Monday update

SHORT TERM: market rebounds, DOW +118

Overnight the Asian markets lost 1.2%. Europe opened higher and gained 0.3%. US index futures were higher overnight, and the market opened five points above Friday’s SPX 2065 close. After a push up to SPX 2072, and a dip to 2066, in the first half hour the market turned higher. At 10am ISM manufacturing was reported lower: 50.8 v 51.8, and Construction spending higher: +0.3% v -0.5%. The market rose to SPX 2075 by 10:30, dipped to 2070 by 11am, and then moved even higher. Around 3:30 the SPX hit 2083, then dipped to close at 2081.

For the day the SPX/DOW gained 0.70%, and the NDX/NAZ gained 0.90%. Bonds lost 12 ticks, Crude dropped $1.00, Gold slipped $4, and the USD was lower too. Medium term support rises back to the 2070 and 2043 pivots, with resistance at the 2085 and 2131 pivots. Tomorrow: monthly Auto sales.

The market opened higher today, following Friday’s afternoon rally, bounced around a bit early, and then hit the 2085 pivot range. With the rally above SPX 2081 today the entire decline from the recent 2111 high to 2052 low begins to look corrective. Unless the market heads lower again before hitting SPX 2100. Considering how oversold the NDX/NAZ were on Friday, this rebound should not have been too much of a surprise. Short term support now at the 2070 and 2043 pivots, with resistance at the 2085 pivot and SPX 2104. Short term momentum rose from quite oversold on Friday to quite overbought today. Trade what’s in front of you!

MEDIUM TERM: uptrend rebounding

LONG TERM: bear market rally


About tony caldaro

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342 Responses to Monday update

  1. Took some profit on SDS but still short.
    Still long DWTI (thanks Fiona) and TVIX

  2. Dex T says:

    Solid day for the bears! Rally from today’s lows was clearly corrective.

    • bud67 says:

      Look at the NY A/D line– that still appears to be in an uptrend.
      But, not for long as the SP500, BoYu is in a declining pattern,

  3. bud67 says:

    Came across this NY A/D line link on stock
    Might be useful.!ADLINENYA

  4. ABchart says:

    The lows are not done yet, even if we bounce.

  5. fotis2 says:

    Phil what say you for 2051.76?

  6. bud67 says:

    To The Readers of My Work in the SP500.
    Thank you. But, do not be concerned by the
    2, or 3 losers on this board. You know, who they are.
    When, Mr Caldaro tells me to leave, change, or
    go quiet. I will listen. OTW, I have no plans to change.
    Just having fun….

  7. fotis2 says:

    Bears going for retest of lows

  8. Anyone know of any studies on EWT. I am long term quant 30+ years in finance. I am interested in any reason to pay attention to this stuff other than out of amusement. ‘Momentum” generates excess returns (without clearly defined explanations). Similar studies on common chart patterns (double bottoms and H/S which fail to find any predictive value. There seems to also be moderate success of simple moving averages in asset allocation. Wouldn’t it make sense to know the historical facts, such as what is return from buying assets once you have identified third wave. Only other way to quantity usefulness is looking at track records of investors following strict methodology over long period. Any positive or helpful feedback would greatly appreciated. Try to hold back on the negativity.

    • aahmichael says:

      Marc, EW is a combination of art and science. As a quant guy, I doubt you would have any use for employing art into your analysis. Best to stay with what has worked for you for such a long time.

      • i get that and am not new to it nor unbale to distinguish difference between trading versus investing etc..But at end of day I don’t need more than a handful of proprietary factors to explain the risk hence the expected return of any investment apporach. I’m just wondering how people view EWT in that respect . Thanks for reply

        • “Art” is part of all successful strategies whether labeling waves, drawing trendlines, or analyzing data i would suspect.

          • fionamargaret says:

            ..even in chaos theory, quantum mechanics, etc..

          • bud67 says:

            reply – I for one, Do not employ EW in my own work.
            Other than as a starting point/guide. I use software.
            I also use 2 tech tools, you may wish to review.
            1st – I use a Stochastic 82% K and a MACD of 10,20,4,
            and with the later I use a standard MACD histogram.
            This pretty well allows me to see, investment highs/lows
            rather well….good luck

        • aahmichael says:

          Think of it this way: Just as it’s very easy for people to open up online trading accounts and call themselves traders…even though they have no clue what they’re doing, it’s equally as easy for people to stick a bunch of numbers and letters on a chart and call themselves EW analysts…yet they have no idea what they’re doing either. As in all endeavors, there are those who have the skill to utilize EW in their analysis with wonderful results, but for the majority, it’s useless.

        • Perhaps you could opine how an indicator based on social mood and sentiment has any validity in a fully rigged market closely correlated with the FED balance sheet.

