Monday update

SHORT TERM: gap up opening and rally, DOW +90

Overnight the Asian markets gained 0.5%. Europe opened lower but finished mixed. US index futures were higher overnight and the market gapped up to SPX 2389 at the open. The SPX had closed at 2382 on Friday. The market continued to rise until it hit SPX 2392 around 10am. Then after a pullback to SPX 2387 by 11am it headed even higher. Heading into the close the SPX hit 2395, then closed at 2394.

For the day the SPX/DOW gained 0.45%, and the NDX/NAZ gained 0.85%. Bonds lost 1 tick, Crude rose 35 cents, Gold added $5, and the USD was lower. Medium term support rises to the 2385 and 2336 pivots, with resistance at the 2411 and 2428 pivots. Tomorrow: new home sales at 10am.

The market gapped up at the open today for the second day in a row. The market opened at Friday’s SPX 2389 high and continued to rally. We now have a wave up from SPX 2353 to 2395 with several insignificant pullbacks along the way. Unlike Friday, however, the NAZ/NDX led today’s advance, and is now a bit over 0.50% from its all-time high. The DOW is still over 1.0% below its all-time high. As noted in the weekend update, we prefer the DOW leading at this stage of the uptrend and wave structure. Short term support is at the 2385 pivot and SPX 2353, with resistance at the 2411 and 2428 pivots. Short term momentum displayed a negative divergence all day, but no notable pullback occurred. Best to your trading!

MEDIUM TERM: uptrend

LONG TERM: uptrend

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

About tony caldaro

Investor
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132 Responses to Monday update

  1. johnnymagicmoney says:

    I listen to CNBC sometimes for a contrarian indicator. I just heard “without question the risk is to the upside” and “we are in the early innings of the bull market” and “earnings haven’t been good they have been great”.

    hmmmmm

    idiots galore – how close are we??

    that and I am waiting for a price target of 2000 on Amazon once it hits 1,000

    maybe Blodget can come on and make the call

  2. torehund says:

    Waiting for everything worthless to go up because something else is believed to be even more worthless…Thats what they call a miracle 🙂

  3. ragnar5 says:

    Smart guy discusses the PPT:

    • tony caldaro says:

      and gets it all wrong =)

      • Smart guy…he said just what I told him to say–verbatim…lol.As I’VE said ad nauseum:Since 2009,the banks are the Fed and the Fed is the banks.Fed saved them all and now they are the Fed’s servants.
        “What can we do for you today JY?”
        “Prop that oil up,dollar needs buying,bust that gold,tote that barge…”
        ” And THIS week?Buy that DJT.”
        “The,the POTUS?”
        Nooo,not Donald J Trump–the TRANSPORTS you idiots!!!”
        🙂

  4. vivelaamo says:

    Does Swarm still only work on Firefox?

  5. vivelaamo says:

    My favourite market the RUT is testing the downtrend line and 20 day SMA. Break here and then we could see fireworks!

  6. Markets looking very “toppy” now (H&S on Ndx). Taking profits and waiting for another day!

  7. phil1247 says:

    https://charts.stocktwits.com/production/original_83791027.?1495403400

    lots of talk about bitcoin today ….alphatrends chart

    peak?

  8. phil1247 says:

    cln7

    51.77 next target

  9. STEPHEN BARTLETT says:

    I mentioned going long S&P near the recent low. I would stay long. New high coming. Wave e of triangle on the weekly chart. Bull mkt over.

  10. vivelaamo says:

    Still not convinced by this up move. If I followed Elliot wave I’d say it’s got B wave written all over it.

