Monday update

SHORT TERM: gap up opening sold, DOW -4

Overnight the Asian markets gained 0.4%. Europe opened higher and gained 1.3%. US index futures were higher overnight, and the SPX gapped up to 2147 at then open. The SPX had closed at 2139 on Friday. At 10am the SPX hit 2154 and began to pullback. Also at 10am the NAHB was reported higher: 65 v 59. The pullback continued into the afternoon with small bounces along the way. At 1:30 the SPX hit 2136, completely retracing the gap up opening rally and turning a few points negative. The market then rallied to SPX 2146 by 3pm, only to pullback and end the day unchanged at 2139.

For the day the SPX/DOW ended flat, and the NDX/NAZ lost 0.30%. Bonds lost 1 tick, Crude rose 15 cents, Gold added $3, and the USD was lower. Medium term support remains at the 2131 and 2116 pivots, with resistance at the 2177 and 2212 pivots. Tomorrow: housing starts and building permits at 8:30.

The market gapped up at the open for the first time since early this month. That gap up opening was also sold off, but eventually led to slightly higher prices a few days later. The rally took the SPX to 2154, the highest level since a week ago Monday. Then the market closed the opening gap and turned negative, hitting SPX 2136. From Wednesday’s SPX 2120 low we can now count four overlapping waves: 2151-2131-2154-2136. This could be a nesting of waves, or more corrective activity. Important support remains at the 2131 pivot range. Short term support is at the 2131 and 2116 pivots, with resistance at the 2177 pivot and SPX 2194. Short term momentum was quite overbought during today’s rally then ended at neutral. Trade what is in front you!

MEDIUM TERM: uptrend underway?

LONG TERM: uptrend


About tony caldaro

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123 Responses to Monday update

  1. johnnymagicmoney says:

    so the markets are going to be really unhappy if the japs don’t do more ineffective insane risky stimulus…………………ok I got that lol

  2. micky says:

    Kudos Jack P for first calling the triangle. So if it works out we then know we will get a last wave down after it completed.

  3. fotis2 says:

    Possible CH on CORN 19.00 needs to break to validate lets see.

  4. manunidhi21 says:

    Namaste Tony.
    Do you favor a rate hike coming ?

  5. kingfrogcash says:

    Yellen has to raise rates Wednesday. But only if the BOJ drops helicopter money tonight, Uncle Ben told them to do. The markets will sky rocket on the BOJ, giving her an excuse.
    She loses all credibility if she waits. No one likes a rate increase before Christmas.

  6. NEWBIE says:

    Vix is telling you guys the party is over, don’t fight it.

  7. phil1247 says:

    shorts and longs continue to break

    triangle continues to form

    triangle breakout at 2pm tomorrow

    see ya there !

  8. fionamargaret says:

    Continuing on Tony’s sequence of numbers, we should reach 2157….today….

  9. mtu MTU says:

    [110pm] SPX update –
    Squiggles and tracking counts. Potential triangles. See charts.

  10. vivelaamo says:

    The uptrend from Feb in the s&p and DOW still hasn’t been breached. Until it does (and maybe even gets backtested) why turn bearish?

  11. NEWBIE says:

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  12. fotis2 says:

    CL think bounce here closed gap target 47.00 stop 42.50 lets see.

  13. stmro says:

    FED lowers GDP forecast yet again. They might not be allowed to speak publicly, but they can still manipulate the news stream. What a coincidence too – just before the rate decision!

    • Housing starts–which the Fed calls “residential investment”,is the reason.I wondered what happened,as gold made a small move up,and oil and equities bounced about 15 minutes ago.
      I’d watch Nasdaq for what leads this market down.
      Wells Fargo CEO testifying is a sleazeball.You can tell the way he parses the questions,obviously to avoid saying anything that would be used in a class action case.
      “Is this fraud”?
      “U h Uh,I’m not a lawyer”.
      But he is a crook.

      • Btw,he’s got a huge cast on his hand…I wonder what could’ve caused that kind of massive injury.Temper tantrum?

      • johnnymagicmoney says:

        just talked to someone who used to work for them……………….he said it was widespread across the company and its worse than what is out there already. the stock has problems

        • CB says:

          Pretty outrageous. stuff. A few years ago they sent us some unsolicited debit cards (tied to our business accounts). Had to send them back and tell them we didn’t want anything like that (for obvious reasons).
          The nuts from “Business Development” thought that debit cards tied to clients’ business accounts were a great idea…. 😉
          Learmed – that cast could be fake too….a little sympathy for the crook , perhaps , during those tough hearings..?

    • EL MATADOR says:

      NYFED GDP Nowcasting Report site says,
      “We will not be publishing our report on September 16 since the date falls during an FOMC blackout period. Reporting will resume on September 23.”

      How convenient!

