Monday update

SHORT TERM: gap down opening then rebound, DOW +67

Overnight the Asian markets lost 0.3%. Europe opened lower and lost o.4%. US index futures were lower overnight, and the market gapped down to SPX 1990 at the open. The SPX had closed at 2000 on Friday. In the opening minutes the market bounced to SPX 1995, then pulled back to 1989. After that it started to rally. Just past 1pm the SPX hit 2006, when two speeches were released by FED officials:, Then the market started to pullback. Just before 3pm the SPX hit 1991, bounced, retested that low and then again rallied. Also at 3pm Consumer credit was reported lower: $10.8B v 21.3B. Heading into the close the SPX hit 2002, and closed there.

For the day the SPX/DOW gained 0.25%, and the NDX/NAZ lost 0.40%. Bonds dropped 5 ticks, Crude rallied $2.05, Gold added $6, and the USD was lower. Medium term support remains at the 1973 and 1956 pivots, with resistance at the 2019 and 2043 pivots. Tomorrow nothing on the agenda.

The market gapped down at the open, hit the low of the day at SPX 1989 in the first hour of trading, and then rallied back to within 3 points of the 2009 uptrend high. After that the market came within 2 points of the low of the day, and rallied again. A choppy day, with no clear direction, except for the support given to big oil stocks, and beaten down stocks, with the continuing rally in Crude. May need a reversal in the Crude market, before the next SPX downtrend gets underway. Short term support is at SPX 1989 and the 1973 pivot, with resistance at SPX 2009 and the 2019 pivot. Short term momentum dropped below neutral during today’s pullback, and ended just above neutral. Best to your trading!


About tony caldaro

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216 Responses to Monday update

  1. fotis2 says:

    Futes contained the drop at the 34ema tested trendline and held DT confirmed during trading hours 2000 level line in sand..

  2. simpleiam says:

    fionamargaret, haven’t seen you today, but you done good, Lady!

    • fionamargaret says:

      X Beav
      …and on my oil schematics, no 11….. 60 remains the dominant number, but other numbers will intertwine.
      I mentioned about a week ago, the oil price pattern was forming in bands i.e 26 – 40, 35-50, 50-30, and that is still how it is playing out.
      I suggested everyone buy 1000 shares UWTI + 1000 shares UGLD – cheap insurance.
      (I also bought UGAZ@.70……going higher).
      Keep the Faith.

  3. captbara says:

    Looks like buy the open tomorrow, gap up or down.

  4. Lee X says:

    Pivot time

  5. purplember says:

    need a close on the lows of day

  6. bud67 says:

    Lettie – if you read this. Contact me

  7. captbara says:

    An actual bear count (probably LD) confirmed before market close will be quite a shock.

  8. OneAndOnlyUniverse says:

    Tony ,
    You have mentioned oil a few times in the last week , ” the world is awash in oil , May need a reversal in the Crude market, before the next SPX downtrend gets underway.” I would like to know,
    1 ) Is crude an important factor in your bear market call to $spx 1100 2) What is your price target for $wtic at some time during the bear in 2017 ? 3) What makes you think that you have any edge in calling future prices in $wtic ?


    • tony caldaro says:

      1. Crude has nothing to do with our bear market call.
      It has more to do with how traders are playing the equity market.
      2. $11
      3. Just following Crude because traders are following Crude.
      Doesn’t give me any edge either way.

      • OneAndOnlyUniverse says:

        Edgar Martinez ( 11 ) , not a chance in 2017 ! $spx 1687 maybe 1575 , that’s it !

        • tony caldaro says:

          Phil Simms says yes =)

        • ewtoriginal says:

          OneAnd Only,
          You ran a trading desk and you use the phrase “Not a chance”? I ran a big desk too for a long time.I learned to never say Never. Ever. But, that said, I too doubt $11 but don’t doubt SPX 1550 or 1275.

          • tony caldaro says:

            The CRB, which nobody cares about nowadays, recently hit the same level it was at in the year 1973.
            The demand weighted GTX, which thanks to GS everybody follows now, has already taken out its all time low in the year 1998.
            Nat Gas took out its 1998 low just this month.
            Crude’s 1998 low is $10.65.
            The world is awash in Oil, and the Global PMI was reported at 50 just this month.
            When the world enters recession, with all this supply, what is going to stop the decline?

          • cosmos77 says:

            Thanks Tony. Your rationale for the low in oil at $11 area is exactly why I love this blog. Your price projections are always base on thoughtful analysis based on your many years as a student of the market. Keep up the extraordinary work here. Thanks.

          • OneAndOnlyUniverse says:

            In dealing with risk bids or any index , i would never say , ” not a chance .”

            $11 oil in 2017 , impossible and ” not a chance ” !

  9. llerias7 says:

    A parallel with 2008:…

    • llerias7 says:

      Should see a final leg up…would be like the “kiss good bye” for wave-B.

