Monday update

SHORT TERM: higher open, then pullback, DOW +85

Yesterday FED chair Yellen gave a speech: Overnight the Asian markets gained 0.6%. Europe opened higher and gained 0.1%. US index futures were higher overnight, and at 8:30 the NY FED was reported higher. The market opened at a new high, SPX 2559, and immediately began to pullback. By 12:30 the SPX had dropped 6 points to 2553, and then tried to rebound. Heading into the close the SPX hit 2558 and ended the session.

For the day the SPX/DOW gained 0.25%, and the NDX/NAZ gained 0.30%. Bonds lost 7 ticks, Crude rose 40 cents, Gold dropped $8, and the USD was higher. Medium term support remains at the 2525 and 2479 pivots, with resistance at the 2575 and 2594 pivots. Tomorrow: export/import prices at 8:30, industrial production at 9:15, then the NAHB at 10am.

The market continued its current routine, (sell-higher opens, buy-lower opens), this morning, as the market opened at a new all-time high then pulled back. The new high was marginal, only one point. And the pullback was minor, only six points. This gradual grind higher has been underway for the past 8 trading days. No change to the short term count, as the market appears to be waiting for a catalyst. With earnings season underway and options expiration on Friday, maybe we will see some definitive movement some time this week. Short term support is at the 2525 and 2479 pivots, with resistance at the 2575 and 2594 pivots. Short term momentum continues to display a negative divergence. Best to your trading!

MEDIUM TERM: uptrend

LONG TERM: uptrend


About tony caldaro

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71 Responses to Monday update

  1. fotis2 says:

    And with Phils favorite BBs on weekly

  2. UCO could now test trendline of highs – last two days -15m

  3. XLV breakout daily triangle, ?completing Wave 5

  4. captbara says:

    AMZN looking like 5 waves from 931..

    P.S. DXY daily – IHS

  5. kvilia says:

    CL measured move may have been completed. Let’s see if pullback to $51.39 is defended for a long trade.

  6. Bud Fox says:

    My last word for the month….if I were, an SP500 fund manager. I would be, “selling” in to
    strength. I am in cash. No reward, but no risk either…Everyone have a great year,
    the rest of 2017. My last thought’s for 2017…

  7. getting closer to an interesting juncture. The bullish case. SP 500 doesn’t break 2500 level the rest of year. Waiting on micro 3 to finish with a 20 point nano 4 and then up for nano 5. 30 point mirco 4 then micro 5 and a 3 percent decline for minute 4 with minute 5 up.

    I know lots of people looking for a test of the gap 2462/2471 or minor 3 or minor 5 of int 3 or even major 3 to finish all of which should take market down below 2500. Its what used to make a market. But with everyone pilling into leveraged etfs and parking it there, hard to tell. should be an exciting end of month with at least some 1 percent intraday moves. been 6 weeks since a 1 percent intraday move, just slow and steady grind.

    Good luck all, hoping to try a short at 2525-2568 for at least a 20 point pull back.

  8. vivelaamo says:

    Imagine if this time least year somebody said the DOW would hit 23000 in 2017. You would have got slaughtered by the bears.

  9. phil1247 says:

    the brick wall was severely tested last week but held at 1.188
    now the euro is the one crumbling
    dollar mojo is back !

  10. Good morning traders. As a follow up to my posts last night on precious metals, I thought I would try and put 2 charts, 1 of the $USD/YEN cross and Gold, futures, GC all in 1 chart. If you want one trading tool to know what has the highest probability of the near-term direction of precious metals, take a look at the trading activity of the $USD/YEN cross.

    Currently, looks like continued weakness in the $USD against the YEN, which is bearish for precious metals short term. Finally, precious metals seem to trade 50% measured moves short and long. Would expect GC to see some type of a bounce on the test of the 50% LONG (yellow line) or the profit target on the short (green dotted line). This analysis was not meant to be a trade only trying to show the relationship between the $USD/YEN and GC.

    Notes on chart..

