Monday update

SHORT TERM: gap down opening, DOW -178

Overnight the Asian markets lost 0.1%. Europe opened lower and lost 3.1%. US index futures were sharply lower overnight, and the market gapped down at the open to SPX 1857. The market had closed at SPX 1880 on Friday. The market continued to decline to just past 10am when it hit SPX 1839. Then after a rally to SPX 1849 by 10:30 it made a lower low at 1833 by 11am. Another rallied followed to SPX 1848 by 12:30. Then the market made its low of the day at SPX 1828 at 2:30. After that the market rebounded strongly to hit SPX 1861 just past 3:30 before closing at 1853. Volatile day!

For the day the SPX/DOW lost 1.25%, and the NDX/NAZ lost 1.70%. Bonds gained 27 ticks, Crude dropped 85 cents, Gold rallied $15, and the USD was lower. Medium term support drops to the 1841 and 1828 pivots, with resistance at the 1869 and 1901 pivots. Today: long term investor sentiment was reported lower: 52.5% v 55.3%. Tomorrow: Wholesale inventories at 10am.

The market gapped down at the open to start the week. The fourth gap down opening in the past six trading days. The market opened below the two week support level at the 1869 pivot, and continued to decline. The first decline held the 1841 pivot, then the next decline found support at the 1828 pivot. There is a cluster of pivots in this area: 1818, 1828 and 1841. The next lower pivot is at SPX 1779. With todays’ drop below the SPX 1852 level, noted in the weekend update, it appears the first downtrend of this bear market is actually extending. While the SPX has still remained with the downtrend range (1812-2116), a break lower now appears more probable. Short term support is at the 1841 and 1828 pivots, with resistance at the 1869 and 1901 pivots. Short term momentum rose to neutral after remaining extremely oversold early in the day. Best to your trading!

MEDIUM TERM: downtrend may be extending

LONG TERM: bear market


About tony caldaro

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240 Responses to Monday update

  1. stmro says:

    Was that a completely flat close?? On days like these its as if the algos are just messing with us.

  2. mike7x says:

    Uhhhh ohhhhh…
    “Fed asks banks to prepare for neg Tsy yields in stress tests –CNBC sources…”

  3. john b says:

    If the 1870 area cant be won,1800 could be next

  4. captbara says:

    Yen kind of looks toppy, like 5 up from Jan 29.

  5. lunker1 says:

    30min candle having trouble closing above 1854/55

  6. rc1269 says:

    rarely does it signal a capitulatory bottom when we trade sideways for a day and a half after dropping 70-80 points the prior day and a half. just sayin

  7. Would love to see accelerating down now. or somethigh else is playing out

  8. fotis2 says:

    Big Bad Bear not taking nonsense at 1869

  9. Lee X says:

    See how CL gave a heads up to the rally in SPX ? Pretty amazing

  10. fotis2 says:

    Very sneaky same like yesterday

  11. stmro says:

    If we close here (1865-1870), we are at the Goldilocks level for maximum confusion and event risk.

    Does Yellen blow us through 1870-1880 resistance tomorrow or does she disappoint and send us to a lower low below 1812? Place your bets🙂.

  12. captbara says:

    1870s coming at least

  13. Last attack was an other abc. How many more they wants?

  14. At my opinion, during Testimony the market will crash big and none could do nothing since speaking at the convention. No joke, can you imagine…. would be outrageous for Yellen.

  15. Gary Lewis says:

    All bullish now on SPY.

  16. NEWBIE says:

    Big short squeeze coming just in time for:

  17. NEWBIE says:

    My thoughts: Gold & Silver is going to rocket, Oil is going to rocket. Everyone keeps talking DEFLATION, I think Hyper INFLATION could be right around the corner.

  18. senrex says:

    With oil down 6%, the market should be down much more?

  19. Me thinks 1880 is going to be a ceiling on this SP 500 for a LONG TIME

    Lots of Fibs line up there, 1782 should be bottom of 5 of 3, then a Rally 4 to 1880 maybe 1875

    Then another leg to 1680 for 5 from 2104

  20. aahmichael says:

    Just like yesterday afternoon, SPX has put in another hourly 3BR. Yesterday’s did not work out, but normally these do work out in a big way, when they’re in the direction of the trend. This one will be invalidated at 1855.89.

    • EL MATADOR says:

      Since everyone is talking and posting goldie stuff, well I want in on the conversation, here is my chart fwiw. I’m expecting current rally cap near the cyan or magenta channel trend line. then a pullback to back test the break out from either orange trend line or red channel trend line before resuming uptrend rally.

  21. lunker1 says:

    daily chart – 2104-> 5=1.62×1=1784
    60min chart – 1947-> if 1862 was 4, then 5=1=1787

  22. llerias7 says:

    Crude oil on its way to low 20´s. Final low is the consensus…

  23. captbara says:

    Hourly 8 EMA containment, wee

  24. lunker1 says:

    the intraday action yesterday and today appears to be the opposite of Jan 27/28.

  25. johnnymagicmoney says:

    Things to ponder

    1) Let’s say a big US Bank or financial firm starts having issues before November. Don’t think a single candidate would support helping. That would not be good and it would not be suprising. Could be a lot of symmetry to the last election cycle
    2) Chinese lie (we all know this). So if they admit to GDP of 6.7 what really is it?
    3) Why are the European Banks getting obliterated? China? Energy? What do we not know?
    4) Greece has a huge payment coming. At some point I think they let go of the country. The political will for each additional restructure is waning to say the least.
    5) Energy, transports, small/mid cap, biotech all obliterated yet there are oodles of large cap stocks that still trade at very high valuations. Regardless of good earning reports the market can assign any valuation it wants to a great company that is beating expectations. Facebook can trade at a 20 PE. If the FANG stocks trade at reasonable long term valuations what price are the overall markets then?
    6) There have been no sustainable market movements on the problems of say a Russia, Brazil, or Japan yet any one of them could bring the markets down if their debt is unpayable. We focus so much on China but I run out of fingers trying to count all the sizable countries that could adversely affect the US markets. Lots of talking heads focus on China and ignore the rest of the world – this isn’t just China – this is global. I think Kyle Bass will make a butt load of money on Japan
    7) Going back to the European Banks ………….there was leverage and bad debt but the part of the fall as you all know was attributed to not knowing who was lying or had a true understanding of their firm’s solvency risks. DB issuing a statement today about their strength followed by a new low was quite reminiscent to 09.

  26. mjtplayer says:

    US Dollar Index – testing support at the 95.70 area

  27. 123 abc says:

    Tony, in regards to the current Minor-c decline, from 1927 to 1828, would you say it was 3 waves or 5 waves?

  28. Just some stuff I m watching:
    RSI on the GDX hourly going lower as GDX tries to move higher.
    Break of 17.25 to 17.30 breaks an hourly uptrend line.
    Back inside the BBs-middle band near the 15.30-15.50 gap area.
    Of course if the Dow falls 300 today technicals probably won t matter today.Good luck all.

  29. nickokc says:

    Tony or any generous contributor what’s the current count for XBI thank your very much in advance.

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