Monday update

SHORT TERM: pullback continues, DOW -133

Overnight the Asian markets lost 2.2%. Europe opened lower and lost 1.6%. US index futures were lower overnight, and the market opened at SPX 2089 seven points below Friday’s close. In the opening minutes the SPX ticked down to 2088, then rallied to 2098 by 10:30. After that it headed even lower. Heading into the close the SPX hit 2078, then bounced to close at 2079.

For the day the SPX/DOW lost 0.80%, and the NDX/NAZ lost 0.90%. Bonds gained 9 ticks, Crude slid 55 cents, Gold rose $9, and the USD was lower. Medium term support drops to the 2070 and 2043 pivots, with resistance at the 2085 and 2131 pivots. Tomorrow: export/import prices and retail sales at 8:30, business inventories at 10am, and the FED starts its FOMC meeting.

The market opened lower today, as foreign markets sold off. Then after turning slightly positive the market headed even lower after Europe closed. Thus far we are still counting three waves down from the SPX 2121 high: 2108-2118-2078, during this largest pullback since the uptrend began at SPX 2026. Currently we observe a double positive divergence short term, but no bounces yet, and an oversold daily RSI. Normally this should be enough for a reversal to the upside soon. Short term support drops to the 2070 and 2043 pivots, with resistance at the 2085 pivot and SPX 2121. Best to your trading!

MEDIUM TERM: uptrend

LONG TERM: neutral


About tony caldaro

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340 Responses to Monday update

  1. Quick one, My target of 1980 has gone for toss. I hope it at least falls to 2070 now. Bulls in action. look at NYSE A/D line. Also, property near me was sold for 27.4% above asking price, which was bought by Chinese student..

  2. Wow .. while the expectations for a FLAT have been fulfilled .. with a wave higher than previous C, there is also a perfect expanding diagonal at the bottom .. with perfect measurements that can also be a vth wave. Either is possible at this point.

    SPX - Three Minute - Jun-14 1535 PM (3 min)


    • thomos1 says:

      I have the first part of your flat as a sharp wave 4 (2070.15/2066.27/2074.54) to alternate with the flat above (2097.88/2088.30.2098.12). So yes I also have that final expanding diagonal as a 5th wave to cap Down 3 of the drop so far from 2120.55. Next would be a flat Down 4 if the impulsive count is to stick (we have different larger counts I sense), so if this pre-FOMC ramp carries us straight higher into what would be a sharp, that alone should be an indication the 5-wave is busted imo. In which case C-leg would be the correct completed structure at 2064.10 (a 3-wave).

  3. vicavale says:

    For AHH Michael….Was there a new “Last Gasp” formation on the Daily? Three bars up, then two bars down? Thanks!

    • aahmichael says:

      No, because the low on 6/6 was not lower than the low on 6/3. For a good picture of what the formation looks like, look at the move from last November’s high to last December’s high in the weekly COMP. The weekly COMP has the potential of forming that pattern again this week, but it needs to close below 4771 on Friday fort that to occur.

  4. Jimbo says:

    If my sums are correct, the wave from 2116.8 to todays low at 2064 was a exact 425% extension on the wave from 2120 to 2107

  5. Bob Sagget says:

    FWIW here is my $.02 on impending events.

    The Fed / Tomorrow is a non-event. I do not anticipate equities suddenly rising on euphoria the Fed did not raise rates. Not raising rates tomorrow has got to be baked in.

    The UK will leave the EU. This news is not going to get any ‘better’ between now and June 23 when the final votes to leave are tallied. The variable then is this. What is the ultimate low point in the $SPX given the UK’s departure from the EU? And, do we slowly grind down to that target low between now and June 23 then head lower on “Sell the news?”

    The Fed / July is somewhat of a wild card. My bias is the Fed will not raise. If I am correct that the UK will leave the EU, I doubt the Fed will raise in July.

  6. tradeanimal says:

    Don’t know if anyone has mentioned this but is SPY not tracking SPX over the last two days? The tracking difference seems unusually wide. Any thoughts or am I just whistling in the wind? Thanks.
    SPY hit and dipped below the hourly S3 pivot at 207.04 – pretty steep sell off or the compressed action of the last few days is impacting the pivot ranges. Went long SPY call options at 207.

    Good luck all !!

  7. Jack Sparrow says:

    stealing aah thunder we are on the way to forming weekly 3BR

  8. phil1247 says:

    here come da swoosh down

  9. Jack Sparrow says:

    seems like 4 th wave triangle forming

  10. rd3777 says:

    Another big distribution day….tops all over the place. portends big decline ahead….

