Monday update

SHORT TERM: quiet open then big rally, DOW +175

Overnight the Asian markets gained 0.6%. Europe opened lower but finished mixed. US index futures were lower, then higher overnight. At 8:30 the NY FED was reported lower: -9.0 v +9.6. The market opened two points above Friday’s SPX 2047 close and continued to rally. At 10am the NAHB was reported unchanged at 58. The rally continued throughout the day, with only one 3 point pullback, until the SPX hit 2072 just past 3pm. Then the market dipped to close at SPX 2067.

For the day the SPX/DOW gained 1.00%, and the NDX/NAZ gained 1.25%. Bonds lost 14 ticks, Crude rose $1.65, Gold added $1, and the USD was lower. Medium term support remains at the 2043 and 2019 pivots, with resistance at the 2070 and 2085 pivots. Tomorrow: the CPI, Housing starts and Building permits at 8:30, then, Industrial production (est. +0.25%) at 9:15.

With no gap down opening this morning, to clear the positive divergence, the market rallied. While we estimated 15+ points off Friday’s SPX 2043 low, the market did a lot more than that. With Friday’s low of SPX 2043 falling short of the previous low at 2039, and the rally above 2071 today, it is possible that wave ii/b is not over yet. And the market could rally back into the 2085 pivot range yet again. Short term support is at the 2043 and 2019 pivots, with resistance at the 2070 and 2085 pivots. Short term momentum hit quite overbought today after Friday’s positive divergence, then dipped lower. Trade what’s in front of you!

MEDIUM TERM: downtrend probable

LONG TERM: bear market


About tony caldaro

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329 Responses to Monday update

  1. kvilia says:

    Dear Igor and Phil, it is much better to be in than out having stops in place. Once out of this choppy period, the large move will make some traders money. No risk.

  2. vivelaamo says:

    Support here proving to be a tough nut to crack. I think tomorrow’s attempt will be succesful and this area will be back tested a few times before we fall hard.

  3. Holly Silver says:

    Went back in and bought CALLS for SPY expiring Friday. Long shot but since the market didn’t break yet again I expect fast action as a breakaway or breakdown. Doing the contrarian play. Dollar holding and Gold not moving. The next few days could have many scratching their heads.
    I expect the equities to rally hard as Gold falls. I have position for both. It is just as likely the reverse action occurs. bet with my recent winnings only.

    I do love it when we come to some sort of crossroads. You do get your monies worth. Doubt we meander sideways after 2 PM tomorrow.

  4. phil1247 says:


    u long short or just watching?

  5. bud67 says:

    the, SP500 BoYu, remains in a strong sell/down mode.
    Having broken a triple low support, downside looks
    wide open…..Bud

  6. simpleiam says:

    Typical… Breaks just below the actual pivot by 1 or 2 pts, takes out the stops, then pops back up above the pivot. Been doing that for many months. Would prefer not to see gap down in the morning to go short, but a drop from the open. Otherwise, it’s going up for more pivot ping pong.

    • Igor says:

      Hi M!
      We don’t have to trade if the picture is not clear enough. It is better to be out wishing you were in, than in wishing you were out😉

      • simpleiam says:

        I agree, Igor. That’s why I made the statement above.
        Hope you’re doing well these days. Pivots providing mucho dinero as HD’s post implies.

        • Igor says:

          Thanks M, I killed it in April. It looks like we are in the choppy market (consolidation) again. Sitting in cash and reminding myself that patience is a virtue. Glad to see you on the forum. Yes, HD is an ace in trading HDivots🙂

      • phil1247 says:

        phil1247 says:
        May 16, 2016 at 4:07 pm
        you know what they say………….

        i’d rather be out …wishing i was in…..
        than in…….wishing i was out

        igor …….i agree !

  7. fotis2 says:

    Phil 2050.40?

  8. So, with the fractal break lower on cash; only triangle option is for the “barrier triangle”. It would basically be a triangle against the lower daily Bollinger Band. For that, cash 2039.45 has to hold, or 2030 in the futures – both on a closing basis. Otherwise, we are in the minor C wave down, and B completed at 2080. (The C wave down would be expected to go to the 100-day SMA in the ES futures or 1990 in that cash). Very, very difficult to say with such choppy waves, currently.