      • valunvstr says:

        100 day sma and 200 day ema happen to be at 1999/2000. Reasonable why market stalled there. 100 day ema is at 1975 and rising. In October the market failed at the 200 day ema, tested the 100 day ema and then moved higher. I’m not trading based on this but thought it was a comparison worth noting as the 100 day ema isn’t that far away and would provide a reasonable pull back before another move higher.

  10. blackjak100 says:

    As some people have noted, there is nothing bearish about this price action. DOW is about to go green as I type. The LD TJ proposed works, but need to see more first.

  11. Peter Sliney says:

    I think we’re too close now not to have to year end gap filled. Until then light volume and choppy action. Pick your spots tight stops and serious discipline.

  12. simpleiam says:

    Looks like a big C&H since the open this morning on 3 & 5 minute charts. Guess we’ll know soon enough.

  13. Here is a ‘live’ count on the SP500 5-min chart in “real time”. There are still numerous possibilities for the wave structure. If an expanding diagonal forms clearly and with the right measurements a longer downward move can be made. Right now the hourly retracement has only been 23.6% of the second upward wave (not sure if it is iii or c).

    SP500 (5 Min)  3_8_2016h

    As with all diagonals – since they are formed as zigzags – there ‘MUST’ be an alternate count, and that is that, so far, only a double zigzag downward has formed.

    Cheers and enjoy the chart.

    • Now above the last black a wave; minimum for a wave (4) is 1996.34, because in an expanding diagonal wave (4) ‘must’ be longer than wave (2). Thus, the chart makes an actual Elliott Wave prediction.

      • blackjak100 says:

        Well done TJ! I agree and as I said yesterday, the only bearish count was a LD.

        • Thanks! bj .. just keep in mind that diagonals can be ‘ending’ as well as ‘leading’. There is no certainty until the origin is exceeded, upward, or it’s wave (5) is exceeded downward. If it’s an ‘ending diagonal’ it is c of a fourth wave, with a fifth wave to follow upward. If it’s Leading, then it would be to a minute i one wave, lower.

      • With the lower low, the likely count is W-X-Y-X-Z, using the alternate in red; not sure the final part of the Z wave is completed, but it can be counted that way.

    • H D says:

      ET, just an observation, maybe you can comment. A majority of the counts you propose are diagonals, leading, ending or triangles. Do you feel like those are best practice, highest odds counts? Did last weeks leading diagonal, you proposed, terminate or invalidate? Is there an easier way to count? You are showing WXY, and ABC’s as 123’s. No offense meant, you can preview my count below and tear it up as you see fit.

      • First.. this is patently not true. My hourly up count from the 1812 lows – as I have explained on here – currently contains only five-wave sequences, i.e. impulses, where other people’s counts contains sevens, etc. Whether it is A-B-C, up, or 1, 2, 3 ,4, up remains to be seen. On the five-minute chart above, I could only see three-waves sequences down (although I looked long and hard for five wave sequences, and labeled some). So, a diagonal and a multiple zigzags came to mind, and it is labeled as such because that’s what I saw. And that’s how I label waves: I label waves for ‘what I see’ and not with some ‘pre-conceived notion’ that a ‘bear market must have started’, etc.

        Yes, in this case the diagonal did not work out and that tells one a lot! It tells one that “five waves sequences down” are not ‘yet’ to be found, and that is critical information. Yes, five wave sequences down can not be found – even if one invokes diagonals! Yes, there is some ‘way’ that nested 1-2’s lower could be labeled, but that is not clean yet either.

        I was ‘possibly’ looking for a diagonal to be an ending ‘C’ wave to a fourth wave flat, but that did not materialize. So, it may be a fourth wave ends as multiple zigzags lower, but that needs to be proven by a new high.

        And, not for anything but because the Dow did not make a new low where the S&P did at 1812, Prechter ‘still’ sees a triangle as ‘possible’, but not confirmed on the DOW as a Primary 4th wave. But, he too, sees the possibility of a Primary C top in May, 2015, as well.

    • aahmichael says:

      What you have labeled as wave 2 made higher highs in several of the other major domestic indexes. Therefore, it’s impossible to label that as a wave 2. 2006 has to either be a failure, or a B or X wave.

      • Yes, I noted that in the Dow; which is why I was thinking of a fourth wave possibility. Perhaps the Dow had made a higher B wave, and the S&P had not. Still, it is correct to label such in the S&P500. I count each index, objectively, for what it is. Sometimes the count is incorrect or invalidates, as this one did. I would rather accept the invalidation of a count to learn what the ‘true’ count – or a better count – is than to break the real rules of Elliott wave and come up with patently false patterns such as the ‘irregular zigzag’ as other wave counters have done.

        • aahmichael says:

          I’ve mentioned here many times that whenever I come up with a count, it has to work in all the indexes, or else I know it’s not the right count. So, I never settle on a count in SPX without verifying that it’s also a valid count in W5000, DOW, XMI, OEX, NYA, COMP, and NDX.

