; they don’t know how, don’t want to learn, and are constantly fighting each other over what and how to do everything.
            3. Everybody knows, including Houston People, that the hay-day of Big Oil is likely over, gone, done, kaput, and finished.

            Nothing in any of the reports that are posted here have any new information. Big Oil is way ahead of the media; in fact, US govt gets much of it’s intel from oil co. employees. Sent a lady to Iraq a few years back. She’s an ex-Navy, nuclear engineer. She’s now a Mgr. just below VP status. Gee, wonder how that happened?! LOL! 😉

          • Dex T says:

            Simple, I agree with you completely. However there are a lot of bulls on this site (and throughout the internet) who keep looking for an oil rally and for a new oil bull to begin.

            There are many people purporting to be in the oil industry and from Texas commenting on various articles claiming that a new bull will begin. A lot of energy firms lost vast sums betting on oil so I don’t think the knowledge is that prevalent.

            it just brings the question- without energy how can the markets keep advancing in P5?

      • simpleiam says:

        The Houston People? LOL! Okay. I don’t know what “Houston People” have been saying, but wish you’d let me know.

    • ABchart says:

      Thanky you Dex.

      Iran produce Oil for only 1$/barrel? This is done by the 72 virgins or what? 😉

      Otherwise, Saudi Arabia yesterday announced a budget deficit of $98 billion for 2015, and also announced +50% at the pump for the consumers.

      • Dex T says:

        Possibly forced labor. Or they are only counting certain costs.But yeah the claim is not likely

        They will have to offer cheaper oil just to gain market share and then increase production once they have established customers.

        Global economy is going to have to turn up big next year to go through the supply.

  6. rabbittrader1 says:

    If Crude Oil is spoiling the SPX party and if one accepts that crude oil is dropping to $26 per barrel, then what does that imply about the SPX?

  7. EL MATADOR says:

    Well so much for WS/Media pundits cheerleading of “Years Ending in 5’s” are Bullish….We are about to witness the first ever back-to-back negative closing on the INDU (2005 and maybe 2015).
    Is the 5 Year thingy turning into a busted pattern or is it changing trend, anyone?

    Now WS/Media is cheerleading the so called “Bullish Presidential Election Year” and so called “Bullish Return After A Flat Year” (while limiting the stats to 1960, how convenient of them). But if you dig deep enough, IMO, 2016 favors Bears and if my market analysis is right then I’m looking forward to the much anticipated Kick-off of Cycle 2 Bear.

    Cheers and Happy New Year

    • fionamargaret says:

      You sound a bit jaded El Mat…not to be. As we say “keep your pecker up”

      • EL MATADOR says:

        Fiona – I’m still bullish that we are in P5 but I believe we are in the last innings and I hope we get nothing short of 2175 SPX but the Market’s dominant factor in determining stock market’s major direction, Monetary climate, has been leaning toward the dark force. Fed is draining liquidity/money out of the stock market and it started with the QE tapering and now it’s raising rates. The market is trying to adjust to reduced liquid/money due to negative monetary climate but it is struggling to hold at the seams. Watch how market behaves as Fed continues to hike interest rates. The closer the rate hikes are spaced the more negative it is.

  8. Hi All –
    My main purpose today is just to wish you all the best in the New Year – whether from a personal, or a trading or an investing viewpoint. As the chart below shows, and as most of you know, there really have not been any significant new highs or lows yet, so several Elliott Wave counts are still possible including Primary 4, continuing, and Primary 5, underway. There still is not a good way to distinguish, and much of the chatter on here reflects that situation.


    Some of you may say, “well what good is that from an Elliott wave point of view”? As you know the market has been very whippy of late, and the volatility continues. So, it might be a time to describe the market as ‘sideways’ until we get more clues, and then apply that description to one’s own strategies. From my own perspective, and as reflected in my blog, Primary 3 was so long in time that a longer Primary 4th wave would not at all be unexpected.

    For me, it’s been a time to enjoy family and friends and begin to reflect on what would be better in the New Year. Dream it, and then Do It! Best wishes to you all.

    • jobjas says:

      As I have mentioned before in this forum , It is crucial to identify the dips in the larger time frame charts whether it is minor 4 / intermed 4 / major 4 / primary 4.Once that is ascertained look for a 5 wave move up of one degree lower to find the top of the larger wave.

  9. Gary Lewis says:

    Puerto Rico defaults (yawn). Isn’t complacency wonderful? But when Janet announces a bailout, the market will soar. How cool is that?

  10. blackjak100 says:

    Minute ii fib time & price confluence 2067-2068 between noon-12:30pm. tend to be powerful when they line up.

    • fionamargaret says:

      ..sounds good BJ – is it even possible this is wave 5??