    • captbara says:

      SPX always did make for the toughest counts. Have you looked at the yen or USDJPY lately? Very clean waves, and looks impulsive to me.

    • simpleiam says:

      Interesting. Looked back at Dr. Boom, and he had 1990 about a week/10 days ago. Guess he should’ve gone with his first guess. Will see. Waiting for 2036 to break before doing anything to the short side.

    • blackjak100 says:

      I missed this, but looks like 2 of C completed yesterday as a nice expanded flat. It avoided a truncation and was just over 1.618*a. This means we are in 3 of C down now.

  9. phil1247 says:

    /ES target of 2013 was not a typo about an hour ago

    bearish below 2047

    extension short in force 15 min

  10. H D says:

    don’t go chasing waterfalls:mrgreen:

  11. simpleiam says:

    PIVOT coming up!

  12. blackjak100 says:

    Great R/R to get long here with stop at 2043 IMO. Very little risk

  13. vivelaamo says:

    Could do with the market crashing to Feb lows in the next month or so. My future depends on it 😳

  14. kvilia says:

    Last warning to the stubborn bulls. If you are not fully hedged, short, or in cash, don’t come back in tears. Once 2019 pivot is lost, it’s going to be an avalanche.

  15. stmro says:

    Crazy market, but middle bb held so yet another test of 2040 next.

    3rd test should be a break but maybe that’s just my desperation to get out of this infernal trading range speaking. I’m not a day trader…

  16. phil1247 says:


    2048 has failed

    target 2013

  17. mjtplayer says:

    FYI: Major long-term Bradley turn date next Wed May 25th. This is a very strong turn date, the strongest since Aug 27th, 2015 – which was just 3 days after the Aug 24th plunge. These are long-term turns, meaning months. Given where we are, the turn is probably lower, unless we get a massive plunge in the next week which could signal a turn higher.

    I’m guessing we get a drop into Fri/Mon below 2,039 perhaps down to 2,000+/- 20pts or so. Then a rally next week into the 3-day holiday weekend back to 2,060+/- and the last rally before the real plunge lower in June. Just a guess….

    • Dex T says:


      There is another full moon Saturday and Mercury is also going back to forward motion on Sunday.

      Next week is set for a major turning point

  18. vivelaamo says:

    Should re-test the h&s neckline today or tomorrow.

  19. SP500 cash .. now down below 62% retrace of yesterday’s up move. Can go lower if it wants.

  20. 123 abc says:

    Tony, time to turn Intermediate-b back into purple haze?

  21. Why are the transports so strong today?

  22. fotis2 says:

    Tony mentioned a similarity to the last drop can see it here now

    • gtoptions says:

      5/17 = 12/7 😉

    • mjtplayer says:

      A drop below 2,039 to get the bears excited and get everyone talking about H&S downside projections, only to rally again? I would say down to 2,000 – 2,020 then a rally back to 2,070?

      • gtoptions says:

        YPP @ 2015 may provide temporary support. Major C should be quite destructive. The Bulls can disagree with me if they wish. GL

    • mcgcapital says:

      Looks more like august than December IMHO. December we had bigger up/down moves before rolling over whereas this looks like a series of lower highs with support around 2040+/-5. When that breaks down it could potentially move quickly.

  23. mcgcapital says:

    August 2015:

    May 2016:

    Starting to look quite similar heading into opex Friday. If they can’t hold above 2040 the odds of a waterfall decline increase.

  24. Trader Joe
    Hope you see this
    Last wed 5-12, you posted a chart showing A down from 2111 with a B up and a note of a possible larger B triangle to eat up some more time. As I look at the action since it appears we could be in d down of that larger triangle.

    • Hi pt – no, not quite. Minor A = ES 2030, a of triangle = 2080, b of triangle = 2035, working on c of triangle (up). Had five waves up to 2070 .. should have another five waves up to 2075. And that’s IF it’s a triangle, not a flat. As I have said many times below. This ‘could’ be a flat b wave as well, meaning any higher high than 2080 could finish it.

      But, the clear alternate for minor A, down, is minor 1, down (just doesn’t seem like it b/c no lower low was made beyond prior minute iv). So, I remain, “patient and flexible” until the market makes up it’s mind.


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