Monday update

SHORT TERM: all-time new high then pullback, DOW +63

Overnight the Asian markets gained 0.8%. Europe opened higher and gained 0.4%. US index futures were higher overnight, and the market opened at a new high: SPX 2504. In the opening minutes the SPX hit 2508, and then started to drift lower. At 10am the NAHB was reported lower: 64 v 67. The market continued lower until it hit Friday’s SPX 2500 close around 2:30. Then it bounced into a SPX 2504 close.

For the day the SPX/DOW gained 0.20%, and the NDX/NAZ ended mixed. Bonds lost 7 ticks, Crude slipped 10 cents, Gold dropped $12, and the USD was higher. Medium term support remains at the 2479 and 2456 pivots, with resistance at the 2525 pivot. Tomorrow: housing starts, building permits and export/import prices all at 8:30.

The market opened at an all-time high today, rallied to SPX 2508, then drifted lower into the afternoon. At the high the hourly RSI set up a negative divergence. Let’s see if this pullback gathers some momentum overnight/tomorrow. The short-term count from SPX 2417 remains unchanged: (1) 2455, (2) 2428, (3) 2480-2447-2508. Plenty of room for a decent pullback here without overlapping any waves. Short term support is at the 2479 and 2456 pivots, with resistance at the 2525 pivot. Short term momentum displays a negative divergence. Best to your Tuesday trading!

MEDIUM TERM: uptrend

LONG TERM: uptrend


About tony caldaro

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126 Responses to Monday update

  1. Tony any feeling whether DAX and Nikkei will complete 5 waves and de-correlate from the US indices? tks

  2. gary61b says:

    DT for minute 3….. will know by tomorrow if it is.. 🙂

  3. vivelaamo says:

    Oops. Just seen I was beaten to it. My bad

  4. H D says:

    While it’s slow, here’s something interesting. Nibiru, allegedly 3 days away from impacting Earth and yet nobody can see it….. This is on FOX so I am assuming it is not “fake news.”

  5. learnedmylesson25 says:

    Gold really has no support until 1287ish.I’ll go with 21 from Elroy as similar support for GDX.Trump threatens to annihilate NK and market doesn’t twitch….Later all.

  6. scottycj1 says:

    Looking for RUT at 1472

  7. H D says:

    you guys are en fuego. 4 point range and thirty paragraphs to say SPX HWB!

    Nobody re-invented the wheel. Some here have been saying HWB for years. :mrgreen:

  8. gary61b says:

    ES 2511-12 has overhead for today, weekly overhead at 2417.

  9. fotis2 says:

    You guys need some chill music..

  10. amittsite says:

    Take it easy on the posts..please..100 points on Dow not happening..but 100posts here..😁must be tough on Tony c.

    P.S..its all in jest..👆

  11. im looking for a new high at 2515-2520 before any pull back. Good luck all

  12. mjtplayer says:

    All eyes on the Fed tomorrow and whether or not they begin “QT”

  13. fionamargaret says:

    UWT, UGAZ, UGLD, JNUG, NUGT, ERX, SQQQ, and a little TMF.

  14. asaraniti says:

    Sorry Tony C.

    Last post during trading hours. The/ES algorithm once again tested the 50% micro long at 2501.13 (front run of that level) and defend…SO FAR…just like it did in the overnight session. This is what I meant by objective evidence that the algorithm was programmed to ignore a new event flash move (+/-). No change in any of the retrace levels noted on this mornings chart. BTW the gap filled. Should 2499.97 brakes then /ES 2494 is the next level the /ES is likely to trade to.

    My analysis continues to be, at this snapshot in time, the SPX is trading in a micro wave iii and wave iv will be confirmed on a brake of the 61.8% of the more conservative measured move at /ES 2491.17.

  15. phil1247 says:


    gold coming down to potential support levels
    extension short at 1315 must be surpassed to even consider
    going long again

  16. pooch77 says:

    So Tom Demark calls top today

  17. SPYtrader says:

    From Monday’s Update:
    JK 8 posts, Fiona 8 posts, Phil 2 posts. If you need help I know people.