  11. Goes without saying: 2400 is still a tough nut to crack!

  12. kvilia says:

    Mjt, you may want to try to reconsider your metal’s bias. Every time you, scotty and agree call for metals crash, metals find support. I see a healthy pullback as dollar is rallying into the HWB short from recent highs. Once resistance confirmed, it will continue decline and gold will resume higher towards 1340-1350. At some point miners are going to explode, most likely raising 50% in several trading sessions. That’s what the charts are showing. Tomorrow dollar should top out. I would continue to play miners long with stops in place. Just my 2c.
    Cheers,
    kv

    • mjtplayer says:

      It’s not bias, it’s the result of my analysis.

      There’s nothing bullish about gold, miners or PM charts – nothing. On the flipside, the Dollar is at extremes not seen in years, from a positioning and sentiment standpoint, as the result of panic short covering in the Euro.

      If gold is struggling to catch a bid while the Dollar is tanking, what do you think will happen when the Dollar reverses?

  13. Richard Glackin says:

    If…IF, we have one more high after this one that makes this rally a perfect ‘B’ wave run up. If we do not get one more high then we are likely looking at a 5 wave move up. FWIW.

  14. UPDATE: Volatile session up to now! – Spx (etc.) safely (?) now back in ascending channel – and Wave (V). Off to new heights on the “wall of worry”.
    Spx hourly futures –
    http://imgur.com/a/Hkylt

  15. fenster6 says:

    tony time to take that neg deviation red arrow off your hourly charts I think.

  16. Last one–off to my local casino–to play the “Bear Flag ” slots-which I know aren’t rigged,lol.Trannies broke 9000,gold is slipping.The FANG stocks ALL have lousy RSIs on various time frames.What can you do?The bear flag is now a buy signal.It has to be bullish when DJT ignores a probable 400 points drop on a chart pattern that reverses.Much later.

  17. https://charts.stocktwits.com/production/original_83839381.?1495469095
    Last night,I received a BitCon email from a BitCon proponent extolling the virtues of BitCon.I said,”It’s a Seinfeld coin–based on nothing!It’s not real.”
    The woman fired back:”It’s not controlled by the government…and what is real btw?”
    I compared it to going to the store and buyIng imaginary food with real cash.What good is that?
    Bernie Madoff is probably saying,”I wish I’d have thought of this,I wouldn’t be sitting in jail.”
    I’m absolutely floored by BitCon.

    • tony caldaro says:

      Tulip Mania a few centuries later.
      Back then it was not selling pressure that created the crash.
      It occurred when buying dried up.

    • H D says:

      any different than gold coins?

      • tony caldaro says:

        yes, dealers can mark up coins

        • H D says:

          Think some of these private currencies are here to stay. Their recent rise in value vs USD and political climate is interesting. Maybe a measure of fear, like gold used to be.

      • Gold is rare, like Bitcoins, but also visible, portable, not dependent on electronic machinery and useful (for jewellery, dentistry, industry…). If civilisation does break down – and it always does every milleniium or so – gold will be like “money in the bank”. This fantasy inspires Doomsayers constantly and creates demand! One reason “primitive” society allows the rich so many wives is to transport and save their gold in the form of jewelery. One wife would be overburdened!
        Overcontrol by government is the only inspiration for Bitcoins. Governments know this and it prohibits them finally from eliminating paper money, seizing bank deposits etc. Gold isn’t so easily hidden.
        More ideas? An interesting topic….

        • H D says:

          Bitcoin is being accepted almost everywhere. From GOP campaigns to Amazon. You can’t buy anything with gold. In a doomsday scenario gold will be worthless IMO. Different topic but people will want survival items, food and bullets, not shiny coins.

          • mjtplayer says:

            Bitcoin is accepted for commerce now, gov’t can step-in anytime and change that.

            Bitcoin is being allowed by government b/c it doesn’t pose a threat and they’re curious about it. When that ends and governments outlaw it’s use, Bitcoin crashs in value.

          • Just occurred to me: As soon as you start actually USING your bitcoins for transactions of any kind, they are sure to attract the attention of the tax department sooner or later. Then their primary value – invisibility – will immediately disappear. On the contrary the govt. will become curious about what other uses you may have for them and will want to audit your accounts etc. etc…
            All common sense….