          • OK. So, in this instance wthe NYA did make the higher high, as did the DOW. But the COMP did not, (according to, so even as I do see some merit in this idea – which I hold ‘in some ways’, too, it leaves open the question of how many of which indexes must all confirm together. To my knowledge, you have not presented any objective research on this topic (of ‘developing a correct EW count by using only confirming index counts’), and so at this point it is still just an ‘idea’. I have often read in newsletters things like, “the transports topped here, and then the Nasdaq topped a few weeks later, and then the S&P topped, followed by the Dow”. So, if that is the case, how sure can one be of this position that all major indexes must have the same count? They don’t all have the same components, so even logically, it is still an ‘iffy’ proposition.

          • aahmichael says:

            You won’t find this in any book. It’s my own discipline developed over my 30 years of real time trading and counting waves. I think of all of the indexes I listed as different representations of the same thing. They each simply give different views. It’s no different than when I had to go in a month ago and get x-rays on my knee. Did they just take one x-ray from one angle? Of course, not. They took many x-rays from every angle imaginable. Why do they do it that way? They do it that way because they know that different views from different angles expose different things…yet, it’s all the same knee. To me, the different indexes do the same thing with the market. I do not include the trannies or the small caps in the mix, because they are independent of the broad market.

          • Ok. So now that you don’t include the transports, we can just ignore the long history Dow theory confirmations, etc., and we can ‘just take your word for it’ that your idea has merit. You refuse to answer the two questions posed, “how many of which indexes, and how often does it work or not work out of how many samples available”. Failing to do this, I’ll just stay with what is in the book.

          • aahmichael says:

            First of all, I’m not asking you, or anyone else, to do as I do. I’m just sharing what I do, how I do it, and why I do it. I will say, however, that it’s because of how I count waves that I immediately knew that it was impossible that Monday’s print of SPX 2006 was a wave 2, as you had it labeled. It’s also why I immediately knew (and stated in no uncertain terms) last August that Tony’s P5 count was doomed for failure. (even though some on this board called me delusional at that time.) Finally, Dow Theory has absolutely nothing to do with wave counts, and in regards to your 2 questions, I already listed the indexes that I include, and the number of times that my method hasn’t worked work is zero. Think about it…there are only 2 kinds of waves: impulsive and corrective. It’s absurd to think that the Dow would be in an impulse wave at the exact same time that SPX is in a corrective wave.

    • 123 abc says:

      Thank you for the great analysis; always enjoy inspecting the squiggles. Here is another idea, albeit probably breaking many rules…!


  14. OneAndOnlyUniverse says:

    You guy’s feeling lucky ???? Sorry , not yet

  15. ewmarkets says:

    SPX may test the 89-week MA presently at 2026. In 2008, bear market started in earnest after rejection at 89-week MA. In 2001, SPX endured the bulk of the bear market evaporation after failing to reach 89-Week MA. Tony set an upper limit of 2028; it would coincide with reaction at 89-week MA.



  16. johnnymagicmoney says:

    The headline you will see eventually

    “Markets up on stimulus bets after nuclear proliferation”

  17. H D says:

    GM Tony, all. 32 and 79 (both weekly pivots) make a nice 2-4 TL, maybe the most objective tool in EW.

  18. gtoptions says:

    SPY ~ So far holding WPP @ 198.37 ~ Ext to WR2 @ 203.33 ??
    GL All.

  19. Our weekend report had at least 7-8 charts with CLEAR signs of a market top.

    the 2009 number was 10 over my projection

    But I figure out as posted here a few days ago that the ABC up from 1810 was legit

    1810-1926 A
    Then Irregular ABC 1926-1902-a; 1902-1950;b 1850-1892-c for a 38% fib

    Then the C was 1892-2009 which was 117 points, and A was 116 points… A equals C

    The charts put up were off the chain yelling for a reversal

    1932 is the first target on deck from the weekend report

    Best to all

  20. Arthur Knopf says:

    Didn’t get around to posting earlier, but about a month ago I started to keep a score card of the 16 indicators I track using +1 for positive, 0 for neutral and -1 for negative. Feb 12 was at +6, Mar 4 dropped to -1. Ratings are subjective.

  21. NEWBIE says:

    How much higher before the wheels fall off?

  22. So far they re attributing the oil selloff to “a fear of high inventory numbers”.Lol.Didn t bother them last week.

  23. mjtplayer says:

    No 10:30am rally today, that’s different. So far it looks like one of Tony’s “gap and go” days.

  24. fotis2 says:

    Argento1 excellent call on ALSI looks like this is it!

    • argento1 says:

      Cheers f!
      Looking for top40 44k now for a nice long entry, markets seem to be climbing a wall of worry and me thinks higher prices awaits after this weeks pullback into end of April!


  25. Is this part of wave 6 down and expecting wave 7 up to the 2019 pivot area to finish B ?

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