Monday update

SHORT TERM: pullback Monday, DOW +40

Overnight the Asian markets lost 0.6%. Europe opened lower and lost 0.4%. US index futures spiked early with the initial rally in Crude, but then declined overnight into the open. At the open the SPX was 2 points lower than Friday’s 2260 close. Then after dipping 1 point further in the opening minutes, rallied to a new high at SPX 2264 by 10am. After that it was pullback mode for the rest of the day. By noon the SPX hit 2252. At 2pm the budget deficit was reported higher: -$137.0B v -$56.8B. Heading into the close the SPX hit 2258 and then closed at 2257.

For the day the SPX/DOW were mixed, and the NDX/NAZ lost 0.60%. Bonds slipped 1 tick, Crude rallied 85 cents, Gold rose $4, and the USD was lower. Medium term support remains at the 2212 and 2177 pivots, with resistance at the 2270 and 2286 pivots. Tomorrow: export/import prices at 8:30 and the FED starts its FOMC meeting.

The market opened slightly lower today, bounced around a bit, then eked at a new all time high at SPX 2264. After that the market pulled back for the rest of the day, as Friday’s negative divergence had an impact. We can now count 5 waves up from the Minute ii low at SPX 2187: 2198-2188-2252-2243-2264 with a sixth wave underway. No overlaps yet, and not expecting a Minute iii high yet either. Short term support now at SPX 2252 and SPX 2243, with resistance at the 2270 and 2286 pivots. Short term momentum declined to neutral during the pullback. Best to your trading!

MEDIUM TERM: uptrend

LONG TERM: uptrend

CHARTS: https://stockcharts.com/public/1269446/tenpp

About tony caldaro

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98 Responses to Monday update

  1. torehund says:

    Regime change and phase-transition, non-linear systems.

  2. Bud Fox says:

    12/13 3:52pm edt —Just took a very small position in SDS at 14.70….end

    • jhjoyner says:

      DJ-20 and DJ-30 at ATH which confirms Dow Theory-if you believe it is important. People quickly talk about it when there is non confirmation but when it confirms no one is interested. Ummmmm

  3. Would appreciate a reply, from anyone following the R2K index. Is it currently in a wave four? My untrained eye seems to be seeing that. Thanks, Mike

  4. cosmos77 says:

    This rally might have blown it’s top at 2277.53 and be the final gap up (exhaustion gap) for this up move. Previous exhaustion gaps since September ended those rallies (i.e., 2154.78, 2179.99 and 2187.87) were all terminal moves. Each one produced sell offs 79 pts, 38 pts, and 80 points. Also, note the latest -D.
    Thanks Tony and good luck all.

  5. Took some AA long calls. Should try a trip to 33/34. Let see. Some stops not to far down

  6. Bud Fox says:

    I have sold my SSO long position. Based on the NY A/D line…..bud

  7. Dex T says:

    Interest rates are going to increase tomorrow by 0.25 and more can be expected in 2017. Tightening is on the way.

  8. captbara says:

    Expect 50 bp hike tomorrow. But rate hike is bullish now, like back in 2004-2007.

    • Dex T says:

      The fed futures is predicting a 25bp tomorrow. But we’ll get more next year. Yellen is out in a year and Trump will likely appoint someone more forceful and hawkish.

      It’s a blowoff top. Everything has been bullish- the bulls got their “euphoria” that many have been searching for these past few months.

  9. Bullishness is rampant,but if they don’t push this above 20k,it’d be an upset along side Trump and Brexit….hmm.Reading today,the establishment Repubs DO NOT want to give Trump what he wants–a much less extroverted spending bill seems to be in the cards.Less spending=less growth,less profit.Keep an eye on what those guys say about that aspect.I’m done for the day…I nibbled.Good luck all.