      • blackjak100 says:

        No, because then wave 4 shows up as 2 red candlesticks on the daily and wave 2 has no red candlesticks. Would not look right at all for an int degree wave.

        • scottycj1 says:

          There are 10 different EW counts out there….WHY ?
          Difference of opinion….yours must be right
          Also you don’t even know what degree i’m talking about

          • blackjak100 says:

            Lol…well mine should be right if this is minor 3 of int i. Really doesn’t matter what degree it is if this is major 3….can’t have much overlap. I respect everyone’s opinion and all outcomes, but will not change my count unless I’m proven wrong.

          • quantmaven says:

            What is your count for crude oil? My only issue with the bull hypothesis you have is that unless crude oil magically starts to do something on the upside, it will drag the S&P 500 down.

          • blackjak100 says:

            Do not trade crude as its a tough animal. My rough guess would be in some type of wave 4 right now with wave 5 down to come for a long term tradeable bottom.

          • fionamargaret says:

            I don’t have counts QM (as I don’t do waves), but numbers and sequences I do.
            UWTI is a buy at 3.50.
            Yes, I like your work.

  11. ABchart says:


    The main scenario is the pink (posted last week). But the orange one is still possible because we didn’t exceeded 2085 (bearish TL). And we have a big weekly resistance on European indices.

    55% pink.
    45% orange.

    After a potential decline in early January, SPX is headed for 2200+ (may be 2280), DAX for 12500+ (may be 12800), CAC for 5200+ (may be 5350).


    Will post an update next Sunday, after verifying som monthly data.

    Enjoy your holidays!

  12. manunidhi21 says:

    Namaste Tony.
    Isn’t Crude spoiling SPX party ?

  13. Read a couple things about gold.One guy had a 1060-1080 range.Break below would lead to 1030 and new lows.At 1059 right now.A new low I would buy more should be a +div again.In GDX until 3rd week of Jan anyways–up 3% right now since i went from 4% to 20% allocation..Hoping for more of course.Happy new year and the rest of the old year.

    • gasman88 says:

      Gold has been very frustrating lately, whenever it looks like it’s about to break out, bang… gets pounded again, but the range has to one either way. My guess is gold is due for a rally

    • chrisk44342 says:

      I remember when people were thinking that there was no way gold would approach $1000.

      • Gasman…very true.When it decides to pop the 50d it should be the real deal.Goldfingers crossed.

        • kevinm76 says:


          You are sounding similar to this past September before the bounce into October. Back then, End of quarter, this time end of quarter AND year. You were 100% correct and I believe you will be this time as well. Patience. The time is not right until next week. Jan-March should be a fantastic time for precious metals.

          Interesting note: If Gold closes were it is now TOMORROW within +/- 10 dollars on the monthly chart it will form a doji. Last time it did that was Nov 2014 and in two months time Gold rallied 177 points into Jan 2015.


  14. purplember says:

    does it mean much if there is a clear 5 wave down on 5min chart from 2082 to 2069 ??

  15. blackjak100 says:

    Notice how close his target is to TC’s 2397. Timing bull market to end mid 2016? Not so sure but long way away if count is even correct.


    • EL MATADOR says:

      Count is wrong. P4 did not truncate. OEX is the main living proof why SPX P4 did not truncate.

      • blackjak100 says:

        There you go again El mat. Actually P4 did not truncate as Natey has it if it’s going to match TC’s count. why can’t SPX truncate and other indices make marginal new lows like R2K, NYA, etc did???? A truncation usually happens before a strong trend in opposite direction which we saw 1872-2116.

        • blackjak100 says:

          should have said P4 truncated at 1872.

        • EL MATADOR says:

          I will keep it is quite simple, it’s about the each index constituents/components influence on the index price and not necessarily what some other index did. The OEX’s 103 stocks currently have huge influence on the SPX’s price vs the other 401 stocks in the SPX.
          As I’ve mentioned before all WS needs to do is bid up/down the OEX index (103 stocks) to control the market especially INDX (29 of 30 INDX stocks are listed in this index), SPX, NDX, COMPQ.
          Ask yourself this simple question, why didn’t INDX, NDX and COMPQ truncate?

          • blackjak100 says:

            Simple answer is they didn’t truncate because they are showing relative strength during P5. The non-truncated indices are a sign of relative weakness during P5 or bear market. Again I’m open to all outcomes, but I’m guessing TC will be scratching his head like me if this is not P5 from 1867/1872.

    • pooch77 says:

      Course we get pullback to 1900 could be up 25% by July

      • fionamargaret says:

        …everyone, just everyone, would jump on 1900….nice

      • blackjak100 says:

        Pooch, trust me if that happens we will be in bear market and I would give up trading because all the obvious indicators no longer work (VIX, $spx a/d line, etc.)