      • EL MATADOR says:

        HD you can melt any gold coin and make craft products that you can sell. You can use it as collateral too. And it cannot be cyberhack…..can you do this with bitcoins?

    • For the average person gold is a lot more tangible for instance than equities (stocks). You have to have quite a number of stocks in a certain company before you can actually “do” anything with them, what to speak of Bitcoins. Sure, as long as you have a willing customer you can sell anything, even tulips. But that has little to do with the qualities of the product itself, only the value placed on it by some customer.
      As a kid we used to even take silver dollars or quarters and, using a small hammer we could make nice rings, like a wedding ring, out of them.
      Bitcoins have the quality of “invisibility” and “transportability”. Meaning you can (probably) take them with you, if you move overseas (no customs). And the government or (other) thieves can’t find them to grab them.

      • tony caldaro says:

        Several months ago the SEC refused to allow Bit coin to trade as a currency ETF.
        The reason is that the IRS ruled Bit coin is an investable asset, not a currency.
        What this means is if you bought your coins at $1000, and used them to purchase something when they are $2000, you have a taxable gain. You bought and you sold.
        When the IRS decides to crack down on Bit coin users in the US they will be in for a frightening surprise.

        • H D says:

          Interesting. I’m not a tax expert by any means but I’m pretty sure nobody here is afraid of investments of any kind making gains. If they tax it as property so be it.

          • tony caldaro says:

            Totally agree, but how many people actually know there is a tax consequence.
            Worse case example.
            Let’s say someone was lucky enough to buy bit coins at $5 five years ago and held them. Today they go out and buy a car for 20 bit coins. They think they just bought a $40K car with $100 in 2012 USDs. Yet, according to the IRS that is about an $8K long-term capital gain tax liability. The gain goes undeclared and the interest on that gain starts to accumulate. Think the bubble in bit coin, and it is a bubble, will burst when the IRS cracks down.

        • Lee X says:

          “Let me tell you how it will be
          There’s one for you, nineteen for me”
          💲

  18. Even I knew the markets would not care about an isolated terror attack.What WOULD they care about?Probably coordinated attacks in multiple locations.But that would be only for the first few times…and that’s iffy.
    So know we’ll see if bear flags have been rendered obsolete(Transports at 8990-9000 area)as well as -divs on equities.The -div is very much alive on GDX and PMs,but as long as 10d (22.78)and 20d (22.66)hold–no problem-o.
    Good luck all.

  19. torehund says:

    Sunny afternoon, I will let the paint dry without disturbing its timid process 🙂

  20. H D says:

    Thoughts and prayers to the families affected in Manchester. Suicide bombing a pop show packed with children is a new level of cowardice.

    • vivelaamo says:

      Born and bred in the country that he attacks the innocent children of. Makes me sick to the stomach. Such a sad day for humanity.

      Worse thing is that it’s never going to end. The west created ISIS by removing the dictators that would never let them exist. Now they continue to supply the countries that fund ISIS. Nothing makes sense.

      • fotis2 says:

        No the worst thing is its not going to end because we are governed by a bunch of d….heads who will do absolutely nothing but the same old ”This kind of thing gives fuel to right wing movements…”

  21. gtoptions says:

    Thanks Tony
    SPY ~ Testing W/M/Y Pivot Resistance Again
    FOMC WP Play on tap? Or, breakout?
    GL All

    https://www.tradingview.com/x/xekWxC1b/

  22. phil1247 says:

    /ES
    2399 target is next … prob by 10 AM

  23. UPDATE: Wave (V) underway, on the path to new highs after mini-consolidation. My entries at blue arrow.
    Spy hourly futures –
    http://imgur.com/a/moPsc

  24. Vishal says:

    /GC and TLT – these setups look ominous for the indices

    http://imgur.com/AvIF4HW
    http://imgur.com/7PCkyvM

  25. stormchaser80llc says:

    SPX briefly surpassed the 2391 resistance line I have been talking about, only to reverse on strong negative divergences on the hourly chart. A pullback is expected at least in the short term.

