Monday update

SHORT TERM: gap up opening post op-ex, DOW +77

Overnight the Asian markets gained 0.5%. Europe opened higher and gained 0.1%. US index futures were higher overnight, and the market gapped up to SPX 2152 at the open. The SPX had closed at 2141 on Friday. In the opening half-hour the SPX hit 2155, and then started to pullback. By 12:30 the SPX had reached 2147, and then started to drift higher. In the last hour of trading the SPX hit 2152, then closed at 2151.

For the day the SPX/DOW gained 0.45%, and the NDX/NAZ gained 1.10%. Bonds lost 6 ticks, Crude slipped 25 cents, Gold dropped $3, and the USD was higher. Medium term support remains at the 2131 and 2116 pivots, with resistance at the 2177 and 2212 pivots. Tomorrow: Case-Shiller and FHFA housing at 9am, then consumer confidence at 10am.

The market gapped up at the open for the first time since last Tuesday. In fact, looking back from the SPX 2115 low, all three rallies (2149, 2148 and 2155) have included a gap up opening. At the open the market cleared the first two rally highs at 2149 and 2148. Then after a pullback to SPX 2147 this rally closed above both of the previous rally highs. Is the uptrend finally getting legs? We now have 5 small waves off the SPX 2115 low: 2149-2124-2148-2130-2155. Thinking this market needs to make new highs before anyone gets that excited. Short term support is at the 2131 and 2116 pivots, with resistance at the low-2150’s and mid-2160’s. Short term momentum hit quite overbought after Friday’s positive divergence, then ended at ovebought. Best to your trading!

MEDIUM TERM: downtrend may have bottomed

LONG TERM: uptrend


About tony caldaro

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78 Responses to Monday update

  1. pooch77 says:

    Go long after the election weekly charts on rit and spx should bottom around Nov 8th,rut shoulf embedded at bottom as spx pierces 20 level

  2. Jack Sparrow says:

    for Fiona and the rest who follow oil…the pattern that i saw in my dream has not been invalidated yet and it is playing almost to the perfection. so what we have from low of 26 is a contracting diagonal (A that is)…we just completed the 3rd move up of this diagonal…now we should head down to 46 and then a move up to complete the 5th ) and final move up to complete the diagonal (but we should go above 52ish… and then we go down in B (dont know how many dollars) which will then set up a sharp move up for C which will take the oil to 70… the above to play out in coming months to a next summer.

    remember this post in the future

  3. fotis2 says:

    So far closed gap lets see where to from hereon.Looking at this add today claiming 864% gain on trading acc. and wait for the punchline …in 5 months….I mean really 864% in 5months??geeez

    • fionamargaret says:

      …probably playing penny stocks Fotis, and maybe he had only $500 to start with….
      you do really well…don’t drive yourself crazy…..x

  4. stmro says:

    Wow this is dull. We need some kind of shock lest this market float here forever. Maybe Yellen announces she’s buying 100% of the equity market or Russia nukes ukraine. Either one might be good for a dozen points or so.

  5. Jack Sparrow says:

    a contracting diagonal formation is in process from the low of 2115. it should end around 2160 in next couple of days. (that will either be 1 of 5 for bullish count or a of upward correction for bearish count. then a move down to 2130 ish followed up by a sharp move( probably related with election) for 3 or C

  6. Btw…Lockhart speaketh at 1:20pm.Later all.

  7. Some of that bad seasonality for Nasdaq kicking in today?If true…rest of the week is bearish.

    • tommyboys says:

      “Bad Seasonality”? Look at CBs post below – 9:30pm

      •  I posted this yesterday:
        Tom Bowley of Stockcharts.
        “This week is also the worst historically for the NASDAQ. Check out the annualized returns by day from today through Thursday (October 27th):
        October 24th (today): -62.22%
        October 25th (tomorrow): -75.45%
        October 26th (Wednesday): -75.60%
        October 27th (Thursday): -94.81%
        The good news historically is that once October 27th is behind us, all of our major indices turn very bullish as we wrap up October and head into November.”

