Weekend update


This volatile week started at SPX 2486. After a gap up opening Monday and rally to SPX 2509, the market went into chop mode ahead of the NY Day holiday. A gap down open started the action on Wednesday. After hitting SPX 2467 early the market rallied to SPX 2519. Thursday had another gap down opening. The market quickly dropped to SPX 2448, rallied to 2488, then dropped to 2444 just before the close. Friday a totally different story. After a gap up opening to SPX 2482 the market just kept on rising, hitting SPX 2538 before closing at SPX 2532. For the week the SPX/DOW gained 1.75%, and the NDX/NAZ gained 2.25%. Economic reports for the week were light and mixed. On the downtick: ISM manufacturing, plus both jobless claims and the unemployment rate rose. On the uptick: the ADP, monthly payrolls, and auto sales. Next week’s reports will be highlighted by the FOMC minutes, the CPI, and ISM services. Best to your week!

LONG TERM: downtrend probable

After the worse December since the year 1931 many of the market pundits capitulated and turned bearish. The SPX lost 9.2% on the month. It is probably best to describe 2018 as a bull sandwich: two three month corrections, with a six month uptrend in the middle. Net loss YoY 6.2%. Economically, the ECRI was making lower lows this week.

Last weekend we noted that just when many were turning bearish several foreign markets looked like they were in the last bear market downtrends: China, Germany, Hong Kong, Singapore, S. Korea, and Spain. This week China made a new bear market low, Hong Kong confirmed its last downtrend, S. Korea confirmed its last downtrend and made a new bear market low. S. Korea looks like it could be bottoming now.

An emerging market that is enjoying the fruits of its economic and political recovery is going mostly unnoticed. It just made new bull market highs in the first three days of this new year. The market: Brazil. After a market crash, along with nearly every other market, in 2008, the BVSP rose in a P1 bull market until 2010. Then economic/political trouble set in and a six year P2 bear market followed until the worldwide low in 2016. It has been rising in a P3 every since. Short term charts are on page 5 of the stock charts link below.

Nothing has changed on the long term count or the weekly chart. You can read last weekends update for more detail.

MEDIUM TERM: downtrend

Made some notes on the daily chart to prove a point. For those that think the POTUS and FED cannot move markets, think again. Note the four instances in December when the POTUS or FED did something market noteworthy. December 4th, Trumps tariff man morning tweet. The market was at SPX 2786. By December 26th the market had dropped to SPX 2347: -15.8%. Along the way Powell stated that rates and QT were on auto pilot during the rate hike pressor on December 19th. If you recall the SPX dropped 100 points between the time the FED raised rates and he finished his pressor one hour later. On December 24th the Presidents Working Group convened. Then on Christmas day, December 25th, Trump tweeted stocks are cheap. The SPX had closed at 2351 on the 24th, and has since rallied 8.0% at Friday’s high. Clearly Powell and Trump can move markets.

With the best surge in market breadth since the downtrend began it is possible Int. A ended at SPX 2347 and Int. B is currently underway. A 38.2% to 61.8% retracement would be normal for a B wave of this degree: SPX 2574 to 2714. It’s a large range but nothing this volatile market couldn’t handle in a couple of days.

We also see the possibility, as noted in the DOW charts, that Int. C is still underway. This was detailed in last weekends update. Either way we should be seeing a retest of the December lows before this bear market ends.


The pattern for this downtrend remains the same. An abc down to late October, a November B wave, then another abc down to late December. While the pattern has been unchanged, the wave degree has been a bit difficult to determine. Ideally, as noted last week, a drop to SPX 2310 would ideally fit the SPX and DOW.

Short term support is at the 2525 and 2479 pivots, with resistance at the 2575 and 2594 pivots. Short term momentum ended the week overbought. Best to your trading in the NY.


Asian markets were mostly lower and lost 0.8%.

European markets were all higher and gained 2.1%.

The DJ World index gained 1.5%, and the NYSE gained 2.2%.


Bonds continue to uptrend and gained 0.6%.

Crude appears to be trying to get an uptrend going and gained 5.8%.

Gold remains in an uptrend and gained 0.2%.

The USD is in a downtrend and lost 0.2%.


Monday: ISM services and factory orders at 10am. Tuesday: consumer credit. Wednesday: the FOMC minutes. Thursday: weekly jobless claims and wholesale inventories. Friday: the CPI and the Budget deficit. Best to your week!

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

About tony caldaro

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759 Responses to Weekend update

  1. I think a potential bull/bear inflection point is coming to our markets in tonight’s overnight session. If Zerohedge.com and Reuters reporting is accurate….China/US will make coordinated statements about the trade talks that just ended in China. China is waiting for the U.S. trade representatives to arrive back in Washington first before publishing their statement.

    What significance that delay has is unknown at this point. There were both positive and negative quotes from Chinese officials.

    • The SPIN ZONE! Only preliminary talks. How trump responds with action will be watched. Lifting sanctions, not likely. Holding off March 1st sanctions? announcing more meetings? Market will take what it can out of this but is it enough?

      • gary Not spin, just a potential market moving event. The vice premier attended the meetings which is significant. But I agree both sides will want to spin this positively for their stock respective markets. Wall Street is just looking for an excuse to rally the markets and positive statements could do the trick. No I don’t expect anything other than they are talking, progress is being made and they will met later this month at Davos.

        • Progress? Never happen. Trump wants the Chinese to know their place. Only progress will be AFTER he is gone. How did DACA go? You know when they all compromised and trump reversed his decision? Same with government shutdown. Fool me once shame on you, fool me twice…There will be more meetings but it’s just a stall tactic on China’s part. placate Tump to show he is in charge. Imagine stating the trade war over tech supremacy and telling the other nation you have to change your goal. How would YOU react to that? never going to happen.

          • 600 point decline, pension plans are severely underfunded (with increasing bankruptcy/or at a minimum a decrease in promised benefits to save the pension system, in some municipalities), State of the Union Speech, Powell may try a rate increase in March/June, poll numbers are down, defectors within his party. All signal to me, that Trump will cut a deal in Davos but it may only be a concrete first step….a financial detente, if you will. I will still wait for China’s statement tonight before assessing the status of trade talks. .

    • zerohedge.com just published the US statement on trade talks. A nothing burger. If you ask me this was a bit disappointing. Don’t think the Street is going to like this statement but what do I know.

