monday update

Posted on February 6, 2012 by

SHORT TERM: consolidation day, DOW -17

Overnight the Asian markets were mostly higher, gaining 0.6%. Europe opened lower and indices were mostly lower, losing 0.3%. US index futures were lower overnight, and the market gapped down at the open to SPX 1340. The market had closed at SPX 1345 on friday. Within the first half hour the market hit SPX 1338 and then bounced to 1342 by 10:00. A small pullback to SPX 1339 followed, and then the market tried to rally. Drifting up for the rest of the day the SPX closed at 1344.

For the day the SPX/DOW were -0.10%, and the NDX/NAZ were -0.10%. Bonds gained 12 ticks, Crude lost 65 cents, Gold slipped $4, and the USD was higher. Support for the SPX remains at 1313 and then 1303, with resistance at 1363 and then 1372. Short term momentum pulled back from extremely overbought to neutral, then drifted higher. Tomorrow, FED chairman Bernanke testifies before the Senate at 10:00, then Consumer credit will be reported at 3:00.

The market started the week with a gap opening for the fifth time in six trading days. This follows the first four weeks of the year, when gap openings occurred only once or twice a week. It does appear the market is getting a bit choppy after three months of uptrending. Today’s gap down opening didn’t generate much downside momentum, as the market pulled back only 7 points from the uptrend high at SPX 1345. After hitting the low at SPX 1338, the market drifted up for the rest of the day. It still appears Minute wave iii is underway. Today’s pullback did reset short term momentum to neutral, and the market can now resume this rising wave. Short term support is at SPX 1333, 1321 and then the 1313 pivot. Overhead resistance remains at 1345/47, and then the 1363 and 1372 pivots. Best to your trading!

MEDIUM TERM: uptrend high SPX 1345

LONG TERM: bull market

CHARTS: http://stockcharts.com/def/servlet/Favorites.CServlet?obj=ID1606987

About tony caldaro

Investor
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68 Responses to monday update

  1. rc1269 says:
    February 7, 2012 at 2:47 pm

    I’m curious-

    If there is an adverse Greece/Europe event, do investors think that a) no matter what it is it’s not really a big deal or b) they can get out quickly and limit their losses? Perhaps there’s another thought process out there, but those seem to encapsulate it.

    Generally it seems like most investors are not set up for any type of adverse scenario. ie, all roads lead to better conditions at this point. Greece? who cares. That was so last fall! (and the previous summer…) It does make one wonder why all the politicians and central bankers over there are making such a big deal out of things when the market clearly thinks it’s not really an issue at this point…? Either it IS a big deal, or politicians are spending a whole lot of time on nothing.

    I’m curious if this will be like the well-telegraphed S&P downgrade of the US, that inexplicably still seemed to take the market by surprise. “I know everybody has been talking about the chance of a Greek default, but I didn’t think they’d ACTUALLY do it!” haha

  2. H D says:
    February 7, 2012 at 2:41 pm

    As long as you close out flat u have the same odds again Wednesday. 1350 is no bueno IMO
    C ya’s in the AM.

  3. H D says:
    February 7, 2012 at 1:25 pm

    an abc to HWB 1342 would set it up again. IMO

  4. DR CL says:
    February 7, 2012 at 12:33 pm

    R2 and pivot held…here ya go bears its ur ball at the moment _

  5. M1 says:
    February 7, 2012 at 11:15 am

    Tony, even when we were not expecting a wave III down, it certainly was one posibility. I guess the bears must remove that count now since the dji made a new high today.

  6. vishal409 says:
    February 7, 2012 at 10:54 am

    Tony are you observing with every subsequent rise interest in the markets is getting lower i mean wheres the euphoria (in the blog as well!!!!)?

    • tony caldaro says:
      February 7, 2012 at 11:01 am

      Vishal, The blog is always its busiest when the market does something unusual.Or we are in a bear market.In a bull market, the bulls are passive and the bears vacate the premises.

