Monday update

SHORT TERM: quiet day, DOW +16

Overnight the Asian markets gained 1.1%. Europe opened higher and gained 0.8%. US index futures were lower overnight, and the market opened five points below Friday’s SPX 2022 close. By 10am the market hit the low for the day at SPX 2012 and then started to rise. Heading into the last hour of trading the market hit SPX 2025, then pulled back to close at 2020.

For the day the SPX/DOW were mixed, and the NDX/NAZ were +0.10%. Bonds gained 1 tick, Crude dropped $1.20, Gold slid $15, and the USD was higher. Medium term support remains at the 2019 and 1973 pivots, with resistance at the 2043 and 2070 pivots. Tomorrow: Retail sales, the PPI, and the NY FED at 8:30, then Business inventories and the NAHB at 10am.

The market opened lower today, touched SPX 2012, then rose to a marginal new uptrend high at 2025. Not much of a pullback, nor rally, to make any difference in the short term count despite the rallies in overseas markets. As noted in the weekend update, there remains a negative divergence on the daily RSI. Plus today, with the marginal new high, we now have a developing negative divergence on the hourly RSI. The next pulback could be quite telling. Short term support is at the 2019 and 1973 pivots, with resistance at SPX 2028 and the 2043 pivots. Best to your Tuesday trading!

MEDIUM TERM: uptrend

LONG TERM: bear market


About tony caldaro

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154 Responses to Monday update

  1. Dex T says:

    Tomorrow is expected to be another Fed non news day but the next rate hike may be in June.

    Fed seen holding rates for now, leaving door open for June hike

    “June seems certainly like a possibility” for the Fed’s next rate hike, said former Minneapolis Fed President Narayana Kocherlakota last week. Kocherlakota’s own preference is for the Fed to take out “insurance” against a recession by cutting rates back to near zero.

  2. johnnymagicmoney says:

    14 largest market cap stocks in the green (averages negative)

    Russell down 1.45%

    guess biotech and oil dominate the Russell

    crazy divergence today

  3. Here’s an update on the possible bear flag, just prior to the close. Five down and three-up to the 50% retrace – exactly. Should result in five more down tomorrow (at minimum). Based on the slowness of the decline, still feels highly ‘corrective’ at this point. (Not trading or investment advice.)

    SPX - Five Minute - Mar-15 1453 PM (5 min)

    Cheers and enjoy the chart!

    • steventrees says:

      It’s five wave up already, still have five wave down tomorrow?

      • Can still be counted like this – because wave (iv) down did not overlap (i) — just a longer flat wave for (iv). Also cash did not make a new higher high, and we are below the 61.8% retrace.

        SPX - Five Minute - Mar-15 1624 PM (5 min)

        While there is ‘no guarantee’ that the diagonal was not a (B) wave, up, and the five down a (C) wave down; it should not matter much in the long run. I know what people are trying to do here: they are likely trying to ‘short’ above the 20-day SMA. I have published on my blog a paraphrase of Ira Epstein’s rules for trading. A link to those rules is again published below. He teaches that one waits until prices are below the 20-day SMA to sell. Here is the link. You, of course, can do what you want. I do not provide trading or investment advice.

        Cheers & enjoy the chart!

  4. Dropping in for a sec.GDX up today though gold is down.RSI for GdX confirming lower prices ahead imho.Scenarios abound but what the Fed does (or doesn t do)tomorrow is not as important as how the dollar reacts to it.I m at 10% GdX for now.Good luck all.

  5. nyjsec314 says:

    Bought some TLT calls. God help me.

  6. fotis2 says:

    Doesn’t want to go down Market version of the movie ”Too Hard To Die” Bull Flag?

    • blackjak100 says:

      The move from 2005 looks extremely corrective and NYAD -1400ish. I would not bet on breakout, but That’s why my stop is at 2025.

  7. Bob Sagget says:

    Just ponder how much Wall Street will hate “The Donald” as the next POTUS. I mean, really. The only thing that could be worse for Wall Street is prison sex.

