monday update

SHORT TERM: gap down opening starts week/month. DOW -17

Overnight the Asian markets gained 0.5%. Europe opened lower and lost 0.5%. US index futures were lower overnight. At 8:30 PCE prices were reported unchanged, Personal income (+0.3% v +0.3)/spending (0.0% v +0.3%) were reported mixed. The market gapped down at the open to SPX 1927, then declined to 1920 by 10am. The SPX closed at 1940 on Friday. At 10am Construction spending was reported higher +0.1% v -0.4%, and ISM manufacturing was reported unchanged: 48.2 v 48.2. After what ended up being the low for the day the market started to rally. Just before noon the SPX hit 1936, then pulled back to 1926 by 1pm. At 1pm vice chair Fischer’s speech was released: The market then resumed its rally hitting SPX 1947 at 3:30. Then a pullback into the close ended the day at SPX 1939.

For the day the SPX/DOW lost 0.05%, and the NDX/NAZ gained 0.15%. Bonds lostΒ 9 ticks, Crude dropped $2.25, Gold rallied $11, and the USD was lower. Medium term support remains at the 1929 and 1901 pivots, with resistance at the 1956 and 1973 pivots. Tomorrow: monthly Auto sales.

The market gapped down at the open, hit SPX 1920, and then rallied to a higher highΒ at SPX 1947. From last Wednesday’s SPX 1873 low, and retest at 1874 on Thursday, we can now count seven waves up into today’s high: 1894-1879-1899-1886-1940-1920-1947. This pattern suggests, when this rally ends, it could be the end of the entire advance from the downtrend low at SPX 1812. Short term support remains at the 1929 and 1901 pivots, with resistance at the 1956 and 1973 pivots. Short term momentum ended the day with a negative divergence, and medium term momentum is neared overbought. Best to your trading!

MEDIUM TERM: potential uptrend still underway

LONG TERM: bear market


About tony caldaro

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284 Responses to monday update

  1. learner3078 says:

    Hi Tony, for the countertrend rally, could 1812 to 1947 be the first wave up, and 1947 to 1897 in the second wave, with a third wave up from 1897 to follow, potentially targeting 2019 or 2040.

  2. Short term momentum ended the day with a negative divergence, and medium term momentum is neared overbought.

  3. fotis2 says:

    I remember last year it would take the whole day to move 5 pips now it does it in 5 minutes..

  4. S2 says:

    SPX targeting 1750ish probably within 1, maybe 2 weeks…low odds to last up to 6 weeks. Why 1750ish? It is…
    (1) the location of the bull market uptrend line 667–>1075,
    (2) near the 23.8% Fib retracement of the bull market at 1788 in typical Fib step-by-step pattern,
    (3) the first H&S target of 1755ish,
    (4) just above the center Andrew’s pitchfork line from the last 2 bear markets at 1720ish,
    (5) w5=w1*1.62 Fib (1947-[(2116-1993)*1.618) at 1948,
    (6) the 8-10% drop seen all 4 times since CY1987 that the weekly 13SMA, 20SMA, 34SMA and 50SMA all trended down in proper order as occurred Monday (1947-8to10%=1753 to 1792),
    (7) similar to the ongoing CY2007-2008 analogy with a retest of the lows in this case 1812 and
    (8) a match for confirmed bear market behavior of surprises to the downside, more extreme sentiment and weaker bounces
    I’m expecting the recent 1872/1873 pivots to be pierced, small bounce and then crap the britches. Or my appearance could be a sign of new bull market highs. πŸ˜‰ Good fortune.

  5. uncle10 says:

    Thanks Mr T. 50 is the new 10. πŸ™‚
    I was trying to explain negative rates to my teenager. He looked at me funny and said ” thats crazy”. May you live in interesting times…
    gl all.

  6. phil1247 says:

    sneaky es broke then regained .50 level of long 1895

    could be short squeeze brewing

  7. Lee X says:

    Did SPX just print 1900? I’m at a freaking Starbucks help a brother out

  8. captbara says:

    Possible falling wedge for most of the day here.

  9. Jimmy Porter says:

    Anyone else see this c wave as a diag. tri with the sp starting to create a smaller diag tri. currently on 3 wave of mini tri

  10. Jim Guthery says:

    Bought XIV hoping for bounce – Tight stops for sure!

  11. phil1247 says:


    careful with shorts here…..if this supports here we could run up to 1960.

    but the short from highs to here would have to break first

  12. phil1247 says:

    1893 es target coming up next

  13. tomasso60 says:

    national debt!

  14. rd3777 says:

    This should be a powerful wave down,as every stock has joined the party now.

  15. xuwu992000 says:

    Today, we are going to bottom around 1890, at 2:30pm. Then a bounce for w-2 of Major 5.

  16. mjtplayer says:

    Fresh lows for all the dying coal mine canaries: DB, CS & UBS

  17. phil1247 says:

    1898 es target hit

  18. Tony, re: “no, waves need to be quantified….if we drop lower Major A continues”

    In science, laws are 100% reproducible, rules and fungible. I don’t want to put you on the spot, only trying to understand your/OEW thinking. Question, is there a possibility that Major C started? At what level would OEW confirm that major wave C started?