  18. Good morning all.

    Trading setup for /ES today. Yesterday afternoon, the gap was filled which broke an micro extension. However, as in last week, the extension broke on a flash news event of a tax proposal that would be a negative for high-tech companies and the Nasdaq promptly sold off which dragged down the other index’s. The algorithm simply ignored that breach as though it never happened. You can see that in the overnight session as the 50% micro retrace long of that extension move was defended, which is bullish.

    The higher probability is, the /ES can fill the gap (/ES 2501.92) sometime today but there are 2 bullish profit targets above at /ES 2508.30 and 2511.75.

    Bottom line, both the 15 minute and daily charts are bullish. /ES would have to trade below 2491.17 by 1 full tick for any possibiity of a trend change. Combined with Tony C count… micro wave iii
    is intact and micro wave iv would probably print when /ES breaches 2491.17.


    • aahmichael says:

      Are you saying that the DH system includes a newsfeed, and every move in the market has to first factor in what’s coming over the newsfeed, and the trader then has to do a psychological analysis of the price movement and use discretion to determine whether or not it should be ignored? If so, does that mean that all trades are entered with market orders, rather than with limit and/or stop orders? Thanks.

      • Hi aahmichael

        I’ll take your replies one at a time. Regarding newsfeeds DH makes no assessment. That was mine. I am simply drawing a logical conclusion on the facts…..could I be wrong, absolutely. Does it matter, no, price discovery is the only thing that matters.

        1. There was a sudden/brief pullback in the major index’s yesterday afternoon. Which began to recover suddenly forming a “V shape low”.
        2. The pullback coincided with a news event that one of the proposals within the tax cut proposal would be negative for high-tech companies.

        3. The 61.8% micro long broke BUT BUT BUT was tested again and the second test was a perfect defense of that 50% measured move long. We see this all the time. The key once again is that if a second test of the 50% extension long trades and is defended after a news event, this is a high probability that the algorithm will ignore that brake as though it never happened.

        I don’t know this at the time of the barke. It only becomes apparent when the second test of the 50% extension long trades and is defended.

        • aahmichael says:

          Again, you’re explaining the market movement a day after the fact. In real time, based on what you have explained so far, someone using the DH system would have been stopped out of their long during yesterday’s gap fill just beyond the 61.8% level. I assume they would now be flat, unless they went short at the 50% retrace of yesterday’s decline, with a stop at the 61.8% level, which would have also been hit for a losing trade.

          • NO 100% incorrect, read the post I just wrote, it answers that exact question. Would be happy to try and clarify the analysis. Let me answer it another way. If you bought the /ES last week, depending on your investment strategy, I would place a stop 2 full ticks below the more conservative 61.8% retrace at 2491.17. I mentioned that on the first post this morning…read that post again and look at the chart…that level is right there.

    • aahmichael says:

      In the setup that you posted yesterday, you outlined both the 50% and 61.8% levels that needed to hold for the uptrend to remain intact. Both of those levels were breached in yesterday’s day session, yet you’re now saying that price action should be ignored…based on what the market did after those levels were breached. However, in the real world, traders don’t get the benefit of an after-the-fact redo.

      • NO! I checked that post and the accompanying chart. I said, “If 2500.38 is tested and defended, the /ES will rally to a profit target of 2506.45. If /ES brakes that 61.8% of that measured move setup, then the more conservative extension will be tested, 50% retrace is at /ES 2493.25. Not sure if Tony C would count that pullback as a micro wave 4.
        The 61.8% of the more conservative measured move never traded. From memory, the 61.8% level of that measured move was 2490.25….check yesterday’s afternoon low.

        aamichael, I think your getting hung up levels in a chart posted one day and extrapolating it to the trading activity a day or two later. I explained this last week to you. Look at the above chart, this chart should be viewed as a snapshot in time. The conservative 50% and 61.8% retraces and the higher profit target are etched in stone until either that profit target trades or the 61.8% level is breached. When either of the 2 observations occurs, the algorithm immediately erases these levels and new levels/targets are drawn…no subjective interpretation, 100% math. What will change are the smaller moves.

        The importance of these smaller measured moves is that it leads the index to either that profit target or the 61.8% breach. Let me put it another way. The /ES futures or any index for that matter, usually will not go straight up/down. Those staircase moves are the micro shorts or longs leading the index to that trend.

