thursday update

SHORT TERM: choppy session today, DOW +28

Overnight the Asian markets were mostly lower: -0.9%. Europe opened lower but rallied: +1.2%. US index futures were higher overnight. At 8:30 weekly Jobless claims were reported unchanged: 351K vs 351K, Personal income was positive but lower: +0.3% vs +0.5%, Personal spending increased: +0.2% vs +0.0%, and PCE prices were positive but unchanged: +0.2% vs +0.2%. The market opened higher at SPX 1369, and continued higher until 10:00 when the SPX hit 1374. At this time ISM manufacturing was reported lower: 52.4 vs 54.1, and Construction spending was reported lower: -0.1% vs +1.5%. The market pulled back to SPX 1368 on the news and then tried to rally again. At 10:30 FED governor Raskin’s speech was released: http://www.federalreserve.gov/newsevents/speech/raskin20120301a.htm. Around 2:00 the SPX rally hit 1376. It then pulled back to 1368 by 3:30, and ended the day at 1374.

For the day the SPX/DOW were +0.40%, and the NDX/NAz were +0.75%. Bonds lost 12 ticks, Crude rallied $2.00, Gold rebounded $29, and the USD was lower. Support for the SPX moves back to the 1372 and 1363 pivots, with resistance at the 1386 and 1440 pivots. Short term momentum fluctuated around neutral for most of the day. Tomorrow, the economic slate is clean.

The market opened higher today, rebounding with the rally in Europe. Yesterday’s SPX 1364 low was never challenged, and neither was yesterday’s uptrend high at 1378. The market stayed within an 8 point trading range, (SPX 1368-1376), for the entire day consolidating. When we review the short term charts we find this advance, from the Minute wave iv low at SPX 1337, has had four noticeable pullbacks. Usually the next new high should complete this wave: Minute wave v. But this market continues to grind out slightly higher highs without any meaningful pullback. The upper trendline continues to limit the rallies, and is now in the low 1380’s. Until this market makes a pullback of over 20 points, and drops below support at 1352, it could continue to grind its way higher.

Short term support is now at the 1372 and 1363 pivots, and overhead resistance is at the 1386 and 1440 pivots. Short term momentum ended the day above neutral. The short term OEW charts continue to remain positive with support at the 1363 pivot. Best to your trading!

MEDIUM TERM: uptrend high SPX 1378

LONG TERM: bull market

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

About tony caldaro

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52 Responses to thursday update

  1. DR CL says:

    Whatever happens in the markets…Make sure you enjoy every day and let ur family/ friends know u love em.

  2. rc1269 says:

    TheYenGuy:

    I’m not sure what you’re looking at in commenting about “the failure of credit” and “the end of credit as we know it.” I’m pretty sure if that was the case today we’d be seeing considerably stronger signs. The 10yr UST is nearly 1pt higher today. The IG CDX index is about 1.5bp wider today, far below the recent wides and very far below 2008 levels. The HY bond index is 12bp wider today, out to the not-so-distressed yield of 7.2%. FITB, a regional bank with exposure to some of the weakest local economies in the midwest, just issued 10yr debt at about 3.6%.

    So far, the credit world feels very much intact.

    “A global deflationary credit collapse commenced today”
    I have a lot of difficulty seeing that happening under the current Fed and ECB regimes. There are a lot of bad things going on in our global economy, but I don’t think that’s one of them. Maybe someday, but not today.

  3. DR CL says:

    Turkeys told me ES in correction. Tony starting to hit hard in Williamson Co. My wifes in Carbondale sez its blowing hard

  4. DR CL says:

    Just took video and pics of funnel cloud nw johnston city. Sirens still going turkeys are mad

  5. DR CL says:

    Hey guys the mkts are starting to feel like the weather here in the heartland. Just got hail and looks like more to the west.

    • tony caldaro says:

      CL is as turbulent as the weather

    • CB says:

      Tony, Lee – you guys have just had some terrible tornadoes in So. IL. That’s pretty unusual for this time of the year, isn’t it? Hope that’s over now ..Stay safe you guys. All I can say is if anyone looking for good weather they should come to AZ – one more week of good weather is expected before a major heat wave starts ;)
      And, my small caps are getting even smaller today, and I think I am gonna need a loan from the Bank of the Yen guy…unless the bots start buying something pretty soon. Where are we in the grand scheme of things, anyone?

      • tony caldaro says:

        CB, R2K is threatening to confirm a downtrend. Midwest will not have another turbulent year.

      • CB says:

        thanks Tony. That’s interesting. So you can predict the weather, too :) That’s cool, Tony! How do you know about the weather in the Midwest?

      • tony caldaro says:

        Not even Nature can predict the weather =)

      • CB says:

        Oh, OK..I thought you had some statistics telling you u were not gonna have another turbulent year..Hope you like whatever you get Tony..