    • fionamargaret says:

      …join the group Marc…we would be delighted to have you …..I am not a wave person either….numbers and sequences…

    • H D says:

      @Marc, this topic/debate has come up so many times I blogged it in RT. For me the pattern is more important than the count. Ultimately the counts change but the entries and exits I find exclusively from EW are the most profitable. No indicators, no oil, no news, no data. Just price. The fractals can’t be denied. You can see the exit/entries here.

      Those February EW lows in real time proved to be great entries for the way I trade. GL

    • Igor says:

      David Aronson (CMT, trader, analyst, quant) in his book “Evidence-Based Technical Analysis” examines how you can apply the scientific method and statistical tests to determine the true effectiveness of technical trading signals. In chapter 2 “The Illusory Validity of Subjective Technical Analysis” he writes regarding EWT:
      “EWP has the seemingly remarkable ability to fit any segment of market history down to its most minute fluctuations. I contend this is made possible by the method’s loosely defined rules and the ability to postulate a large number of nested waves of varying magnitude…
      Thus, even if the fundamental notion of EWP is wrong, the method of analysis will still be able to obtain a very good fit to past data.
      In fact, any sufficiently flexible model can fit a prior set of observations with perfection. For example, a polynomial function with a sufficient number of terms (equal in number to the number of data points) can also produce a perfect retrofit. However, a model or method with an unlimited ability to fit past observation but which cannot make testable (falsifiable) predictions of future observations is neither meaningful nor useful.”

      • H D says:

        Hi Igor, I have yet to read a single book about trading but understand your point. I think what get people hung up on EW is the labeling. I’m sure you have seen a 5 wave move or 3 wave counter move? People want LT results from ST fractals and that’s not how the market works IMO. I’ve added a “0” to my EW analysis. When a wave terminates I can let go of all the previous labels and work with the current price action until that wave terminates. It simplifies things and I don’t have to go hunt down some page number to make sure I haven’t broke a rule.

        • Igor says:

          Hi HD, simple is good. All market moves in a nutshell consist of accumulation , distribution, re-accumulation, re-distribution and trends in between.

          • ewtoriginal says:

            And,if properly applied, in my opinion, a relationship between price and time. I do not allow for continual extensions and multiple (x) waves outside the bounds of waves of similar degree.. The picture is a painting and it is art and science. Thats why I see 3 waves from the 2009 low.

  9. EL MATADOR says:

    oh oh, gold and U$D about to swap trends….. check out the daily candles

  10. stmro says:

    Big spike at 2pm EST. I wonder what happened? Oh wait why even ask :):

    13:56 News Bot: BoJ’s Kuroda says that the BoJ will take additional easing steps if needed

    14:01 News Bot: Japanese Finance Minister states that the country will respond to JPY movement if required

  11. vivelaamo says:

    The move up soon isn’t stopping for anyone. Like a rocket ship!!

  12. phil1247 says:


    dollar threatening to break ext short at 92.95

    would open the door for quick move to 94 for ol bucky

  13. Jack Sparrow says:

    so there wont be a forceful buying at the close like yesterday because the morning action must have scared those idiots who bought yesterday

  14. Dex T says:

    A new moon is set to occur Friday so be careful of letting emotions guide your decisions as the week rolls on.

  15. rd3777 says:

    Only a matter of time before this market collapses….too much bullishness and something will kick off the break….crude,Japan,Europe? A black swan for sure.

  16. Jimmy Porter says:

    Any Thoughts?
    sp 5.3.16
    My thinking:
    The sell off at open threw me off a little. It retraced farther than I expected thinking wave (b) would be a simple zigzag. Yesterdays rally retraced enough to be considered circle wave b. However, I didn’t think that it was complete considering the b wave of circle a was drawn out for a couple days. It just seemed too direct. The market looks to me that circle b is forming either a regular flat or an expanded flat. I can’t say that (b) wave is complete yet that is why I am leaving the expanded flat option open.
    I am looking for (c) wave to be in a 5 wave pattern that will most likely exceed the high of yesterday with the downtrend line being a magnet.
    Once that is complete circle c wave should start that will take us to new lows completing minor wave 4

  17. this is usually where the master snatches the people from the students hand and all bears look at each other like , what the hell just happened, including me

    • ABchart says:

      By Friday, we may be 3% higher on the US indices, and 4% on the € indices.

    • Holly Silver says:

      A few percentages off all time highs and everyone a bear!
      Does anyone consider a different take on the shocking moves over last 12 to 18 months?
      Perhaps that WAS the correction. No? Macro action was as follows: China and EU recessionary pressures. Deep correction in their markets causing disruption in Energy and exports in US. In this same period we had a HUGE expansion in service sector, jobs, labor market, discretionary income, savings, reducing of debt, business reduction in inventory and spending. Earnings have suffered but given the huge offset in domestic economy there was a buffer.

      Technical immediate picture: Lows should be seen today or early tomorrow. See a close today around 2060. Next 2 weeks will be explosive on upside. Not sure if we just hit new highs or break decisively above. BET THE BULL TOMORROW! Rare opportunity IMO.