  11. EL MATADOR says:

    How convenient is this….looks like “they” are gonna hold near the lows and start the BTD during the ON so “they” can squeeze the cash shorts on the open tomorrow….geez

  12. johnnymagicmoney says:

    Newbie – where are your Bear pictures?

  13. mcgcapital says:

    Looking very similar to last summer now in terms of set up. US markets outperforming substantially. Thinking we bounce around here but bottom around 2040 spx and 5800 ftse next week before the referendum. Then an ‘in’ vote would push us back to 2100 and 6200. I think the real decline will start in July/August and sticking to a break of 1800 before 2135. The last 2 moves before a waterfall decline in August and January had 3 peaks near the high so if there’s no brexit a rally back to the high would fit. Catalysts for the down move would likely be the same as the start of the year (earnings, China or US growth). Obviously if there’s a brexit we will probably just break through the bottom of the range but I see the move over the last week as the market moving more into line with the actual odds of an out vote… Risen from 20% last week to 40% this week.

    • cyanus66 says:

      Looking for a meaningful bounce here at 2064 in fact.
      2064 is the 1.618 ext of the June 3rd low [2085] to the June 8th high [2120] — the high itself was a 1.618 ext of the May 10th high [2084] – May 19th low [2025].

      These fibs/pivot areas seem to be meaningful, so far.

      • ewmarkets says:

        Hi, can you explain why 2064 is the 1.618 ext of 2085–>2120. It appears it should be a retracement. But the 61.8% retracement is at 2062. Also puzzled why 2120 is the 1.618 ext of 2084–>2025. But they both evidently work so thank you in advance for explaining.

      • ewmarkets says:

        OK, I got it. I used the wrong starting points (not 2085 and 2084). Thanks.

  14. vivelaamo says:

    2040 by the end of the week.

  15. 123 abc says:

    Tony, if 10,119 is taken out on the NYSE Composite, will OEW consider the move as an ongoing Irregular Flat Major-2 wave; or, would OEW consider the entire uptrend from the Feb lows as over?

  16. Leading Diagonal or Ending?? Leading only if the highs are exceeded before the lows are. Ending as the C wave of an A-B-C flat. Very, very difficult on a three-minute chart to say if the internals are “three’s” or “fives”.

    SPX - Three Minute - Jun-14 1316 PM (3 min)


    • thomos1 says:

      TJ, how about an 8-step update for this poss 5-wave impulsive from 2120.55? I have us in a sharp wave 4 of the third wave down. Trying to determine whether it capped at 2074.54 or whether it needs another ramp to 2085 pivot zone (2078 lower boundary). Oscillator already backed way off from peak at wave 3 of 3. After 5 waves down we could go back up to test that broken SPX TL from below.

      • The technique is reserved for impulses because a lot of c waves don’t end on a divergence, and right now, the 120 – 160 candles would be on an “odd-ball” time frame like a ten minute chart.

    • A 78.6% “deep” retrace so far.

      SPX - Three Minute - Jun-14 1415 PM (3 min)


    • Lower low makes diagonal end of a C wave, of some degree. And a double-bottom so far, could be a larger degree flat wave.

      SPX - Three Minute - Jun-14 1518 PM (3 min)


  17. H D says:

    PSA: There is nothing proprietary about traditional book Elliot wave. You can literally run a software program and get numbers and letters on a chart. Those books have been wrong since the 666 low though. Just ask anybody that was on a B wave from ‘09 and are now P5. Rather than waste time learning every nuance of every rule you can to spend time learning the EW set ups, patterns, and where counts become significant. Tony has done that with his own version of OEW as have I, HD unpublished ™ :mrgreen: There are others here that have a unique proprietary approach that incorporate EW concepts that trade circles around “counters”. Watch Mat, GTO, phil, to name a few, for some unique perspectives on price, pattern, Fibonacci extentions etc. If you just want numbers and letters, run the software. Sometimes the best that gives you is 50:50 though. The last set up I posted here was +34 from 2085 pivot at 2119, terminal pattern, wrong above 2121. They took it to the limit for me (2120.55) but from 2119 SPX fell exactly (55) handles to LOD 2064. Why did I pick 2121? Mat had a great read on the SPX sell zone and said it was going way down, GTO had weekly visitor, Wpp, that hits almost 85% of the time BTW! Phil caught the fib extention short. Those are all proprietary, unique set ups that get little attention here IMO. Everyone just wants a chart with letters on it. Not to take away from anyone’s work but… I think some are not even reading the updates. The personality of this blog has changed so drastically. People just post random prices, 2160 etc, with zero analysis, and that drove a lot of interesting people away. 3 posts, Figure out what you want to say about 1 days worth of market activity in 3 posts, as Tony has requested. Tony used to share so much more info intraday. His 2 replies to scott c. are the most important info in today’s comments. Think about it. I must be getting old. I sound grouchy.

