Monday update

SHORT TERM: Tech continues to lead market, DOW -27

Overnight the Asian markets gained 0.2%. European markets were closed. US index futures were higher overnight. At 8:30 personal income (0.2% v 0.3%)/spending (0.0% v 0.0%) was reported mixed, and the PCE was reported lower: -0.1% v 0.2%. The market opened 5 points above Friday’s SPX 2384 close, then drifted down to 2385 by 10:30. At 10am construction spending was reported lower: -0.2% v 1.8%, and ISM was reported lower: 54.8 v 57.2. The market then rose to SPX 2391 by 12:30, only to drop back to 2385 just before 1pm. After that the market rallied. Around 2pm the SPX hit 2394, then pulled back to close at 2388.

For the day the SPX/DOW were mixed, and the NDX/NAZ gained 0.80%. Bonds lost 7 ticks, Crude slipped 55 cents, Gold dropped $11, and the USD was higher. Medium term support rises back to the 2385 and 2336 pivots, with resistance at the 2411 and 2428 pivots. Tomorrow: monthly auto sales.

The market opened higher today with very few foreign markets open. After two pullbacks to SPX 2385 the market managed to reach 2394 in the afternoon, then pulled back. Tech was strong but the DOW was negative. Quite a one-sided market of late. Investors buying growth and selling cyclicals. As a result the market remains bifurcated. Techs making new highs and cyclicals going sideways. Short term count remains unchanged with three waves up from SPX 2329: 2361-2345-2398. Short term support is at the 2385 pivot and SPX 2369, with resistance at SPX 2401 and the 2411 pivot. Short term momentum ended the day just below neutral. Best to your trading!

MEDIUM TERM: close to confirming an uptrend

LONG TERM: uptrend

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

About tony caldaro

Investor
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97 Responses to Monday update

  1. Richard Glackin says:

    This morning I looked at the futures and said to myself, “This market isn’t doing anything today…no point even thinking about a trade.” So, I went outside and cut up a large tree that had fallen in a wind storm. At least I got some work done today. 🙂

  2. johnnymagicmoney says:

    I cant see how oil falling apart is going to be good for the reflation trade along with the fact that I don’t think the FED raises and if they do their will be even more of a slowdown. Its obvious that higher rates are already putting pressure on the numbers.

    Oil chart looks really ugly

  3. im short from here, looking for 2370 in the AM for wave 4 of B, then rip higher to 2410 for c of B

    good luck, see what apple has to say

  4. blackjak100 says:

    A word of advice on TWTR. IMO, it looks like short covering and not real buying. The weekly MFI displays no +div normally seen at longer term bottoms. In fact, MFI recently confirmed the $14.13 price low.

    http://stockcharts.com/h-sc/ui?s=TWTR&p=W&b=5&g=0&id=p12095991078

    just one example of many I found…look at +div On the weekly MFI in AAPL in early 2016…

    http://stockcharts.com/h-sc/ui?s=AAPL&p=W&b=5&g=0&id=p62767443866

  5. Bud Fox says:

    TWTR – looks very Bullish right now, imo….

  6. fotis2 says:

    How’s that oil dip’

  7. mjtplayer says:

    Very boring day on light volume, same as yesterday. Markets awaiting the Fed tomorrow, jobs print Friday and French election Sunday

  8. cj32 says:

    Cr. CBZ

  9. scottycj1 says:

    Think we are about to rotate out of the Naz indexes into Dow/Spx.

  10. blackjak100 says:

    Fed should get us to ATH tomorrow followed by reversal. Everyone can go home today.

    • No Apple earning, no FED no good valued companies can have the same weight of the possible consequences to a nasty move on the North side of this equation. Sorry to disappoint you.

    • vivelaamo says:

      Gaps to fill first IMO.

      • Weekly gap at 2355.

        • H D says:

          have either of you backtested the gap theory? How many open gaps are on the SPX chart, how quick do they typically fill, what % even fill etc? I’ve heard the theory presented but is it tradeable?

          • gtoptions says:

            Gaps work best as support and resistance. No guarantee past gaps get filled.
            Plus, there will be no gaps when Trump bans Futures trading. jk…. LOL 😉

            https://www.tradingview.com/x/1W4fREYW/

            • H D says:

              Ha, 78 signed executive actions already? sure, why not 1 more. Agree S/R levels. If it were only that easy to say there’s a gap and it will fill.

              • phil1247 says:

                when does the SPX gap at 768 fill ?

              • vivelaamo says:

                Are they not self fulfilling prop like most TA? From personal experience I find those big Sunday night gaps tend to fill in indices. I don’t take as much notice of the daily ones. Happy to be shown examples of weekly gaps that were never filled if anybody has any?

            • SPYtrader says:

              Why stop at Futures. Let’s ban Option Trading. Then only allow 1 trade per year for each equity. Only person left on the site will be Bud, the long term investor.