    And what will happen at 7PM ET today? (Little Marco) Rubio and Kasich will be gone. That will leave just “The Donald” and Cruz. I think Wall Street will pass the IQ test and quickly determine which of the final two (Trump/Cruz) will survive and rise to the top as a formidable Democratic opponent.

    There may be rough (market) waters ahead.

    • Page says:

      If Trump becomes next President then people will really make good use of the well known phrase “God Bless America” 😀

    • bud67 says:

      Bob – I do not look at the next POTUS quite the same
      way you are. I prefer, looking at the price pattern
      of the SP, for example. The Bull run from the 2011 low.
      Now, 2016 is a nice 5 year run, don’t you think.

      • Bob Sagget says:

        Bud – yes, very nice 5 year run. My post was not meant to demonstrate my personal political beliefs or aspirations. I was posting the thought because the Super Tuesday results will likely skewer the indexes. Oh look it’s already happening! $VIX is rising from the ashes 😉

    • Dex T says:

      Wall Street has been dealing with Trump (and his father before him) for decades via his real estate deals. Trump has a building located at 40 Wall Street. I worked in the building for a brief period of time.

      The street never had any major problems with Trump before.

      Their main concern is the lack of QE from the Fed and potential rate increases, as well as the overall weak Global economy and deteriorating U.S. earnings.

      All of these have little to do with the Presidency.

  8. prakashbkc says:

    GM TC sir,

    if fed adopt NIRP like japan the what it impact on market? What do u think

  9. blackjak100 says:

    TC said this next pullback would be telling. I believe it has arrived and i agree 100%. The P5 case would be a 45-55 pt pullback int iv. To show alternation with int ii expanded flat, I’m looking for a ZZ/DZZ 1st and triangle 2nd. The bear case obviously needs to blow through 1973 pivot.

  10. johnnymagicmoney says:

    Russell getting smashed but major averages refuse to go down much partly because Apple is having a big relative day (in fact 10 of the 18 largest companies are in the green). VIX not up much which doesn’t make me feel too comfy. Its like the VIX just wants to be smashed down with a BULL.

    • johnnymagicmoney says:

      here comes the joke of a market we have…………… volume BTD BTD BTD!!! Bet we hit a marginally higher high on the S&P on this rally before the day is over. OMG BUY OF THE CENTURY THE MARKET IS DOWN 10 HANDLES!!!!!! OMG!!!!!

  11. ariez5 says:

    My comment is still awaiting moderation. Thanks.

  12. It seems worth noting that the S&P500 5-minute cash chart, ‘did’ make and complete an ending diagonal last night in perfect form with the right wave lengths. Further the diagonal was validated as an ‘ending’ diagonal by breaking below the start of the diagonal.

    Therefore, we ‘should’ be in an overall corrective wave sequence lower – at the very minimum. So far, there are a small degree ‘five-waves down’, and what looks like a bear flag forming.

    SPX - Five Minute - Mar-15 1132 AM (5 min)

    Cheers and enjoy the chart.

  13. TMF says:

    Vix needs to close a gap just above 15, one more big rally into Friday. Too many bears still.

  14. johnnymagicmoney says:

    retail sales negative and previous month revised down and oil down second day in a row and we aren’t even down 1% from the top

    delusion could last a lot longer

    every 2 handle drop on the S&P is bought back. I guess that’s the beauty of machines – they have no feelings ie fear. They just calculate. Drop buy drop buy drop buy

    • mjtplayer says:

      Nobody is going to place large bets ahead of the Fed meeting tomorrow.

      The BOJ meeting went as expected, markets sold the news, same should happen after tomorrow. Tonight’s primary results should help in the downside: if Trump wins Ohio then markets sell-off, but if Trump doesn’t win Ohio it injects uncertainty as to what will happen when the convention comes and who will be the nominee. I’m not sure what the markets would prefer – Trump or uncertainty?

  15. The majority of companies just entered the buyback blackout period leading into the 1Q earnings season, and high valuations in the absence of corporate demand may weigh on stock prices.

