Monday update

SHORT TERM: quiet day, DOW +20

Overnight the Asian markets lot 0.7%. Europe was closed for holiday. US index futures were higher overnight. At 8:30 PCE prices were reported higher: +0.1% v +0.3%, and Personal income (+0.2% v +0.5%)/spending (+0.1% v +0.5%) were reported higher too. The market opened five points above Friday’s SPX 2036 close, and immediately began to pullback. At 10am Pending home sales were reported higher: +3.5% v -2.5%. The pullback continued until about 10:30 when the SPX hit 2032, then the market started to drift higher. At 2pm the SPX hit 2043, then dipped down to close at 2037.

For the day the SPX/DOW were +0.05%, and the NDX/NAZ were -0.10%. Bonds gained 3 ticks, Crude slipped 5 cents, Gold added $3, and the USD was lower. Medium term support remains at the 2019 and 1973 pivots, with resistance at the 2043 and 2070 pivots. Tomorrow: Case-Shiller at 9am, Consumer confidence at 10am, then a speech from FED chair Yellen at 12:30.

The market opened higher today, pulled back to SPX 2032, rallied to SPX 2043, and then closed about unchanged. No real change in the short term count, nor the potential downtrend scenario. Market still needs to break SPX 2009 and 1969, before making a new uptrend high, to add to the probabilities of a downtrend underway. Short term support is at the 2019 and 1970 pivots, with resistance at the 2043 and 2070 pivots. Short term momentum made it to overbought during today’s rally, then declined to neutral. Best to your trading!

MEDIUM TERM: uptrend may have topped

LONG TERM: bear market

CHARTS: https://stockcharts.com/public/1269446/tenpp

About tony caldaro

Investor
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220 Responses to Monday update

  1. roksha69 says:

    Added to shorts at 2054.03. Looks cheap to me

  2. vivelaamo says:

    Haha I see everyone is going nuts now and taking about new highs etc. I love this site! I kept saying BTFD but why go long from these positions. Surely you have to short now.

  3. frommi2 says:

    If this was wave 4 of P-V and Tony`s original assumption holds that P-V will be one wave, we can easily see a 10% upmove in the next two weeks from here to 2200. Russel now looks very bullish, too. Hard to be bearish here. Especially when one looks at the chart of AMZN or FB.
    And i really don`t care if someone was not able to count this wave up to this point as 1-2-3-4.

  4. Page says:

    Don’t short. Haven’t you heard don’t fight the Fed? CBs around the world carrying the stock markets on their shoulders. No interest rates hike this year, this is election time, you will see new highs before all this is over.

    • llerias7 says:

      I have been saying that for weeks…something was cooked at G-20…end of February-origin of this everlasting rally…

      • Page says:

        Yep. All charts will be readjusted as markets continue to grind higher at least until May.

      • Dex T says:

        There is no evidence to suggest that and Central Banks are working on different schedules.

        What could they “cook-up” other than QE

        Yellen repeats the same things over and over and some days the market likes it and some days it doesn’t

    • rabbittrader1 says:

      SHORT THE spx, BUY Gold futures (June, Sept and December) Rabbit

  5. Bob Sagget says:

    $2,056.60 is the target to beat.

  6. rd3777 says:

    I wonder if we will get a reversal down before the close today?

  7. Here is why diagonals are tracked. They do not always work out. They are ‘infrequent’ patterns, but when you count a truncated C wave low, as I did on 3/25, which I was also criticized for, and when it says, therefore, that the market is likely stronger than weaker, but then you try to count an impulse up – and it is not there – but you plainly see a diagonal, both in the DOW and in the S&P, then one counts things as one sees them. As below. ..

    DJIA (15 Min)  3_29_2016b

    Cheers and enjoy the chart.

    • blackjak100 says:

      Looks like int iv completed as a ZZ with no truncations at 2022. This is nice alternation with int ii expanded flat. Looks like 2100ish is min target for Major 1.

    • spindoc73 says:

      The truncation and diagonal feature seem to have fueled or at least associated themselves with a reversal. A 50% retrace from ~2045 /ES would test the linear trend one more time.

    • Going into the payroll report on Friday, IF a new high close is not made today, then a “a barrier triangle” could be forming. We are about 30-min from the close now. This would fit with the diagonal as an “A” wave only. IF new highs are made, then the assumption of a barrier triangle is not a good one, and impulse 5, up, or a larger “running triangle” are underway. Patience and flexibility remain the key.