          • aahmichael says:

            HD, as you know, all gaps are not created equal. There is a big difference between break away gaps versus exhaustion gaps. Here’s a study that I posted over the weekend about the latter. The reader will have to decide if the criteria was over-optimized.
            http://www.hussmanfunds.com/wmc/wmc170501.htm

            • H D says:

              Looks like a thorough write up. Can you give me a tradeable edge from it though? The discussion for years has been “the gap will close” and I am simply asking for actual data that proves that theory? FWIW 1987, 2007 exhaustion gaps etc very different ideas.

        • vivelaamo says:

          yep thats the big one staring at us all.

          • phil1247 says:

            768 spx

            • phil1247 says:

              weekly gap never filled

              • Someone else on here,a couple years agostated weekly gaps get filled pretty quickly,within 2-4 weeks.After that,if they don’t fill,it can drag out.We were watching one for 10 weeks,but I believe it finally filled.I read a column by an analyst who wrote today,”This is the only unfilled weekly gap I’ve identified on my charts for over 2 years and much longer than that actually.”
                So the odds are 2355 gets filled in the time stated.

              • H D says:

                @ learned, there r 4+ open gaps last year alone on the SPX, all the way back to 2036

              • that 2036 is what im looking for after the the final wave up to approx. 2451
                wave 1 was 198 points im expecting wave 5 to be weaker at .618 of wave 1 is 122 points, 2329 plus 122 is 2451. 1820- 2451 is 630 points .618 is 382 points putting it at 2069.

                33 points off, but I bet it gets there.

              • CB says:

                re: filling those gaps…market makers are likely not all that interested in doing that in the immediate future…Why? It stands to reason that they would be interested in revisiting those levels quickly only if it would benefit them…so, let’s say that they think that the market is going a bit higher from here and that they wanted to shake out some retail longs at those lower levels..2360-70ish… However, since da boyz have obviously been paying attention, especially in the last 2 week, they know and can see from the charts that there is basically no retail volume in those gaps and most retail people started getting interested in getting long in the 2380-90 area….so, let’s just say that markets makers are pretty reasonable in that they have little interest in going there right now, especially since they still have a bunch of captive shorts from lower/and (presumably) current trading levels. If you think about it for a minute, re-visiting 2350-2360-2370 wouldn’t benefit market makers since they were already heavily long from those lower levels before the French election…but it would greatly help all the stranded shorts, so da boyz are obviously not going to do that in the immediate future, right? Now, if/when retail starts chasing higher prices again, that’s a different story …Also, as most of you here mention, we’ll fill those gaps at some point…maybe in a month or so ? ..
                Now, even if the volume situation is not instantly obvious to anyone from the charts, one could simply treat this (or any other investment) blog as a contrarian indicator, and one would have noticed that in the days prior to the French election there was not a soul in sight that wanted to be long equities….only the pros were long because they had to…so there you have it…

  11. vivelaamo says:

    Id prefer to short from here and I feel dirty saying that.

  12. blackjak100 says:

    A wave iv triangle of any type can be ruled out for a wave 4 for anyone looking for an impulse from 2322 or 2329. Feels like 2382 gets taken out to target a wave 4 low near 2378ish before targeting 2400-2410.

    • blackjak100 says:

      I should rephrase a triangle looks unlikely as it could still morph into a descending triangle.

  13. Still waiting for uptrend confirmation? The only thing should be focusing on is the geopolitical tensions and eventually invest in survival stuffs like soya beans, rise, grain and gasoline. At least until they will seat at the negotiation table. Other way you are dancing on the Titanic bridge smiling ans weaving like a Marie-Antoinette….

  14. Bud Fox says:

    SP500 – needs a push above 2400 to complete the top pattern.

  15. H D says:

    Think it was a month ago the special report on USD posted. BITCoin soared 40%, USD -3%
    https://bitcoincharts.com/charts/bitstampUSD#rg30ztgSzm1g10zm2g25zv
    Private currency has some momo going forward IMO.

  16. To me,the Nasdaq weekly looks comparable to July 2014 at the major 3 top.Dropped about 10-12% with a similar -div.Good night all.

  17. fotis2 says:

    Gold looking bullish longs stop 1238 target 1350
    https://invst.ly/3v03x

  18. fenster6 says:

    Anyone has a count for the CAD they would like to share?
    Many thanks

  19. stormchaser80llc says:

    As expected, a new low occurred pre-market before starting a new uptrend. While the progress higher has been slow, believe it will start a new leg up as soon as SPX can sustain above 2091. Strong bullish belief based on my proprietary Technicals Model, which zoomed its way to a Technicals Model Thrust in late April. These have always been bullish with 50% or so of the run to come. Technicals Model and my other signal remain bullish. SPX hourly has been showing consolidation since April 25th, with a narrowing Bollinger Band. This is supportive of the start of a new leg higher this week.

    Much more FREE analysis at my site (http://navigatethemarketstorm.com). However be advised that I do ask folks to take a few seconds to register for a log-in, making sure you agree to my legal documents.

  20. Ajay Singhi says:

    Not sure but Dow should be down around 200 points today. Let’s see.

    • Richard Glackin says:

      I see I’m not the only one who follows JO. Personally, I think it is amazing just how low this has gone. You are probably right about it turning back up right here. Could well be a 1-2.

