Monday update

SHORT TERM: pullback resumes, DOW -27

Overnight the Asian markets lost 0.2%. Europe opened lower and lost 0.7%. US index futures were lower overnight, and the market opened 4 points below Friday’s SPX 2271 close. In the opening minutes the market popped to SPX 2272, then resumed its decline. At 11:30 the SPX hit 2257, and then did a zigzag up to 2267, before closing at 2265.

For the day the SPX/DOW lost 0.25%, and the NDX/NAZ were mixed. Bonds gained 19 ticks, Crude lostΒ 40 cents, Gold rose $8, and the USD was lower. Medium term support drops again to the 2212 and 2177 pivots, with resistance at the 2270 and 2286 pivots. Tomorrow: existing home sales at 10am.

The market opened lower today, turned slightly positive at SPX 2272, then dropped to SPX 2257. The rest of the day it just drifted higher. The recent decline from SPX 2279, a week ago Friday, looks fairly symmetrical: 2258-2277-2257. Overall, however, the market activity remains choppy and looks corrective. The DOW has been weak, the NDX/NAZ stable, and the SPX appears caught in the middle. Looks like the Techs need to lead lower if a downtrend in underway. Short term support drops to SPX 2254 and SPX 2245, with resistance at the 2270 and 2286 pivots. Short termΒ momentum dropped to oversold at today’s low, then bounced to neutral. Best to your trading!

MEDIUM TERM: downtrend underway?

LONG TERM: uptrend

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

About tony caldaro

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135 Responses to Monday update

  1. phil1247 says:

    poss 30 min shooting star /es

    out for the day

    see what da boyze cook up overnite

  2. Lee X says:

    Tony

    At what point will you be nuking the IP addresses of the folks here who refuse to comply with your request to squash the political debate here ?

    And if you haven’t reached that point would it be ok for me to engage them as to hasten their journey to a complete melt down here on the blog like so many before them ?

    For a bunch of hot shots they sure show no signs of discipline.

    Thanks and have a nice Tuesday πŸ˜‰

  3. micky says:

    I got next st rest between 86/89 st support 77

  4. phil1247 says:

    /es

    2276 retested and held

    2281 next target

  5. vivelaamo says:

    Anyway see a h&s forming on the DOW if 20000 not taken out? Or is that ‘clutching at shorts’

  6. llerias7 says:

    Tony, the present EW count (clear today) should be, according to your charts, minute 3 of minor 3 of Int.III (M1). Right?

  7. vivelaamo says:

    DOW 20000 to be finally breached by the end of the week. Pb is over. Disappointing it ended so soon but it is what it is.

  8. captbara says:

    Posting dancingbull.gif now to create the pullback.

  9. phil1247 says:

    /es

    aggressive extension failed at 2276
    support now at 2269

  10. NEWBIE says:

    SPX 1500 before 2300.

  11. micky says:

    need some action a bit higher, but I think its safe to say that it was NOT a wave 1 down to 2254, or what do you think Linda West. I know it was just a count of someone else you shared with us, but I did caution folks over here that it did not look like a wave 1. I am quite sad that Bud felt it necessary to add that he adored the so-called Elliottician whose count you posted at the time.

  12. tommyboys says:

    AD line busting new ATHs πŸ˜‰

  13. Page says:

    Looks shorts will be crushed by Friday. Strange market.

    Tony, do you see WROC anywhere? πŸ˜€

  14. soulsurfer says:

    We have a possible market turn date today:

    https://investingintelligent.com/2017/01/24/sp500-our-fibonacci-related-timed-trading-interval-signals-a-turn-january-24/

    aloha
    soul
    ps: in case you’ve wondered, I’ve been AWOL over the past weeks as I’ve been traveling to the far corners of the world but am back in full swing now.

  15. gary61b says:

    The Soros of the market must be starting to unload their shorts……..

  16. H D says:

    SPX +10, see if the BOTs show up.

    GC is having trouble with major fib level IMO for those looking at that product. Chopping people up.

  17. Ajay Singhi says:

    Two things became clear today: 1) SPX won’t cross 2300 in this rally and 2) 2232 should break before 2287(should happen in the next 2 days).

  18. kingfrogcash says:

    $CORN is falling fast. If Trump evaporates Ethanol there could be a chain reaction. Farmers, Equipment, Fertilizer

    • fionamargaret says:

      PT seems to me to hanker after a past long gone. (age?)
      The way goods go from country to country before you get a finished product also created the glue between countries. If we start unravelling that……
      KFC, PT was talking NG for transportation (??), at least one of his picks was….is that instead of ethanol…..

      • Dex T says:

        Hardly. Trump and team are pragmatists who understand the mess that exists and working to make real changes- i.e. preventing the U.S. from becoming a socialist third world hellhole.

