Monday update

SHORT TERM: roller coaster day, DOW -123

Overnight the Asian markets lost 1.0%. Europe opened lower but gained 0.7%. US index futures traded generally lower overnight. The market opened three points below Friday’s SPX 1948 close, then bounced to 1950 by 10am. At 9:45 the Chicago PMI was reported lower: 47.6 v 55.6, and at 10am Pending home sales were reported lower: -2.5% v +0.1%. The market pulled back to SPX 1944 by 10:30, then rallied to 1958 by 11:30. After that it started to pullback again. This pullback lasted for the rest of the day as the market closed at SPX 1932.

For the day the SPX/DOW lost 0.80%, and the NDX/NAZ lost 0.75%. Bonds gained 5 ticks, Crude rallied $1.05, Gold rose $14, and the USD was higher. Medium term support remains at the 1929 and 1901 pivots, with resistance at the 1956 and 1973 pivots. Tomorrow: Construction spending and ISM manufacturing at 10am, plus Auto sales during the day.

The market opened relatively flat on the day, bounced, and then hit SPX 1944. After that the rally fell short or Friday’s SPX 1963 high, and then made a lower low at 1932. The weakness we had noted on Friday definitely made its appearance today. Thus far we still have three waves up for Intermediate wave C: 1939-1925-1963. The pullback from that high is also three waves: 1944-1958-1932. Intermediate wave C is certainly not looking too much like Intermediate wave A at this point. Let’s give the market another day or so before calling the SPX 1963 high the end of Int. C / Major B. Short term support is at the 1929 and 1901 pivots, with resistance at the 1956 and 1973 pivots. Short term momentum ended the day quite oversold. Best to your trading!

MEDIUM TERM: uptrend likely underway

LONG TERM: bear market


About tony caldaro

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317 Responses to Monday update

  1. 123 abc says:

    Tony et al, wonder if anybody can assist with a basics question:

    Major-b has so far consisted of 7 corrective Minor waves; and corrections can also be 7, 11 or 15 waves. However, if you look at the internals of Intermediate-b, doesn’t it consist of 2 Minor waves also? Therefore, why isn’t the overall structure for Major-b thus far considered as 9 waves?


  2. Jimmy Porter says:

    I think my favorite wave at the beginning of a bear market is wave 2 or wave b depending on which wave theory you use. TV is now calling for 1810 as the base, excited about huge rallies, everyone is starting to feel warm and fuzzy on the inside that the worst is over. Everyone who was wishing they would have sold back in December and saying they would do anything to have the market go back up and then they will sell… now are thinking that it may keep going higher and make new highs so they don’t sell.
    Then the first sell off starts and everyone says that it’s just pulling back to consolidate so it can go higher like the rest of the rally from the low. Then it rebounds to sucker more people in but falls short and turns hard to the downside and everyone starts to panic.
    Then all the people who said they would sale once during wave 2 or b and didn’t hold on to their stocks thinking if it can rebound once it will do it again, while all the smart players are reaping in the profits taking the market to new lows


  3. steplaland says:

    This whole thing looks like the august drop and recovery. Getting nervous.


  4. kvilia says:

    Don’t forget a super Tuesday. Trump wins – markets will tank tomorrow?


  5. Tony, after today’s action which hit both of your pivots (1956 and 1973), will you consider the higher one again (2019) or do you think the 7 waves will do it?


  6. I just sold 50% of TQQQ at 91.81.


  7. The reason we had 1976 as one of our TOPPING pivots this week was as follows

    1810-1947 A
    1947-1892 B (55 Fib points and 38% Fib of A)
    1892-1976 C (equal to 61% of A)

    1999 is next pivot and we have 2 more convergences of 61% and 78% fib there… plus gap fill


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