  10. johnnymagicmoney says:

    As negative as I have been I did have a chunk of SPY and just sold half of it at 2177

    so stretched.
    VIX is up today in a huge up day
    Out of last 5 days (including today if VIX closes higher) you would have 4 out of 5 higher closes of the VIX while the market is going higher
    DOW close to 20k
    EXTREMELY UTTERLY longer term negative divergence on the Russell and since then it has been underperforming – as you know this tends to lead
    many of the indices hitting the resistance of their longer term trend lines.
    Complacency abound

    I could go on and on but enough evidence right here right now to sell

  11. phil1247 says:

    ding

    spx thru 2276 target

    new super aggressive ext long support 2275

  12. chrisk44342 says:

    Maybe this is the end of Pico 1 within minute iii?

  13. Dow Rsi14 at 16 yr high, above weekly BB by more than 1% and Spx with weekly Macd divergence, Bulls are arrogant now ☺ A pull back up to 2200 is needed now.

  14. Out of XOM and SPY. And re-assess. Will wait a retrace, at least a minor one to have new idea of how far could travel

    • Thinking: Oil have to rise no stop from now. Since the China is a big buyer, the only way to have not to devalue to much there currency is to make the oil go up. If they will keep devaluing they will impoverish the country. Will be Trump strong on the global diplomatic point of view to find alliances?

      • Dex T says:

        Oil won’t get very far for very long. U.S. shale oil producers are already increasing their output to counter the cuts from OPEC. There are a huge number of U.S. producers waiting to get back into business and increase their rig count on rising prices.

        There is a very large amount of accessible oil worldwide relative to demand so there is zero reason to expect oil. It’s heyday has passed.

        Trump’s choice of Tillerson as Secretary of State demonstrates that he is mainly interested in an alliance with Russia.

  15. phil1247 says:

    http://tos.mx/5kIQlP?image

    SPX

    next target is 2276

    bull above 2263

  16. Positive PM news.HUI didn’t break 175 yet. +div weekly GDX.I’m still thinking about it.May have to nibble…lol.

  17. EL MATADOR says:

    all numbers pointing to run up to 2286 Pivot before any meaningful pullback to 2212 pivot maybe even 2177 pivot.

  18. tommyboys says:

    Tony how is it possible to review saeculums 6k years back? We only have decent data in THIS country maybe a century and a half back – and that’s questionable – but tracking back in other countries – Europe etc…based on wars, famines, technologies(?) – seems impossible. Awesome report BTW – just curious on this…

  19. purplember says:

    TLT anyone nibbling at a bounce here. on Daily +div on RSI and MACD

  20. fionamargaret says:

    T. Boone, in an interview yesterday on Bloomberg, said oil will be 60 within 2 weeks….he makes it look so easy…

  21. H D says:

    * that was the Santa rally, SPX ~ +(89) in Dec. Reminder, Dec has never closed red 3 years in a row.

  22. phil1247 says:

    DOW……

    now the daily extension long support is 800 points below the peak

    once the 15 min extension fails it could be a wicked drop to support

  23. bolderbob says:

    Hi Tony
    You mentioned you have counted 6 sub waves and #7 appears to be underway. How many of these sub waves will be in Minute 3 before it ends?

  24. phil1247 says:

    BADA BOOM!!!!!!

    thru spx 2267 target

    new extensions in force

  25. mjtplayer says:

    New 52-week high for the QQQ’s, finally playing catch-up to the rest of the indices.

    The QQQ’s just broke above $120, now trading $120.18 and just $0.32 away from testing/tagging the ATH from March 24th, 2000 at $120.50

    I test and reversal from here could be an epic double-top for the QQQ’s. Important moment….

    • mjtplayer says:

      There it is, the QQQ’s just hit $120.51 – a new ATH above the 03/24/00 high, only took 16.75yrs to get back to the bubble highs.

      What happens from here is crucial: breakout and continue rallying or fail and reverse – possibly marking an epic double-top.

