Monday update

SHORT TERM: gap down opening then rally, DOW +240

Overnight the Asian markets lost 2.3%. Europe opened lower and lost 1.2%. US index futures were substantially lower overnight, but rebounded before the open. Nevertheless the SPX gapped down at the open to 2119, and immediately started to rally. The SPX had closed at 2128 on Friday. By 10:30 the SPX had reached 2137. Then after a small pullback to SPX 2131 the market rallied to 2151 just past 1pm. At that time FED governor Brainard’s speech: A larger pullback followed to SPX 2139 by 1:30. Then the market moved even higher. Heading into the close the SPX hit 2163, then dipped to close at 2159.

For the day the SPX/DOW gained 1.40%, and the NDX/NAZ gained 1.70%. Bonds gained 5 ticks, Crude rose 20 cents, Gold slipped $1, and the USD was lower. Medium term support rises to the 2131 and 2116 pivots, with resistance at the 2177 and 2212 pivots. Tomorrow: export/import prices at 8:30.

The market gapped down at the open today for the second day in a row. The market had not had two gap down openings in a row since the SPX 2074 low in early July. Previous to that is, you probably guess it, the Br-exit downtrend low at SPX 1992 in late June. Interesting pattern considering today’s rally. After opening the SPX 2119, (2116 pivot range), the market rallied impressively for the rest of the day with only one notable pullback after FED governor Brainard’s speech. Today’s rally not only closed the opening gap within a half hour, but nearly reached Friday’s SPX 2165 opening level as well. The oversold conditions, noted over the weekend, suggested a potential downtrend low Monday/Tuesday. If SPX 2119 was it, this downtrend would be the smallest correction, in percentage terms, since early 2006. Too early to tell at this point. But if the DOW clears 18,552 print basis the downtrend is probably over. Short term support is at the 2131 and 2116 pivots, with resistance at the 2177 pivot and SPX 2194. Short term momentum rose from extremely oversold to overbought. Best to your trading!

MEDIUM TERM: downtrend bottomed already?

LONG TERM: uptrend


About tony caldaro

This entry was posted in Updates and tagged , , , . Bookmark the permalink.

138 Responses to Monday update

  1. kvilia says:

    I would be selling tomorrow into the morning rally. SPX targets 2154 or 2162. Thinking rally will fade around 10 am.
    Learned, what do you think about miners? Dollar is moving up, so my buy was premature today, not a big lot. Will they have a pop? I think if they do, then will sell off with general markets.

  2. pooch77 says:

    Pug had us moving up big today…start tomorrow

  3. Jack Sparrow says:

    seems like we are doing flat abc (4th) – a to 2160 b to 2120 now c working up?

  4. rd3777 says:

    Since FB is the most widely held stock by hedge funds,you can clearly see a top has been made from the topping tail and given the point in the pattern it probably is at least a meaningful one.

  5. ajaysinghi says:

    Gap up of 1% tomorrow and another 1% likely after that.

  6. alexhartley1 says:

    Hi Tony – on the JPY charts there’s a confirmed BLUE B on the daily but not on the weekly. Is a separate confirmation required for the weekly to be made permanent?

    I ask because I keep reading about the ‘Secret’ Shanghai Accord and the desire of the US not to have the Yuan weaken against the USD so instead the USD and the Yuan weaken against the Euro and Yen for the time being. Therefore there’s a belief from a few people I’ve read that the JPY could still have more downside to 95 for e.g. Perhaps also the move in the Euro/USD which has been trending higher is not done yet either.

    Do you think the US or the ECB and Japan will the be the next ones to launch more types of QE? Perhaps after the US elections if the market is dropping into this date.

    Thanks in advance.

  7. stmro says:

    “The BoJ are to explore delving deeper into negative rates”. Good for a v. temporary blip, but trend is down for next couple of weeks.

  8. mtu MTU says:

    [120pm] SPX update –
    Squiggles from yesterday’s low. Currently breaking out of a small-degree expanding EDT. See charts.

Comments are closed.