thursday update

After a quick review of all six indices we follow, we have the following comments:
The TRANsports continue their assault at new all time highs, underpinning this market, they went virtually straight up again today tacking on another 50 point gain. See TRAN122205.
The DOW, which also made a low on Dec 13th with the TRAN, is also displaying positive strength, as it made a new closing high from that low, and appears to be moving up in 5 waves. See DOW122205.
The NAZ/NDX/SOX all appear to display the same patterns. After making a high in early December, ending wave 1, they sold off in an ABC corrective wave 2. At the low, the short term momentum was the lowest it had been, by far, since the late October bottom. See NAZdaily chart: notice the similarities of the corrections and the MACD momentum at the bottom of the chart. From the tuesday morning oversold low, they have been trying to advance in an impulsive fashion. Notice the gaps up openings circled in green on the NAZ 122205 chart.
The SPX looks to be caught in the middle of the upward push of cash buying, and the downward pressure of futures selling. But it did close at nearly the high tick of the day today.
Looking at the NDX EW pivots. The NDX slammed right into the 1658 pivot on tuesday morning with all the selling. It then rallied into the next pivot 1671, found resistance and settled in the middle of the range for the day. On wednesday, it gapped up on the opening, rallied thru 1671 strongly, but then selling came at 1683 and it spent the rest of the day vacillating around 1671 and closed there. Today, it gapped up again at the open, eased back into 1671 again and then rallied to take out yesterdays 1683 high, before settling at 1683 at the close. The EW  pivot 1658 held firm, 1671 is now support and 1690 is our next target. Here is a list of the EW pivots we have been using: 1639, 1658, 1671, 1690, 1709 and 1717. In order for the NDX to move higher it needs to penetrate each one on the way up, and then use it as support, as it is now doing with 1671.
Personally, I feel the recent low set up very nicely. The TRANsports are getting the markets moving upward again, the DOW is following, and the NAZ/NDX are preparing to lead the market much much higher. Wave 2 appears to be completed and we are entering the early stages of what should be a dynamic wave 3. Happy Holidays!   

About tony caldaro

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