      • Amazing stat.However,the Fed doesn’t believe in double tops,H&S or – divs.But they DO believe in Santa Claus rallies.
        Here’s a thought on Goldman Sachs price move up.Why wouldn’t they–since Trump is sprinkling them liberally into government positions of power?
        I’m debating whether to try a post Fed purchase of gold stocks tomorrow.There are many people who think THIS year will be a repeat of LAST years rally–post Fed hike in Dec 2015.No one thought that last year–which is why it happened.Tough call,but I think I’ll wait for price action first.Good luck all.

  26. cj32 says:

    Cr.to CBZ

  27. vivelaamo says:

    Last chance to buy a decent dip on the fed volatility before xmas. Miss it and you will have to wait until January. All in my humble opinion of course 🙂

  28. stormchaser80llc says:

    In futures trading Sunday night, SPX hit the 2070 pivot (which was also the level of the first bottom of the Sept-Oct triangle), as predicted. Negative divergences at the top were present on the SPX hourly chart. However on SPX daily and HYG:IEF daily, any negative divergences are few and short lived. Negative divergences do remain on Breadth indicators, but not so much on the %stocks above their 20/50 dma. My proprietary Technicals Model had a bad day (relatively speaking) and is pointing to more of a pull-back. Putting the pieces together, a continued pull-back is likely, but this was likely not the end of the uptrend.

    More discussion and charts here: http://navigatethemarketstorm.com

    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.

  29. I have to laugh at the MSM commentary concerning Trumps picks for his Cabinet being “too Wall St”.Watching CBS tonight,instead of the daily lunacy of NBC,Scott Pelley sat and interviewed various “experts” –who were more like witnesses in a continuous trial against Trump’s every decision.
    “Tell me Mr Cohen,what do you think of Donald Trump castigating the CIA report on Russian hacking?”(Of course he disagrees).
    “Tell me Mr.So and so,do you agree Mr Trump seems to filling most of his economic positions with Goldman Sachs backgrounded individuals?And doesn’t this go against his anti-Wall st stance in the primary season?Isn’t he goIng back on his campaign promise?”(Of course he agrees).
    There is one fact:No one in media is contemplating–that since 2008–there IS no line separating government and Wall St.Banks and brokerages had to sign up with the Fed back then in order to survive.Hank Paulson laid the law down–I’m totally convinced.You WILL do our bidding,prop up markets when we tell you–for the good of the country (pension funds,debt financing etc).Either play ball OUR way or go belly up.
    And now it’s official…as GS takes over.

    • That is fantastic.
      The first large city concert I ever went to was this, Beethoven #4 op 58.
      Andre Watts soloist. Carnegie Hall. Larger than life.

      This was the first Piano Concerto ever to begin with the piano solo.

    • wmorel says:

      Raymond is suggesting that price appreciation happens for 5 to 7 years in every decade. Is this another Magazine cover ?
      Markets started to climb in a sustained session in march 2009. 7 years puts it about when?
      And when a pullback occurs, in what direction is the market then moving.
      And energy not near its past highs???
      Yes but I think oil price was at its peak? And while we are at 50, that’s a long ways away from its peak

      I like their blurbs, but I was never a fan of of house analysts. Having worked in that biz for years, one learns quickly their job is to keep the salesman selling and the clients buying.

      Greenspan called it years back, this is no trend, its irrational exuberance.

    • vivelaamo says:

      Some great comments from Raymond James today. Thanks Fiona.

  30. http://www.marketwatch.com/story/700000-homeowners-fall-out-of-refinanceable-population-as-trump-trade-rolls-on-2016-12-12
    this was inevitable, mortgage qualifying to purchase will be next and then the tumble begins a new.

    http://www.marketwatch.com/story/two-traders-arrested-over-alleged-manipulation-of-more-than-2000-stocks-2016-12-12
    and of course this factor called Greed as suggested the other day.