        The current economic system is a badly constructed poorly managed bureaucratic monstrosity. It was cobbled together so a handful of very wealthy corporate execs lobbyists and fund managers could maximize their profits. They had zero problems unraveling the prior system and lobbying for their benefit and they can alter the

        There is no “glue” holding countries together and there never has been. There are only the developed countries and a bunch of backwards banana republics that are welfare states. Aside from commodities they contribute practically nothing and are unable to take care of themselves.

        • ariez5 says:

          Dex, You talk about “welfare states” so pejoratively. Do you know that the non-partisan Tax Foundation did a study in 2016 on which states get the most federal aid? The states receiving the most were MS, LA, TN, SD, MO, MT, GA, NM, AL, ME. 8.5 of those voted for Trump. The states needing the least aid were IL, NJ, CA, NV, KS, DE, CT, VA, AK, HI, ND. 7 out of those 10 voted for Clinton.
          It’s interesting that those who criticize Democrats the most as “socialists” tend to get the most welfare from our government. Would you be interested in joining my political movement to boot out our “welfare republics”? Judging by your stance, I think the results of the election would be much more amenable to our tastes.

          • Dex T says:

            It’s not as clear cut as you make it out to be. You need to take into account state budgets, economy, population size, geography, etc… Much of those Federal dollars are apportioned for different reasons.

            For example many of the pro-Clinton states you listed (Illinois, CA, CT, NJ, etc…) have really severe budget problems and huge debt loads.

            CA is often touted because it has a large economy because of its huge population and size but it has really severe budgetary problems that are never addressed as well.

            I’m definitely in favor of making cutbacks across the board. Realistically speaking we aren’t going to be losing any states from the Union anytime soon but we can definitely cutback on worthless foreign entities.

      • EL MATADOR says:

        Fiona – Is PT a Neo-Globalist advocate? Sure sounds like it based on the “….glue between countries” comment. The Neo-Globalist agenda was to run a One World Order on a capitalist economy with socialist policies. This has anger the populist/nationalist masses into a new awakening and they are winning on a global scale.

      • fionamargaret says:

        This is the first time I have asked a question in regards to PT, and actually it was really the ethanol part I was interested in..I have never participated in any of the political discussions. My reply to Mat was a joke….I cannot argue with the guys on a subject in which they are so well versed
        I apologize Tony..

  19. im short from 2270 with a stop at 2274 worth a shot

    good luck all

  20. Wish I could post the chart but UUP has some open gaps between here and 25.1 to fill,including one big gap around 25.6.Something to keep an eye on.They’re mostly from election week.Off to the casino.Good luck all.

  21. kvilia says:

    A question – I received a Good Faith violation in Fidelity Rollover but never got those in TD Ameritrade rollover. Apparently I cant sell securities in Fidelity account before the settlement, 3 days after buy transaction. Can anybody explain? Thanks.

  22. phil1247 says:

    GOLD

    /gcg7 1224 target validated …..

    added more GLD

  23. captbara says:

    ES trying to break the descending TL today

  24. micky says:

    Its really sad that there are so many traders/investors on this blog, who believe this and think that. Who cares really? Price via the charts will show the way! And the charts will give ample warning of the intentions of the market if it were to have a crash in store.. By that I mean price, and only price, no technical indicators or political musings etc. What better tool can one wish for than Elliott Wave .It would save a lot of traders if they would just do a little bit of effort and study Tony,s charts and quit scanning the internet for clues and opinions….end.

  25. alexhartley1 says:

    Morning Tony, Could you kindly explain the small ‘black c wave’ low recently marked on the Euro chart please. The colour normally indicates a Major C has completed correct? In this instance wouldn’t that mean a Primary C has been completed?

  26. I notice that $SPX fully closed the gap from Friday, then made a nominal new low for the short term. On the other hand, $DJIA only closed the gap from late last week, then showed some short term strength.

    Also, seems the $Tran only need a small upward push to get a “left-hand” crossover on the daily MACD (seen in the histogram at the top). Histogram has been negative since Dec 14. Quite a few trading days.

  27. -divs on NUGT and GDX.Wouldn’t be surprised if both are red today.Last -div was a one day 5% drop and a rebound.If you sneezed,you missed it.We’ll see about this one.Weekly +div still figuring 40% up from 18.68 to top of the top black crow (or close)at 25.40.to 26 (as a stretch).200d will be a tough nut to crack on a first attempt near 25.That could be it as well for this run.Good luck all.

    • fionamargaret says:

      Good stuff Learned…..now what do you think about the gold standard being brought up again….does PT not just really need a time machine…..

      • Lol.When you hit the Irish Derby,I’ll consider the possibility of a gold standard.. Lightning has to strike once to strike twice.Great song,though I love the Animals version a little more.

