tuesday update

SHORT TERM: stocks rally in choppy day
The market started the week on a positive, rallying from the opening bell. But ran into short term overhead resistance at SPX 1522 around 11:30, and then turned lower. The intraday pullback lasted until about 2:00, when most of the indices were lower on the day. The SPX hit 1512. Then a late afternoon rally again pushed the market up into a positive close. At the close the SPX/DOW were 0.15% higher, and the NDX/NAZ rose 0.55%. Bonds traded a few ticks lower, Crude lost $1.85, Gold gained $1.00 and the Euro ended flat. The Tech sector appears to be providing support for the market, as both GOOG and AAPL have been rallying of late. While the Cyclicals appear ready to more lower. If this uptrend is going to extend higher, the Techs look like they will lead the way, until the Cyclicals break to new highs. If not, the bottom should fall out shortly.
If you recall, when the market extended through two long term EW pivot points last year, SPX 1383 and 1438. The Techs and Cyclicals took turns supporting the market. When the SPX hit 1383 it had only ended Minor wave 3. A quick pullback to 1361 then followed, Minor wave 4. Then a rally to new highs by Thanksgiving should have ended that uptrend. The Techs broke lower, but the Cyclicals supported the market until the Techs recovered after the New Year began. This time however, the SPX pivot at 1530 appears to have ended Minor wave 5, and there is no reason for any further upside. Yet, another "tug of war" between tech and cyclical traders is underway. The market did react, as it often does when reaching a long term pivot, by pulling back quickly to the recent low of SPX 1505. Since then it has rallied in what appears to be an ABC to this morning’s high of 1522. With the long term 1530 pivot hit, and the typical 1% – 2% reaction out of the way, the stage is set for a medium term decision. Which should occur this week. Short term momentum is just above neutral, so tomorrow’s opening can go either way.  
MEDIUM TERM: neutral, SPX/DOW targets have been hit
LONG TERM: bullish.

About tony caldaro

Investor
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8 Responses to tuesday update

  1. tony says:

    Hi Shawn,
     
    The COT readings is the only \’glitch\’ I see in the technicals.
    It will be interesting to see how it plays out.

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  2. tony says:

    Hi Tony,
     
    Gold is acting a bit stronger than I expected.
    Kind of following the stock market.

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  3. tony says:

    Hi Frank … China gapped down 6% on that news, traded a little lower, then closed there.
    AAPL is saving the day thus far.
     
     

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  4. Frank says:

    Well, Open is very nasty so far… Although I don\’t like the early sell off this fast though, it might just reverse later, or maybe the PPT would step in?
     
    Frank

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  5. Anonymous says:

    hi Tony:
     
    even though the 5th wave you mentioned might be complete, i am a bit concerned about commercials being net long this market…doesn\’t it mean we might be headed higher before any correction takes place? thanks
     
    Shawn

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  6. Frank says:

    Hi Tony,
     
    It seems China\’s 6% drop has some effect throughout the world.  Although not as strong as last time.  Many people on TV kept saying is a good move by China and this will be a healthy correction.  Pre-market here is down also.  Although it seems dip buyer still buying at the support low of yesterday.  Especially the QQQQ (that reflects the Nasaq), is not quite near yesterday low while SPY is pretty much near yesterday\’s low (15 minutes chart,QQQQ really looks strong).  AAPL this morning (as of now) is pretty strong.  While most tech is in red, aapl is green.  Will AAPL save the day again?  Will we gap lower and reverse?  Let\’s see…
     
    Frank

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  7. Tony says:

    hi Tony,Gold could be ready to turn up.regards & happy trading.http://globalgold.blogspot.com/

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  8. Frank says:

    Hi Tony,
     
    Did you see the news regarding the increased stamp tax for Chinese equity market?
    http://www.marketwatch.com/news/story/story.aspx?guid=%7B9D11A468%2D9653%2D4362%2D8E33%2D76C62AAE5EB1%7D&siteid=rss
     
    Do you see this as anything significant?  Or could this be the trigger?  I guess we\’ll see tonight how Chinese market react to it…
     
    Frank

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