Monday update

SHORT TERM: flat opening then drift down day, DOW -52

Overnight the Asian markets lost 0.4%. Europe opened lower and lost 0.7%. US index futures were lower overnight. At 8:30 the NY FED was reported lower: -6.8% v -2.0%. Then at 9:15 Industrial productions was reported higher: 0.1% v -0.4%, and Capacity Utilization was reported lower: 75.4% v 75.5%. The market opened unchanged at SPX 2133, slipped down to 2127 just before 10am, then rallied to 2135 by 10:30. The market then started drifting lower. At 12:15 FED vice chair Fischer’s speech was released: By 2pm the SPX hit 2124, and then started to rebound. The rebound was to SPX 2129 by 3pm, then the market drifted down to close at 2127.

For the day the SPX/DOW lost 0.30%, and the NDX/NAZ lost 0.25%. Bonds gained 9 ticks, Crude slid 45 cents, Gold added $3, and the USD was lower. Medium term support is now at the 2116 and 2085 pivots, with resistance at the 2131 and 2177 pivots. Tomorrow: the CPI at 8:30, then the NAHB at 10am.

The market opened flat today, bounced around in a narrow range, then drifted lower for most of the day. At the low, SPX 2124, the market hit the exact lower end of the OEW 2131 pivot range. It then bounced 5 points before drifting sideways into the close. Not much to add to the weekend’s update. The pullback from SPX 2149 has now exceeded the 0.618% retracement level, but has yet to break the 2131 pivot range. Market seems to be looking for a upside catalyst. Short term support is at the 2116 pivot and 2100+, with resistance at the 2131 pivot and the SPX mid-2140’s. Short term momentum hit oversold at today’s low, then bounced. Trade what’s in front of you!

MEDIUM TERM: downtrend may have bottomed

LONG TERM: uptrend


About tony caldaro

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89 Responses to Monday update

  1. johnnymagicmoney says:

    reports have come in that Netflix accounts for 46% of this country’s GDP

    that would explain the strong market today

    or what seemed to be a strong market today =)

    • We all watch TV and movies 85 percent of our waking hours and text the other 15 percent.

    • CB says:

      46%, wow! That would explain why we’ve had zero productivity growth in the last few years, which is what Greenspan likes to gripe about 🙂 Kids are watching too much Netflix at work….it must stop 😉
      “or what seemed a strong market today”.. lol..that’s funny, JMM.
      The market did OK today – the Naz is back above its 50 MA, and the internals are improving – what’s not to like?… I know…tomorrow is another day…right… Have a great evening everyone.

  2. NEWBIE says:

    GO TIME!!!!!!!

  3. What makes gold treacherous is DB.If they are borrowing gold to sell,rallies will terminate unexpectedly..possibly with bad news from DB.CBs were selling gold at 1370,1350,1320.There’s more to come unless DB’s stock starts rising..imho.Still,nice little bounce here.Out of here.Later.

    • johnnymagicmoney says:

      me bought miners this morning …………….looking pretty good so far……………..all I wanted was a nice entry point. Weird market today if you ask me

  4. stmro says:

    The Gartman signal hit gold again. Now wait for him to reverse.

  5. torehund says:

    Gap/fade on the Rut, but thereafter a solid recoup, hoping for a cup and handle 🙂

  6. kvilia says:
    The lower white trendline goes all the way back to 2009, so it will provide a strong support. I could not figure out what market needs to do considering Tony’s bullish count but now it is clear to me. The markets still need another correction, so my chart fits it well. Of course if 2116 holds, this projection goes out the window but I think the break below holds higher probability at this point.

  7. CPI up .3.Up 1.5 the last year

    Excluding food and energy, consumer prices rose a lesser 0.1% last month.

    Real or inflation-adjusted hourly wages, meanwhile, fell 0.1% in September. Hourly pay has risen a scant 1% in the past 12 months.
    There is no real growth.No inflation.Should be no rate hike.
    But I think post-election,we get one….ONE,and then a year of more threats of another one.

    • fionamargaret says:

      Well my hedge friends suggest gold (real assets are going to be the thing)…knew you would like that…plus oil…Saudis want 55 and said golden cross….also don’t bet against the Saudis…..golden cross sounds like voodoo…but anyways bought oil and gold…

      • Todays $XJY was impressive.A huge drop to 95.12 with a a at 96.35.Don’t know why the massive drop,but a long candle back up,to say the least.Goldfingers crossed,Fiona for a good rebound,to at least the 20d sma at 24.90.See what happens there–and if XJY can get over its 50 ma.Good luck all.