        • aahmichael says:

          It certainly wouldn’t be the first time that I misunderstood something. Your post yesterday was an addition to your Sunday night post:

          “asaraniti (@asaraniti) says:
          September 17, 2017 at 9:28 pm
          New high /ES 2503.75..1 point higher than the recent high in my above post. The analysis above is intact. However, for every 1 point the futures trade above 2502.75 simply add 1/2 point to the 50% retrace and .381 points for the 61.8% retace”

          Since the market went straight up to 2506 yesterday morning, then I assumed the high to high measurement was from 2496.25 to 2506, and that the retracement levels were calculated on that range. Yesterday’s decline took out both the 50% and the 61.8% levels by a lot. So what’s the purpose of the 61.8% level if that’s not where a stop would have been placed?

          • asaraniti says:


            1. Your assumption is correct….FOR THE MICRO TARGETS LEADING INTO THE PROFIT TARGETS ABOVE.

            2., A profit target mean take profits! Partial or full profit depends upon what level you bought/ES and your trading strategy…day trade, scalp trade swing trade.

            3. If you are in a “swing trade” or bought /ES let’s say last week, your stop again would be 2 ticks below the 61.8% retrace 2491.17 meaning ignore the smaller micro longs if they are breached.

            4. Again, this analysis is a snapshot in time, looking at the chart as of early this morning when I posted the analysis.

        • mcgcapital says:

          Even still I don’t get how you can ignore certain moves. I see that people are trading this system profitably but every move matters

          • phil1247 says:


            its like medicine
            its art and science
            you have to know whats normal and what is not

            the chief of radiology at Georgetown hospital told us

            ” a radiologist with a ruler is a man in trouble “

          • aahmichael says:

            Seems to me that the ‘hype” of the DH system is that it’s supposed to mimic algorithm trading. However, algos never use discretion. That’s the whole point of algos.

            • asaraniti says:

              Define discretion. Look at the above chart/commentary. If the /ES continues to technical test every 50% micro long leading to higher highs. The only statement you can make about the algorithm is that it was programmed to ignore a breach possible due to a news flash event…and you realize this is a possibility in the overnight session when a second test of the 50% micro long was tested and defended.

              I think some are getting hung up nomenclature, making it difficult to understand the algorithm..fair enough. Lets me put it this way. What would the very savvy traders on DH’s subscription site say, if Tony C. wrote a post on where the OEW count is at the present time.

              aahmichael, et. al. I strongly recommend taking DH 1 penny 1 week trial offer. It offers (webinars) so much more than an understanding on how to trade this algorithm.

              He also wrote a book, Trading the measured move Check it out on, they have a table of content and the first few pages of a couple of chapters you read without buying the book. I think you can buy the kindle version for <$10.00

              • aahmichael says:

                In trading, discretion is when you decide to take a system generated trade or not take a system generated trade. (I use the term “system” to mean any defined set of trading rules, triggers, parameters, etc. It doesn’t have to be coded in a computer.)

                I have no idea what you’re referring to when you speak of “the algorithm.” What is that and what does it have to do with the DH method of trading?

                You can’t compare EW counts to a trading system. By definition, there are always a multitude of different EW counts that are valid at the same time, yet often pointing in opposite directions. In addition, EW is just a form of analysis. It’s not a trading system that generates buy and sell orders, although, EW counts can be incorporated into the inputs of a trading system.

              • locanbbs says:

                Is the point then that you only trade during market hours and whatever happens in between you ignore? I at least cannot work on that basis, the market could collapse and you are still waiting for market hours. That’s why I use indicators, namely to see which breaches are to be reacted upon and which not.
                Asaranti: By the way it’s spelled “break”, “brakes” are for trucks, cars and bicycles. If you keep using the wrong spelling, I’ll soon be doing it too!

              • locanbbs says:

                Asaraniti: I mean in market hours you always take the last test as determining, ignoring if price had broken the 61.8 previous to later defending the 50?

              • asaraniti says:

                locannbbs…LOL Hard to trade and post at the same time, already missed one entry when /ES tested 2501.13.

                Regrading your question….100% NO!!! You need to read my posts carefully because the nomenclature might be new to you (and others). If it trades it counts. Whether it be in the Sunday night Asia open or the overnight session in European.

