Monday update

SHORT TERM: gap up opening, DOW +135

Overnight the Asian markets gained 0.1%. Europe opened higher and gained 1.0%. US index futures were higher overnight. The market gapped up to SPX 2458 at the open and continued to rally. The market had closed at SPX 2441 Friday. Just before 11am the SPX hit 2468, pulled back to 2463 by 3pm, then bounced to closed at 2466.

For the day the SPX/DOW gained 0.80%, and the NDX/NAZ gained 1.30%. Bonds dropped 9 ticks, Crude lost $1.35, Gold slid $9, and the USD was higher. Medium term support jumps to the 2456 and 2444 pivots, with resistance at the 2479 and 2525 pivots. Tomorrow: retail sales, export/import prices, the NY FED all at 8:30, then the NAHB and business inventories at 10am.

The market gapped up today for the first time in two weeks. It gapped over the 2444 and 2456 pivots at the open, which it had lost on Thursday, and continued higher. After three waves down last week: 2462-2474-2438, with a double bottom at 2438 and an extreme oversold condition. It has now had a quantified reversal to the upside, from SPX 2438 to 2468 thus far. A gap up opening, not as dramatic as this one, kicked off the previous Micro 3 in May. Let’s see how the market handles this one on this busy economic/opex week. Short term support is at the 2456 and 2444 pivots, with resistance at the 2479 and 2525 pivots. Short term momentum ended the day overbought. 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. Bud Fox says:

    TWTR….while many are watching crude oil…..I am waching TWTR….roughly $16.
    This one could easily run to $20, or above….developing

  2. Page says:

    Oil … short squeeze coming … watch UWT to fly …. 😀

  3. bfquant says:

    If we are nearing the end of an A up, then I would expect C to be short or outright truncated, otherwise it would likely be 3 of a larger 1 up.

  4. captbara says:

    Now it looks like IHS on index futures across the board.

  5. phil1247 says:

    last one

    /CL

    above 47.61
    crude can squeeeeeze up into next short entry in the series
    i will be waiting there

  6. JK1987 says:

    If the past is prelude, today could be a doji, flat day, and probably a couple more doji days.
    no firework either side.
    gap probably closed with es.

    like JK said:
    August 14, 2017 at 4:25 pm

  7. vivelaamo says:

    Anyone else got their eye on that April weekly gap on the Nasdaq? Only one still open.

    • JK1987 says:

      there are two April gaps not filled on Nasdaq.
      you are looking forward to get them filled?

      https://gyazo.com/8a44e4b10bba75560335d14424f23682

      I think NEWBIE would not like to see above gaps got filled, and vipulm555 would like it.
      if you analyze closely their show up timing and wording, it’s spooky that NEWBIE actually is a bull while vipulm555 is a bear. or both of them (probably same person) just an image to manipulate the sentiment w/o trade involved. did you see their funny exchange last night? 🙂

      it seems profound when I see the usual bear file the latest 13F Filing:
      “George Soros purchased a new stake in the PowerShares QQQ Trust in the quarter worth more than $1 billion. “

      • vivelaamo says:

        Yes I think they will close in the next few months to set up for a nice end of year grind up Santa rally.

        Newbie is 100% a bull. I’ve been saying that for ages. Not sure about Vip. I think he is genuinely bullish.

        Makes for amusement if nothing else.

        • JK1987 says:

          vive, you think they will close in the next few months?
          I don’t think so, 100% not a chance.
          watch closely what are the gaps on the chart that I am referring to. 🙂

        • CampFreddie says:

          Viv – Newbie is Def an Uber Bear and below is one of his aggrresive shorts that was a disaster.
          25-04—Newbie posts – Tommyboy, I just bought 10,000 shares of uvxy at $14.42. I will show you how I make money.
          If he is not a Bear, then he is a bare-faced liar 🙂

      • CampFreddie says:

        JK – You are a funny guy, good to see you posting again.

    • micky says:

      do you really find gaps useful to trade Vive ?If so, when do you target one and when not?

      • vivelaamo says:

        I keep my eyes on the weekly ones. They tend to get filled eventually. Just something to be mindful of rather than trade for. Look at the DAX as an example of leaving that April weekly gap way behind and looking like wouldn’t get filled anytime soon. Got filled last week. FTSE will follow. DOW SPX AND RUT filled it quite early before rallying.

      • Jimbo says:

        I think there is still a gap on the FTSE at around 5140 from Nov 2011 lol

  8. ombak kaki says:

    TC:
    tentatively your spx count now is INT III, minor 5 , micro 3 of min III in progress if break 2490??
    thanks

  9. mcgcapital says:

    So far looks like downtrend activity. Open higher sell off below previous days close. Smartz are selling into strength. Can’t see the attraction in being long unless that 2470-80 area was cleared given the almost perfect reversal pattern we saw last week

  10. purplember says:

    wow Auto parts store are getting their tail kicked in 2017. Some are down 50% names like O’reilly, Advanced auto parts and autozone. the fear is Amazon will steal all their business online. If i need a part for a car, i’d much rather go get it right away then order online to ship to me.

    i don’t own any of these stocks for worth watching for a bottom.