    Buybacks remain a major source of demand for equity. We expect S&P 500 firms will boost repurchases by 18% to $604 billion in 2015. While roughly 70% of share repurchases are implemented via 10b5-1 programs, firms refrain from discretionary buybacks during the blackout periods that extend from roughly five weeks prior to earnings reports through 24-48 hours post-announcement. As volumes decline, market performance appears more vulnerable to the seasonality of buyback activity.

    The closing of the buyback window ahead of earnings season has recently coincided with weaker S&P 500 performance. In half of the last eight quarters, the S&P 500 declined during the four weeks prior to earnings season. The S&P 500 rose an average of 0.3% in the month leading up to earnings season versus +1.6% both during earnings season and in the month following earnings season.
    This is an article from a year ago.We re in the same time frame.The buyback blackout period has had a some huge selloffs and a couple 70 pt S&P minor ones.The next 4 weeks are very likely down because of this mechanical stock market function.

  16. For all Gold peeps. I am sure that someone has done some research on what is a better play. JNUG or NUGT. Why would one choose over another. I see that in % terms, Jung is more volatile.

  17. kvilia says:

    “I think he got in because Bush had just started a huge war that had zero to do with 9/11 and Wall Street bankrupted the country and then demanded a bail-out which bush and his minions handed over. But maybe you have other ideas.”
    And then Obama came in with a bailout program that resulted in current market bubble based on zero interest rates, CEOs getting huge bonuses, keeping all tax loopholes in place, and out of college kids not being able to find jobs. I am not even going to start with the foreign policies fiasco. Just awesome track record, and that’s exactly why Trump is in the leads – people get feed up with all bs both parties cover up their liberal/conservative agenda. But I’m sure folks on this board can see a bit further than their nose.

    • fishonhook says:

      Hmmm…the unemployment rate dropped 45% on his watch and the S and P tripled. Name me another President that achieved that without staring a major war?

      Here is a list of the other 340 things he did including having all Govt contracts audited

      he is the only President who has no sexual, corruption or buddies-getting-rich scandal associated with him. He is squeeky clean.

      Of course he cannot do too much, he has every wealthy Billionaire and their lobbiest stacked up against him.

      And somehow people think a Billionaire , blow hard will fix the system?? pleeeze!

      • johnnymagicmoney says:

        honestly guys both of you stop drinking the kool aid…………..Bush was a bad president and so was Obama. trump could possibly be worse. every once in a while we get a good president but its been a long time and the change in the electorate is making it even more difficult as time passes

        • bud67 says:

          interesting comments/above.
          question should be, in what
          direction is USA heading….
          and, yes. That is a stock market

      • kvilia says:

        Unemployment dropped=flipping burger jobs
        SPX trippled – exactly my point, fiat money, gov. generated liquidity – think about Fed and banks as government agencies
        billionaire will fix nothing in this case, this is just explaining why this election is different
        Very bleak outlook imo, it is too narrow of a view to express partisan interests today, problems are far beyond that. Trying to expand your horizon…

      • ariez5 says:

        +100, Fish. People want to see in Trump an “outsider” who can “shake up the system.” Actually, we have a man who doesn’t have the guts to disavow the KKK, who never learned that this country was founded on religious freedom and opening its arms to members of any faith, who routinely encourages violence against protesters at his rallies, who denigrates entire nationalities and religions with stupid generalities, who encourages his supporters to make Nazi-esque gestures of support to him, and who speaks on a fourth-grade level. He’s not an outsider, he’s a thug. Oh, and he says he would “get along very well with Vladimir Putin.” Makes sense.

      • EL MATADOR says:

        “Hmmm…the unemployment rate dropped 45% on his watch and the S and P tripled. Name me another President that achieved that without staring a major war?”

        Seriously? Lets see here, we have growing population YOY and a declining workforce participation (continuation actually but still declining also since Mr O took office) YOY. Yet magically we have job creation and declining unemployment under Mr. O. That said was the “job creation” and declining unemployment statistics a result of demographics forces or Mr O policies? It’s pretty freakin clear it was mostly due to demographics and not Mr O’s policies.