  28. stormchaser80 says:

    After another stab at 2270 last night, and a morning plunge, the market improved. The market continues either to consolidate or top, with my Volatility Models showing only 1.3%/0.8% of trading days since 1990 have been less volatile. Also Bollinger Bands on the SPX Daily, Oil and HYG:IEF continue near historical narrow widths. HYG:IEF continues to break down faster than SPX and Oil.

    My proprietary Technicals Model was negative today. It has been hovering om either side of zero for the past several weeks. Need to string together some winning days or losing days before the bigger pattern will emerge. $VIX looks to need a low lower than Friday, but also a high higher than last week given incomplete divergences on the hourly chart. Market Breadth and Internals remain weak.

    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. PriceSeries says:

    The market correction is about to be over and will be followed by another rally. I expect the big drop to come end of Feb. or early March until then enjoy the coming rally.

    We identified a trade on NII Holdings, Inc. which exited today with 31% gains.
    Image:

    Description:
    http://www.priceseries.com/trade/NIHD-NII-Holdings-Inc-stock-gains-31-percent-a-Trade-Record-by-priceSeries-2016123020170123.html

  30. kingfrogcash says:

    the market has corrected, by sector. Banks have quietly dropped the requisite 5% are turning back up. $JPM and $GS ready to rock. DOW 20k this week. Auto’s will help. Trump to smack Japan Tuesday morning over Auto’s.$BA beat on Wed.

    • Trump to smack Japan, Trump to smack China. Well it works both ways, China has intimated it will retaliate by switching it’s new plane orders from Boeing to Airbus and cancel US agricultural imports in favor of Brazil, then tax Apple products heavily.

      Trump will soon wake up to the fact that he’s living on a two way street!

      • NEWBIE says:

        I do not believe there is anything Trump can do to prevent the hard times that are coming to the USA. Unfortunately he is going to be the fall guy.

        • EL MATADOR says:

          You wrong Newbie, China will lose this trade war. See my post below. USA import +$430 Billon of China garbage vs China importing only +$130 of USA products. Believe me when I say they need USA more than USA needs China…..Also ask the OPEC nation how their oil war went, not to happy are they.

          • Dex T says:

            Exactly! The Chinese NEED the U.S. consumer to keep their economy going. They also own so much debt that they will be careful not to rock the boat.

            Trump has a lot of leeway to maneuver. The U.S. has always had the upper hand but weak leaders have always played it poorly.

            Trump was absolutely correct when he said the U.S. has some of the world’s worst negotiators.

        • i think the greatest bubble of wally will burst very soon.

      • EL MATADOR says:

        Trump understand that this is a two way street but he also believes that the USA has the upper hand in any trade war. I also believe the USA has the upper hand. And the number back it up too.

        Based on 2014 OEC trade data: “The top export destinations of the United States are Canada ($241B), Mexico ($194B), China ($134B), Japan ($67.5B) and Germany ($61.6B). The top import origins are China ($432B), Canada ($331B), Mexico ($291B), Japan ($128B) and Germany ($121B).”

        http://atlas.media.mit.edu/en/profile/country/usa/

        https://www.cia.gov/library/publications/the-world-factbook/rankorder/2087rank.html
        https://www.cia.gov/library/publications/the-world-factbook/rankorder/2078rank.html

      • kingfrogcash says:

        I didn’t say China. Japan makes it difficult for US auto to sell in Japan. My context is the rise in the stock market in the short term. This week. Buy the dip.

      • Dex T says:

        Those numbers are chickenfeed in comparison to the trillions that have flown from the U.S. to China. The entire Chinese economy has been built on the backs of U.S. consumers.

        Apple already has most of their cash overseas to avoid taxation. It’s not like the revenue they generate overseas finds it’s way back to the U.S.

        Ditto to many U.S. multinational corporations. The business they do overseas remains there.

    • Fiona, I always loved “61”
      I saw it in concert about 5 years ago.
      It was a NJ PAC (Newark, NJ)
      The soloist was a young Japanese woman (can’t remember her name)
      This music requires some physical strength.
      I think that woman actually jumped into the air a few times (both feet off the stage), just to get the power into the violin that she needed.
      Amazing.
      I also think, that the Playbill said it was only performed 4 times in the 19th Century.
      Difficulty level = 5 star?
      As a musician yourself, do you have any comment on music like this, and the overall evolution of music.
      TIA.
      Sorry to all the others for off topic rant.