    • vivelaamo says:

      Uni-select also after a buy out of a big European car parts provider.

    • tommyboys says:

      With all the cheap lease deals over the past several years I cant believe many even buy parts anymore – although prolly different markets in different regions. I know its way cheaper for me to lease new every 24 months than own and upkeep – for sure.

  11. shauryagh says:

    Silver stop loss hit at 16.65

  12. purplember says:

    Oil – from $42.01 to $47.31 was either wave 1 or A wave. $47.31 violated today so 5 waves up is out the door.

  13. Mary773 says:

    Thank you for sharing, Tony,

    Up gap causing momentum indicators to reverse from a deeply oversold condition following a scheduled cycle low accompanied by a high put/call ratio and the VIX returning below its upper Bollinger Band .The most recent time this combination of technical factors occurred was November 7.

    Stops in place beneath Thursday’s lows.

  14. learnedmylesson25 says:

    Last 3 times SPX has broken above 10d–they had 50 points each time.10 d at 2463–add it up.

  15. NEWBIE says:

    We are headed back to 2435 in quick fashion, then a small bounce up before we break below 2400.

  16. gary61b says:

    morning news numbers look good… 2473.5 might of been end of w3 or B. If a=c 2462 level.

    • gary61b says:

      wave 4 looks done at 9:30 possible reversal now to finish 5.

      • gary61b says:

        If we had 3 up 2473.25 and this was w 4 down to 2460 then possible 1=5 at 16.25 points. 2476.25 if it happens today, overhead 2480.75… If no up turn C down…:-)

  17. learnedmylesson25 says:

    Buoyant econ numbers this morning.Revised older ones and the latest ones.Gold failed at 1300,no doubt—could have been a contenda.GDX never was.Down to 22.49 this morning–below 10 and 20d.You know the drill.Heading lower.

  18. phil1247 says:

    crude…. could get a quick short squeeeeeeze before the real collapse to 38

    es….. most aggressive extension failed… my cue to exit longs
    looking for possible short entry

    gold and silver ….. testing support mentioned yesterday…
    1272.70 /gc is key to continuation towards 1339 now
    failure there and 1240 is a magnet

    bonds……….. taking profits on TBT now ….bonds at support

    • phil1247 says:

      sold TBT
      bot SLV
      still looking for short entry on es
      watching for GLD buy entry

      see ya !

    • Phil, YM trader here…..any thoughts or projections? I think I see an inverted H&S neckline in the 22033 area on a 30 minute chart which would be good for at least 200 points from there. According to the way I have my fibs, I see the 78.6 retracement of the high at 22060. If anyone else has any ym comments I would be most appreciative. Thanks in advance.

      • phil1247 says:

        hey david

        stopped following ym cuz es came back to life
        extension long violated on ym
        but short from highs also broke
        suggests a triangle forming …prob wave 4 … ie end is near
        prob sideways action then post triangle thrust
        ie pop the top before we flop !
        gl !

  19. NEWBIE says:

    C wave or wave 3 down gonna catch the majority with their pants down.

  20. vivelaamo says:

    DOW. If no new high will wait for breach of August lows for potential 400 points move.

    Until then happy to wait.

    • travis01 says:

      Newbie I imagine you like to “poke the bear” with posts but actually fare pretty well with a few well timed large shorts a few times a year. I’m not always short (usually in select longs or cash) and tend to agree on your large downturns. Sometimes we get in a bit early but when correct it is a hell of a gain. Keep it up

      • vivelaamo says:

        Travis not sure how long you have been following this blog but if it’s longer than a few months you would know that Newbie has been making these calls for years during very strong rally’s and if he was really trading these calls he would have been wiped out years ago. It’s kind of become a running joke now because obviously he doesn’t trade every call. God help him if he did.

  21. phil1247 says:

    ES….
    shorts broken
    in extensions of extensions
    bullish above ……. 2469
    next target ……. 2475

    • mjtplayer says:

      Looks like the bulls want to cause max pain to the SPX shorts. I learned awhile ago to be careful shorting stocks, after all the central banks (EU, BOJ) are still printing money and buying anything that isn’t nailed down. For now, that includes bonds, though that market will let go soon enough.

      Oil on the hand they cannot manipulate higher, someone would need to take physical delivery eventually, which central banks cannot do. Oil might be one of the last markets on earth that’s actually trading on supply & demand principles; without heavy central bank/government manipulation.

