Monday update

SHORT TERM: gap down opening, DOW -167

Overnight the Asian markets lost 1.4%. Europe opened lower and lost 1.8%. US index futures were lower overnight, and the market gapped down to SPX 2154 at the open. The SPX had closed at 2165 last week. In the opening minutes the SPX hit 2149, then rallied to 2157 by 10:30. At 10am new home sales were reported lower: 609K v 654K. Then the market resumed its pullback. At noon FED governor Tarullo’s speech was released: Heading into the close the SPX hit 2145, then closed at 2146.

For the day the SPX/DOW lost 0.90%, and the NDX/NAZ lost 0.90%. Bonds gained 11 ticks, Crude rose $1.20, Gold slipped $1, and the USD was lower. Medium term support remains at the 2131 and 2116 pivots, with resistance at the 2177 and 2212 pivots. Tomorrow: Case-Shiller at 9am, consumer confidence at 10am, and a speech from FED vice chair Fischer at 11:15.

Today’s selling appears to have begun overnight in Asia. Then in Europe some non-supportive government comments were made regarding the troubled Deutsche Bank. The DAX was down sharply by time the US markets opened. When Germany closed the DAX had lost 2.2%, and the SPX was at 2148. For the rest of the day the SPX traded between 2145-2153. As a result of today’s decline we now have five overlapping rallies from the recent SPX 2120 low. Yes it looks corrective, and would confirm that with a further drop to SPX 2140 – which would completely retrace the most recent rally. Short term support is at the 2131 and 2116 pivots, with resistance at the 2177 pivot and SPX 2194. Short term momentum is displaying a slight positive divergence at the close. Trade what is in front of you!

MEDIUM TERM: 80% uptrend probability being tested

LONG TERM: uptrend


About tony caldaro

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117 Responses to Monday update

  1. hooloo1957 says:

    FWIW, IMO amzn is completing 4 five wave sequences from the feb low. The last two sequences were in the last 10 days. Does anybody else see that? Or am I crazy?

  2. “While the presidential debate received a lot of attention, I’ll dare to suggest that tomorrow’s COMEX option expiry is much more likely to be the catalyst that produces a fresh leg higher for gold, and for stock in the companies that mine this mighty metal.”
    –Stewart Thomson,gold analyst.
    (I don’t know this guy at all,but the idea was interesting).Good luck all.

  3. Mam the nazdaq is strong like Bull

  4. Lee X says:

    Hey Tony
    Seeing that the blog is talking politics let me jump in and say that the Cubs have a decent shot this year of getting 101 wins and on the subject of weather it don’t get much better in the Heartland than this . Hashtagmowingweatheratitsbest 👍
    Enjoy it dude !

  5. phil1247 says:


    ext long held

    bot more SSO

  6. can it make it up to 2170? or is 2161 all she got?

  7. johnnymagicmoney says:

    Blah blah blah about the debate. I don’t like Trump but the commentators are liberal and spent so much time on Trump’s birther question. Guess what? WHO CARES!!! it still comes down to the economy, and protection of our country. So thos eof you who want to support plastic Hillary spend most of your time on hoe she won the debate because of how he answered questions that people don’t care about (except for people who support Hillary). Bottom line is Hillary’s entire campaign is don’t vote for that guy. Obama ran on an idealistic message and won the first time around on that positivity. because he pissed off so many people with Obamacare and people saw he was just another politician he couldn’t run on his record in relection and he already did the hope and change so what did he do? his entire campaign was don’t vote for that rich out of touch guy. That’s was it. Hillary cant run on her record so she is doing the same thing as Obama for relection but heres the big thing………….NO ONE LIkES HER and many people still liked Obama. If she pulls it off then Trump has no one to blame but himself but this election isn’t Hillary’s to lose contrary to belief. Its trumps to lose and he may lose it but the more Hillary supporters want to run their entire campaign on “not that guy” the more vulnerable she is. Obma got away with it against Romney. It will be harder for Hillary.

  8. torehund says:

    Think it was in the 70 or 80 ies when the Norwegian Government took over control of the major bankrupt banks, stock and bondholders lost everything, and we drifted further into government controlled corporatism.
    Maybe Merkel is thinking the same way concerning DB, if so it would be another nail in the coffin to capitalism and free markets/society.
    Merkel herself is not foreign to large, powerful and big government, (having worked for for Stasi). Intellectuals had a hard time in East Germany, their underwear was harvested in silence, named and put on used jam-jars so that the Gov dogs could sniff them up, if and when needed.
    They say old habits die hard, just hope I am wrong 🙂
    Will Bernie re-emerge against all odds ? He is confluent with the Socialistic trend of Western societies.