  21. bfquant says:

    TC. I know you wrote a long-term oriented piece on the agricultural space several months ago. However, what are your thoughts on the grains subsector? Does the sharp break of the recent downtrend today signify anything of import from a longer term perspective?

  22. A lot of people including me looking for a B wave top soon. Apple earnings on Tuesday night will likely be the catalyst either way. I’m looking for 2410 as well. Thinking tomorrow is a big up day, we shall see

  23. Thanks Tony. With respect to ES, the market was almost entertaining as it spent most of the day in a Fib box anchored by recent lows and highs. After the open it drifted down to 80.75 after a failed retest of Thursday’s close. Then it was it was thwarted at 87.50 and quickly dropped to 81.25……exactly the 23.6% level. From there it rose to 90.75……right at the 76.4% retracement level. It closed slightly lower. Another 10 point range day making four of the last five RTH sessions 10 point range days. SPX target remains the 2425 area after Tony’s other pivots have been cleared.

  24. ATLANTA FED:Latest forecast: 4.3 percent — May 1, 2017

    The initial GDPNow model forecast for real GDP growth (seasonally adjusted annual rate) in the second quarter of 2017 is 4.3 percent on May 1.
    LML25:On April 30th,we’re at an 0.2 GDP according to Atlanta’s Fed.Two days later…running at 4.3–which according to Marketwatch,”helped bring gold prices down.”
    This forecast,after a slew of lousy econ numbers released today.Can’t make this stuff up.

    • johnnymagicmoney says:

      don’t worry they will bring it down five or six times before it is all over. They should be embarrassed by how wrong their models were this past quarter and the number of times they kept lowering the numbers and the frequency of those changes. If they said it was going to be .2 I would expect it to be 3 frankly lol

  25. Okay,here’s Avi’s take on GDX.
    “The current structure presented in the GDX suggests that we are now approaching a low-risk long term entry for investors in the mining complex. As long as the GDX remains over 20.30, we have a strong bullish set up in place that can set up a strong rally into the summer.

    Alternatively, should we see a break of 18.58 (the December 2016 low), that would place our long term bullish perspective in serious jeopardy.”
    He also dismisses any dollar/gold correlation,saying DXY hit 103.5–his target–and there should now be a multi-year consolidation.
    I’ve seen this “if and should” from him before,with poor success.But,thought I’d post it.

    • P.S. Whenever he gives a major target like 20.30 being huge support,you can almost 100% count on that number being tested(and probably broken).Get the popcorn out.Hope he’s right for once.

    • mjtplayer says:

      GDX support is at $21.14, below that the Dec lows. Nothing has changed, miners and silver are both still in meltdown mode as all uptrends have been broken. Gold is still neutral, but a significant break below $1,240 and it too enters potential meltdown mode.

      • kvilia says:

        mj – disagree. gdx is in the bull flag, $20.4 should be absolutely bought with a stop around 20.10-20.20 to your liking. On top of that you an check gold price action before and after every last 4-5 FOMC statements.

  26. scottycj1 says:

    Just rotation as we move higher….

  27. bouraq says:

    Chart of the day is #OIL at http://www.tradingchannels.uk

  28. Tarun Varma says:

    Tony,
    In the current bull run (say since ; feb-16 lows), has there been similar bifurcation between two material market segments (similar to now)?

  29. scottycj1 says:

    Ouch Newb…the UVXY OOOOOH thats a 13k loss

    • Lee X says:

      Bad form sir , bad form

    • NEWBIE says:

      Still holding, not concerned.

      • wildmarkets says:

        Not wishing for anyone to lose money but this is not the way to stick with stocks like UVXY. Decay on such stock is a hell. You better be concerned in the way you invest/trade as in the long run you will ALWAYS lose money!

        • mjtplayer says:

          Wrong.

          The decay works in both directions. In a normal contango VIX futures structure, vehicles like UVXY get destroyed via time decay and futures rolling, that’s correct.

          BUT, the same happens in the other direction when the term structure is in backwardation.

          • wildmarkets says:

            I did not tell that SVXY does not decay. These stocks are not buy and hope (hold)! Momentum needs to be on your side when you trade!

      • VIX did hit a 52-wk low of 9.90 today, and closed at 10.11…that’s an awfully low VIX number, making me think that UVXY might actually be a buy here contango be damned.

        Btw, is this a record low for VIX? The only time I’m seeing it drop below 10 was earlier this year on 01 Feb, hitting 9.97, but closing at almost 12 the same day. Today has to be some kind of record…

        • Found it, here are the record lows, from Wall St. Journal:

          * The record low of 9.31 was set on Dec 22, 1993.
          * Later, the VIX closed as low as 9.87 on Jan 24, 2007.

          • mjtplayer says:

            1994 & 1998, the years following the record low VIX prints, were both bad years for the stock market. 2018 to follow suit?

  30. phil1247 says:

    http://tos.mx/yAGPYt?image

    /ESM7

    shorts broken…..nice bounce from ext long support
    targets at 2404
    then 2430
    bullish above 2372

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