  11. Amit Tiwary says:

    Hello Tony ..Namastey
    One question.
    Looking at India Nifty..What is the probability according to you that Nifty is in intermediate 3 of major 3 of primary 5 of Super Cycle 1..
    Take Care and Thanks for being there..

  12. learnedmylesson25 says:

    Another analyst I read tonight brought up the possibility of an inverse H&S for the DXY.Getting above 94 confirms and PO of 97.This would be a countertrend rally in his opinion.Franklin Sanders is his name.
    This pop in gold was post Golden Week and typical $50ish bounceback.Maybe that’s all it was.We’ll see tomorrow.

  13. learnedmylesson25 says:

    After a great setup for an advance,gold disappointed again.Turning to Ira for an explanation.,he said,”I have no idea what happened today.Now if gold breaks 1286,you eliminate the uptrend.”Back over 1304 would be bullish:Good luck all.We’ll need it.

    • torehund says:

      Could be the dollar strength taking its toll, Euro didnt retrace much. Could be it for Gold in Dollar terms.

    • Lee X says:

      Thx Learned
      You picked ur spot well and that was a nice pop from 1260’s but I’m certainly no gold expert , that’s why I trade the futures 😉

    • fionamargaret says:,PWTADANRBO%5BPA%5D%5BD%5D%5BF1!3!!!2!20%5D&listNum=1

      Yes, it would be nice if gold could break free from the $US…like Armstrong suggests.
      But… you know when all seems lost….look at the pattern on the chart…cast your eye along 122, or use a ruler…nice base and it could even go a smidge lower, but I would not be selling here….x

      • torehund says:

        All options still on the table. Think its wroongfooting bulls and bears to exhaustedexhausted sentiment before a major move. This phase will take AS long AS it needs to.

        • fionamargaret says:

          Gold seemed to do its crashing thing today when Bloomberg were discussing Taylor for Fed, and they suggested if that was the case,, we would be 3 tightenings higher….I would have fainted too….

      • JK1987 says:

        fiona, i see you continuously stay bullish on GOLD and OIL, no matter what have been said. i hate to see you into the greatest danger coming nearly immediately.
        so here is my post #1 for you (i don’t trade those commodities or metals of any kind as i always said, so no conflict of interest).

        seems you like PnF, so i do Elliott wave on PnF chart for you.
        ever saw anybody do PnF ew? 🙂
        look at the black “3”, how steep it went down.
        here we are into red “3” of C, which is much more powerful with great velocity than red A.
        second chart, i use numbers to label the formations, should be fairly easy to see their synchronization for those two blocks.

        oil is the same thing (3 waves up with red wedge from 49 low), you probably can use the same methods above to try to annotate oil.
        not to mentioned 55, i see Sep high of 52.86 should be impossible to reach.
        i posted the oil downside target, you know how low it is. recent bounced up from 49 to 52’s just small changes.
        you, learned, and me also discussed GOLD, USD late Sep, both USD and GOLD are doing exactly the charts i posted and suggested.
        save these charts and play with them.
        even though i don’t know why, but based on my understanding, i don’t think you would ever give up on gold (since i propose the early Sep high of 1360’s) and oil. why? why? why?

        i like what i see on VIX pattern, tomorrow morning, i am going to greatly promote my exposure to VIX in two ways. should become my best performer in my holdings.

        btw, JS said no bubble on the stock market. don’t know if JS knows how to identify a bubble. but i disagree with him.
        i know how to “calculate” if it’s a bubble or not. the market definitely is in bubble territory in any historical standard. stock market bubble needs to come down 80~90%.
        GOLD was bubble at 1923 (of course it’s a bubble, ran from 253 to 1923).
        GOLD bubble burst has not completed yet, i see it needs to be at least cut in half from here 1300 level.

        • fionamargaret says:

          Thanks Jack.
          I was going to talk about the distribution of smooth numbers in arithmetic progression, but felt a simplistic chart would probably be better…. remember I bought at 116 a few weeks ago (and I think it is in a 3).
          I really appreciate your ideas though…..let’s see how the market deals with 2555 +/- 5

          • JK1987 says:

            completed promotion of my exposure to VIX in the extended session.
            my VIX target is 100 during coming big Crash, never changed.
            and VIX 100 is a short term target!

            see ya in a few

    • vivelaamo says:

      Thanks Fiona. I need to learn how to shut out the noise no matter how convincing it try’s to sound. The internet is a dangerous place.