  2. trejder74 says:

    bear here 2582-2595

    see you when new lows is coming

  3. Let the romp continue. The 50 day ma looks like a lock at around 2635. Would be approx 8 percent in a week. Crazy. V shaped corrections. Straight down and then straight up. So from 2574 another 60 points straight up we go.

  4. phil1247 says:


    HI HO………..
    sold silver too soon gain
    but time to reenter for next push up to target

  5. phil1247 says:


    CL blast off continues
    are you still in?

    STRAIGHT up above 50.27

  6. trejder74 says:

    Somebody here wrote that we come to have top 9/1.

    • nsteve24 says:

      Downtown Josh Brown@ReformedBroker
      Jan 7
      “The U.S. withdrawal from TPP was one of the worst own-goals in recent economic history.”
      That’s not the New York Times. It’s the @WSJ Editorial Board.
      The only reason he trashed it was because it was an Obama era deal. Had no clue what he was doing.

    • ariez5 says:

      YO GEORGE!
      “Gary Leibowitz is using ‘the market collateral damage theory of political events’ as a smokescreen to inflict upon us his incessant ill-conceived and inaccurate political comments. He should either stay on topic or have his posts deleted.”

    • fenster6 says:

      Hey George- you hypocrite. You just blasted Leibovitz for posting political stuff disguised as trading. Yours doesn’t even have the pretence of trading info. Hypocrite

  7. I don’t believe bear market rallies are usually associated with such strong market breadth that we have now, as manifested by the A-D lines and the McClellan Oscillators. I recollect they are generally more large-cap oriented. But I haven’t done serious research on the subject.

    • mcgcapital says:

      I don’t think the A/D line works as a predictor of forward returns, it just means that more stocks are rising on a given day than falling. Gives no context on what trend those stocks are in.. most stocks were miles below their moving averages two weeks ago, this rally has just brought them closer to it

      Zweig breadth thrust, A/D lines, WROC.. they’re all trying to measure momentum and use the assumption that what’s going up continues going up and what’s going down continues going down. If there were inverse indicators of these then last month they’d have triggered on the downside. So all that tells me is there was a violent move lower followed by a violent move higher. Is that a characteristic of a bull or bear market?

      • Not too ashamed to admit that I followed the Zweig Forcast many, many years ago. It’s not often that the thrust is triggered but when it does, traders should take notice of that.

        • phil1247 says:


          my cousin started a hedge fund with Marty Zweig

          Joe Dimenna

          man did i go into the wrong business .. LOL

          • You know, I was going to mention that Phil is old enough to rememberer the Zweig Forcasr….but I didn’t want to give your age away…..LOL

            • phil1247 says:

              if you watched louis Rukeysers show each week week
              you might remember this one asa………………

              just before the 1987 crash marty looked terrible
              Lou asked him ….. whats wrong marty ?
              you look worried

              he said
              Lou …i didnt want to say anything that might cause a panic …..
              but i am afraid the stock market is going to crash

      • I know what the A-D line measures. I, and many respected analysts, consider the trend of the A-D line the single most important “market internal” indicator.

        • mcgcapital says:

          There are two glaring problems with using it as a signal of market strength though. The first one is that for an individual stock to count towards a +1 for breadth, it just needs to register a positive return. So if the indices are up 1-3% everyday as they have been, there can be stocks that are lagging showing signs of weakness but as long as they return 0.01% vs the index return of 1% they count as positive for A/D. So when the index is up big I’d expect the A/D line to also be strong.. it would only be weak if individual stocks are lagging by some distance.

          The second one is that all stocks are equal weight. So if small caps are doing well relative so will the A/D line. Over the summer our resident A/D line experts were saying breadth is strong right at the top of the market. I said at the time that that’s because there was a herding into US stocks as the US economy was the strongest of the lot, but that that trend wouldn’t continue as everything else was trending lower.

          For me, with any of these indicators you can’t just read them off and say X reading means Y. You need to think about why such and such a reading is strong or weak and think about what that means. These indicators are generally heavily parameterised so they can trigger when markets make extreme moves. The fact that we’ve rallied hard and that most stocks have participated in the said rally isn’t a surprise at all.. everything was down hard pre Xmas and breadth was washed out. There’s zero evidence that so called strong breadth means we will now head for new highs, particularly if you look at most of the stocks making a positive contribution to the A/D line and can see that they’re mostly all still in bigger picture downtrends.

          • Contrarywise, when a stock is down by only .01 it counts as a -1 input to the A-
            D line. So that factor will even out over time.The A-D line is equal weight by design because it is meant to capture the direction of all stocks in the market. There are plenty of weighted averages to look at if you want that. There are many instances of the A-D line topping out ahead of the price averages, so I don’t know where your research staff is getting it’s data.
            There is also an operating companies only A-D line if you want to filter out the effects of convertibles (interest rates?) on the A-D line. That is a criticism that is often made of the A-D line. I don’t think the amazing current strength of the A-D line is automatically predicting a resumption of the bull market, but it is certainly worth taking note of as a remarkable phenomena.
            I will post the operating companies only A-D line on the Wednesday update.

    • aahmichael says:

      FYI, last time NYMO reached a level this high was on 1/08/2009. SPX then declined 27% over the next 2 months.

    • fenster6 says:

      Hey George- you hypocrite. You just blasted Leibovitz for posting political stuff disguised as trading. Yours doesn’t even have the pretence of trading info. Hypocrite

  8. Gary Leibowitz is using “the market collateral damage theory of political events” as a smokescreen to inflict upon us his incessant ill-conceived and inaccurate political comments. He should either stay on topic or have his posts deleted.

  9. Has the “bear market” really done anything different?
    That is the question.
    For wave counters, it can be very subjective… move the labels around, etc.
    Traditional TA is not that flexible.
    1) Where are the support Resistance levels?

    I have picked these horizontal lines.
    Three of them are pretty clear, NDX less so.
    But, so far, the bear market has only returned to the level of the breakdown.

    2) All four indices are printed neg Divergence yesterday yon the hourly chart.
    3) When the market started sliding, so did interest rates.
    Yield curve inverted in spots. “Now the FED can’t raise rates again!!”
    But the past three days T-rates have risen – up 6% on the 10s.
    The inverted curve is pretty much gone.
    If stocks keep going up, probably so will rates.
    Then more talk of rate hikes.
    If the FED raises in March, how are stocks going up?
    One month T-Bill will be 2.65%

    I don’t see any change from first week of Oct.