    I am neutral the market right now with lower than typical confidence. My trading signal based on my Technicals Model is now neutral, after being favorable for those short. Yet my other signal went bullish today. SPX is above its 20 dma again, and both McClellan and my proprietary Technicals Model are now positive. Breadth is more broadly bottoming and improving. The A-D SPX line made a new All Time High today. VIX hasn’t bottomed but may be soon if the MACD histogram positive divergence is right.

    I would be neutral oil here, closing the day at its 200 dma and the top of its Bollinger Band.

    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. On my site, be sure to check out the real-time Trading Platform (look for it on the top menu). I am taking feedback!

  26. Ira:5 days in a row DXY is below the bb.Me:With a +div,a strong dollar rally is coming.GDX,being as unimpressive as it can be lately–even with a 10% rally from 20.88–will probably dive like a U boat.
    Ira:Looking for a possible equity reversal Tuesday.Until the triple top(20.990)is taken out,he’s looking for a bearish trend to appear.
    Later all.

    • mjtplayer says:

      The Dollar is getting ready to rock and roll, it’s close. Spells trouble in the near future for gold, miners, oil, et all

      Yeah, the SPX rolling over just short of a new high would be bearish, but we’ll see, stocks usually drift higher into long holiday weekends

      • phil1247 says:

        disagree
        dollar is in extension shorts vs euro ..yen.. pound
        no chance of any dollar rally till extension shorts break.
        .. esp vs euro ( 60% of dollar index)

        yes dollar low is due……………… FEB 2020 plus or minus 2 months

        • mjtplayer says:

          Interesting view Phil, thanks. Couldn’t disagree more, as the Euro chart looks dreadful and the EU itself is on the brink of breakup – or meltdown. By 2020, the EU will be a different place, lots of divorces on the horizon – not just the UK

          For both the EU & Japan, it will be interesting to watch how these markets trade when both central banks end QE and take their thumb off the scale; especially the government debt markets.

  27. UPDATE: Market taking off “secretly” after mini-consolidation.
    Spx hourly futures –
    http://imgur.com/a/aigi2

  28. UPDATE: Market taking off “secretly” after mini-consolidation:
    Spx futures hourly –
    http://imgur.com/a/aigi2

  29. Strange behavior, who can explain: After slow grind up with overbought indicators, we’re getting consolidation overnight, …. so that indicators can reset and the bull market take off again tomorrow?

  30. Kisshu2 says:

    expolsion causes bonds to jumpa and stocks to drop after 7:30pm est
    http://www.cbsnews.com/news/manchester-arena-emergency-services-respond-incident/

    • 19 killed,50 injured so far.

      • tommyboys says:

        Yeah lets allow anyone into our country. Forget extreme vetting or even vetting – it could be construed as racism…and we can’t have that.

        • jjjzzzwww says:

          tell the truth ……… you didn’t even know who ignited the bomb when you wrote ……did you?

          • fotis2 says:

            Come on man you don’t have to be Einstein to work that one out.But yeah lets be politically correct ,have a vigil and wait for the next hit…

            • jjjzzzwww says:

              for all you know the terrorist could have been born in Great Britain…..it wouldn’t be surprising (so much for extreme vetting) ………I don’t know and you don’t either but by all means jump to conclusions. Looks like Chump could’ve turned up the volume on vetting his cabinet

              • vivelaamo says:

                If past attacks in U.K. are anything to go by then he probably was born in the country. This is a far bigger issue than just immigration. heart goes out to the people of Manchester. To attack kids this way is a new low.