        • fionamargaret says:

          They mentioned this stuff overnight. I am in GLD …and UWTI…these guys create big moves…cannot do progressions, sequences etc., as my eyes are a problem at the moment…too much screen time… they also suggested SLV… commodities….etc.
          Well I have dogs, but seeing- eye ones…..I don’t think so..

  8. kvilia says:

    Careful with gold – extension shorts validated this morning. NUGT formed a bear flag, expect it to break down and go to 10-11 area at least. I am naked short with UVXY now, excellent entry point this morning, opened with 1400 tick, ES validated daily extension shorts at 1240. Target for SPX is 2116 pivot. If this pivot does not hold, SPX target is 1870. I will post the chart later, remind me. This is very clear to me now, and I give a slight preference to SPX breaking the support this time.

  9. Ajay Singhi says:

    Sell SPX at 2142, SL 2151, tgt 2100. Timeframe 2 days.

    • NEWBIE says:

      Do you have a chart? If so can u share it? Thanks.

      • Ajay Singhi says:

        Sorry. No charts, just counts.

        SPX LT counts:

        Primary 3 finished at 2134.

        A: 2134-1810

        B: Forming an expanded or irregular flat.

        B.C started at 1990 and is forming an ED.

        C1: 1990-2109

        C2: 2109-2074

        C3: 2074-2194

        C4: Forming an ABC-X-ABC structure with X done at 2175. Subsequent A finished at 2114, B done at 2150.XX

        C1 2150-2124

        C2 2124-2145(so far and I dont expect it to go above 2145, though it may)

        C3, C4 and C5 to follow with overall tgt of not more than 2080.

        The next wave up should finish this counter trend rally somewhere around 2200-2230, then the next leg down till SPX 1500.

        Hope this helps.

  10. johnnymagicmoney says:

    Inflation picking up quickly in a distorted yield environment

    Now Wall Street is cheering the good news!

    Can’t make this stuff up! Lol

    • Retail and housing doing very well as “CORE” inflation was lower than expected. .1 percent THAT is the reason the market likes it. Food and energy are volatile monthly reports. If you are determined to see problems you will.

      Goldilocks situation for the consumer continues. This however means nothing in the context of earnings.

  11. NEWBIE says:

    Keep buying, refinance your house and buy stocks. LOL

  12. blackjak100 says:

    as predicted a decent bounce looks likely today. TBD if it hits my min target of 2160ish or continues on towards 2nd target of 2180ish. It would not shock me if it hits 2160ish today.

    • captbara says:

      Cheers BJ. Up was the likely move, especially after NFLX AA which let NQ retest the upper line of channel down again so quickly.

      • alexhartley1 says:

        We should be up into the 20-21st. Then there’s a chance of another decent move down into end of month. Then I guess it’s more about who wins the election.

    • This has been my target for a week now. The market is following script so far. The pattern I am seeing requires a sharp terminal move (flash crash) to happen very soon. If tomorrow holds up I will be betting into the close. My initial target is 2105. I do not however believe its the final break in this very long bull run. Perhaps I am just stubborn but I see a big rally soon after the plunge, assuming we even get it. Reasoning is based on psychology and seasonality. Afraid I have no technical chart to confirm this view.

  13. captbara says:

    5th+ attempt Dax will try to break the daily bull flag – should work this time. This was one clue to stay long despite whatever US was doing.

  14. torehund says:

    Loosen up folks, world was crazy before too. More irony, less sarcasm but a lot of soap 🙂

  15. CB says:

    The VIX, with its wobbly intraday pattern, wants to re-test 14.6-15.0 I think…then we’ll see….

    Is Robert De Niro going to debate Trump sometime? 😉 ..that would be fun…

  16. torehund says:

    Thanks Tony.
    Think we are seeing the results of early “cost push inflation”. Do not know about all those who got pushed out in camp sites and basements during 08 financial crisis, but workforce might be harder tempted than anticipated, and those who endured the pain may be running out of steam.
    Pepsi is announcing less energy added to their soft drinks going into the next decades, sounds like inflation too 🙂

  17. Tony please stop the political diatribe for it can only lead to unwanted rhetoric and unresolved angst. Lets talk immediate market reaction. The drop today was text book for me. It stopped exactly where I thought it would and NOW I hope for that 2 day rally. 2160 should be the top (IF) it gets that high. If anyone’s interested the so called buyback problem is NOW at a 5 year LOW. Yup, can’t blame that on earnings anymore. Love the arguments that get silences by reality, but afraid other silly ones take its place.

    Netflix flew the market away and should be the needed impetus for a rally. If we hit my target by Wednesday I will be betting 10 grand on a one week OTM SPY PUT scenario. My initial target is 205. Waited a while to place a bet and hope I have the chance. In blackjack it’s like having 2 aces while the dealer has a 6 showing.