        • tommyboys says:

          (2nd term) Election year…

          • fionamargaret says:

            If you are trading oil, I suspect it is going to 45ish…maybe check the technicals on that..Bloomberg last week “suggested” it would be good for oil to correct to there, so I have kept that in the back of my mind. Phil’s 14 is rubbish…the oil chart is very bullish…just wait and see. Phil would have had TLT in the morgue….just sleeping…let it come back further for a nice runway to160…but not just yet..

            • fionamargaret says:

              Remember I think 2550 is doable, with 70+ for oil, 160 for GLD, and 160 for TLT….we shall see….x

  8. 2159 next? Then roll over or break out?

  9. torehund says:

    The looks of Yellen and Draghi when rates run wild…

  10. phil1247 says:


    took profits on UUP

    most aggressive extension long has failed

  11. phil1247 says:


    short traded this am

    target 48.99

  12. torehund says:

    TBT looks good in the corrective phase, isnt loosing much….

  13. phil1247 says:

    phil1247 says:
    October 23, 2016 at 9:38 am


    too lazy to post new chart but

    98.98 target hit !

    now pullback or thru target and create a new extension long

    raising stops on UUP at open….may add more if new ext

  14. NINJA SHADE says:

    GM! Today watching an early top at 50day sma at 2159, hourly RSI should display -ve div on a gap up with daily RSI close to 70, IMO a viable short setup

  15. jobjas says:

    the continuing sideways move in SPX is more likely to be wave 4 with a potential ending diagonal to complete W5

    • Praveen Vishnu Shamain says:

      Internal waves of Ending Diagonals should be 3-3-3-3-3. Since you have labelled wave 1 and 3 as 5s, pattern is wrong or numbering is wrong.

      With Regards,

      • jobjas says:

        Agree , cannot be called ending diagonal in EW terms,since there are clear 5 waves in W1 & W3 . But the pattern seems to be developing – time will tell.
        As of now expecting further high after retesting 2120.

  16. If I remember Brexit correctly,markets melted up going into the incorrectly forecast “Stay”vote.
    Sold half of GDX today.Not a buy until 20d sma gets retaken imho(24.40ish).DXY doesn’t have any -div yet,though RSI at 74.Who knows how high that goes?Hoping for better technicals at 22.50 on GDX…others see GDX not being a buy until gap close of 20.Very possible.Gary Savage (who was completely wrong at January low)thinks gold will rally for the next 4 months.He better hope the 200 d doesn’t cave in,for his sake.

    • fionamargaret says:

      Gold is just toying with me…but no worries…GLD is going to about 160…lots of stuff going on in the currency market tonight..but I know you are watching. Not fun chart.
      The oil chart is a thing of beauty…
      $SPX still suggests 2550….how we do that depends on my mood…
      Hope you liked the music…not subliminal messages…though, “lie to me, tell me things are alright” sounds pretty nice…
      Thanks Learned – keep up the good work..I appreciate.

      • fionamargaret says:

        ..and the strangest thing..VRX is doing really well…maybe there’s a blue moon over the Faros. I also bought SLV.
        I used to sell gold when I just couldn’t take it anymore…not very technical…but if it goes to 160, there is 40 upside…don’t let things get to you…..xx

    • phil1247 says:


      savage is wrong most of the time….what do you expect ..he is a gold bug

      he never saw the gold bear market coming and was blindsided …
      buying all the way down like gold bugs do

      NOW i am getting interested in…….
      you probably dont remember
      but many months ago i posted
      that if gold can resist declining with a rising dollar
      then you will have your tell that gold is ready for prime time
      ….i am seeing that now

      • Interesting day for gold vs dollar.I’m guessing gold bulls will hold out until DXY breaks out to new highs…then sell with a vengence.GDX has to get out of its downtrend but ultimately,needs to probably fill a gap at 20.My whole scenario of a bull market in gold was based on gold not dropping below the 200d by much–which would happen if GDX goes to 20.So I’m basically neutral now…see how the charts look at the last GDX low,technically(22.50)
        COT charts look better,but GLD tonnage dropped from 970 last week to 953 today.If COT this week shows longs continuing to decline plus +div at 22.50–I’ll jump back in.Good luck.