    I’ve really enjoyed posting here Tony. You taught me it all. Thanks for everything. I’m still a reader.

  18. Scott C says:

    If OEW is expecting higher highs – should we expect a rate hike tomorrow or hint/thought of one for July? I know the fed is in a weird situation with last months NFP.

    Curious what this catalyst could be. Similarly – is GDX time for a bigger B wave/wave 2 into 16-18? If the market is going up and we are not fully in a bear market then we could assume GDX is going to pullback?

    What are people seeing for correlations out there? I know commodities/miners/etc have held us up here but is there enough in them with the small retraces seen to propel us to the NYSE numbers needed?

  19. vivelaamo says:

    STFR’s!!!’ 😃

  20. magnus1234 says:

    This is my one and only remark about the Brexit. The Britts are burning bridges in an increasing speed with the rest of Europe. The Britts have their rights to vote for whatever they want but to have the cake and eat it is not possible.

  21. johnnymagicmoney says:

    My take is we need to retest the May lows and get the weekly’s oversold. May be a bounce or three in there but I don’t care about them. The real decision is when we get there what to do. Brexit is not going away in the next two weeks. The FED nonsense could give longs their bounce work off short term oversold conditions and then you would see follow through in the sell off end of this week and early next week testing the 2025 level which would coincide with the decision. No leave and you get a huge rally. Leave and it breaks through. That’s how I see the month of June

    • To attribute the EU and China’s problems to our own is ludicrous. Why we would have already fallen hard as they already have these last 2 years. Why is the consumer spending MORE now than the last 6 years? Anyone actually look at the domestic economy? I will reiterate a very strong argument. The consumer debt burden is at 30 year lows. No other way to slice it. Our service industry doesn’t give a crap about Britain.
      The offset from overseas inflow into our equity market would more than make up for any nervousness AFTER the BREXIT decision. I would also watch the setup fro the vote. I believe British dollar and stock market would be low enough to spook anyone on the fence to vote exit.

      The biggest rally of the last 2 years is awaiting the decision. A BREXIT delays the rally till early July while a stay vote causes immediate response.

      Just like Greece and all the other silly arguments as to why we have an immediate crash, this event will be forgotten and the bears will find yet another one to latch onto. Think this thru folks. Has any of these outside events prevented the consumer to spend? Huge pent up demand. Watch the 2 rate hikes this year and more to come because the domestic economy justifies it.

      • mcgcapital says:

        Lol… It’s the British Pound… And as an FYI the British electorate will pay no attention to the markets when deciding which way to vote. The average person doesn’t own a significant amount of equities and most people over age 40 have pensions guaranteed by their companies and not linked to investment returns, and those under 40 are too far from retirement for it to be relevant.

        I do agree on the parallels with last year’s Grexit. But that just led to a relief rally before a much bigger decline.

  22. scottycj1 says:

    How about this on the RUT

  23. mjtplayer says:

    Tony – nice 10pt bounce in the SPX. By your count, is this enough to be considered a wave 4? if not, how much of a rally would you need to see to be called a wave 4?

  24. phil1247 says:

    2070 esu6 must resist
    or russell crowe will be making an appearance

  25. EL MATADOR says:

    If it’s gonna bounce this is the time to bounce back up to 2085 pivot zone than crap back down to retest 2025ish low

  26. NEWBIE says:

    Any thoughts on where we are headed form here stuck at 2066 area for a while.

    • phil1247 says:

      looks like 2050 esu6 is going to be tested

      im lowering stops on half my shorts to 2074

      if this extension short is in charge again we cannot go above there

  27. bfquant says:

    DB cracked February lows. ADR version

  28. Very near 61.8% retrace .. on SP500 daily .. it’s all about whether the trend channel can be recaptured or not, as below.

    SPX - Daily - Jun-14 1140 AM (1 day)


  29. phil1247 says:


    if completed it breaks the .618 support level from 5/19 lows

    the previous ext short at 2072 broke but retested and held ( oval )

  30. Bob Sagget says:

    $SPX $2,025.91 here we come.

  31. vivelaamo says:

    Wow at this rate I might make some money 🙂

  32. johnnymagicmoney says:

    And to think of all those triple leveraged shorts I bought at 2119 and didn’t sell

  33. captbara says:

    No longs below 2075..