  10. lml25 says:

    Time to go back to one of my favorite indexes–DJT.A long bear flag with a breakdown under 8950 has equities resuming the downtrend.Above 9450 would seem to give PPT a victory over another bearish chart pattern.Could be a fakeout if that latter scenario happens,but something should resolve itself fairly soon and we’ll need to watch it closely.G’night all.

    • Sethu N says:

      Yesterday’s low 2547.56 vs 2533. For 9th Jan Hour Support 1 2558 Support 2 2537. Hour is in momentum mode now. Day R 2592 S 2551.Bulls command as long as 2537 is held. I have proved my levels to doubt mongers like mcg,chris. This is the system I adopt and It works very well.

      • fionamargaret says:

        Yes Sethu I find your work really interesting….the simple multiplier I have for the $SPX is 2750, but take with a grain of salt as previously it was 1851. ….x

        I hope you like music. This is Dvorak 6 which is lesser known, but quite beautiful.

        • Simon Rootbeer says:

          Fiona so you no longer think we’re going to 1851 and rather 2750 now instead?

          • fionamargaret says:

            That is what the simple multiplier suggests for $SPX, but as I still have 69 for JPM (I have had all the banks as shorts for quite a few months), I am sceptical to say the least, but there you have it Simon.
            Maybe up to a lower top, then…….if it is plausible at all to begin with….x

          • phil1247 says:


            how do you propose to use this” information” in your trading Simon?
            good luck with that

            • fionamargaret says:

              I could have said nothing, but that is not my way. (nor is posting so many different options I could always be right or claim others’ ideas as my own if a scenario plays out).
              I am mentioning so everyone can check their charts…that is what a study group such as ours was originally based on.

        • Sethu N says:

          I also love music but our music format is called Carnatic. This is in South India.

  11. Good evening all. This morning, /ES declined to a 61.8% long at 2545.41. That level was defended and /ES rallied off that level. That was your entry into the long. There are 2 green dotted profit targets labeled on the chart at 2583 and 2594. I believe /ES will rally to one or both of these targets in the overnight session. The second chart is the /VX futures. It looks like the large traders are going to hammer down the/VX to one or both green dotted lines….they are the profit targets of this measured move short, which will rally /ES to their respective profit targets.

    Notice the inverse raltionship between the 2 futures contract

  12. aahmichael says:

    I have no change in my view of the major trend, but I do have a change in my count. From the top at 2941, every wave has to be counted as a 3-wave subdivision. None of them can be counted as impulse waves anymore, and that’s because of the number of points in the rally from 2347.

    So far, there are just 4 waves:

    Even though it’s only 4 distinct waves, the possibilities remain numerous as to how the larger formation will subdivide and count, because the existing waves are all 3-wave subdivisions. What you’re dealing with, though, are either ABCs, or WXYs, or combo-waves of ABCXs.

    • Jack kendo says:

      Pretty sure this is a bear market rally, there are 3 waves up from 2346.58.
      I have two possible counts.
      Primary is 1-2-i-ii; first “2 @2800” retraced 61.8%, second “ii” @2579.8, retraced 50% from 2800.
      Primary 1-2-i-ii should be the count, because it matches the most bearish pattern possible.

      Most people’s subdivided wave iv of wave 3 is not possible, ndx compq nya already have overlaps.

      nymo is the second highest in history, namo is at all time high. This kind of overbought in a bear market should induce lots downside room for the market.


      • Twosidedtape1 says:

        Nice pickup on NYMO and NAMO! You’re right, NAMO has never been higher than it is at this moment since data was first available in 1998 (on Stockcharts). Have you tried analyzing the weeks that followed from peaks that went nearly as high? I’m going to try and do that tonight.

      • Twosidedtape1 says:

        Hey Jack, I’ve been looking into it and I can’t see a way to use NYMO or NAMO to predict market movement. Peaks and troughs seem to sometimes precede a reversal and other times indicate a strong move with room to run. How are you applying this?

      • I like your setup. Room to rally is wide. It is however a counter trend rally. I know this with absolute certainty because trade wars, shutdowns, can only get resolved thru change in government. Manafort’s lawyers just revealed by mistake that he admitted to collusion with Russia. Flynn and Manafort can be labeled traitors but not trump? how likely is that? Will the stock market ignore Muellers report? it is coming very soon to a theater near you. I can shout, stomp my feet, plead with you for common sense to seep in. Obviously that in itself will not change your position. I tried so many times but failed. thats human nature. Born one way and almost impossible to change. Good luck folks. Me, I look for the opportunity to see the largest YET drop down of them all. A slam dunk sure thing. if only i knew TIMING! Darn.

        • BTW my whole career was built on common sense solutions, analytical skills, and proven track record. Last 4 years of my career ran by myself the mainframe computer department, systems, applications, data base developer, operations manager. if you think that was pure luck think again. Very excited about future here. my only flaw is my impatience. i “see” future scenarios well before the market reacts. Impatience is my downfall, not my analysis. Need help determining absolute reversal points. Lots of possible fake outs. i used to jump at them all before i hit the right one. Honed my skills but still fall for them. Perhaps bullish Phil and his intra-day calls will help. Jack, aah, and a number of other technicians i await your call. i know the direction and path but not when it turns. I will take help where i can get it.

          Stay alert to News Flashes and react as the market does.

          • Old market adage: “Don’t tell me what to buy, tell me when.”
            BTW, the Mueller investigation will come to nothing, and Flynn’s conviction and possibly others will be thrown out because of Mueller’s gross misconduct. No one cared if he defiled the justice system when he prosecuted John Gotti. But we do care now.

      • aahmichael says:

        2800-2347 isn’t a 5-wave subdivision, so it can’t be an impulse wave. Also, the current rally is larger in size than what you have labelled as wave 2, therefore, it can’t be labelled as wave (ii), even if the prior wave had been an impulse wave, because that would be a degree violation. (I understand that OEW doesn’t believe that anything can be a degree violation, but standard EW does.)

        When you have to break rules and force a count, then it’s safe to say that you better look for another count. As I said before, everything from the top has to be counted as 3-wave subdivisions.

  13. phil1247 says:

    Quote of the day……………..

    lunker1 says:
    January 8, 2019 at 10:39 am
    Hi Tony, from 2347 how many waves do you see? TY

    tony caldaro says:
    January 8, 2019 at 1:49 pm
    too many

    • quickrick38 says:


      • fionamargaret says:

        But to be fair Rick, Tony does break down the waves into numbers and if you do a continuation of the numbers, you can reach a conclusion.