  9. captbara says:

    Retested the Fed week consolidation area, now let’s see what the market decides.

  10. Mr.C ,the drop from 1.70 to 1.55 on the ten year…a Deutschebank thing?

  11. rd3777 says:

    Now it looks complete….AMZN 5 waves up….

  12. blackjak100 says:

    NYAD +200 classic B wave underway

  13. NEWBIE says:

    Any bears here if so please share your count

    • phil1247 says:


      i am bearish on gold below 1333
      no rally is possible
      until this extension short breaks

    • rd3777 says:

      Take a look @ AMZN that’s in it’s final 5 of 5 of 5 of Z when that finishes should reverse down and top in a major wave….JPM came out and raised their target to 1000 classic topping action.

  14. torehund says:

    Dollar attempting to start a run which crude abhors. Will it develop into a trend ?

  15. Gold had a chance to make a move over 1346.Would have been huuuge.Hope it’s a temporary setback.Keep watching it.

  16. H D says:

    Did you guys see the futes react to the NFL game last night? As soon as the game ended they took off (34) to (55) crazy Falcons fans. Never seen that before.

  17. mjtplayer says:

    The post-Fed bounce has been taken back and the first debate was a non-event with both candidates looking nervous. Now what? Oh yeah, DB down another 3% after being down 7% yesterday – me thinks that is the real story moving forward, while everyone is being distracted by the debate and the Fed.

    • stmro says:

      Watching DAX close with interest. Close significantly below 10245 would be confirmation of a triple top. Measured move after break of previous low would be around 600 points lower i.e. 6%.

  18. stmro says:

    I’m of the opinion that DB is in big trouble, but i just saw this chart from zero edge and have to say, this is the epitomy of the kind of disingenous rubbish that the site vomits out.

    Look at it. They’ve superimposed two charts going down and obfuscated the vertical scales to create an artificial similarity, seeming to imply that DB is another Lehman. You can take ANY 2 charts going in the same direction and do the same if you simply modify the scale of one axis.

    They do this over and over again with all kinds of instruments. Clowns.

    • vivelaamo says:

      Yep. That is why there is no credibility left for that site and as soon as a bear uses a zerohedge link to back up their case it time to ignore that person.

  19. blackjak100 says:

    It sure looks like a large correction is around the corner. This essentially rules out a third of a third is underway. However, a move to 2230ish first cannot be ruled out. What if the whole wave from 1810 is just Major 1 of P5? This mean int 5 has been underway from 2119 and would be forming an ED. Minor 1 would be complete with Minor 2 underway. How will this gain probability? A 1-2 day bounce towards 2160ish followed by a move towards 2135ish to complete Minor 2 of Int 5.

    The huge problem with this count is P5 would not complete next year. What if the bull market tops at 2230 early next year moving the degree of labeling up?

    • SPX 2230 could be the top, supported by this Bearish Deep Crab pattern.

      X=2187.87, A=2119.12, B=2179.99, C=2146.1, D=2230.36 or the sell zone.

      XA x 88.6% = AB
      XA x 1.618 = 2230.36
      AB x 1.41 = 2231.93
      BC X 2.618 = 2234.82

      You can view this chart on Twitter @martinthomas208

    • captbara says:

      Market hasn’t even opened yet, lets see.

      • blackjak100 says:

        Nope, but I think the election results is key for this market. a bear could easily start with trump victory. An ED underway now would allow for a lot of ‘whip sawing’ until election is over.

        • vivelaamo says:

          I personally think the election will be catalyst for large short term swings but the long term bull will remain in tact. Similar to Brexit.

        • captbara says:

          Considering Wall St. is 100% in line with HRC, it would seem like the expected reaction with a Trump win, but I don’t think it’ll be quite so clear cut to pan out that way, like it is with any catalyst event.

          As always, there will be some sort of non obvious, opposite reaction for a short period.

  20. fotis2 says:

    Phil what you say?2nd inside day for CL today lets see the break.

  21. vivelaamo says:

    Market has nothing to do with the debate. It’s up because we dropped for 2 days straight. It’s called a bounce.