  34. Scott C says:

    Hi Tony, What needs to occur for you to change your uptrend/neutral stance with the NYSE or SPY? Patiently waiting — with a desire for it to go south 🙂

    Thank you

  35. stmro says:

    Boy was I wrong about that bounce. Support broken now.

  36. blackjak100 says:

    Good call aah – market is looks toast now and could see bug drop shortly

  37. phil1247 says:

    added back 1/2 shorts sold yest

  38. wanderer says:

    The daily “guess the SPX close” tournament is now open.
    The rules are:
    a) Entries must be submitted before 11:30 am New York time (ET). After this deadline, the entries will be disqualified.
    b) to qualify, you must state the SPX number, and not just a vague opinion (such as “it will bounce off the pivot”)
    c) the winners are determined based on whose guess comes the closest to the SPX close at 4:00 pm ET the same day.

  39. mjtplayer says:

    Uptrend from the Feb lows has clearly been broken on the SPY. If we continue lower there’s no support until 205.21 – the gap left open from 5/23. There’s also an open gap at 204.20

  40. Run for the hills! Looks like we get a choppy two days followed by more downside. Logical that we find a bottom around the BREXIT decision. The domestic economy is doing what I expected, accelerate in spending. If the domestic end keep showing strength it will be a launching pad after the BREXIT announcement. See the ultimate low from this event at 1990’s. The launch should take it to next highs and fast. Strap yourself in for this roller coaster will be huge.

    • johnnymagicmoney says:

      Sure thing holly i mean Gary I mean holly crap I mean Janet

    • EL MATADOR says:

      Well Gary-Holly, Let me say it again;

      Father tell me, we get what we deserve
      Oh we get what we deserve

      And way down we go-o-o-o-o
      Way down we go-o-o-o-o
      Say way down we go
      Way down we go

      You let your feet run wild
      Time has come as we all oh, go down
      Yeah but for the fall oh, my
      Do you dare to look him right in the eyes?

      Cause they will run you down, down til the dark
      Yes and they will run you down, down til you fall
      And they will run you down, down til you go
      Yeah so you can’t crawl no more

      And way down we go-o-o-o-o
      Way down we go
      Say way down we go
      Cause they will run you down, down til you fall
      Way down we go

      Oh bab-bab-yeah
      Wow baby-a-aha
      Bab, down we go

      And way down we go-o-o-o-o
      Way down we go
      Say way down we go
      Way down we go

  41. Interesting that as Euro rates go negative,gold hasn’t moved up more.1292 not bad and likely new highs .Question is,depending on Brexit,is there a huge unwinding on June 24th?
    As far as the Fed goes,never fear–PPT is always there.

    • scottycj1 says:

      REALLY ? Where were they August 19th thru 24th 2015 ?

      • Look it up and learn.The Fed gets caught flatfooted all the time.Just look at their economic outlooks…wrong 90% of the time.They probably never saw August coming.PPT is initiated when needed.A quote attributed to PPT is,”better to pour in a certain amount of money to prevent a meltdown than to have to put 10 times that amount after a meltdown.”
        Any of these V shaped rips are PPT…and there have been a few.
        They’ve also put caps on gold(see gold manipulation settlements)and kept bonds nice and low.You don’t understand how complicit they are with other banking institutions?In 2008 when Paulson met with them all,he told them what the deal was going to be.You will be our traders and in exchange,you will be allowed to exist and make your profits and keep your millions in stock.
        This is the new alliance,believe it or not.Maybe we need it,maybe we don’t.But it’s there.

  42. scottycj1 says:


    Like a said yesterday 2082 next flux zone….draw a line across 2082

  43. magnus1234 says:

    Not a single PPT comment in the fora for several days. Will we get one today?

  44. ajaysinghi says:

    Target is still minimum 2100 this week.

  45. stmro says:

    Very meager gap down. Think we close it and bounce.

  46. phil1247 says:


    broke initial short
    but 2072 must break to get a strong squeeze going

    • phil1247 says:

      cue russell crowe

      ext short broken at 2072 esu6

      • phil1247 says:

        door is open now to larger ext short at 2083

        above there you could get panic BUYING

        • phil1247 says:

          long from low has held for now at 2062

          TARGET 2133

          • fishonhook says:

            I think the opposite. The trend is now down. Maybe some minor gyrations up. but fundamentals Brexit, negative interest rates etc are beginning to weigh on the markets

            • aahmichael says:

              You’re correct, Fish. The tend, at least for the short term, is straight down. The market has gapped down 4 days in row. It couldn’t close the gaps the first 2 days, and yesterday and today are even worse, because those daily gaps were quickly filled, but then the market headed south again and made even lower lows.

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