                HOWEVER, if you see a break of a 61.8% measured move long or short BUT over the next few hours or the next day in today’s case you see the original setup tested a few times and defended you need ask yourself, is the algorithm ignoring that brake for some reason? JUST LOOK AT MY CHART, /ES 2501 WAS TESTED AFTER THE BRAKE LAST NIGHT AND DEFENDED AND WAS RE-TEST AGAIN THIS MORNING AND WAS DEFENDED.

                If you don’t update your analysis taking the break into consideration but 2 retests defending, your analysis will be flawed and your entry or exits trades are incorrect. DH will look at several technical lows/highs (anchors) to see if a algorithm is attaching themselves to that level for any reason. The key is, are those anchors testing and defending the 50% measured moves. That’s another reason why you might see 2 sets of measured moves. Sounds confusing/unscientific but it’s really straight forward…. if you know how the system works.

                This observation will probably happen again tomorrow with the FOMC statement. If it does, I’ll post it…we’ll see.

          • asaraniti says:


            yes, every move ,matters for a day trade or scalp.
            no, ignore the micro moves long/short if you are a swing trader.

            profits targets are just that, take partial/full/or none at all depending upon your investment strategy.

            This system increase the probability of what /ES levels are likely to trade on a 15 minute chart, what you do buy/sell/hold when these levels are tested is up to you.

            I’m not smart enough to give trading advice.

            • phil1247 says:


              you have done a tremendous job of explaining the method
              and its obvious you have a strong grip on how to use it
              some people are just too rigid and stubborn to succeed with this
              just forget about them and dont waste any more of your valuable time

            • asaraniti says:

              sorry about the breaks…LOL

              Yes, to the last test. If I see a sudden waterfall decline, a break of a 61.8% level and then snap back, V shape bottom. It traded, it counts. HOWEVER, I would keep in the back of my mind, a possible sloppy/reactionary trade (possibly due to a news flash). Might even draw up a second analysis on the chart to account for this. Then watch the trading to see what levels are being tested and defended to know which is the correct analysis.

              • asaraniti says:


                I meant discretion rhetorically. A computer algorithm is nothing more than a software program that some hedge fund managers use to trade in this case ?es futures. Not speaking for DH, he has a proprietary system that “mimics” the way these algorithms trade.
                I thought last nights example was perfect. A 61.8% was breached, it was retest a few hours later and 2501.13, the 50% level of that move was defended and more importantly, that level was retested again this morning and defended (front run). That’s the key. I missed the entry this morning but did scalp a trade for beer money. Had I not taken that sloppy/reactionary trade into consideration I would be trading on flawed data.

                Finally, you are 100% correct about OEW. I was using the K.I.S.S. method to try a link between OEW and trading this algorithm. Micro wave iv has to decline by some proprietary level (EW 23.6% or 38.1% of micro wave iii?) for TC to count it as wave micro wave iv and I telling you now, based upon the chart I posted this morning, a snapshot in time, I don’t see how that can happen without breaking /ES 2491.17.
                Now if /ES rallies lets say 20 points of course this level will change because the profit targets would have traded.

  19. jwmcbride says:

    Want to clear up comments from yesterday since many on this site tend to attack other traders. 2500. My personal trading setups are as following swing trades 1-3 months and day trades.
    never hold a postion once my 3rd wave target is hit.

    Wanna be traders pick a trading plan set rules for how you enter and exit and you will make a lot of money. Phil is on the right track and will get there

  20. captbara says:

    Nikkei is trying to go parabolic.

    • fionamargaret says:

      …they are just back from holiday…playing catch-up..

    • JK1987 says:

      that’s because time is up, and nikkei has to push to a new high for 2017 to complete the same B top pattern that i posted for all US markets.
      it’s all the same everywhere, some B are elevated, some B are flat.

    • locanbbs says:

      Kap’n, on the contrary Nik (futures) has just given a sell signal and they are consolidating now like all the other markets.
      And to JK’s chart, I don’t see Nikkei in the 4/5th waves, but in the 3rd, which may be extending now. The proposed 4th wave is probably much too short and the EWO (Elliott wave oscillator) was only 1 month in the red and has now turned green again, is therefore probably extending. No sell signals yet either. The next months will tell!
      nikkei MONTHLY futures –

      • locanbbs says:

        We’re not in a recession,…yet…! And Ray Dalio’s “greatest fear” is that the CB’s will tighten credit too soon. That supposes that they will really do as they say–or is this just another example of CB “double-speak”. I think they hope that by threatening and by perhaps a few token actions enough people will be frightened into acting as they wish without their really having to carry out real, effective measures.themselves in this direction. Of course some time they will have to carry out their threats or become known as “paper tigers”. A lot will depend on who Janet Yellen’s successor is.