  8. blackjak100 says:

    There you have it! Caution on rate hikes is warranted. I tried to lay out why in the last 24 hrs. It’s very simple indeed. The only reason the fed will ever raise rates is inflationary pressure and this could be why this time is different as TC stated in WE. they are going to inflate this market bubbke until they no longer can. Path to 2500 very reasonable P5.

    • I don’t think the WE read that way…I took ‘this time might be different’ to be all like:

      • And actually it’s WU…unless you prefer ‘weekend edition’…but who’s counting…

        • blackjak100 says:

          Yes WU my bad. I actually don’t think there was any sarcasm because he mentions it would be the first time in 120 yrs OEW would not work. The host has been much more quiet on the board than I can ever recall. May or may not mean anything.

    • ewtoriginal says:

      Thats the plan. Dont pay those trillions back in current dollars. Pay then back in Buffett dollars…50% discount in 15 years.

  9. learnedmylesson25 says:

    5,10s and 30s all down in yield…DXY down…so gold up.Hopefully tomorrow–3 Fed govs don t come out and try to stop the dollar from falling again.A day without the Fed talking is like a day without sunshine–NOT!!

  10. rd3777 says:

    The one thing Janet can’t do is relieve the oil glut….game over.

  11. fionamargaret says:

    2058

  12. My take for what it’s worth. The action from the recent rally high appears to be corrective, but not yet complete. Using a C=A formula from that point indicates a dip to the 2014 area before a resumption of the uptrend. On the hourly chart, it looks like a Gravestone Doji forming at the upper bollinger band that could mark the high of the current proposed b up.

  13. captbara says:

    Gold to $1500 if more QE is true

  14. Bob Sagget says:

    Yellen – without comment. Fed will “Proceed cautiously”

  15. Page says:

    You can draw all lines/circles/squares/triangles you want, I just want to say market is going higher (SPX 2100+). Oil going higher, Gold going down. If you want to short this market then wait until April 15. This year sell in May and Go away will work.

  16. ajaysinghi says:

    Sl hit. Today may not be a good day for shorts.

  17. mjtplayer says:

    SPY has closed the open gap from this morning. Last minute performance chasing is centered around AAPL & the the FANG stocks, all collectively trading well over 1% higher, which is ramping the NDX.

    Otherwise it’s another sideways boring day on super light volume.

  18. Market-leading Dow Industrials giving back a little bit while smaller cap sizes gaining a little bit.

  19. johnnymagicmoney says:

    Personally I really am perplexed. I joke about the bots a lot but seriously who is doing the buying. You have a huge move up in short time, there is lots of deteriorating data out there lately, and even oil is getting hit today but we can’t manage a sell off at all? Not one? Is it really computers?? If not where the hell are the sellers and profit takers??? No one wants to participate on either side??? If the market moves to all time highs fine but no sell offs at all in the meantime after that move? I don’t even understand what seems like manipulation. It’s Ghost Street

    • Bob Sagget says:

      Bots…they over and under compensate, they lack practical/hip-shot flexibility. Some event must be the ‘trip wire’ to change their stance from buy or hold to sell or hold. Stay tuned.

      • Dex T says:

        Exactly. Volume over the past days and weeks does not lie.

        SPY has a total of only 22 million shares traded since market open. The humans are not participating.

    • rd3777 says:

      Trust in Yellen don’t ya know….sad but true. Everything is inconsequential.

      • learnedmylesson25 says:

        PPT.Yellen tells Goldman and Chase what to do.As a reward Chase gets to buyback shares and management reaps in millions.When the big boys are properly positioned for a selloff,Yellen will allow the markets to go lower.Not much free market activity going on anymore.

    • ewtoriginal says:

      Foreign banks doing all the buying with the corp buybacks supporting prices. Bots only intercept buyers and sellers.

    • valunvstr says:

      It’s sad and pathetic hedge funds buying the quality and selling the crap one day (like today sdrl, FCX getting crushed) then vice versa the next day. So it just creates churn. Eventually they all fall together. Just takes time.

      • ewtoriginal says:

        Whats just as sad is that they destroyed the tiny bit of fear in the market which created good trading. Only “investors” (loose term) and asset gatherers,like the few brokers who visit this site and comment at highs, care about the current slow creeping BTD rally.