  31. mjtplayer says:

    In the futures market:

    – All-time record short interest in the VIX, eclipsing the prior records from mid Jan and early Sept

    – Traders have turned bullish the Euro and now have the largest long exposure since Q3 of 2014

    – Traders have their largest long exposure to the US 10yr Note since Q4 2012

  32. torehund says:

    Tony, bull is humming along. Even the Rut went up a bit today and the feared full stretched e-wave towards 132 might not manifest itself in a downward direction. So lets just smear ourself with a bit of patience.

  33. bouraq says:

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

  34. Is it still possible that this rally from 2922-2929 is the c leg of an upward a-b-c (B) correction of minor 4 and that the C downleg of minor 4 will commence once it tops out? I think Tony eliminated that possibility because there were 5 waves up to 2406, but if this rally does not become impulsive, I think that that is still a possibility.

  35. Thanks Tony. Big day for SPX as the AD line approached the highest level since early March, helping the entire McClellan family of indicators turn green. Along with improved breath, we saw a surge in net new 52 week highs….a measure essential for further highs. The widely respected Lowry Research Group, believes breadth and new highs to be the mothers milk of new highs. And by most measures we went from risk off to risk on. Anyway, I wanted to ask you what is your count off the bottom? At the risk of violating the squiggle rule, I have this a nano v (?) if Int iii and if the rule of 24 holds true we may see 2403 before Int iv kicks in. I have today as 61.8% of the move from 65 to 79 (2394), leaving 9 points to take us a bit higher assuming all of the other obstacles are cleared, including our dear, dear friend 2400.

  36. mtu MTU says:

    [EOD] Stocks-
    Bull (green) / bear (red) squiggles of the rebound in SPX(Chart 1) and the preferred larger structure (Chart 2). See charts.
    http://market-timing-update.blogspot.com/2017/05/market-timing-update-52217.html

  37. vivelaamo says:

    Thanks Tony. 1 day down 3 days up. Back to where we started.

    • pooch77 says:

      ???, 1 up 3 down 4 up ,than a nice short

    • tommyboys says:

      Was the “impeach Trump” correction 👍🏽‼️

      • Bud Fox says:

        Do you, really believe Pres Trump will get the boot?
        I, do not think so.

        • tommyboys says:

          No way just sighting the “reason” for the one day dump. He’s doing awesome things its just not getting reported. His base is growing while he has to fight tooth and nail for everything. He’s following through on what he was voted in for. Meanwhile DNC being class action sued by its own members claiming Bernie was railroaded 😬… Once over the hump and a few policies start kicking in and GDP rises he will gain popularity beyond his base.

          • Bud Fox says:

            You have my respect….

          • Lee C Wilson says:

            right, because at the snap of the POTUS’ fingers the economic engines are going to kick in defying rational GDP growth. History is on the side of a mature economy growing 1.5%-2%. It’s difficult to find what untapped vernal growth the US possesses, so I’m skeptical it’s as rosy, or simplistic, as you portray. And let’s not discount the damage the MAGA POTUS intends to inflict on his populist base — the decimation of medicaid and other facets of the social safety net — will be felt before any purported stimulus puts the working class back to work or balances the wage stagflation that’s divided this country over the last 40 years.

            • tommyboys says:

              Of course not Lee. It’s not about any one person – this is why I don’t understand all the Trump backlash. It’s about POILICIES. If his “conservative” policies are allowed to take hold by those that crave high taxes and big government control, growth will assuredly gain steam. Cutting government and expenditures are surely bullish for the economy. Whether those portionally come from Medicaid is questionable and actually rather unlikely. Highly doubt that one gets thru either party. Ultimately he’s doing things that help the economy thus the little guy. This is something the elite left under the guise of the bleeding heart – mmm – will never do. The parties flip flopped somewhere over the past half century(?)

        • Kisshu2 says:

          expolsion causes bonds to jumpa and stocks to drop after 7:30pm est
          http://www.cbsnews.com/news/manchester-arena-emergency-services-respond-incident/

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