  21. locanbbs says:

    UPDATE 2: Spx hourly futures with new wave count. Spx still above the 34 sma and probably going sideways till Tuesday (last market cycle bottom for a while).
    spx hourly futures –

  22. JK1987 says:

    Monday September 18, 2017 – Market Top and the coming bear market report
    highly likely all markets have completed long term cycle top on September 18, 2017

    From the Long Term Cycle point of view, in the last 100 years, there are only two bear markets with different characteristics.
    We are about to enter the third bear market in the last 100 years. the depth and the time duration will be the most overwhelming one.

    The first stage of the coming bear market that we have never seen before

    Debt Deflation
    deflate all classes of assets
    count on it


      • JK1987 says:

        i see different big picture than Bridgewater’s Ray Dalio
        Dalio’s biggest fear was 1937 (the article dated back to April 21, 2015)

        1937 DJI decline 41% in 8 months for the bottom, that is not a bear market in my previously defined bear market for its duration and extent.
        And mainly 1937 was not in the window of the Long Term cycle. 2008 was not in the window of Long Term cycle either, so should not in one of the bear market i defined.

        i have researched and prepared for this scenario for months.
        All studies are by my own, not reference to any other’s work.
        September 18, 2017 highly likely be the end, and be the starting point.

        the debt deflation will deflate all assets.
        gold, oil, commodities…
        US dollar could rally to 120, then collapse, gold will rally from there to unbelievable new ATH.

        high debt assets will be very vulnerable, and the debtors (banks) will be victims too.
        example, tonight Toys R Us files for Chapter 11 bankruptcy, The retailer has $4.9 billion in debt, $400 million of which has interest payments due in 2018 and $1.7 billion of which is due in 2019. that’s overwhelming. and a lot more are like this one.
        GE was once the biggest market cap during 2000 ~ 2007, when GE touched financials, they are doomed in 2008. after the big “save”, now in 2017, GE still is in a very bad shape that worst than 2008.
        will be more and more to come.

        Central banks cannot save this one.
        i really don’t know what to say, it’s terrible for everybody, no matter you are bulls or bears.


        • JK1987 says:

          btw, Bridgewater’s Ray Dalio owns the biggest hedge fund ever.
          In 1982, Dalio confidently predicted the global economy was headed toward a depression and he traded accordingly.
          then Dalio went broke.
          Dalio said he was too arrogant, overconfident and failed to do enough historical research.

          i don’t know if Dalio has done enough historical research or not for current scenario.

          btw, 1982 was in the window of Long Term cycle, and he missed that one.

        • fionamargaret says:

          Dalio was discussing 1937 in an interview yesterday Jack, so I searched for hard copy and found what I sent you…did not check the I would presume he has had this in his mind for a while.
          I see a depression (like 1929) but stuff happening first…

          • JK1987 says:

            is the interview available somewhere?
            i like to hear what’s the extent and cycle Dalio is into as a compare note.
            “by finding other independent thinkers who are on the same mission as me and who see things differently from me. ”

            from Dalio: “In retrospect, my crash [failure] was one of the best things that ever happened to me because it gave me the humility I needed to balance my aggressiveness. I learned a great fear of being wrong that shifted my mind-set from thinking ‘I’m right’ to asking myself ‘How do I know I’m right?’ And I saw clearly that the best way to answer this question is by finding other independent thinkers who are on the same mission as me and who see things differently from me. By engaging them in thoughtful disagreement, I’d be able to understand their reasoning and have them stress-test mine.”

            here most people are too bullish and don’t see what’s coming. i cannot find anyone here to discuss. here i always got rejected or got insulted when i say the pessimistic picture.

            • fionamargaret says:

              Try this Jack…and there is a link on it to see the whole interview..
              ..and there is Armstrong Economics for a differing opinion..or google “economy depression
              and see what links you get…

              • JK1987 says:

                thank you fiona. i will try it tomorrow.
                for many months, i already studied the scenario from many angles, history and now. i wish we could, but we could not escape, no CBs or any force can help.
                my sincere advice, better to prepare than regret later. if it does not come, great. but if it does come, what can we do?