  16. purplember says:

    BJ are you counting 2005 to 2067 as Int I or 2005 to 2082 as Int I ?? you mentioned 38% retrace of 2044 to 2082 (is that minute I of Int III)

    • blackjak100 says:

      I’m counting exactly as TC has it except degree of labeling is not certain. 2044-2082 would be minute i of minor 3 of int 1. IMO, int 1 of major 3 should look like a 5 on daily chart so we have a ways to go before int 1 complete. It could complete by end of next week however at the earliest.

  17. skmcobra says:

    Guys, I have become a bigger believer in correlations even though I know they can burn you. When looking at P2 in 2011 and then P4 this past summer, the similarities are undeniable. This makes me a bull going into Q1 2016. I don’t know if 2300SPX will be seen but I definitely am looking for a new ATH in Q1.

    • chrisk44342 says:

      I guess I am in the ‘burn you’ camp. Correlations and fractals- things can look similar/resemble each other all the time. I respect TC’s analysis- the fact that he observed the 83% likelihood of a subdividing P5 based on prior P5s is a great observation. As a speculator, I put zero faith in this correlation because I was tought that every trader should approach their position as a 50/50 proposition. Will his insight be profitable? I don’t pretend to know- it’s all in how you manage your position and your risk and whatever edge you bring with you. Past history is not a bankable edge so I acknowledge it and ignore it at the same time.

  18. fotis2 says:

    It ain’t what you dont know that gets you in trouble.It’s what you know for sure that just ain’t so…Mark Twain (one of my favourite authors) from the movie The Big Short can’t say I enjoyed the movie the Revenant was much better…

  19. simpleiam says:

    BJ’s pullback commences.

  20. reckless says:

    I think the bull market will peak at 2175

  21. quantmaven says:

    Here’s my squiggle count on the ES:

    My forecast is aligned with Cygnet Noir. There is still some juice left out of this rally, at least 2085pts in my opinion.

    • quantmaven says:

      Well wave 4 is completed just before European markets open. This is the same thing that happened for wave 2. Wave 3 began around 3AM EST. Lets see what happens this time around… We have a flag / pennant / triangle formation, still unbroken.

  22. locanbbs says:

    Crude collapsing after hours.

    • locanbbs says:

      … leaves the stock markets (futures) apparently undisturbed (still climbing), but extremely overbought! Excessive optimism = “last gasp”?

    • locanbbs says:

      Just shorted SPX with close stop. Crude still falling.

      • quantmaven says:

        If you are comfortable losing money in the very short term, sure. This is what I think crude oil is doing: It seems to be tracing a triangle. While price is still in this downtrend channel, it remains bearish. If you short crude oil at this price, you might be surprised by a little upside tomorrow but nothing too terrible if you are not day trading.

        • quantmaven says:

          I checked this CL count again and it could be counted slightly differently with the triangle being already completed. In that case you could be right for crude oil to fall again, but will that translate to S&P 500 to drop too? At least it would stall the rally for sure..

        • rabbittrader1 says:

          Crude going to $26 per barrel. Get with the program.

  23. instigator928 says:

    Looks like TNA going up…On the daily chart have: CCI>100, Green Awesome Oscillator, True Strength Index Rising, Positive Klinger Histogram and RSQR has bottomed.

  24. locanbbs says:

    Thanks, Tony, for all your insights and readiness to share them in 2015! Looking forward to a great 2016 with your help! It’s not so often today that such unselfish helpfulness and lack of envy is found! (Especially in business!)

    By the way, one question:
    After the “Big Up” at the end of 2015, what is your experience about a “Big Down” in January to “digest” these gains, gains which in many ways seem artificial, probably based on “insider” mechanics?

    Thanks again!

  25. What a move on the $CPCE… looks like market is about to top out around here….

  26. Tony, thanks much for your excellent market calls, you are a wizard.

  27. hakunamatata1966 says:

    Thank you. Question, what spx level is expected in this uptrend to confirm we are in major 3 ?

  28. Gary Lewis says:

    Heads up for those who like to do the opposite of what I do – bought some March SPY puts this afternoon. Still looking for a test of the Aug-Sep lows. I guess others will interpret that as a test of the highs guaranteed.

  29. Minimum target for last week’s Big Up would be met at 2085. There are higher targets is SPX goes higher, but 2085 will be enough to call the Big Up a success.

  30. Vox Zeit says:

    Major-3 → Intermediate-i → Minor-3 → Minute-ii, in progress ?:

  31. manunidhi21 says:

    Thanks Tony.
    Crude data not good. Lets see if they work together or not.

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