    • equitybriefcapital says:
      February 7, 2012 at 1:35 pm

      Vishal,
      I may not say it as Tony does but the blog will see its highest traffic during high volatility, which is normally a function of bear markets or corrections in bull markets. When the market is in a confirmed uptrend more time is spent on individual security analysis. Just my take.

      • tony caldaro says:
        February 7, 2012 at 2:10 pm

        Hi Vishal, The landscape for stock selection is changing.Corporate results, and the Street’s response to those results, are probably the least predictable they have ever been.Many seem to beat the Street by a penny these days, and the Street can buy or sell the news. ETF’s are removing some of the risk through diversification.There are over 1100 of them now.The market is no longer a market of stocks, but a stock market equity class asset with a variety of sectors and indices. For example.Let’s say you bought the AAA rated DOW in 2009 and it doubles, which it nearly has.The easiest way to buy the DOW is the DIA ETF.But if one wanted some leverage, like a stock, they could have bought the DDM: 2X DOW ETF.It is up 300% since 2009.How difficult is it to find AAA rated stocks that have quadrupled over the same time period? The bell curve is quite narrow when it comes to that criteria.It’s a new millenium.And things are changing.

  8. DR CL says:
    February 7, 2012 at 9:08 am

    You guys have a gooden! ..see yas at the close

  9. H D says:
    February 7, 2012 at 8:59 am

    GM all. The morning dip? is it still that easy?

  10. DR CL says:
    February 6, 2012 at 10:22 pm

    watch futures tonight

  11. M1 says:
    February 6, 2012 at 9:53 pm

    Tony, if I1 of major 3 ended last week I wonder if a +61.8% pullback would be normal.. (at 1200)
    Thanks

    • tony caldaro says:
      February 7, 2012 at 5:55 am

      Mario, If the uptrend ended last week and we get a 61.8% retracement again.It wouldn’t be Major 3 but Int. i.Major 2 and Minor 2 retraced 61.8%, but Minor 4 only retraced 23.6%.Still think we’re in Int i of Major 3, with heavy resistance in the 1363-1386 pivot zone.

  12. vorfahrt says:
    February 6, 2012 at 8:19 pm

    Tony,

    Do I read your thoughts correctly, that in the stock market there will be a correction soon when the corrent w5 is over this month, while gold/silver look like they still have substantial advances ahead before a more meaningful correction (as in correction of more than one week duration)?
    Thanks, Joerg

      • vorfahrt says:
        February 7, 2012 at 10:56 am

        Tony,
        Thanks so much! You and this blog are awesome! I must say that without this guidance here and subsequent trading money, my family would not se so well. After more than ten years of falling real wages in this country, my salary by itself would not go very far any more and we would be in a real pinch. Let’s not forget that that is the reality the vast majority in this country faces (“the 99%”). Sometimes this whole injustice makes me really mad. Joe

      • tony caldaro says:
        February 7, 2012 at 11:02 am

        thanks Joe,Just trying to close the gap.

  13. fenster6 says:
    February 6, 2012 at 7:51 pm

    Hi Tony

    Looking at the big picture…

    I read somewhere that an impulsive move cannot be followed by an impulsive move. So if the fall from 2008 was a five wave impulsive move, how can the move since then be a new bull market?

    thanks

  14. David Banister (@activetrading) says:
    February 6, 2012 at 4:50 pm

    1352-1376 remains my interim objectives Wave and Fib wise, but honestly having alot more fun trading stocks than worrying about squiggles in the SP 500

    Best to all

  15. My Play Money (@myplaymoney) says:
    February 6, 2012 at 4:32 pm

    Stock market article with interesting charts: “Was Friday’s Price Action in Gold Signaling a Top in the S&P 500?”

    http://goo.gl/F3Oyl

  16. M1 says:
    February 6, 2012 at 3:36 pm

    Thanks Tony, unfortunely for my short position opened on friday the market didn’t open with a large gap down as I was expecting so I closed it early in the morning. Cash again, but still obversing that bearish pattern.
    GL

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