  19. locanbbs says:

    Spx “missed” opportunity for easy buy signal at 1905. Looks like a longer consolidation or going directly down = 50/50.

  20. All the bearish sentiment is a great backdrop for an explosive move higher after one of the greatest bull markets in history. Not to be underestimated imho. We may have begun P5 Major.2 and when it ends watch for P5 Major 3.

  21. phil1247 says:

    bot bonds
    added stock shorts here

  22. 123 abc says:

    Tony, what is your intraday instinct at the moment?: is Major-c of Intermediate-c in progress to the upside, or is the continuation of Major-a to the downside in progress?

  23. valunvstr says:

    They’ll defend 1910 like they defended 1890. Up we go to 1970. It’s amazing the global markets can fall apart but they will prop up the is until they just can’t anymore.

    • mjtplayer says:

      SPX 1,970 has been both support and resistance many times over the past couple years. It would not surprise me that it acts as a magnet once again. Also, 50% retrace from 2,116 lies at 1,964. 50% retrace from 2,134 lies at 1,973.

  24. phil1247 says:


    took a step back ….while 163 is strong resistance ….thru there we could be looking at 176 target

    bigger triangle in play and this post triangle thrust to 176 could put in the bond top

    not so anxious to sell 30yrs i have left now

    163 is key

    TONY……..your recent post made me reconsider a bond top here….thanks!!

  25. johnnymagicmoney says:

    four shots at breaking 1910 here and then impulsing higher ………………hmmmm

  26. how about a small rally to 1920 then close at 1900?

  27. johnnymagicmoney says:

    What do you guys think of Utilities here?

  28. 123 abc says:

    7 waves down, is the bottom for Minor-b complete?:

  29. Shall we close the gap on SPX around 1893 or 1868? All things in time.

  30. locanbbs says:

    Tony, thanks for your great comments and instructions!
    Spx testing tough support at 1903 (futures).

  31. purplember says:

    OT: looking out my window: heavy heavy snow, 35mph wind and cant even see my neighborhood house across street…….. this is where i ask myself why in the heck do i live in the midwest ugh?

  32. learnedmylesson25 says:

    Last post til later but gold seems to be watching to see if SPX breaks 1910 convincingly.Then hopefully it (gold)can rally some.Off to the casino (not Shanghai)

  33. SPX 5 min chart broke down from a wedge, best look for me is around 1881

  34. Millan Tomic says:

    1947 is unlikely to be the high on this bounce. Usually, intrayear tops in year 4 of a 2 term are made in Spring, then escalate downwards. Since 2016 started at 2043, bounce should retrace to 2000 is reasonable, best case 2040. If this is the case, most likely we have one more corrective ABC into higher high into Spring (that we retraced to 1950 almost was textbook). So next move down should be corrective (making a higher low, worst case low retest), IMO. Sometimes, tops are made in March, so we have 6-8 weeks left, oif the model is to repeat (sometimes, can extend into April).

  35. Gary Lewis says:

    As I wrote in my blog on January 25,

    “Important support levels will be watched for over the next two Friday closes. This coming Friday, the last trading day of January, I’ll be looking for a Four Month test of the August low at 191.61. The following week will be a three week test of January 15th’s close at 187.81. If we maintain support over these next two weeks, a substantial rally could happen.”


    We did hold above 191.61 on Friday, proving a successful test of the monthly lows. Now for a three week test of the low this Friday at 187.81.

  36. Jim Guthery says:

    Does anybody know the Bradley turn dates?

  37. stmro says:

    So far all its doing is testing the middle band at 1915. The close relative to this line will be critical.

  38. 123 abc says:

    If this is Minor-b of Intermediate-c, it really needs to find support pretty much now; currently at the 50% retracement level:

  39. learnedmylesson25 says:

    Avi yesterday said it was important to hold 1918
    and then 1910.After 1910—down to 1815-1825.Below that 1700-1730.Then 1530.Gold underperforming considering .

  40. gtoptions says:

    Thanks Tony
    Monday SPY tested & failed WR1 @ 194.16
    SPY ~ Below WPP @ 191.55 ~ Next WS1 @ 188.95
    GL All

  41. phil1247 says:

    1902 es target coming up

  42. elmer510 says:

    Strong decline now at SPX and according to Tony it’s possibly Major A continued.

    Then Major B rally might be postponed – a last waltz for the bulls still to come ?

  43. maxmax12 says:

    What sectors would you guys short the next couple of years if we are indeed in a bear market?

  44. mjtplayer says:

    Tony, do I understand correctly that without an “uptrend” confirmation, OEW would view this rally as a continuation of major A?

    Also, did you see my squiggle count chart I posted last night? Your thoughts? I have 5 corrective waves off the Fed day low (int B) to complete minor a, as I don’t think yesterday mornings’ drop (20pts) was large enough for minor b. 60min SPY candles, we printed a “dark cloud cover” in the final 2 hours of trading yesterday, which signals a reversal. I’m counting this mornings’ drop as minor b if it can drop closer to 30pts or more from yesterdays high of 1,947

  45. 123 abc says:

    Is it plausible to suggest that Minor-a completed at 1947, with Minor-b now in progress?:

  46. NEWBIE says:

    Buy physical gold and silver, its gonna rocket as the dollar dies and the market implodes.

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