        • quickrick38 says:

          fiona, I’m simply agreeing with his comment…I think its a good one.

          • fionamargaret says:

            Yes Rick you are right.
            I should perhaps have said alternatively there in the morass of waves, there still are the number sequences.
            You always have been counted on to be fair in your assessment of ideas, and didn’t mean to suggest otherwise.

        • quickrick38 says:

          And just now, there went the notion of a wave 4.

  14. Page says:

    Absolutely positively markets going down tomorrow, SPX to lose minimum 100+ points by Friday.

    • Colin C says:

      I find such a statement on here a waste of space and time for people to read.

      • fionamargaret says:

        Actually Colin I like Page and her suggestions, and she is often right.
        Even if she had a poorer success rate, it makes one take a second and think.

    • wanderer says:

      I sold my farm and has invested all the proceeds into S&P 500 puts. My brokerage account is now down 85%. What do I do?

  15. tommyboys says:

    AD pretty strong again today at almost 4/1 pos on NYSE & more than 2/1 pos on Naz.

  16. EL MATADOR says:

    Tony – Did WROC trigger today? ZBT was triggered today. Million dollar question now is, will be market react similarily to 10/19/2015 ZBT. I am anticipating a similar cause and effect.

  17. Some CNBC talking heads really trying to talk stocks UP. Did you all see Pete Najarian’s daughter won Miss Nebraska? She’s a beauty! No beard, not bald… Takes after her Mom. Check out his TWTR for pics.

  18. I still can’t figure out the waves. So keeping it simple.
    2347-2521 is 174
    2521-2444 is 77
    A=C 2444 plus 174 is 2618. That would be a 271 point move up. Although, I’m not convinced we get that high. Usually falls short of equaling A. But since I’m clueless on micro count. I will use it as a base case.
    So a .
    .38 retrace is 103
    . .5 is 136
    .618 is 168
    So from 2618 would expect a decline to 2515. Minimum. Max 2450.
    Other up waves have been
    2710-2812 102 points
    2603-2815 212 points
    2631-2800 169 points

    So at 2618 being 271 points would be the largest point gain and would probably be only minor A of int B. I believe the wave 4 option is toast.
    So if we decline in minor B to 2450 minor C would egual A at 2721
    From the high 2941-2346 which is 595 points. A .618 retrace is 368 points
    2346+368=2714. So the 2700 area looks like the target for this int B
    IntC =A then at 2105
    Just playing with numbers. If any of it helps great,

    Good luck all

  19. Exciting news driven market. Found out today Manafort gave 2016 campaign data to Russian operative. Only one not talking because the Russians will kill him. Mueller should be submitting report soon. Trump and treason will be synonymous and his whole family empire will be destroyed over it.

    First we have trade war talks winding down. Second we have government shutdown and how that affects the GOP decision to stick with him. Third we have Impeachment process right after report is delivered, assuming it gets seen.

    is these times exclusively event driven? you bet. if a 600 point drop followed by an 800 point rally wasn’t a result of single glaring events i don’t know what will sway you. i am glad many now believe in the power of external noise. During transitional times news driven events causes the type of schizoid fast reaction. In other words when markets are in flux and can’t see a clear path they latch onto such news.

    One thing everyone agrees on, but not necessarily for the same reason, is that we have not seen the bottom yet. Tomorrow should be another (possible) reversal. breakout past 2600 negates that assumption.

    • That against fundamental data: Trade talks, government closure, impeachment, and other trump chaos not yet revealed gives me the odds of new lows at over 80%. My only question is how low not if it breaks.

      • Fast and furious! Court rejected foreign company request to hold back disclosures to Mueller. Put back on 50,000 a day fine. Coming to a head folks! Fireworks like nothing we have seen in the past 2 years is just getting started. Expect the shocking and unexpected from today on out. Testing my theory that a sitting president off his rails can cause world market turmoil. FOLKS this is the best TELL in markets you will ever get. I made good money using this method.

  20. Daily charts:
    LNG & PLNT look to be completing IHS. NTAP puts just tearing it up! Been a great trading environment both ways. VIX collapsing, and if it gets low enough, I might buy a tad of UVXY. Sold it waaay too soon the last 2 times.

    • Twosidedtape1 says:

      Put buyers are out there today. p/c ratio in spy 1.30.

      • 2-sided, sure looks like it. I don’t do SPY, but have no doubt they’re going in. Think they might get squeezed a bit more. Twice monthly open range says minimum close ~60 SPX pts. lower (from today’s high) by Thurs. before OPEX. Will see.

  21. purplember says:

    any Vanguard users here ? Vanguard announced it will stop all leveraged trades and all short trades. either cash, bonds or long stocks.

    • xEVAx says:

      I am and Im online on my brokerga account right now, the quote on SH, 1X short SPX is 23.52

      • purplember says:

        starting Jan 22nd vanguard will block all trades

        • xEVAx says:

          Ahh thanks I missed this email =( WTF??? Gonna have to move my brokerage….

          Beginning January 22, Vanguard will no longer accept purchases in leveraged or inverse mutual funds, ETFs (exchange-traded funds), or ETNs (exchange-traded notes).

          We’re making this change because these products and services do not align with our investors’ focus on the long term. Most of these investments are designed to deliver their stated returns for only a short period (for example, 1 day or 1 month). Their extremely short-term, speculative nature is contrary to the long-term focus shared by most Vanguard investors.

          If you already own these products, you don’t need to do anything. You can continue to hold them, choose to sell them, and transfer them in kind from or to other institutions. But as of January 22, you won’t be able to make new purchases in your Vanguard account. And any open buy orders you have will be canceled after the market closes on January 18, 2019.

          Thank you.

          • This is interesting, given that Vanguard currently offers 75 of their own Vanguard ETF’s that trade at zero commission. Are they gonna shut down their own ETF’s too?

            • xEVAx says:

              They are going to lose a lot of business including me but it’s my nature to wonder WHY??? The brokerage side should not care one bit as long as there’s trading…. I will probably keep the bonds there and the brokerage account open, but this sucks and Im gone =(
              How do you hedge longs at Vanguard??? Guess you cant, smell fishy to me…..