    Now as the last legs of this buy on rumor market loses its propulsion forward, just like when a pendulum swings that little bit more, then hangs for a second before it starts to swing back the other way, i think we will see a flurry of selling to lock in gains as this “make believe” market blows past all kinds of pivots and the rush to sell accelerates as the pendulum does.
    Technical trading only works when things are normal, this past market since Tony called a Bear months ago, has been all manipulated, feds or big brokerages or guys like those above, it does not matter who, but manipulated none the less. And I believe Tony has tried to adjust his counts based on what trades before him, but i suspect he is putting on a brave front as he scratches his head in disbelief, trying to find something that fits, maybe 1929 does more so than anything else??
    and now as reality sets in that nothing much will really change whether its Trump or Bubba Smith runs the white house, you just cant employ more than where you are at now being full employment and it does not matter if cash from offshore accounts get repatriated so uncle sam can tax, and which which will never happen, as it is not like they could not use the money in other banks to buy or build existing or future business from those accounts, nor will companies buy more equipment or take on more inventory as people have extended themselves to the max and beyond already and with oil down and lots of rigs and tractors etc all sitting idle, why buy more when so much is under utilized? How many widgits which many not made here does one need? How many cars that many have already replaced can one drive? especially when autonomous driving is around the corner? Bridges maybe, but how are you going to pay for it if you break all your trade agreements/promises with other traders/countries who buy your debts, borrow from your new friend Putin? and with PEs at near 30X’s versus traditional 14x’s, don’t you just think the market is a little rich?? sorry a little long but i have been trading since 1975 and i have never seen such bull before, unless you count the times before the notable crashes. Its never different this time, no matter what condo salesman is in the white house.

    • …and it’s being done at moments where events have gone AGAINST market consensus(Brexit & Trump).At those moments where futes go limit down,the ECB rolls its sleeves,waits for trading to be suspended and then blatantly props up equities(and the US is secretly doing so also).PPT in full power.
      They’re scared to death of another 1987.

  31. Looks like the great profit target was hit out of trading hours. But the pull back is a minor one judging the strength. It maybe prepare for much higher and to extend the streak to 2272. And since during this rally it has by other pullback prepared a new weekly target at 2318 could also make it without retrace much. Will see.
    It certainly lagging the Dow when usually doesent and think it will re-equilibrate at some point. ES is also lagging and seams not coordinating, it could or could not be a good sign, sometime shorting the future is a strategy to add to other long.
    But maybe to trade the Dow instead of SPX could be easier this year. Unfortunately I do not have the parameters for the Dow since it has never retraced since election……
    I am using some sector instead, XLE is my preferred actually because it has not gone parabolic yet. Took a trade Friday and close it at the open this morning. Than took some call on XOM and waiting to see haw will develop. No futures and kept a small runner SPY.
    I suppose no rates rising yet. It would be a smash for the housing sector. FED is the only player that cannot have a forward looking, only has t base decision an facts and stable data.

  32. Nice call sensei. Overnight futures on the Dec contract tagged 2270 and change and then pulled back. Our high of 2264 was a retracement of ON trading and after clear rejection I wound up shorting 2263 , the lower bound of your pivot range ( think) supporting 2270 and very close to 2262.50, the 1.618 extension of the initial Trump pullback. And, of course, a moderate increases in VIX bolstered the decision to short as well as calculated R1 being 2263 https://www.tradingview.com/x/q2MO9Uud/

  33. bouraq says:

    Chart of the day is $EURUSD at http://www.tradingchannels.uk

  34. kvilia says:

    Thanks, Tony – BOT in my view.

  35. mtu MTU says:

    [EOD] Stocks – Tracking the post election rally (Chart 1) and how it fits into the bigger picture (Chart 2)
    [green] extended w3 impulse.
    [blue] extended w1 impulse
    [red] double zigzag.
    http://market-timing-update.blogspot.com/2016/12/market-timing-update-121216.html

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