  22. rd3777 says:

    Let’s see if the JPN225 can hold this rally tonight….up to the NL and 50 pct fib…dead cat bounce..if so 3rd wave down on tap…

  23. NEWBIE says:

    Small pop before drop to 2100

  24. trump leading in opinion poll of debate here

    hmm I thought trump doing good in the debate would be bad for the market but futures are up.

    • lcd00 says:

      Trump did not do well in the debate; must be joking that he had a solid performance. Futures are up because he faltered.

      • yeah i agree with yo from what I saw. I only saw the end and I thought he was going off on tangents too much and hillary looked more composed but, and time magazine website have trump winning.

        I don’t know what to make of all this. I think Hillary’s biggest problem isn’t donald trump but the 3 things that hurt her is supporting obamacare, raising taxes and her awful foreign policy track record. voters just don’t want any of that. she needs to soften her stance on the first two and try to inspire more confidence in the latter.

        • ariez5 says:

          Mark, I have no idea what you are looking at. The main article on Time. com is titled “Diligent Hillary Clinton Upstages Donald Trump at Crucial Moment.” It begins:
          “Perhaps you can’t wing your way to the White House. At the first debate between Donald Trump and Hillary Clinton, authenticity proved to be no substitution for preparation, and strong words faded in the face of solid experience.”

          Trump was the rude, blustering, narcissistic liar that he always is, and the world saw it. Even Dana Perino and Brit Hume on FOX NEWS agreed he LOST.

          What is interesting is that the market is going to open almost unchanged. For the moment, the threat of Deutsche Bank going under seems greater than the relief that a fool with a wildly over-inflated sense of self will likely not get his tiny little hands on the nuclear codes.

      • tommyboys says:

        Pretty simple. “Taxes” are NEVER good for the market. Lib wants yet MORE taxes while the Conserve wants them reduced. Middle class can’t afford to pay to educate everyone – and this is exactly the group that would have to if you socialize education – just look at what socializing healthcare is doing. Vote policies not people.

  25. cj32 says:

  26. fotis2 says:

    So Trumpet good for the Market Hillarious not?Can never work out these political shenanigans seems best bet stick to trend and close ears.

  27. cj32 says:

    ES cr. to CBZ

  28. torehund says:

    Thanks Tony.
    Europe is entering financial turmoil that may eventually lead up to a financial crisis. Deutche bank is no more than a symptom, a cough. Interesting times.

  29. My opinion…a tie.Each did their thing.

  30. captbara says:

    ES rebounding on Trump’s corporate tax plans. Hillary sounds lost in comparison.

  31. stormchaser80 says:

    Both the Technicals Model and McClellan were negative today. Oil had gains but sold off at the end of the day. HYG:IEF mysteriously had a big negative day. Hourly SPX chart shows price nearing reentry into the sideways triangle, which if not defended by Bulls, would open up to significant selling below. SPX Daily lost the 20 dma, and the 20 is below the 50 dma for the past 8 trading days!

    More discussion and charts here:

    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.

  32. blackjak100 says:

    Will the bull be saved by a dominating performance by HRC and a subsequent big bounce tomorrow? With another down day tomorrow, McHugh’s proprietary could trigger a sell which has been very accurate identifying swings in int trend.

  33. Hi,thanks Tony
    Looks like is missing one leg for a wedge
    but,if it brakes the trendline,Tony’s original count(B up) will have it probability raised,in my opinion

    240′ log

    daily arithmetic

  34. phil1247 says:

    Public Service Announcement

    i have mentioned this before
    but with
    deutche bank developments
    i repeat

    ETNs (exchange traded notes )
    can become worthless overnite with default by the issuer

  35. bouraq says:

    Chart of the day is $DJIA.

  36. rd3777 says:

    Thanks Tony,
    I still think we had a failure here…..pattern look extremely bearish….

  37. 123 abc says:

    Thank you Tony et OEW team for today’s update.

    Should a Deutsche Bank bankruptcy start a European banking crises, does OEW still think that Primary-iii could still unfold in the American markets? If the FTSE count remains bearish and validates true, wouldn’t one would expect the DAX to follow suit?

  38. kvilia says:

    Thanks Tony. Big boys want to take it down but for now they are not ready. Traders paradise as we are bouncing around. Expecting 50% hwb short retest, and then continuation of the short trade. Miners may have another dip, spoke too soon. But they will lift off in the coming days.

  39. fotis2 says:

    Thanks Tony good run till now lets see tmrw.

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