        • purplember says:

          $8 trillion of debt is $70,000 per every household in america
          IRS scandal – no resolution
          Benghazi – that darn video some homeless man created
          ISIS – that JV team but we got them contained lol.
          obamacare = trainwreck
          race relations are worse ever in my lifetime
          Dividing a nation isn’t healthy for nation

          • fishonhook says:

            “Dividing a nation isn’t healthy for nationDividing a nation isn’t healthy for nation”

            really and what is your hero Trump doing? Get your head out of the sand

            BTW did you know that the US debt increased 180% under one President alone? Guess who? Reagan!

          • simpleiam says:

            Well fish, we finally agree on something. Reagan absolutely spent money like there was no tomorrow. He did it in CA, then, to the Nation. People do not understand that his Policies started the debt ball rolling big time.

          • purplember says:

            Fish We love you. you need a HUG !!

          • purplember says:

            ppl forget Reagan inherited a 14% inflation rate. gov’t spending will go up at inflation rate or more vs 1.5% cpi rate today. bush/obama spending out of control but one wants to focus on 40 yrs ago. btw at least Hillary isn’t in denial, she said last night no ONE died in libya on her watch.

          • rabbittrader1 says:

            Dont forget how Ronald Regan shut down all the long term care state hospitals in the country and put tens of thousands of mentally ill people on the streets of America only to find most of therm now incarcerated in prisons throughout the country, and on Seroquil .

          • anyone who trust any politician has got their head in the sand….you CANT trust any of them……there are really no GOOD alternatives…people are blind

  18. opader says:

    Thx Tony …

    Tuesday … Mar 15, 2016
    @ 09:15 – Support: 2000, 1990
    Resistance: 2020

  19. The McClellan Oscillator has made what looks like a 4-week wide head and shoulders top. If this pattern validates, it means we should see some weakness in the A-D line probably weak enough to take the McClellan Oscillator down to 0.

  20. fotis2 says:

    The uptrnd trendline broke on hourly yesterday -DIV on daily CCI+close bellow +200 short term swing short lets see..

  21. Tony,
    Looks like the express train to the valley is arriving at 10:30 pm with s&p futures hitting lows at 2005.65 and continuing to fall! Ouch! I wonder what happens when it leaves the station tomorrow and who’s on-board.

    • ABchart says:

      So Donald will probably win because SPX is going to 1000

      • fishonhook says:

        There are not enough dumb people in the US to put him over the top.

        • purplember says:

          fish oh yes there is… you think Obummer got in

          • fishonhook says:

            I think he got in because Bush had just started a huge war that had zero to do with 9/11 and Wall Street bankrupted the country and then demanded a bail-out which bush and his minions handed over.
            But maybe you have other ideas.

        • ABchart says:

          But dumb people are in a bull market. Uptrend everywhere 😉

        • There are plenty of dumb people. Look at the last 8 years.

        • johnnymagicmoney says:

          I thought the same thing about the GOP nomination……..remember you are thinking with an intelligent mind. That’s where you are making your mistake. If you can get really dumb for a second you will find many people just like you and you will also find the Donald quite capable of leading the free world. I would not suggest you try this however. It’s like the old wives tale of crossing your eyes… might not be able to reverse it!!! Then come November you’ll have a trump bumper sticker on your car!!!!

    • purplember says:

      honestly, these are the stupidest quotes. dem & gop establishment will try all tricks to keep their “guy or gal” in office to run the “establishment agenda”

    • Bob Sagget says:

      And tomorrow is “Super Tuesday” In which Trump’s destiny will likely be (perceived as) sealed. Yeeeee Haw!!!!!!!!!

