monday update

Posted on April 23, 2012 by tony caldaro

SHORT TERM: European selling drives market lower, DOW -102

Overnight the Asian markets were -1.2%. European markets opened lower and dropped 2.7%. US index futures were under pressure overnight, and the market gapped down at the open to SPX 1367. The SPX had closed at 1379 on friday. By 10:00 the SPX had declined to 1359, hit extremely oversold, and then tried to rebound. For the rest of the day the market recovered, somewhat, rallying in a choppy fashion up to SPX 1368 just before a 1367 close.

For the day the SPX/DOW were -0.80%, and the NDX/NAZ were -0.90%. Bonds gained 9 ticks, Crude lost 80 cents, Gold slid $4.00, and the USD was higher. Support for the SPX slips to the 1363 and 1313 pivots, with resistance now at the 1372 and 1386 pivots. Short term momentum rebounded from extremely oversold. Tomorrow, the FED starts its two day FOMC meeting. At 9:00 Case-Shiller will be released. Then at 10:00 Consumer confidence, New home sales and the FHFA index.

The market started the week with a ‘gap’ opening for the fifth time in the past six trading days. Obviously there is a lot of activity in overnight trading. Today’s selloff took the SPX down to within two points of the previous short term Intermediate wave A low at 1357. Again, the OEW 1363 pivot held and the market rallied into the close. Tomorrow may prove to be quite an interesting day.

The decline from last weeks Intermediate wave B at SPX 1393 clearly looks like Intermediate wave C. Thus far, we have had a three wave decline to SPX 1370, which we labeled Minor A. Then a rally to SPX 1387, which we labeled Minor B. Minor C is underway now. As soon as the OEW 1363 pivot range, (1356-1370), fails, the steep part of this declining wave should be underway. We continue to look for a correction low between SPX 1300 and 1340, and ideally between 1313 and 1327. Short term support is at the 1363 pivot and SPX 1340, with resistance at the 1372 and 1386 pivots. Short term momentum is nearly back to neutral after getting extremely oversold.

MEDIUM TERM: DOW downtrending, SPX likely to follow

LONG TERM: bull market

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

About tony caldaro

Investor
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52 Responses to monday update

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  1. rc1269 says:
    April 24, 2012 at 1:56 pm

    Anybody else think AAPL looks primed for a big earnings bounce? +div on daily RSI. Closed the gap up on 3/13.

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  3. rj2212 says:
    April 24, 2012 at 1:16 pm

    Going off Tony’s $SPX count, Int IV of Major 1 (primary I) and Major 4 of Primary I took four weeks to tag the 30 week EMA. If this is major 4 of primary III, we are currently in the fourth week. One possible scenario is tagging the 30 week EMA by this or next week. The 30 week ema is currently at 1324.76 and rising. Just adding my 2 cents.

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  4. kvilia says:
    April 24, 2012 at 1:11 pm

    Small caps are clearly struggling. I’m sensing RUT can and will break down below 785 and IMO it could get to the solid support level around 705. This is pretty much a 15% haircut from the current levels, which in turn means touching a 1200 mark for SPX. I noticed M1 had a similar bearish projection, is it only two of us?

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  6. Igor says:
    April 24, 2012 at 11:17 am

    Following up the latest COT report posted by sai, in this article (link is below) you can see commercials short positions from 2009. Commercial short positions are near 3-years low what correlates with a temporary bottom.
    http://thedailygold.com/gold-and-silver-enter-period-of-low-volatility-and-disinterest/

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  9. equitybriefcapital says:
    April 24, 2012 at 9:40 am

    Has anyone noticed that the $CCI and $CDNX are on pace for their 9th consecutive week of losses/lower lows? Would seem as though a bounce or potentially a major low is near. Seeing commentary on Canadian message boards fearing another 10-20% downside from here.

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