    Need to get in the game for I have been on the sidelines way too long. Wish me luck folks. Anxiously waiting the next 2 days out.

  18. captbara says:

    ES NQ down channel broke/breaking. Was a bear fake all day today if overnight holds.

  19. mtu MTU says:

    [EOD] Stocks-
    SPX is retesting the blue line (Chart 1) and a reaction/rebound here looks probable. Chart 2 presents the squiggles as a potential setup for a rebound. Chart 3 shows where the market is in terms of tracking scenarios.

  20. stormchaser80llc says:

    I feel like the trend continues to be down, but there is a counter-trend bullish retrace higher to come. This is based on positive divergences on the SPX chart with tired technicals on the $VIX hourly chart. $VIX was higher with the market for some time today, which tells me this down move is likely a counter to the counter trend higher rally. Make sense? I hope so. We’ll see if it pans out, but we do continue to see the Monthly, Weekly and Daily charts exhibit exhaustion, while the Technicals Model cumulative score is nearing a cross below its 200 day moving average for the first time since the Spring.

    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 to see daily posts. This takes 15 seconds. This is to protect myself, ensuring that everyone agrees to my legal documents.

  21. johnnymagicmoney says:

    I cant help myself …………….

    Netflix will sport a 50 billion market cap tomorrow. It had a ‘BLOWOUT” quarter today. That translates to 6 cents a share this quarter on a 120 price. LMAO

    So how will it monetize its customers without losing customers?? The answer is it cant (not to the extent that justifies its market cap). Awesome company and awesome product but that doesn’t mean its a money making machine but lets keep bidding the stock up on subscribers at 10 bucks a month in a company that spends massive amounts of money to get those additional subscribers………………………..AT TEN BUCKS A MONTH!

    • They also laughed at AMAZON for years. You can dismiss the markets reaction and valuation but more times than not they turn out to be winners in the long term. Buffett is a brick and mortar style valuation man and he just stays away from these companies simply because he doesn’t understand it. I also step aside since I have no clue how to value these companies. It never pays to stay with a strong general market bias and find excuses why the market has been going against your assumptions. We are not in any sort of frenzy or excessive optimistic euphoria here. Some companies get valued to the moon and later it turns out to be justified while others fail miserably. Netflix is doing everything right so far. A stumble could be catastrophic at these prices but personally I would not bet against a winning hand.

  22. johnnymagicmoney says:

    do bulls really like the recent action of the NYAD?

    as Clint would say …………………do you feel lucky punk?

  23. bhuggs52 says:

    Really has felt to me like the markets have been idling in neutral since the main run-up to the POTUS election kicked in earlier this year…any serious action won’t emerge until after the results are in Nov 8, up or down, depending on who wins.

    • bhuggs52 says:

      G, you make good points. The one direction I would bet on the market going is down, if Trump were to win. His presence would create too much uncertainty. But I doubt he will win. In which case, your points could well be in play. The market and the street are already down the road on what’s to come. I do still sense that it is not until post-election that we see the significant volatility or a rally.

  24. bouraq says:

    Chart of the day is $GBPUSD at

  25. Thanks Tony for your always useful insight. I know we have both been using little “Fib” (2115 to 2170) but big “Fib (2074 to 2194) has been prescient as well.

  26. captbara says:

    Looks like ES and NQ will try to break the channel down again overnight, thanks to Netflix.

  27. CB says:

    Thanks Tony. As hot as it is today in your neck of the woods, try to relax on your front porch a bit and enjoy some music. =) Cheers!

      • CB says:

        Start counting those heat waves Tony =)

        • tony caldaro says:

          correction on Wednesday … rain

          • CB says:

            hahaha….nice job, Tony. Well, at least Mr Fischer hasn’t destroyed the market today…

            • tony caldaro says:

              It always amazes me why these other FED people even talk.
              The only two that matter are still Yellen and Dudley.
              Both have been there since the great recession.

              • CB says:

                Good question, Tony.
                Interestingly, Fischer, after being hawkish in Sept.,seemed to agree with Yellen’s “high pressure” policy today when he said that : ‘You could go over full employmnet ‘by a couple of tenths’ without danger.”

              • They managed to have one of the longest bull runs in history based on their 7 year decisions. Not one person here ever thought we would see the domestic economy doing so well for so long. facts are facts and any way you slice it the Goldilocks economic trend has worked. real jobs, wages and extremely low costs. Time for a change in mindset and curtail the individuals need to gamble for higher profits. We are firmly in a position to raise rates to just normalize it. ridiculous base we are in and any rate hike will cause no strain on system. In fact it should do the opposite, spur additional spending. Watch big ticket items AFTER the rate hike. 2 rate hikes in 2 years.

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