                PS. for the spx chart i posted.
                a of A (took 6 weeks), c of A(took 11 weeks) both are about 15% decline (not bear market), concentrated selling were in 1~2 weeks.
                use Wave 5 high 2134 as equilibrium recovery point. spx took one year and 2.5 months to reached today’s 2508 top for a gain of 17.5% (not that much compared to the previous two 15% correction in a short period of time).
                talk about velocity, it’s fast and furious in the “correction”, and we have not experience or talk about the velocity of a bear market yet. and i am seeing this one as one of the three biggest bear market in last 100 years from cycle view.
                good night

            • vivelaamo says:

              Jk it’s not that people are too bullish. It’s more a case of people know crash’s don’t happen over night and there will be lots of warnings before we do crash. You seem like a nice guy but you need to realise many have posted tops and major crashes on this blog for weeks on end just for the market to go on to make double digit market gains. They don’t post anymore.People’s views are nothing personal against you, they are just saying what they see. The blog is mainly day trader so a crash which could happen next year while we continue to make new highs on a daily basis is not much use to many here.

              Don’t take comments personally. You should encourage those that question you. It’s not a competition. Have a good day pal.

    • vivelaamo says:

      Jk one question. How much higher can we go before it’s no longer a cycle top? Or is there no limit?

      I would have thought the date of a market top would be the date that there were no new highs. We are going to gap up today. Does that mean Tuesday is actually the top? Then Wednesday and so on until we finally top?

      • JK1987 says:

        vive, think big, not trivia. i am not going to answer this kind of question. DO NOT try to trap me in the trivia. i am posting the big picture and what’s coming. i do have the details, but it’s not for the public’s view.
        if you get it, you get it. if you don’t, you don’t.
        only for people who can get it, and willing to hear.
        good night

        • vivelaamo says:

          See you are not open to questions so stubborn in your views. Those trying to question and understand where you are coming from are accused of trying to trap you. You ask many questions to others but do not welcome them yourself. You wont have any more comments from me.

          Good Luck with your trades.

  23. locanbbs says:

    UPDATE: Our call for a consolidation was right. And though I expect only a short-term downtrend, as Jeffrey Saut of Raymond James (see Fiona’s comments) says, the market has momentarily “little internal energy” for a renewed uptrend. Even the Russell 2000, which is still climbing, will soon reach the limits of the sidewards channel it’s been in for most of a year.
    rut DAILY futures –

  24. bouraq says:

    Chart of the day is #ES and

  25. bfquant says:

    QQQ, XLK uptrend looking increasingly choppy.

  26. So, bull or bear. 2508 may have need a ending diagonal. Need to break 2480 to verify. Or 2508 ended wave 3 of micro 3 . Drop of .3875 would take you to 2484. Then micro 1 equal 5 at 2436.

    Then micro 4 and micro 5 to follow. Then minute 4 and 5 higher to complete Int 3.

    Key is 2480. Holds going 100 points higher to finish Int 3 fails dropping 100 points

    Should know this week

  27. scottycj1 says:

    This configuration has led to some very nice uplegs…..SPX Bullish % crossing above the 50 DMA.
    Guess what happen today ?

  28. JK1987 says:

    Tony Thanks

    parabolic corrections comparison, seems like 23.6% retrace is the key.
    1. GOLD: working on “a bit” of correction for 4, then shoot to new ATH.
    2. GBTC: “a bit” of correction to 4, then shoot to new ATH.
    3. Nasdaq: correction of 4 completed, at new ATH.

    don’t remember ever saw an “Exetreme Greed”

    cheers! (added to the sentiment)

  29. 56rambler says:

    Glad to see you back, Mr. Caldaro! Thank you for your generous time and effort!

  30. fionamargaret says:

    Tony, do you have another “pivot” number possible between 2479 and 2525….thanks.

  31. phil1247 says:


    i know you are interested in DOW
    i was looking at old charts and saw this one i drew up weeks ago
    it got lost in the SPX hoopla
    looks like target at 22417 is going to be hit tomorrow
    whether or not it can get thru and create a new extension or not will be key
    if it goes thru ..
    you could be looking at DOW 23000 and melt up

    good luck !

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