    • rabbittrader1 says:

      Plunge Protection Team does the buying (didn’t you know?)

  20. spindoc73 says:

    There’s not enough to take on the stress or to encumber agility in case of a trend change, but I am favoring this to turn out as a fake in route to challenging 2120’s.

  21. fishonhook says:

    Whatever happened to rc? He had some insightful comments about the markets

    • blackjak100 says:

      He commented everyday when the market was crashing because he called it correctly. However like most, they go quiet when it goes against them.

  22. gtoptions says:

    Thanks Tony ~ Great WE Update
    SPY ~ Test WPP @ 203.36 ~ WS1 @ 202.03 ~ WS2 @ 201.21
    Maybe this time is different. 😉
    GL All

  23. EL MATADOR says:

    CL put in an impulsive 5 wave decline from Friday 42.49 high. Trend change baby it’s bears time to party

  24. So, after yesterday’s diagonal, there ‘appears’ to be the deep retrace to the 78.6% level. The low must hold for a Leading Diagonal, wave 1, otherwise it’s an Ending Diagonal wave C, probably of a flat. We had clearly ‘suspected’ wave -iii of c would form in the overnight (because that’s when wave iii’s form), and that suspicion was correct.

    DJIA (15 Min)  3_29_2016a

    Cheers and enjoy the chart!

    • H D says:

      ET, after your oil count yesterday got busted why would you go w a LD for DJI?

    • blackjak100 says:

      Been thinking int iv ‘could have’ ended at 2022. TJ, why not update your int term S&P count? You were the first to suggest a P5 may still be needed. yes, it’s still TBD but you speculate all the time.

  25. rd3777 says:

    The SPX is following crude lower. Key support will probably be tested today or tomorrow,

    • mjtplayer says:

      Initial support for the SPX lies at 2,022. The bears need to take-out this area to gain downside momentum. Above 2,042.67 and the bulls have the ball.

      The chief market manipulator speaks at 11:30am, we’ll see if this makes any difference or not.

  26. ABchart says:

    Hello!

    ES: after 6 sessions in the auction range between 2022 and 2060, today the auction will shift lower in a new range beatween 1980 and 2022. We can trade higher (possible as high as 2030/35), but the most of the time, in the coming days, we will trade in this new range.
    Next week, it may shift lower again, in the 1942/80 range.
    SPX cash = +10 points
    Good luck!

  27. Bryan Franco says:

    TC – Question for you. The Russell 2000 seems to have either finished C of an expanded flat that began on January 20th, with C beginning on February 11th. OR, we have 5 waves up (perhaps A of a zigzag) that began on February 11th. How would you determine the relative likelihood of each scenario? Either way, I think the 5 waves up from Feb 11th are clear.

  28. blackjak100 says:

    Schiff is exactly right about rates. this is what I just said about 12 hrs ago. However, Seymour is exactly right too challenging Schiff. I think schiff is always right, but has no concept of timing. when the fed mentioned 4 hikes this year, housing stocks immediately traded to 52 wk low. When they backed off, they immediately roared higher.

    http://www.cnbc.com/2016/03/24/fed-has-turned-us-into-a-roach-motel-peter-schiff.html

  29. Bob Sagget says:

    Thanks Tony

    Volume is pretty bad. Here are NYSE Volume/Breadth stats going back to December. Volume and 30 DMA decline of Volume are down where they were in December.

  30. fionamargaret says:

    Thanks Tony and everyone……xxx

    • valunvstr says:

      Interesting that he interprets the % of stocks over heir moving average at a higher level while price is at a lower level as bearish. I forget who on the board was interpreting it in reverse and I made the point that not all indicators divergences are interpreted the same. Stoch and RSI come to different conclusions when the market is lower but the indicator is higher. One is a bull set up while the other is bearish.

      Anyone who hasn’t taken the time should really study chart school on stockcharts.com. A terrific education on technicals.

      • TMF says:

        Makes complete sense though.

        Carl is good enough to have a blog at stockcharts. Good company over at that place. Arthur Hill. Etc.