              • The FED oversees all leverage at brokerages.
                FED is probably encouraging all BDs to control leverage, esp. the short side.
                A little late doncha think?

              • Tom Fisher…. this really has nothing to do with leverage. It’s not like Vanguard is announcing that they will no longer accept short sales or marginable trades.

              • Blue – Most people with capital to invest under $5Million have enough sense to spread out leveraged positions and short sales as cheaply as they can. If you can follow that thought, that means ETFs and mutual funds. For the FED, that’s ground zero.

                And, at this point, hearing all the complaining from hedge fund guys (who report they’re being ruined by ETFs) , I wouldn’t be surprised if hedge fund guys are encouraging the FED to push the public out of ETFs.

                But overall, the FED will want to reduce investing leverage here, and make any shorting difficult.

                To not understand that would require a person to believe that most or all Bull markets end happily.

                Thank you for your thoughtful input.

              • should have a 2 minute edit window

            • aahmichael says:

              If you read the notice again, it only applies to inverse and/or leveraged products. I have no doubt that Vanguard is doing this to protect itself. They don’t want that business because it exposes them to too much liability. The major wirehouses also discourage that business, but they do it by requiring a minimum account size of $1mm to trade any inverse product, and a minimum account size of $10mm to trade any leveraged product (whether it’s inverse or not.)

              • aahmichael, the houses don’t require that large of an account to trade leveraged ETN. I have several accts., not anywhere near that large, and I work the ETN’s all the time.

    • xEVAx says:

      Not seeing this at all here??? Quote on SDOW 3X short is 17.88…. Where did you hear this???

    • fionamargaret says:

      VTI down to 97..

  22. phil1247 says:


    did you get back in?

    looks like they want to squeeze shorts again

  23. Dex T says:

    President Donald Trump is weighing declaring a national emergency in order to circumvent Congress’s opposition to his building a wall along the U.S.-Mexico border, but unilateral action by the White House could ignite a political and legal firestorm


    • Dex T says:

      I was somewhat skeptical when the shutdown was first begun but now it’s the second longest one in U.S. history. This could last for a while yet.

      • torehund says:

        Lol, the shutdown makes things work better…Erdogan blamed the coup in order to layoff public personel, Trump blames the lacking wall 🙂 You take what you have got to fire with an excuse.

        • Dex T says:

          I completely agree Torehund because the truly essential employees are already working. They will be voted back pay when this eventually resolves so this is just a temporary hardship. Most of the U.S. is just fine although there will be some inconveniences here and there.

          The U.S. has 380,000 non-essential employees and this number needs to be reduced. I only hope that Trump does so.

        • Hi torehund! Anytime govt gets out of the way, everything works better.

    • Reports of a few minutes ago say POTUS won’t declare tonight, but IMO, if not, this is the final shot across the bow before doing so.

      • Dex T says:

        We’ll see. It’s the best move by Trump and a way to end the deadlock, get the wall, and put all the media attention on the Mexican border. It could force the democrats to relent and compromise on funding.

        • Michael Wiseman says:

          He only wants the wall because his name “TRUMP” will be all over it. It will be known as the Trump wall for decades. He has NPD. Classic case.

        • Dex, I think Trump is making sure to get Dems on record where IF they don’t back down, it’s more ammo for him to declare, and I think he will, possibly in the next week.

          • scorp100 says:

            But I thought Mexico was going to pay for the wall.
            And you think 5 bn is enough for the wall? It’s enough for grandstanding for sure.

            • IF the wall gets built, I think military might end up doing it. $5B not enough to include labor costs.

            • tommyboys says:

              Mexico will be paying for it in the significant cut back to the estimated $120B annually spent on illegals. Will pay for itself in under a year and pay for decades to come. Obama wanted it, Clintons BOTH wanted it, Schumer wanted it, Pelosi wanted it etc… So what’s the problem now? Oh yeah it’s a nonswamper and much hated Trump idea. Hate to have him actually succeed in getting it – making the rest appear as they are – incompetent. Wake up!

              • tommyboys says:

                If walls didn’t work most of Beverly Hills would not and recently Obama would not have constructed a 10’ high one around his compound in DC.

              • Hi tommyboys! Yes Sirry, all those people did indeed speak in favor of a wall; and more than a few have walls around their properties.

                Have you read USMCA? If not, get a small group together and read it. We read it over T’giving weekend. People need to start reading these documents. We’re almost finished with Farm Bill.

              • tommyboys says:

                Fiona just goog them. They’re all over youtube. Schumer gave speech on it in ‘09 and even had funding secured. Slick Willie & Obama spelled it out emphatically at their respective State of the Unions etc…

              • Hi fiona! There IS video all over the place of former Presidents approving of a wall on the southern border. I even remember the Obama speech in which he spoke of it. Ahh, politics.

              • aahmichael says:

                Tommy, hate to break it to you, but there is no 10 foot wall around Obama’s home, Trump made that up…and, of course, you blindly and automatically believed him, just like you believe all of his lies. Nevertheless, there is a huge difference between a wall around a house, or a prison, or the wall in the West Bank, compared to the 2000 mile wall that Trump wants to build. That’s because a wall, by itself, doesn’t stop anyone, and never has. Ever wonder why prison guards have to constantly patrol and monitor the walls of the prison? How many people are going to be needed for 24/7 patrol and monitoring of every inch of a 2000 mile wall?

                By the way, Trump promised Mexico would pay for the wall. He never said that the American taxpayers were going to have to extend credit to Mexico and front them the money, and hope they they would pay it back at some time in the future.

                He lied. He played his cultists for the fools that they are. There will never be a wall, and once Trump understands that fact, he’ll come out and say, “The wall is completed! We decided to build an invisible wall, and it’s the most beautiful invisible wall ever constructed in the history of the world!” …and his cultists will cheer!

              • tommyboys says:

                Some question whether Obummer has wall because the WHOLE BLOCK is barricaded along with armed security lol! They ALL were “for” a wall when it was politically convenient because they have ALWAYS been effective throughout history. Cost is immaterial. Fed stats themselves show $500B – that’s BILLION dollars – each year of illegal drugs alone make it through that border to the US. Now that a non-swamptard that will actually DO something about it, making the loser politicians look like the useless garbage they are, they posture against it. Sickening self-serving swine.

  24. kvilia says:

    Where do you place stops? I’ve been on the loosing streak and now it gets ouchy … If I place a stop too close, a position always gets shaken out, if too far – quite significant loss. Amy advice?

