weekend update

Stocks ended the shortened week mixed as the NAZ/NDX/SPX made marginal gains and the DOW declined about 1/2%. But there was plenty of excitement as the cyclical DOW/TRAN posted new highs tuesday and wednesday, along with new all time highs in the R2K/NYA on thursday and friday. The markets seem poised to launch an extended rally as we close out the month of February.
LONG TERM: Bullish
The bull market in stocks continues as the waves within primary wave V continue to subdivide. The DOW is already making new highs for the bull market, with the SPX just a few points shy. The TRANsports have been on an extended advance since October, with the R2K/NYA joining in the extension of their third waves as well. All in all, it continues to look like a bull market without all the euphoria. Investor sentiment is currently at a low that typically coincides with an intermediate term bottom: cash to chase the market once it gets rolling.
The correction that started in early January does appear to have run its course. The DOW was the first to bottom, surprisingly, and has already posted two nice five-wave advances from its intermediate term low. Expecting more to come. The SPX, after a shallow correction, has also rallied nicely posting one impulse wave and appearing to be in the middle of the next. Its having trouble getting through the SPX 1295 level, and the SPX 1300 level will probably also offer resistance. For the NAZ the next obstacle is the NAZ 2300 level. This cash index has been acting much better than the NDX futures driven index, which has lagged the four majors. Next ahead for the NDX is the NDX 1290 level. All these pivots points, and others, are posted on the 60min charts for each respective index. At the lows the MMI was not sufficiently oversold for a wave 4 bottom, but oversold enough to end a correction. As of the end of the week the MMI is rising strongly, with the DOW/SPX/NAZ all showing breakouts from the downtrend of the past several weeks, and the NDX just about to do the same. It does look like the intermediate term low is behind us. Also, Nagib and I are bullish on the Russell 2K as it continues to make new highs.
The NDX/NAZ/SPX are all coming off of a moderately oversold condition on friday morning and have been moving higher. They all to appear to be in the same wave structure. Minute wave iii is just beginning, as minute waves i and ii completed to start the intermediate term advance. This is all within the context of a minor wave 3 advance from the recent lows. If the cash on the sidelines comes rushing into the market, like it should, we may finally experience the long awaited third of third wave: minute iii of minor 3 of intermedate iii of major 3. We’ve been waiting so long it may be anticlimatic.
The european markets: DAX/FTSE/CAC/MIB have all been extending their third waves while we have watched our market languish. In asia: the HSI/STI  have started to extend, the BSE looks to be turning over, and the ASX/NIK continue their corrections.
Gold: After completing 5 waves down has rallied, expecting another 5 waves down to end the correction.
Crude: Rallied today on the Saudi explosion, but expecting it to turn over and complete its 5th wave down.
Dollar: It appears a short term pullback has ended and the greenback is ready to resume its uptrend.
Bonds: Volatile lately as the 30yr retested it 4.50% yield level, expecting rates to now start rising.
CRB index: Interesting juncture for the CRB, as the recent advance completed in a diagonal triangle. And, this was to be the start of primary wave V. It is worth watching from here on out, as William and I agree, a close below 311 would signal the end of the 5 year bull market, and the beginning of the winding down of the inflation problem.  
GOOG: The intermediate term low appears to be in place, as the stock has rallied about $40 from that low. Expecting the uptrend to continue as GOOG moves towards new highs.
Looking for stocks to break out to new highs, and keeping an eye on the CRB index. Best to your week!

About tony caldaro

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