      • tony caldaro says:

        CB, Actually weather should be turbulent from 2004-2020.But hopefully we are on the tail end of this event.

      • CB says:

        yeah, let’s hope. Although ‘turbulent people’ are a problem too. Read somewhere that being in the 11th or 12th year of the sunspot cycle makes everyone very irritable and causes everyone to overreact to the slightest provocation…so ..more revolution ahead…not to mention aggressive drivers and stuff..

      • tony caldaro says:

        It’s a period of emotional conflict.Higher vibratons get most tied up in knots.

      • CB says:

        thanks Tony. Don’t want to bug you too much…if you could pls. send me a link on those “higher vibrations” I’d like to read about it…I’ve heard the concept but am not sure I fully understand it.
        this is one heck of an uptrend, still.. 5-8-13 offset moving averages on spx daily, fwiw http://screencast.com/t/DiaN66RLm07

      • tony caldaro says:

        CB, It’s quite a lengthy dialogue … over 100 pages.

      • CB says:

        Tony I can handle that..I must have read hundreds of thousands so far in my life..so 100 more is not gonna affect me negatively, I think….maybe I can read it backwards -will speed things up…
        only if you have time Tony, you have better things to do, I am sure.

      • CB says:

        thanks Tony. It looks very interesting. Only a 100 pages, but pretty intense with lots of abstract thinking…contentwise it looks like several university courses.
        I am sure I’ll have a problem with higher math and geometry, and expanding universe etc…it’s always been too complex for me…but I think that I am curious enough about it to try to read it all. Thanks again, Tony. Really appreciate it.

      • tony caldaro says:

        CB, Just take your time.It is not that complicated.

  6. H D says:

    NOAA confirms YU55 in path for Earth 12/21/12 {via twitter}

    • tony caldaro says:

      Although classified as a potentially hazardous object, 2005 YU55 poses no threat of an Earth collision over at least the next 100 years. However, this [Nov 2011] will be the closest approach to date by an object this large that we know about in advance and an event of this type will not happen again until 2028 when asteroid (153814) 2001 WN5 will pass to within 0.6 lunar distances.

      HD, Did EWI start that rumor?

  7. theyenguy says:

    Bonds, including junk bonds, traded lower communicating the failure of credit.

    The ECB’s subordination of credit and massive issue of credit commenced disinvestment out of credit instruments. Credit failed today as investors sold out Bonds, BND, LAG, AGG, expressing a loss of confidence and trust in the world central banks’ monetary policies. The world is passing through peak credit. Investors, in selling debt, are commencing global debt deflation, which will soon be revealed as falling major world currencies, DBV, and falling emerging market currencies, CEW. Competitive currency devaluation will commence soon on today’s disinvestment out of credit instruments, which saw a strong sell of the longer out US debt, the Zeroes, ZROZ, the 30 Year US Government Bond, EDV, as well as the US 10 Year Note, TLT. A global deflationary credit collapse commenced today.

    Junk Bonds, JNK, traded lower communicating the end of credit as it has been known. In a soon coming credit devalued world, diktat from monetary cardinals under the monetary pope, Mario Draghi, will serve as both credit and money.

    Bond vigilantes called interest rates higher globally communicating that the world central banks monetary policies constitute monetization of debt. The ECB’s LTROs, as well as its subordination of sovereign debt, and the terms of the Second Greek Bailout, communicate that the ECB has unified and regionalized banking. The Euro zone now has a One Euro Bank, that being the ECB. A Euro zone coup d etat is being effected by Angela Merkel, and the EU ECB and IMF Troika, where by a monetary union now exists to complete the EU debt union. We are witnessing political capital rising to replace investment capital. An inquiring mind asks, Will a full fledged EU political union and a EU fiscal union soon be a reality? Are we witnessing the birth of a New Europe, that is a Federal Europe?

    The longer out debt traded more strongly lower than the shorter duration debt. ZROZ, EDV, TLT, fell more than IEF. and BLV fell more than LQD, as the Interest Rate on the US Ten Year Note, ^TNX, rose above 2.0%.

    The debt monetization call of the bond vigilantes was so strong that even Emerging Market Bonds, EMB, traded lower, despite rising emerging market currencies, CEW; and World Treasury Bonds, BWX, traded lower, despite rising major world currencies, DBV. Emerging markets sovereign debt is no longer a safe haven investment. The global government credit bubble burst today. No level of debt is sustainable by any government world wide. The global debt trade is done and over. Out of sovereign crisis, the dynamos of growth and profit of capitalism will give way to the dynamos of regional security, stability and sustainability, producing regional global governance.

    Tony, please consider a different Elliott Wave count. When I look at the Finviz chart of SPY, http://tinyurl.com/7xsewhw, I see it cresting into an Elliott Wave 2 Up, ready to fall into an Elliott Wave 3 Down.