    • phil1247 says:

      hi k
      it depends on how much i have at risk
      now i am trading very small after this am break of aggressive ext long on es
      so i give it more leeway than if i had a larger position

    • Kvilia et. Al. …..some questions.statements I ask myself when had a “bad stretch in trading”. It works for me.

      1. Why did I take that trade?
      2. Did that trade follow my rules?
      3. Never take a trade in “no man” land” in between a long and a short.
      4. Don’t take a counter trend trade unless it’s defending a 50% of 61.8% level.
      5. Am I over trading? Three trades per day and close the computers.
      6. Take a long trade when the market/asset you are trading is up.
      7. Take a short trade when the market is down and the asset I am trading is down on the day.
      8. Never feel pressured to take a trade.
      9. I have a sign on my screen that says, you don’t have to trade today.
      10. Stops, I can’t answer for a number of reasons, position size, how much heat you are willing to take, phil mentioned a few. Think about trading half size.
      11. If you have access to a tick chart, only take a long when you see the tick at -400 and only short when the tick is above +400…. in both case wait a split second until you see the arrow on the tick chart reversing trend.
      11. Buy DH book covers a lot of these and other trading issues in great detail with charts. Good info on Position size calculator, stops, when to trade, when not to trade, etc.
      12. Don’t trade the first/last 15 minutes of the day, some use 30 minutes, as the activity is less technical more reactionary trading.

      I know some are going to rip this post apart, fine. All I can say these recommendations have worked for me and I wanted to share with the group. To my detractors, if the show fits, wear it. If not, throw it away.

  25. how many of you are clueless on wave count? I know i am. That being said. i now see it heading lower as long as 2575 isnt taken out. if it does. 2600 is a given. but lets see if we can head straight down into the close.

  26. Twosidedtape1 says:

    That’s a pretty hammer in SPY right now. Going short right here at 256.20. Crude is running into resistance at $50, which was prior support. Maybe someone will give a speech tonight and people will blame that person.

  27. lml25 says:

    As I said a while back,when the H&S reverses from its PO,a retest of the neckline and 2620 is the usual next step.Unless something unexpected happens,still seems likely.Later .

  28. mcgcapital says:

    Was a weak closing auction today on FTSE, a decent sized move in the auction often shows where the markets are headed next few days as institutional have buy/sell orders on the close. Rejected 6900 which was the high of the mid December reflex rally.

    I’m thinking half way back on all indices now then possibly back up again to these levels to form an ‘M’ shape. But let’s see.

    It’s basically a jawbone rally against the bearish fundamentals. Once the China meeting is done tomorrow the jawboning might stop for a while and the market will focus on the bad fundamentals

    • courtesyoftc says:

      this comment tell you the out come of china metting :
      U.S. Commerce Secretary Wilbur Ross predicted on Monday that Beijing and Washington could reach a trade deal that “we can live with” as officials from the world’s two largest economies resumed talks in a bid to end their trade dispute.
      and the video below :

      • mcgcapital says:

        I think they do a deal, not sure on timing though. It’s just whether or not it’s enough to improve the data and earnings because it kind of feels like the uncertainty has triggered bad data in China and elsewhere but its unclear whether reversing the uncertainty will be enough to reverse the negative global economic momentum we now have

        • xEVAx says:

          BIG DEAL =) LOL it could turn it around but doe’s that change the al the BIG numbers that just don’t jive and are going exponential the wrong way??? OH like just about every US states pension short falls, never mind the “budget” …. New Commie majoritys in a few state gov’s, Demorats in the house…. Long U Haul, gold, guns, and Bankruptcy ect… BTW 2574 is 50% back from 2941 and 2574 is 38% back from 2800 oh and it’s time for the 2575/2594 pivots….

      • Right. Fool me once… How many times has this president said one thing even to his GOP base and reneged the next day? Either Trump concedes he will not get the Chinese to stop their target to become the world leader in tech or he slants the meeting with vague promises and a temporary halt to March new tariffs. Impossible they ever iron out their differences. We are telling them to bow down. Trump has between 2 months and 2 years and after that no other president would ever allow this to continue. Xi knows this.

        Best scenario, agrees to more talks and doesn’t add more tariffs in March. The spin. I wonder what happened to the agreement to fund the government where both houses approved unanimously. I guess trump did what he has always done. the complicit GOP is sinking in a black hole almost as fast as trump himself. They either decide to cut their ties or will go down in history as the most self destructive bunch.

        A man that knows his time is up will cause more diversions, not less. Xi agreeing to their demands? Not bloody likely. Trump backs down? Also highly unlikely. best scenario spinning the talks as constructive with no details.

    • stockop says:

      once the meeting ends does Trump get back on twitter? or did the people talking to Trump actually change him? seeing as the man does not seem capable of change I expect he’ll be back at it. I assume the market going up has made him take their advice for now. once he can say “see it isn’t me” I expect him to be back. imo he is a good representation of the everyday investor. they say he was watching every tick during the decline and i assume fox business news all day. https://www.wsj.com/articles/trump-is-gripped-by-market-volatilityand-his-role-in-it-1544199996

      it always amazes me when policy changes happen right at critical junctures. i know its not done for chart help, but when they coincide it always interests me. Hang seng saved by bank reserve changes in China… bear market rally or beginning of policy change/bull market? at this point I don’t know how China can reverse its situation similar to us in early 2008. they are the true threat to a global meltdown along with Europe. ECB has nothing at this point for policy change if a recession occurs, correct? DB and CS look like two bankrupt entities in that situation, too. Japan in a worse situation than Europe with no policy changes available and horrible demographics for the future.

      imo the biggest way to do the most damage is either for the market to continue what its doing or to drop it big overnight. we have yet to have a single one of those this time around! nasty ending to trade war meeting? probably about the only scenario and it does not seem likely.

    • Twosidedtape1 says:

      Sounds about right to me MCG.

  29. trejder74 says:

    phil, if we go below 2545, what is your target?

  30. Did anyone else watch that amazing Clemson vs Alabama game last night from Levi’s Stadium?

    So happy for Coach Dabo Swinney.
    A great read on his life growing up in poverty and playing for Alabama after walking-on.


  31. fionamargaret says:

    DGAZ is down to 97
    UGAZ has just turned up…..check your charts….

  32. vivelaamo says:

    Scizo how’s that short looking??