    • cosmos77 says:

      Nice analysis Red. S&P is currently at 2150 and rising to the upper trend line as you said it might. I count seven waves and they are overlapping and look corrective. Speculators positioning for the FOMC announcement tomorrow?? Maybe sell the news. Whatever it does, I like to fade the initial reaction or wait for the smoke to clear.

      • reddragonleo says:

        I think they will shoot for a double top and either fall short just a hair, or go over it enough to clear out the stops of the bears. Only SkyNet knows how many shorts have their stops over the current all time top… which is kind of a zone starting around 2182-2184 as it’s been hit on 8/15, 8/23 and 9/8… so that level and 10-20 points higher would certain wipeout all the stops.

        History does repeat but rarely does it repeat exactly. So while I see a nice comparison of the current 2 months of Aug/Sept of 2016 to the period of Aug/Sept 2014 that doesn’t mean for certain that we’ll take out the current all time high this time like we did back then. Possibly this time we only make a lower high? I don’t know for sure but I think our best shorting opportunity will be at the close on Wednesday… especially if they squeeze it up to double top the market.

  14. captbara says:

    People all focused on Fed have forgotten about the BoJ tonight.

  15. phil1247 says:


    43.14 target hit!

    • phil1247 says:

      /cl trading tip worked again

      9am 4hr bar took out highs and lows of previous 3 bars

      now has led us to breakdown
      just like the thursday bar that took out 5 previous bars that i posted then

      raised stops on SCO
      still looking for extension shorts to make this collapse easier to work

  16. Seems like some traders are positioning themselves on the long side in anticipation that the Fed won’t raise rates tomorrow. However, if they don’t raise tomorrow, they’ll raise in December. The only thing the Fed can do that is bullish is make a really dovish statement that translates into rates will be low indefinitely, which they’re not likely to do.

  17. stmro says:

    Another morning futures ramp that’s going to get sold i suspect. People will want to get out of the way before the FED comes in on Wednesday.

  18. ajaysinghi says:

    Bears should thank Yellen, Brexit 2.0 coming soon.

    • vivelaamo says:

      Rate increase? Bulls don’t want to go long from here.

      • tommyboys says:

        Counter to the VAST consensus, and some initial volatility notwithstanding, (the long awaited) first several rate increases will be bullish for the economy and the markets. 3-5% are historically VERY favorable rates. We’re no where near these today. Once the initial shakeout – few days at most – we’ll move higher. Banks will finally breath a sigh of relief, loans will be made and margins will begin improving. Banks and Financials will rally leading markets. Long has been the right position for 7 years less a month or two here or there. This will continue until sentiment gets euphoric and/or every other comment in blogosphere continues (7 years now) “warning” of “collapse” or “crash” and all the guns and gold and bunkers have been liquidated. Could be a while…could easily become the longest bull on record. Always a time to short ’00-’02, ’07-’09 etc…but not now.

  19. stormchaser80 says:

    My Technicals Model shows with very significant negative divergence from the SPX, that the market will head lower soon. Technicals were recently weakest since mid January 2016, worse than Brexit. However in the very short term the model is bullish as while each day last week was negative, Thursday through Today improved (less negative), with a better bounce than the market. Doesn’t always work out but something to keep in the back of our minds.

    More discussion:

    My site is 100% free. If you are visiting for the first time, be advised that I do ask new users register for a free login. This takes 15 seconds. This is to protect myself, ensuring that everyone agrees to my legal documents.

  20. locanbbs says:

    UPDATE: Monday a nice consolidation with internals improving (BB%) and now markets breaking upwards in futures markets. Minor cyclic bottoms Tues-Thurs. could be overrun.
    Ndx hourly futures –

  21. stmro says:

    Futures are very active again. A lot of positioning going on ahead of the FED. I hate how every month there are so many new-driven events – NFP, FEDtalk, ECB, BOJ etc etc. Markets used to pay a lot less attention to this nonsense prior to the crash.

  22. Lee X says:

    This post is off topic and is intended for the host and liked minded individuals during after hours, cheers !

    Thanks Tony
    When’s the next wave up for the Cards ?
    I’d like to see them in the post season personally

  23. bouraq says:

    Chart of the day is $DJIA by

  24. rd3777 says:

    A possible 5 point reversal top in the NDX which has taken form before. A broadening top which usually leads to a fast and deep drop.

  25. chicotheman says:

    From here, everything about the past 6 days looks corrective. I guess we clean out the stops under 2120, possibly below 2100 before reversal like last Monday. Would reconsider at +10

  26. phil1247 says:

    WHEN will the triangle resolve?

    probably at the vertical line
    until then probably trapped between 2123 and 2157

    • phil1247 says:

      again…click chart to refocus

      think or swim is constantly changing so i can never work it right

    • ariez5 says:

      Love the chart, Phil. The triangle might get resolved Wed morning due to BOJ and then see a reversal due to Fed after 2:00.

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