      • TMF:
        It’s also true that the breadth momentum has been slowing down, as shown by Swenlin’s own oscillator as well as by the McClellan Oscillator. Maybe the breadth needs to slow down a little to get into alignment with the price more. The price is not that far below it’s peak at this time. But still I hate to be in opposition to Carl Swenlin as much as I hate to be on the other side of the Wall Street fence from Tony Caldaro. But I have observed that the market has been working to nullify the effectiveness of different types of TA for quite a while. In February, the DJIA closed 6 points below it’s August, 2015 low in a nominal confirmation of the new DJ Transport lows in late January. I decided that was a technical fake-out and that it was a kind of “fuzzy” non confirmation instead of a confirmation of the bear. So far I have been proven correct, but if the market collapses from these levels it could still turn out to be a valid bear confirmation. The point is, that if we follow signals too literally, the market has been trying to use TA to mislead us. However, the burden of proof is now on us bulls.

        • ibra76ig says:

          “the market has been trying to use TA to mislead us”. Allow me to disagree with that; in my opinion there are many theories in TA, and none of them is accurate 100% all the time, each one of them has its advantages and disadvantages, some of these theories can’t precisely identify or confirm the turning points of the market’s trend or trend’s reverse point in the appropriate time (which is very crucial for any trader). I think the uncertainty that many traders are feeling about the market due to they don’t pay much attention to the large time frames such as yearly and quarterly time frames because these two time frames give more clear view of what the market is trying to do in the long term specially if there are huge swings at the weekly and monthly time frames, so you need to zoom out to identify these swings in contest of the higher time frame, for example, the selloff in Q3 last year in the DJIA was attempted from the index to develop trough at quarterly time frame, but unfortunately it has developed a descending trough (which I considered a trend reversal signal at quarterly time frame) by closing at 16284.70 on 30/9/2015, since then for almost two quarters the DJIA didn’t print new ATH and we are a few days from the quarterly close, and the index is unlikely to do so, which in my opinion means that the downside risk is outweigh the upside.

          • Those are excellent points, but the most sensitive indexes and indicators are the short to intermediate term ones. Those are the ones most people watch closely and which the market likes to use to confuse and mislead market participants. I will look back at the charts of that time period to see if I can understand what you mean by a “descending trough”.

          • You are right. On some stocks and ETF’s, there are indicators which are positive. If that weren’t the case, I would have a hard time staying bullish.

  31. opader says:

    Thanks Tony. My thoughts for today:

    http://www.balancetrading.org/

  32. MIKE says:

    Hey Dad–How are you feeling ? I feel better. very tired and lots of poop and gas but better.

    Speaking of poop, the refinance is proceeding because I received a good estimate of the closing costs in a statement in the mail today. Probably within two weeks, we should close. I think the interest rate lock expires on May 1–not that rates are going anywhere; we’ll be done way before May.

    And speaking of gas, the market seems like it’s out of gas here. Got overbought on several short term metrics-RSI and choppiness. The stochastics are saying that a pullback is already in progress intraday but that the uptrend is to continue and so the signal is to buy the pullback when it sets up later–maybe this week. I wouldn’t be surprised to see a good sized gap down before the open in the next few sessions. Sell off close to SPX 2009, get the bears excited, and then rally one more time to a new high before earnings. Then rollover like the world is ending, also known in Tony’s work as intermediate wave C down. GDP got marked down by 0.6% from 1.5% to 0.9% this morning–that we didn’t sell off on that bad GDP number probably means that we’re waiting for Janet to speak tomorrow and for the jobs report on Friday. My buddy Whiz was selling AT the money calls against all his longs in this morning’s webinar, so he thinks that we’re close to the top now; if he thought that the market was still going up then he would sell some OUT of the money calls higher up by like 7 to 10%. Apple is a volatile stock–it was trading 105 106 today and Whiz sold next week’s 108’s. Normally you would sell calls $7 to $10 out of the money, so like $113 or 116. How does $2 sound? Sounds like a top to me. I’d like to see 1970 or 1980 on the S&P soon.

  33. learnedmylesson25 says:

    Janet Cuts The Knees Out From Under The Dollar

    Mar. 28, 2016 4:20 PM

    Summary

    “Federal Reserve chairman Janet Yellen suddenly ratcheted down interest rate expectations from four-quarter point rises to only one in 2016. And that one rate rise may not come until December.Foreign exchange traders all share one unique characteristic. You have to show them the money.No interest rate increases mean no more money and they summon the urge to dump the offending currency. In other words, good-bye U.S. dollar.

    Her action was as certain as it was swift.