      • fionamargaret says:

        I knew you would like it…Zimmerman plays well.
        Just when I think the older musicians play better I choose better sound quality and the conductor having firm control, over the soloist…basically the combination of everything.
        I did love the clarinet soloist for his absolute joy (a couple of days back), and the guitar soloist’s embrace of the old conductor..2 older men…stuff like that pulls me right into the frame and melts my heart.(Saturday)
        I really am not answering your questions…because I know the music, I am picky.
        I was going to play Berlioz Fantastic Symphony tonight….sounds like PT, and I laughed…another day.
        Thought Fiona might like the violin. x

    • Beethoven Violin Concerto is always popular here in the UK.
      I’ll be attending a Debussey concert on Saturday at the Sheldonian in Oxford, performed by The Oxford Philharmonic, I believe tickets are still available…

  31. Just throwing this out there…it’s an update to a wave count I posted in mid-December.

    The count has us still in minute wave i.
    Wave 1 of i ended at 2182 on Nov 10.
    Wave 3 of i ended at 2282 on Jan 06.

    Which puts us in wave 4 of minute i right now. Wave 4 to . . .2220ish?

  32. One of Trumpinators economic guys,Steven Moore was in Varney this morning and the inference of the convo was that Trump is going to work on Obamacare first–and that tax cuts will have to wait until September for action.Possibly this plus other factors causing DXY to break 100 tonight.Even off hours are interesting now.Later.

  33. Thank you Tony. Interesting times for sure.

  34. Thanks Tony. This is likely to become increasingly corrective with daily stochastic’s and RSI starting to roll over. https://www.tradingview.com/x/H8K9Bdj1/

  35. Page says:

    Thanks Tony.

    Watching 2177 pivot.

  36. bouraq says:

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

    • bfquant says:

      This sort of action in RUT with these bear- “trappy”- candles would suggest risks were to the upside IF we had just come off of a major correction. Instead, the reverse is true, and we have all of this “air” underneath which changes the pot-odds for market participants. Thus, I think these traps could prove temporary, and risks are to the downside here.

    • RUT Daily RSI has been diving at a 45 degree angle for the past month, technically the odds favor prices following…

    • tommyboys says:

      Guess we got our answer! HUGE breakout πŸ™‚

  37. 123 abc says:

    Thank you Tony et al for the great OEW analysis and wonderful blog.


  38. Dollar has made a temporary low, rallies to 102.
    Markets make a low on Feb 1st then rallies into the 2nd week.. High has already been made for the year.

  39. chrisk44342 says:

    Tony, not that I always believe in what comes out of zerohedge, but I found this article very interesting about active vs. passive investing. http://www.zerohedge.com/news/2017-01-23/myth-passive-indexing-revolution

    It reads as a bit of self-promotion for the author’s method of using ETFs to diffuse the cost of managed money, but also as a criticism of self-directed investors who rely on ETFs as trading vehicles instead of investments. I would argue ETFs, in the hands of an experienced trader, allow that market participant to be more nimble and not be as exposed to the market as would a ‘passive’ ETF holder.

    • aahmichael says:

      That article is very poorly written. Here’s what the author should have said:
      1. Mutual funds, ETFs, and individual stocks can all be used as either investment vehicles or trading vehicles, although mutual funds have severe built in limitations that essentially prevent them from being used as short term trading vehicles.
      2. Mutual funds and non-leveraged ETFs are less volatile, and therefore, less risky than individual stocks.
      3. The broader based the mutual fund or ETF is, the less volatile and, therefore, less risky
      they will be. In other words, index funds and ETFs, are less volatile than sector funds and ETFs.
      4. Actively managed mutual funds have higher internal management fees than passively managed mutual funds, and passively managed mutual funds have higher management fees than ETFs.
      5. A buy and hold strategy, no matter what vehicle is selected, will generally outperform a market timing strategy, as long as the market is trending. Also, in a trending market, a passive strategy will generally outperform an active strategy.
      6. Anyone who wants to be a short term trader, but wants the least amount of risk possible, should only use ETFs, because they trade like stocks, meaning that you can buy or sell them at any time during the day.

      An extremely important risk factor that the article never mentions is the lack of liquidity of many ETFs. If you’re a nickel and dime amateur daytrader/scalper, which describes 99% of the people who post on this blog, then lack of liquidity is normally not an issue. (I say “normally” because, in a fast market, lack of liquidity in an ETF can kill even the smallest trader. As an example, look at what happened to RSP on the open on 8/24/15.) If you trade size, then the number of ETFs available to trade are very few in number, no matter what the market is doing.

      • chrisk44342 says:

        Ha. Very well said brother. Yes the optimal vehicle is the futures contract as long as one pays attention to leverage. By and large, the levered ETFs for SPX are fairly liquid, but wouldn’t be for a hedgie of any size as you say.

  40. The market seems to be in a mood for a correction, especially with all the uncertainties that come with major changes in policy. But Spicer’s press conference today provided accurate information and the market bounced, but I think that the market’s tendency is to slide quietly slide towards earning season and then bounce from there.

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