      All the best.

  14. mcgcapital says:

    It’s going to be very interesting whether there’s a huge up day at some point this week given what usually happens on opex week. Everything feels ridiculously extended short term but still wouldn’t be surprised by a ramp

    • mcgcapital says:

      Also, looking at the chart of the Dow, since the Trump bubble began at 20, 21 and 22000 areas there have been 2-3% pullbacks. So would guess somewhere between where we are now and 23200 area will see some profit taking down towards 22500 probably

    • mcgcapital…Last post tonight. This is just an observation…often, there is an inverse relationship between trading activity the Thursday before options expiration and the week of, options expiration. Since last Thursday was a nothing burger the PROBABILITY is no major move in either direction. Now watch a major move…LOL.

  15. Good evening all. Slow night on the site and the football game didn’t start yet. So, I thought I’d fill in some time with a post of what I am looking at in the overnight session. In a snapshot in time, I would continue to favor the bullish analysis. Netflix beat, DOW 23,000, the gap fill tested 2X and defended 2X and broke the micro 61.8% SHORT broke, all lead me to believe that the highest PROBABILITY is a dance around current levels a rally in the European open, then down to fill tomorrow’s GAP and rally to the profit target.

    If /ES prints a new lower low, in the overnight session, the probability shifts to /ES testing the 50% LONG. Guys, NANO 4 down has a very low probability of occurring until the 61.8% LONG breaks. One caveat (sorry) if the 61.8% LONG trades and is defended, can’t rule a triangle for Nano wave 4. First things first, lets see what happens in the overnight session. Notes on the chart.

  16. Richard Glackin says:

    Unlike some others I do not necessarily see Silver dropping below it’s prior low at 13.62. However, I do see it dropping to within $1.00 of it. My current target is 14.58 where ‘C’ =’A’. Of course, if ‘C’ = 1.382 x ‘A’ then the target becomes 13.20. And on the extreme side if ‘C’ = 1.618 of ‘A’ then it drops to 12.35. I’m looking to see the traditional 5 wave ‘C’ wave wherein the count and scale would be most easily discerned as this drop progresses. We shall see.

    • Hi Richard. I don’t trade silver and I don’t trade currencies. So, from a amateurs perspective, one of the most important factors to take into consideration in trading gold and silver is to watch the $USD/YEN cross….the carry trade. In a snapshot in time, the Yen is technically trading very strong against the $USD. That is bearish for both Gold and Silver. Both are testing a 61.8% micro LONG… at $17.115….but I think both will break the 61.8% LONG and trade lower to the next lower measured move LONG at 16.918. At least that is what I believe has the highest PROBABILITY of occurring. Watch the $USD/YEN cross!!!!!

  17. Thanks Tony. Technically Friday is October’s OPEX but, rightly or wrongly, most refer to OPEX as a week. Rob Hanna of Quantifiable Edges has examined the performance of October OPEX weeks sine 1984 and has determined had you gone long at close on the preceding Friday they would have been generally profitable trades. The chart below shows the results by the number of days the trade was held: Friday’s are interesting as the odds remain favorable, but the size of the average loss rises appreciably.

  18. 123 abc says:

    Tony, as illustrated in the first two images below, there appears to be a wave-4 overlap with wave-1 on the FTSE chart; the third image proposes a new count, any thoughts?

    If agreed with the third chart above, it would support the more bullish count proposed here:

    • tony caldaro says:

      according to our work, there was no overlap

      • 123 abc says:

        Tony, I’ve looked closer, and there does appear to be an overlap! Below is a clearer view taken from

        The first chart shows the overlap. The second chart proposes an alternate count which would maintain the overall larger count. However, the second chart would mean that wave-ii came within 2 points of retracing the entirety of wave-i —would this be accepted under OEW theory?

  19. vivelaamo says:

    Thanks Tony. Anything to take from transports starting to decline?

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