    Federal Reserve chairman Janet Yellen suddenly ratcheted down interest rate expectations from four-quarter point rises to only one in 2016. And that one rate rise may not come until December.”

    Now lets have some gold rally.Good luck all.

    • learnedmylesson25 says:

      This was from seekingalpha.A screwup on their part or what?Yellen doesn t speak til tomorrow.

      • learnedmylesson25 says:

        Seeking alpha must have posted a story pre-written in case Yellen is ultra-dovish tomorrow.Not too professional.

    • EL MATADOR says:

      I see U$D going up … per my chart from Thursday’s thread

      • valunvstr says:

        Yup, back tested a bull pennant and now working higher. At the same time stocks across the globe are hitting either down trend lines or 200 day ma’s. Which makes me wonder how in the world anyone can be bullish gold here?

        • learnedmylesson25 says:

          Per chart I posted earlier in Weekend Update…if the Dow reverses at 17650 in the triangle…gold would explode.It might anyways if Yellen flushes the $ down the toilet.The economic numbers are not worthy of a dollar rally.As noted… Atlanta GDPn down to 0.6 today.

          • Jim Guthery says:

            St. Louis Fed President James Bullard said on Thursday that the slight downgrades in the global and U.S. growth outlook might suggest that another rate hike “may not be far off provided that the economy evolves as expected.”

  34. bouraq says:

    Chart of the day is on #Oil.(needs free membership) http://www.tradingchannels.uk/chart-of-the-day

  35. blackjak100 says:

    Lots of talk about economy sucks or doesn’t suck. too much debt hinders growth which is what we have. The economy is doing fine and I see it daily bring in housing for 10yrs. Housing is doing fine because rates are near 0%. If rates were normal and near even 3%, activity would slow greatly. This is why we saw the market plunge after fed jawboning of 4 hikes this year. When the fed backed away from that, this is why we saw the greatest breadth thrust in history. Status quo means economic activity will remain decent.

    • Bob Sagget says:

      But still…liquidity is non-existent, hence the low volume, which takes us all the way back to 2008 before QE began. I forget who posted the Bloomberg article but you can likely find it…98% of all market gains since 2008 are due to QE. No QE, no liquidity, no buybacks (for a few more weeks) no liquidity, all equals no gains.

      • blackjak100 says:

        There has to be liquidity with the market near ATH. If it was drying up, market would be heading lower. It’s no surprise the fed keeps chickening out on hiking because they know the end result. Activity will slow and growth will go negative. We may be witnessing as good as it gets scenario which is why the bull market is nearing an end.

        • Bob Sagget says:

          We just differ on 1 word. “Is” vs “Was”. I agree with you there was liquidity, from buybacks. But now liquidity is either gone or diminishing quickly as each firm with a share repurchase program (only source of liquidity) is forced to stop buying leading up to their earnings date. It could get dicey.

  36. torehund says:

    ..interesting about programming and perception from Ike.
    The turn happened when Trump and Putin gained traction, the latter exactly on Armstrongs Pi-date last year. Its all a sequence of dominos reaching such huge dimensions of piggy back chaotic movements, that the instability in itself caused a surprising turn.

  37. captbara says:

    Still no close under 8 ema

  38. rd3777 says:

    I expect crude to impulse down tonight in a 3rd wave and to take the ES_Futures with it. Wave E in Oil and stocks should accelerate down with 2 days of topping action behind them.
    ES_F 20 minute chart

  39. valunvstr says:

    Short 2022, 2037, 2040. The 2037 was at the close today (I only get closing prices). In no way am I suggesting we don’t go north of 2050. If people are going to share ideas, it’s only fair to share actual trades and hold me accountable.

  40. Still crawling on the underside of the lower uptrend line like a caterpillar.

  41. mjtplayer says:

    Thanks Tony! Big drop in the Atlanta Fed’s GDPN, now 0.6% for Q1, down from 1.4%

    We had a Q4 revision to 1.4%, now Q1 on pace for less than 1%. The economy still sucks, nothing has changed…

  42. kvilia says:

    Thank you Tony.

  43. roksha69 says:

    Thanks Tony! Volatile week ahead I suspect??

  44. tony caldaro says:

    was in the mid-70’s here yesterday
    cheers!

  45. simpleiam says:

    Thanks Tony! Hope you had a great Easter. It was close to 80 degrees here yesterday.

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