    • phil1247 says:


      zero EDGE is negative on everything…….not very helpful and may be harmful to forming an unbiased opinion on what is going on

      • Bob Sagget says:

        Phil thanks, I appreciate the feedback. I have been reading ZH for many years and am familiar with their bias and myriad articles written about the potential psychological influences of ZH. I dismiss the ZH editorials as humor / fodder BUT, I continue to troll ZH for 2 reasons a) It is the only place on the web I can find free Goldman Sachs (and related) reports and b) ZH is a great source to simply locate peripheral blogging sites to add to my bookmarks list. Then again maybe Goldman Sachs should be the target of your feedback “not very helpful and may be harmful to forming an unbiased opinion on what is going on.”

        Regarding what is really going on…the markets are simply rigged via the relationship between the Primary Dealers (Goldman Sachs controlled) their influence of HFTs and their relationship to the Federal Reserve (Goldman Sachs controlled). My quest is simply to find more data inputs to form a more educated guess as to which which direction (Up, Down, or Sideways) the market rigging will take us next.

        Stanley Druckenmiller has said it best. The markets are not influenced by earnings. They are influenced by liquidity. Liquidity is controlled by the PDs via HFT and the Fed.

      • johnnymagicmoney says:

        That’s like saying Mickey Mouse is positive.

    • zvyezda says:

      Choose one:
      Snowden: 2016: a choice between Donald Trump and Goldman Sachs.

  22. purplember says:

    this is fundamental data point. Market to GDP is at 115%. only time it’s been this high is 2000 and 2007. could the market go higher and create more of a bubble – absolutely. However, it’s rare any kind of bull market starts with high valuations. high Market to GDP % equals low future returns. currently estimated at less than 1% per year for next 8 yrs.

    • johnnymagicmoney says:

      I remember working for Merrill in 97 and in the late nineties the CEO Komansky said the S&P would return 5% per year for the next decade and everyone was like yeah whatever especially when market was going up a gazillion per year. Then the market gut cut in half. Same thing….it’s just another way of saying that a large reset is coming to mess with the compounding. Remember 1550 770 1550 in 8 years from 00 to 08

    • simpleiam says:

      Very possible. From now, until Bear bottoms and turns up again could easily be 8 years.

  23. Bob Sagget says:

    From Ciovacco Capital…
    A) How many countertrend rallies lasted four weeks or more in the Dot-Com Bust bear market (2000-2002)?
    B) How many countertrend rallies lasted four weeks or more in the Financial Crisis bear market (2007-2009)?

    • Hi fiona, I enjoy your posts and charts, thank you much. I’m curious why you pay attention to the 78.6% retracement, as opposed to the 76.4% level? Thanks for sharing.

  24. Market…soooo boring…can’t…take…much…more of this…

  25. mike7x says:

    Thanks Tony! Top (of the dome)?

    • purplember says:

      nice chart Mike

    • valunvstr says:

      So, I’ve seen this dome a few times now. Is this an actual technical method used for major market tops or is it more coincidental that it happens to fit right now? Now familiar with it. Thanks.

    • chicotheman says:

      Thanks Mike. Thanks Tony. Beware the ides of March. Bear count looks good here and has lots of potential. First week of March, so many were so sure with similar targets (seldom works), then the necessary confusion, then the -ve rsi divs at the 200 dsma and other resistance with a fully developed pattern and rapidly escalating political uncertainty. Should be right about here and now, otherwise, back to the drawing board.

  26. llerias7 says:

    Something does not fit…I suspect this might be “the lost” P5.
    We can read and I agree: “The fact that consolidation happened for so long is, in my opinion, not good for the bears. Further, the fact that support was found at 2002 – which is just a few points away from where prior resistance (now support) was — at 2000 — tells me that it won’t be that easy to move back to the downside. The fact that we rallied so fast and hard from the 1960 support also tells me that we might not get that major downside that we were open to getting. As each day consolidates, it’s becoming less and less likely that we revisit the 1800 lows. Those lows may have been the wave IV down and we are on our way to new highs.”

    The main reason might be Crude Oil: if it passes $40 and away, then will travel to $60 in a couple of months! Other commodities are hot again. Implications are huge.