      Underlying health of the consumer is just G-R-E-A-T! bet against a zero rate environment and pent up spending? This advice is only short term. We still have one more decent drop lasting a month or more to contend with, but after that its up up and away. Final stage of this long bull ahead of us.

  18. Let’s see if the bears can mess this up again, they’re trying.

  19. Looks like the speculative juices by the Gold Bugs is starting to raise its head. Just take a look at the dry “hole” that is Tanzanian Royalty Exploration (TRX) which has doubled in just the last 8 trading sessions…. all the way to 0.57 cents

    Leave it to CEO Jim Sinclair not to find any Gold at all.
    He even had to take a gold “loan” from Bill Holter that matures sometime in June.
    Pump…. and Dump???

  20. captbara says:

    Back in oil for bounce here I think.

  21. Peter Sliney says:

    Getting comfortable in a position is like being comfortable in a room with a wild bull. You just can’t.

    • aside from 2011. Bulls have been really comfortable last 7 years. we’ve had some deep corrections but like I said none of them were long and protracted like 2011. My head tells me we are in a bear market but I can’t bring myself to believe it. Bulls will find a way to pull a stick save like they always do.

  22. vivelaamo says:

    Hope you all jumped on board. PB over. All times highs coming up.

  23. mjtplayer says:

    The European & UK banks are getting hammered.

    Today’s reversal in the Dollar could mark the beginning of the turnaround in everything: commodities, materials, EM, European banks, etc. Watch the Dollar for today’s close and any potential follow-through in the days ahead.

  24. phil1247 says:

    SOLD all UGOLD

  25. ariez5 says:

    AAPL: Medium term the 1-year descending triangle will likely break, but short term:
    green on a very down day
    double hammers at 1-year horizontal support with an hourly divergence
    declining down volume
    RSI in the low 20s
    very extended from 13 EMA
    had four days where the candle body was completely out of the lower BB.
    I sense a bounce is in the works.

  26. stmro says:

    Bears needed to deliver today and they have. Typically middle band ping pong resolves after 2-3 sessions so I think we’ve resolved to the downside with today’s action.

    Looking for a cluster of support between the 200 MA at 2013, 2000 and then 1980.

  27. Jack Sparrow says:

    Fiona, small market right here in 2050s european markets closed… which can be construed as b wave then we go down to 2030/2020ish plus minus few backtest 2055 and then down to 2000 plus minus.

    the usual disclaimer; 3 months into trading…IQ with high vix

  28. vivelaamo says:

    Bears must be climaxing right now. Perfect pb to buy more dips. Trend high by the end of the week or ATH by end of May.

  29. captbara says:

    Funny, now it’s time for SP to crash and USDJPY to rise?

  30. bud67 says:

    Margret- looks like the BoYu top of 4/20. and sell 4/21.
    Has worked out rather nicely for us….:)

    • fionamargaret says:


    • aahmichael says:

      Bud, you must have the most accommodating broker in the country, who is willing to bust your trades long after the fact, because according to your own posts in real time, you and your BoYu indicator went long at 2098, thirty five minutes before the close last Wednesday.

      bud67 says:
      April 27, 2016 at 2:26 pm
      The SP500 BoYu, moved back to a Buy signal.

      • bud67 says:

        aah — I really have nothing, in the way
        of a reply – I care to share with you. Further, the BoYu indicator “remains my own – very private indicator”…Granted, it takes sometimes a skill to read the chart correctly – just the best I can for myself. As for a broker. I make my own decisions, and do not trade. I see
        no great rewards in trading – right, I
        do not have that skill.

        I am a practicing investor – I like buying oil investments as there lows.
        I own OIL, and plan to hold it till you
        grow “old”…that’s a long long time.

        A piece of advise – before I part – learn to invest – you can make more
        money that way, and you family will love you for it….end

  31. shauryagh says:

    Crude sliced through 43.75 pretty easily. Will be interesting to watch the price action at 42.5 support. Buying around 43.25 -43.5 levels with stop loss at 42.35 with targets to 48.4 will likely prove to be a good risk reward trade in crude

  32. micky says:

    looks we retrace soon to the up

  33. phil1247 says:


    gold putting pressure on ext long at 1285

    failure implies plunge to 1250

    will sell final 25% of UGLD if it doesnt hold

    also i dont like holding these ETNs overnite because of possible default risk

  34. stcoleridge says:

    Hi Tony, not sure if you’ve noticed but your NDX hourly chart is showing 30 Nov. 2007.

  35. 123 abc says:

    Speculative squiggles…

  36. DXY did what I suspected.Breaking 92..25 didn’t mean an immediate freefall,but a rally.Now does it go to the dt line–about 94.HYG did this forever last year.New lows,bounce to trendline and new lows.GdX open gap at 23.25.Good luck all.

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