    • tony caldaro says:

      Hi Yenguy, We have reviewed that count, along with many others.The price peak was in 2007 and it was five waves up from 2002.The 2007-2009 decline was an ABC, and not a five.The move from 2009 to now still looks impulsive.The secular low was in 2009, which fits with 1974 and 1942.The secular bear cycles ended in 1949, 1982 and likely 2016. See now reason, at all, to be bearish.

      • theyenguy says:

        Tony, thanks for your well reasoned and detailed position.

        But, World stocks, VT, ACWI, VSS, are trading lower today on competitive currency devaluation, as investor’s are starting to loose faith in the world central banks’ capability to support the global debt trade.

        Fiat money has expanded to its full potential. The global debt trade is starting to exhaust, and competitive currency devaluation, reflected in the currencies seen in this Finviz Screener, http://tinyurl.com/7rbvf9u is now turning risk appetite to risk avoidance, with the result being derisking out of stocks, and deleveraging out of commodities.

        Furthermore, there was a credit collapse yesterday, as reflected in Bonds, BND, breaking sharply lower.

        All I can say is “look out below”, fiat wealth is quickly headed in the pit of financial abandon.

        I hope you won’t think me rude, but I plan to comment frequently in March, and perhaps then, you might revise your bullishness, and come out for an Elliott Wave 3 Down on the S&P.

  8. magnus1234 says:

    CAC40 EWT. First the US then the EU then the EM? CAC40 to finish minor 3?
    Monthly
    http://screencast.com/t/uidLogZwME
    Daily
    http://screencast.com/t/5ApEHKP2iJ
    60min
    http://screencast.com/t/t935fZmP

  9. magnus1234 says:

    The ISDA (the committee that decides on CDS) had a meeting and decided on the potential credit event for Greece CDSs. Have a guess what the response was?

    http://www.isda.org/dc/docs/EMEA_Determinations_Committee_Decision_01032012Q1.pdf

    No surprise at all. Just look at the list of committee members and you will understand why. The sellers are on the committee

  10. manunidhi21 says:

    hi tony,
    can u update on sensex or nifty..
    “””‘http://caldaro.wordpress.com/2011/03/27/indias-sensex-update/”””””
    its almost one year when u did it

  11. Greg Polites says:

    Thanks Tony for the quick response. The strange thing about this bearish wedge from Dec.’11 is that its intersection points to about 7-10 days out. I’ve rarely seen price action go that far but this is a strange market right now – would be surprised to see it box in right to the end…..Greg

  12. Greg Polites says:

    Hi Tony – sorry if this is a repeat comment, but, the hourly SP500 chart appears to be a key window into today’s price action. The large bearish wedge since Dec ’11 was broken yesterday into the close. Today’s price action backtested this lower wedge line as resistance today and was twice turned away. With some Elliot annotation it appears yesterday’s drop out of the triangle could be wave 1 down (degree?) with an ABC retracement for wave 2 testing the lower triangle band today. The third test and possible failure of this lower triangle limit remains for tomorrow. Within this ABC correction, wave C is forming a contracting triangle with only the e wave left for tomorrow as a third but failed attempt at reclaiming the larger bearish triangle. If this interpretation is accurate we would expect one more uptrend tomorrow to just short of SP 1377 then a turn down. Any rise above the previous high at SP1377.8 would invalidate this call. Would greatly appreciate your critical review –
    Cheers,
    Greg

    Chart at: http://stockcharts.com/def/servlet/Favorites.CServlet?obj=ID4478213&cmd=show%5Be259500210%5D&disp=P
    Discussion at: http://hgpolites3.wordpress.com/

    • tony caldaro says:

      Hi Greg, A possibility.This market needs to break at least 20 points to get some profit taking going.The action over the past couple of weeks has been quite choppy.But this has not scared buyers at all.Until the break the drift continues.

  13. DR CL says:

    Thanks Tony
    I can’t believe this weather.
    Keeping an eye on the sky tomorrow though.

  14. M1 says:

    Same thoughts and watching the same charts

    The one suggesting NDX going up to 3100-3150 and spx up to 1630…
    1. http://stockcharts.com/h-sc/ui?s=$NDX&p=M&yr=13&mn=0&dy=0&id=p03475453942&a=258568990

    On the bearish side, both charts are still intact and suggesting an important selloff may unfold in the coming months
    1. http://stockcharts.com/h-sc/ui?s=$NYA&p=M&yr=13&mn=0&dy=0&id=p90338799719&a=258089896
    2. http://stockcharts.com/h-sc/ui?s=$OEX:$USD&p=M&yr=20&mn=6&dy=0&id=p20300766759&a=258090209

    = Inflection point.

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