  27. torehund says:

    lyrics ahead of time…humans have come advanced considerably in 40 years 🙂 🙂 🙂

  28. mjtplayer says:

    Thanks Tony!

    The insane overbought levels are getting more stretched. How long can the rubber-band go without snapping?

    – NYSE of stocks above 50 day MA = 85.82 (highest reading since the fall of 2013)

    – NYSE Percent of Bulls = 59.66% (highest reading since last June)

    – NYSE McClellan Summation Index = 735.20 (highest reading since July 2014)

    Another spinning-top doji candle today in the SPY, just like 3/4, only with smaller wicks. Let’s see if this one results in any meaningful sell-off. VIX held-up well today, staying in the green all day and still holding the critical mid-16’s support area.

    We’ll see what tomorrow brings, heavy economic data in the morning plus reaction the the BOJ meeting tonight. Then tomorrow night is the primary results, reaction Wed, all leading-up to the Fed meeting.

    • tawcap says:

      Thanks MJT. I’m not sure what to make of the breadth data and whether as a bear it should be concerning me. I can see its uses in looking for divergences within a trend, but now we’re in a different trend I don’t know whether it shows much to make a comparison between now and October for instance. Given we’re at a 50 day high and significantly above the spx 50dma, for a stock to be under its 50dma it would have to be lagging the market badly. The main things I see is that the slope of the 200 day is still down and falling, and momentum on the monthly is still weakening. Any sustained price action above current levels could change this though, but as a sense check, the market wasn’t able to break above the 2050-2100 area the whole of last year so I can’t see a catalyst that will bring buyers in at those levels when the risks have increased, the earnings outlook deteriorated and monetary policy decisions appear to be having smaller and smaller impacts. Either way, at current levels it won’t cost much more to call the market’s hand!

    • EL MATADOR says:

      Time to bring Da Suicide Squad

  29. tradeanimal says:

    Thanks Tony. Appreciate your analysis!

  30. Bob Sagget says:

    Tony many thanks for the tireless and unselfish flow of information. I, for one, really appreciate your daily posts.

  31. Still possible to count the hourly DOW as ‘five waves up’. Every sub-wave is shown on this chart, which currently contains the needed 120 – 160 candles. In particular, since wave (v) of minute i (circle i) ‘can’ be counted as a small ‘five’ itself, we should do so, and not call it a ‘b’ wave. The DOW’s half-hourly triangle for minuet (iv) of minute iii was outlined for you earlier and is shown in the same location on this hourly chart. In particular, the more objective tool, the Elliott Wave Oscillator shows a decline under the zero line for the second wave and a decline under the zero line for the fourth wave, and there is still a divergence for wave minute v on the EWO.

    DOWI - Hourly - Mar-14 1642 PM (1 hour)

    The ‘ugliness’ of the wave might indicate the wave itself is in a first wave position, like in minor A of a much larger diagonal fourth wave, (diagonal headed lower), which might be reinforced by the poor alternation, or a minor 1 wave, of an Intermediate wave (1) of Primary 5.

    ‘Can’ the waves be counted as a “three”? Yes, it can be, but not as easily on the DOW, at this point in time. Therefore, I am just going with the more objective indicator (the EWO) until there is evidence to the contrary.

    Cheers! And enjoy the chart.

  32. kvilia says:

    Thank you Tony.

  33. fotis2 says:

    Thanks Tony out for a full day and already feeling withdrawal symptoms anyone who says trading isn’t addictive hasn’t traded..

  34. 123 abc says:

    Expecting three more waves to complete Major-b uptrend…


    Thank you Tony et al.

  35. ABchart says:

    Thanks Tony!

    “…negative divergence on the daily RSI. Plus today, with the marginal new high, we now have a developing negative divergence on the hourly RSI. The next pulback could be quite telling.”

    I think the topping process has begin. What can we expect? a pullback of about 20 points, then new high of about 15/20 with the daily negative divergence still alive, before the drop.

    Your system work like that Tony?

  36. Thanks, Tony…I will remain flat as a pancake, but realize I may well miss the turn. Pazienza !

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