  33. stockop says:

    KB Homes tomorrow, Citigroup the 14th (most of the big banks report next week), Netflix the 17th, and Schlumberger on the 18th. Not many companies with China exposure (I’m sure there are, but no “big” names to my knowledge). While there will be a better view with some chinese ADRs reporting between now and the 23rd (if you like fake #s), it looks like Amphenol might be the first US based company with exposure to China that we get to see if there is contagion potential.
    (APH/china exposure found using https://finance.yahoo.com/news/big-stocks-exposure-china-185734394.html)

    Markets looking quite bullish. I do think earnings are going to make or break the market. Stocks start breaking out of bases (the few that have them) and fundamentals be damned the bull might have some more legs. at this point i almost expect the initial reporters to do well. I want to see how it does in the middle/end and when companies with international exposure report.

    Fwiw i have had on my calendar for a while now that a blood moon is set for the 21st of January. In some random rabbit hole at some point I read that a red moon on the cover of the wsj is a bad omen (he said/she said. never seen it before and got no proof). guess its gotta make it there first…

    • tommyboys says:

      Fundamentals may be quite stronger than the fatalists opine. Don’t count on blood moons and opinions are just that. GL of course.

      • mcgcapital says:

        What do you need to see to turn bearish? You do seem to just brush anything negative off as irrelevant and only focus on things that are perceived bullish

        • tommyboys says:

          Cortez becoming President…

          What do you need to turn bullish? Myriad redundant essays written here by many are just opinions – and we all know the value of these. Most technical indications have correction more behind than in front of us. Was hugely bearish from 2000-2010, not bearish here. Good day.

          • mcgcapital says:

            So to summarise nothing will turn you bearish. Thought so. You always said you’d tell us when the cycle was turning based on your A/D line and that’s when to get out of equities. I’m yet to see you tell us to get out, so you’ve been bullish the whole way down and are still maintaining the bullish stance. It’s bagholding.

            I’ve explained a few times what I’m looking for to be longer term bullish. Higher highs and lows would be a start.. plus fundamentals like liquidity need to change and there’s no sign of CBs backing off enough with QT still ongoing, and would like to see leading indicators pointing upward. Estimates on earnings are still inconsistently high vs the global economic data and guidance that is coming out of corporates. So there’s a few things, but everything that matters still looks bearish pointing towards this being a bounce

  34. Deal or no deal. US-China talks end tomorrow. Best scenario is a delay of March new tariffs. No incentive for China to change their long term tech strategy. No other president will continue this madness. From a few months to 2 years China will hold out. If US extends the truce markets will take it positively. no deal and markets will fall hard again. This is from my silly insistence that trade wars affect stock markets. Silly me, I was told over and over again EW the prognosticator and all seeing mechanism knows all.

    An optimistic result of talks will drive this to the upper region of assumed target. If not we drop immediately after.

  35. My favorite CEO on Nightly Business Report from the JPM Healthcare Conference last night. Interview starts at 8:35


    • riderbobo says:

      Sold my SRPT this morning for a profit. Not liking what I see in biotechs in general.

      What is happening with Illumina? Investors didn’t like their dog and pony show, or did they give one?

      • stockop says:

        No idea if this is related, but found it interesting nonetheless.

        • stockop says:

          And it got cut off.

          According to GS: “Noting that S&P 500 companies in aggregate derived 30% of revenues from international sales in 2017”
          -Illumina is one of the company’s mentioned.

        • Stockop, 11% of revenue exposure to China for a company like ILMN doesn’t even begin to move the needle.

          ILMN pre-announced Q4 revenue ($865M) above the Street last night at the JPM Healthcare Conference. But…. high-end 2019 guidance hit Street ($3.76 – $3.8 Billion vs consensus of $3.8 Billion), with strong growth for sequencing consumables, but microarray expectations lagged.

          2018 NovaSeq placements came in below the guidance range because customers pushed out their orders into 2019. This caused the stock to crater after-hours.

          ILMN had 100+ NovaSeq placements in Q4-2018 which was a new record. The installed base is now at roughly 600 systems vs 285 at the end of 2017. This implied an increase of about 315 systems, which was below managements target of 330-350 NovaSeq shipments in 2018.

          As I said before, it appears that some customers pushed out their orders into 2019.

          • stockop says:

            It was something I came across doing other research and found it worth pointing out. I agree that the amount is negligible, but i will go out on a limb and say it is far from non-existent. I don’t know where their primary revenue growth was estimated to come from (did they have China expansion dreams)? Is the slowdown in that small revenue stream so severe that it brings worry to the global economy? Just playing devil’s advocate. Don’t bother responding to this because it is meaningless and was just something I glanced at and passed on. You seem to know a ridiculous amount about healthcare I’m impressed.

            Do you by chance think this could be a buy the rumor sell the news type of event (i.e. the JPM Healthcare Conference)? Seems like the perfect market (market as a whole not the sector). News seems incredible. Do you really believe there is that much room for growth? I mean as much as you like EXAS the stock is still up 50% in a year (1500% in 2 years). Is there really that much more room in the current environment? I don’t see why a good amount of healthcare stocks made their run leading up to this event. Seems like as good a time as any to unload on the public. I assume you don’t see it this way, but even so whatever information you have to share about the conference would be much appreciated!

            • Hi StockOp,

              First off, let me answer your question about the diagnostics and life science sector by saying that I told everyone here last week that the JPM Healthcare Conference would serve as a “catalyst” for the sector to experience a good rally.

              For people who trade “actively” this was definitely an event driven trade that people were focusing on, especially since many of these stocks have been hammered as of late and were terribly oversold. Of course, it helps to have a real good fundamental understanding of some of the companies involved, be it SRPT or ILMN or EXAS.

              Could this be a “Sell the News” event?
              No doubt about it!

              For my trading account, I purchased shares of EXAS from $56 – $59 on Xmas Eve and liquidated them earlier this morning.

              Now, for my investment account I still hold a core position in EXAS.

              The reason I continue to hold a core position is because (A) . . . had I worried about the stock going from $5 to $21 (2016) or from $13 to $61 (2017) or from $38 to $82 (2018), I would have gotten out every time and never realized massive gains… not too mention (B) the fact that their product Cologuard has only 3.5% penetration of the total addressable market.

              I like investing in companies that have “game-changing” technology without much (if any) competition that are facing a (TAM) total addressable market that is MASSIVE.