        • fionamargaret says:

          Absolutely Learned..when you do the technicals it just makes my heart sing. Gold is just playing around with the 200…as I said not a fun chart…but once it gets going…
          I don’t know if the miners will do as well as GLD…depends why gold is going up..
          One of the big fund guys seemingly thinks VRX can go to 42….hmmm, that was my price, and it is copyright…x

  17. NEWBIE says:

    TOO many complacent bulls, see u at 2080 -2060.

  18. All lead economic indicators China, US, Europe, Japan, Brazil pointing to global growth pickup checkout nowcast,com shows nowcast models like the Atlanta fed model tracking quarterly GDP, should be a good 6 months before the Chinese property boom or USD strength upsets the apple cart 7 trillion borrowed by EM countries denominated in USD.

    • Yes I was expecting this would happen and my long term model should see a reverse correlation between what transpired in first 3 years of this recovery. Consumer strength globally against a backdrop of earnings pressure. Exact reversal. This would mean we could indeed have a decidedly bad market year even as the consumer and economy does well. Worse case scenario is a 20 percent drop in equity prices in 2017 based on earnings growth not being able to keep up with expectations. Best case is a situation that allows corporations to stay in line with pretty high expectations and the market grinds upwards. I expect a 20 percent drop in 2017.

      Interesting how everyone thought the street was nuts to keep pushing forward higher earnings expectations when there was a current stall. They saw, as I did, the potential for a surge in spending. This doesn’t mean we will follow the script laid out but it does mean there is a clear possibility and visibility.

      I see 2179 as next possible top to this current drive.

  19. “We now have 5 small waves off the SPX 2115 low: 2149-2124-2148-2130-2155”.
    Thanks Tony. Did you notice how many movements we have had that are around 24/25 points: 49 to 24; 24 to 48; 30 to 55. One of those Hmm things unless you see more. I think we could pause briefly before tackling the 2160/2162 area

  20. 123 abc says:

    Thank you Tony et al, an excellent OEW update to begin the week.

    It appears your call of 2115 marking the bottom is gaining traction —once again, another superb call. Now thinking the following since the 2115 low…
    — Wave-1 (Impulse): 2115-2149
    — Wave-2 (Flat): (a)2149-2124, (b)2124-2148, (c)2148-2130[Lower-low in DOW]

    In the SPX futures, expecting a pullback to ~2145 at which point to go long, with stop/hedge at 2135.

  21. mtu MTU says:

    [EOD] Stocks-
    NDX makes a new high today but remain ambiguous in terms of bias.
    SPX gaped and closed above the green line (Chart 1), but below its MA50 (Chart 2). Today’s upward gap around 2140 is at risk of being filled before the downward gap above around 2165, until SPX can close above MA50 and the red line in Chart 2.
    Two potential diagonal triangles (discussed in the weekend commentary) remain on the table (Chart 3). See charts.

    • captbara says:

      What makes NDX less “truthful” than SPX or any other index? Better to check all of them and see which one is least/most likely, and which MT count fits best overall. ST they can all be on different paths.

      Actually, Dow I don’t really bother with since it’s only 30 stocks.

      • CB says:

        Nice call, and you were watching the right index last week!
        The BF in the QQQs was so explosive that it just had to gap up =)
        QQQ daily

        • captbara says:

          Yes I was looking for some gap up action on Sunday. The thing is if it’s really in the midst of the kick off to minor 3 up then there is very little margin of error at this point, time and count wise. Any pullback that’s too big or chop that takes too long in the next 2 weeks would drastically change this view.

          • CB says:

            Thank you. Great advice. OK, so we’re keeping this bull on a tight leash, Capt…or a lasso, rather.. 😉

  22. fionamargaret says:

    …maybe typo..”support at the 2131 and 2216 pivots”…we will get there, just not today..

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