      Oil ETF – USO. Textbook bear flag:

      https://www.tradingview.com/x/HXcXb72N/

      • learnedmylesson25 says:

        The European banks and financial institutions are as beholden to the ECB as our banks and brokerages are to the Fed (since 2008).If Draghi says “buy oil”,I think someone buys oil.”Sell gold” though is never “buy gold”.These markets can’t be controlled if they’re not ALL controlled–or it could get away from them.That’s my two bitcons–which are now worth $8800 US dollars lol.Unfrickin’ believable.

        • fotis2 says:

          Over here its zombieland on all instruments till the US Market open everyone in Europe follows US of course they are in denial but the charts don’t lie

        • mjtplayer says:

          No, they cannot just buy oil, eventually someone needs to take physical delivery. The metals on the other hand they can manipulate, they could take physical delivery and store gold/metals in a warehouse somewhere.

          Oil & oil products, soft commodities and nat gas they cannot manipulate – they would have to take physical delivery, which they cannot do, they cannot store.

  22. stormchaser80llc says:

    SPX made a significant bounce as alluded to on Friday today, closing just below its 20 dma. Volume was lower. SPX hourly chart shows how quickly it sliced back up through all pivots and resistance lines lost during last week’s downdraft. A few negative divergences occurred at today’s top so a pullback is likely here before a likely new recent high. VIX cratered as I suspected on Friday, but should continue lower as it only made 1 minor positive divergence at today’s lows.

    Both my swing trading signals remain BEARISH (since 7/28 and 7/31). Internals improved today, yet maintain a downward trend. Likewise for participation. SPX A-D line did spike above its descending 20 dma, remember it did not confirm the last SPX All Time High. The SPX McClellan was improved but still made its 11th negative reading in the past 12.

    My proprietary Technicals Model was a little higher today, but still made its 6th negative reading during the past 7 days. This is the chart of the day and I will display it below.

    HYG:IEF bounced back into its Bollinger Band but remains well below all major moving averages. Plus no positive divergences were made at its bottom last week so its most likely still in a downtrend. Oil had a big loss today, probably money rotating back over to stocks. I am surprised the consolidation/pullback has taken this long, for my theory of new oil highs to be correct, it needs to turn around soon.

    Supporting charts and 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.

    I want you to know I am quite serious about developing my site the right way, I am in this for the long haul, and I will improve my services at every opportunity I have. Traders this next part is for you! I recently uploaded a significant upgrade to the Trading Platform (see top menu of my site for the link). I offer 3 diverse models for the SPX AND the consensus of all 3 models, at time-periods of 1 min/5 min/10 min/15 min/30 min/1 hr and soon longer periods. No matter how frequently you like to trade, I will have you covered. I even have the ETF GLD (gold) available at the 1 min timeframe. These timeframes, available trading vehicles (why not oil, why not china etf?), and models will continue to expand over time! If you are an active trader, you will view my site as something more than just a daily analysis of the markets. I want traders to live here during market hours! I want us all to make money!

  23. learnedmylesson25 says:

    ZH reporting NK is BD (Backing Down).Futures are therefore UP

  24. If we are going to blast of, Dow could be in its 5th wave up towards 22500, appears to actually be the cleanest chart

    • Which then I would be looking for 1 more up sp 2505. That’s my 2 cents if 2474ish is taken out. If so hope it does it by this Friday. Lines up with some turn dates I have. Tough market. Dow say 1 more high though in my opinion.

  25. Last time.
    Stephen Swanson (@belloswede) says:
    August 11, 2017 at 4:50 pm
    Thanks Tony and I’m looking forward to the WE update.

    As of late, there has been much discussion of VXX….the first ETN offered by Barclay’s iPath deigned to offer exposure to trading volatility. As with most structured financial products, it complex and poorly understood. Because of some experience in trading volatility, I though I would offer a brief description of VXX and highlight some of its characteristics.

    VXX, in simple terms, is a basket of VIX futures contracts. And the value of VXX is set by the market, but it’s closely tied to the current value of an index (S&P VIX Short-Term Futures) tied to a hypothetical portfolio of the two nearest to expiration VIX futures contracts. Every day the index specifies a new mix of VIX futures in the portfolio and short-term contracts are sold while longer dated VIX products are purchased, resulting in contango loss.

    Because of this, its only useful for very short term trading using options. Alternatively, you can invest in one of the four VIX products offered by the CBOE, including VIX.

    From Six Figure Investing (https://sixfigureinvesting.com/2013/03/when-a-hurricane-messes-with-a-volatility-index/)

    Unfortunately using VIX futures introduces a host of problems. The worst is horrific value decay over time. Most days both sets of VIX futures that VXX tracks drift lower relative to the VIX—dragging down VXX’s value at the average rate of 4% per month (30% per year). This drag is called roll or contango loss.