              EXAS not only has a game-changing technology for colon cancer screening, they are also lead by a most excellent management team with an R&D partner in the Mayo Clinic who continues to help them explore cancer screening for the top 15 cancers…. this time, using a blood draw (liquid biopsy) to detect early cancer and/or monitor cancer. This is the next big frontier in Diagnostics…. liquid biopsy…. which analysts believe will be at least a $13 Billion market by 2030.

              Now what is the total addressable market for a non-invasive colon cancer screening test called Cologuard in the USA?

              The FDA approved label is for the average risk population ages 50 – 85.
              That right there is 85 million people.

              Age 65 and over is covered by Medicare.
              $512 per test once every three years.

              Meanwhile, there is a push to expand the label to start CRC screening at age 45 given the increase in CRC incidence rates, and even age 40. That would increase the avg risk screening population by another 20 million.

              So then you have to ask yourself what kind of penetration can Cologuard make into this total addressable market? Is it 10%? 20%, 30%? More?

              Four years ago the Company went on record saying that they expect 30% market penetration. Last year, they showed even more confidence and increased their guidance to 40%. If you do the simple Math, you can see the potential for explosive growth and revenues on a non-invasive test that an individual can use in the privacy of their own home.

              Never mind the fact that the Company is enjoying 75% gross margins on Cologuard, which is reimbursed for by 94% of commercial insurers at between $550 – $650 per test, once ever 3 years. The COGS is down around $125 and the test enjoys 94% sensitivity for early stage cancer (Stages 1 and 2).

              The sales of Cologuard have been pretty linear ever since it commercially launched back in Q4 of 2014. But given more insurance coverage and a recent sales partnership with Pfizer that started in Q4 of this year, we are now finally going to see “hockey-stick” growth. This is confirmed by the number of new Docs prescribing Cologuard for the first time increasing from 10,200 per quarter to 15,000 per quarter!

              With only 3.5% of the market penetrated by Cologuard, I dont believe that the share price has discounted anywhere near potential revenue, not too mention an upcoming Liver screening test, and possibly others.

              Mind you, there are “shorts” and “trolls” who have spent the last 4 years trying to “spin” a Bear Case against EXAS. People like Whitney Tilson (who shorted EXAS at $10 and closed his fund last year and left the hedge-fund business) and other guys like Andrew Left (who started shorting EXAS in the 30’s) who just dont understand the Company or addressable market very well.

              But I’m able to sleep at night with a 7 figure investment position because I am confident in the management team executing their business plan… a plan that I am extremely familiar with.

              Thus, I continue to maintain a core “investment” position.
              Hope this helps answer your questions.

      • First off, I don’t really believe that you bought any SRPT yesterday to begin with Bobo.

        It’s simply far too volatile for a guy living on a $600 a month pension in Canada. Besides, why would anyone buy shares of a company that they know nothing about? 😀

        FWIW: I believe that SRPT sold off yesterday after a $13 rally because there was some disappointment that they did not announce any data from their LGMD2E study. The company said that while they could have hustled together data for one patient, they wanted to wait till later this quarter when they will have a complete data-set. They also made it clear that they had not seen any biopsy data from this study yet. This was mentioned in the “Q&A” that was held in a conference room…. right after the public presentation in the ballroom.

        Perhaps when you actually know what LGMD stands for, we can chat again about SRPT.

        Now please go back to Daneric’s EW blog for paper-traders where you tell the 3 stooges there that you have me “blocked”.

        You’ve trolled me enough here as it is.

  36. lunker1 says:

    Hi Tony, from 2347 how many waves do you see? TY

  37. Dex T says:

    Sears to ask bankruptcy judge for approval to liquidate

    “Sears Holdings will ask a bankruptcy judge Tuesday if it can proceed with liquidation after it could not reach an agreement on chairman Edward Lampert’s $4.4 billion takeover bid, casting doubt on the survival of the 126-year-old U.S. department store chain, people familiar with the matter said.”

    “Sears, which filed for bankruptcy protection last October, may have to close some 500 stores it is still operating, potentially putting up to 68,000 people out of work, the sources said. Its vast inventories of tools, appliances and store fixtures will be sold in fire sales, the sources added.”


    • Dex T says:

      The end is finally here for Sears. A long time in coming, but no point in prolonging the inevitable.

      • purplember says:

        i’m not sure what eddie lambert saw years ago. Once a retailer gets a negative image in marketplace, it’s extremely difficult to change people’s mindset / image of the company.

        • fionamargaret says:

          …real estate..I think Sears was doomed from the start.

          • Dex T says:

            That’s correct. Lampert saw value in it’s real estate holdings and still does but doesn’t have the financing to back it up. Other players in the game have had enough and decided it’s time to strip is bare.

            “Unsecured creditors have pushed for Sears to liquidate, partially because they contend they will realize a better financial recovery if it does. Those creditors, which include Sears landlords and bondholders, have also questioned Lampert’s pre-bankruptcy transactions with the retailer.”

  38. The absolute best of both worlds with these markets. Money on upside, and good ole dependable NTAP now crashing. Got to love it!

  39. xEVAx says:

    Could be a LD down…..

  40. H D says:

    GM Tony, all. HNY

    Not sure SPX will reach the 2623 or not but Tony did get his 3rd 120+ point wave off the low. -D at pivot. Looking for the sellers.

  41. xEVAx says:

    NDX NEG divergence, leading diagonal for A, ABC, Ending diagonal for C….

  42. xEVAx says:

    1-4 overlapped, now is it down in a choppy C/5 or ABC???

  43. trejder74 says:

    Now from 2578-80 big down
    Here we go

  44. xEVAx says:

    Pivot time at the open, gotta close above 2594-2600 for me to change my count, I’ve been waiting to get here and now we’ll see what the stronger resistance looks like, the old 2656 pivot looks like a good target IF it’s a B wave and not 4 of C…. LOTS of “news” but I do believe “earnings” are gonna start to suck for a lot of companies that are in China…. OH and the FOMC looms on Weds….. Need 6922 on Comp Q, NDX just hit my target, DOW as well…. Straight down to 2325 =)

    • xEVAx says:

      DOW would need a close above 24K, there is an open gap above at about 24666, CLOSE above 2583 also…. It was 3 waves off the low to start and choppy as hell….. If we start P5 Id expect impulse waves…. Funny how nobody likes the ED down but a LD up is fine LOL GL

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