    With lethargic tracking to the VIX, erratic tracking with the S&P 500 and heavy price erosion over time, owning VXX is usually a poor investment. Unless your timing is especially good you will lose money. For a backtest of VXX starting in 2004, see this post.

    (At market close a portion of the shorter term contracts are sold, and longer term contracts purchased—the goal is to give these indexes a constant expectation of volatility (e.g., 1 month or 5 months).)

    Barclays collects a daily investor fee on VXX’s assets—on an annualized basis it adds up to 0.89% per year. With current assets at $1.15 billion this fee totals around $10 million per year. That’s certainly enough to cover Barclays’ VXX costs and be profitable. But even if it was all profit it would be a tiny 0.1% percent of Barclays’ overall net income— which was $10.5 billion in 2012.
    From a public relations standpoint VXX is a disaster. It’s frequently vilified by industry analysts and resides on multiple Worst ETF Ever lists. You’d think Barclays would terminate a headache like this or let it fade away, but they haven’t done that even though 3 reverse splits—which suggests that Barclays is making more than $10 million a year with the fund.

    From iPath

    You May Lose Some or All of Your Principal: The ETNs are exposed to any decrease in the level of the underlying index between the inception date and the applicable valuation date. Additionally, if the level of the underlying index is insufficient to offset the negative effect of the investor fee and other applicable costs, you will lose some or all of your investment at maturity or upon redemption, even if the value of such index level has increased or decreased, as the case may be. Because the ETNs are subject to an investor fee and other applicable costs, the return on the ETNs will always be lower than the total return on a direct investment in the index components. The ETNs are riskier than ordinary unsecured debt securities and have no principal protection.

  26. vipulm555 says:

    All green ES already up 7 points,
    Another gap up tomrrow big money / smart money

  27. mcgcapital says:

    Would be surprised if this just goes up to a new high from here now. Have to agree with Newbie.. we’ve had weeks of a trading range with weakening breadth which was definitively broken to the downside last week. Now that we’ve had one bounce day that doesn’t repair the technical damage. Plus it feels like many people who manage money are now turning cautious and looking for a pullback. Still think we get a 3-5% dip in August so that would take us down to the 2400 area or maybe a bit lower. I’m looking at the 7380-90 area on the FTSE for a top for this move. Will probably test again tomorrow AM

  28. bouraq says:

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

  29. cj32 says:

    cr. CBZ

  30. vipulm555 says:

    Most of index has recovered.
    This being Opex , it looks very bullish

    ES 2500 is back on track

    Cheers,
    SmartZ

  31. mjtplayer says:

    Others posting on WTI and it looks bearish, I’ll jump in and add that today was the day that oil broke. WTI had a reversal day last Thursday, which was the warning shot, today it broke down through $47.71 – which was the potential wave 1 of 3, eliminating a 5 wave count.

    Even if one argues for a failed 5th of 3 (which is a real stretch) below $47.29 ends the discussion and confirms the entire move from $42 in mid June is a completed ABC 3-wave rally, failing at $50 a couple weeks ago. Downside projection is around the $40 area, though others are looking slightly lower (Phil).

    Stay short oil.

    https://www.tradingview.com/x/I6TZFWJC/

  32. blubrd67 says:

    Fiona, what do your magic charts show now in UWT with this larger than expected drop?
    It seems to be going to 12’s before bottoming.

    • fionamargaret says:

      Blu, I laid out my thoughts, but posted them to the Weekend Update, where we were talking.
      I am around most of the evening, so get back to me if there is anything that comes to mind…
      .

  33. torehund says:

    Looks like crude is rolling over, is dollar time😅

  34. mtu MTU says:

    [EOD] ES –
    ES presents a potential 5-down(or 3-down) 3-up structure. Targeting today’s high of 2466.50 or tomorrow around 2471.25 (12pm-2pm).
    https://market-timing-update.blogspot.com/2017/08/market-timing-update-81417.html

  35. phil1247 says:

    CRUDE oil……………….

    a bottomless pit ? ( pun intended )

    bearish below 49.29
    target 38.42
    eventually 14 dollars

    • JK1987 says:

      that crude chart is right at the trend line support from 7/7.
      also has the same bottoming pattern as NDX on 8/10.
      those extensions are harmonic pattern numbers.

  36. JK1987 says:

    Thanks Tony
    Has the bearish count of Minor c of int 4 on the daily chart completed with a failed flat?
    the gap at 2474 has not filled yet.
    34 points from 2437.75 low will be 2472.
    A-D only retraced 38%, weak breadth.

  37. Thanks Tony, Your quantified reversal is going to have me reconsider my 2471 short, I can see it going either way, over 2472 i will become more bullish . should know soon enough though. thanks

    good luck all

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