thursday morning

SHORT TERM: market rallies despite Q1 GDP revision down to 0.6% growth
Overnight the Asian markets all rallied, and this morning Europe came in about 1.0% higher as well. Stocks continued where they left off at the close yesterday, and rallied to new bull market highs in the SPX/DOW/NDX/NAZ/R2K/NYA/TRAN. The uptrend is extending. Short term momentum, however, is overbought and the market is due for a breather. It certainly appears that Minor wave 5 is subdividing into five Minute waves. Minute wave one ended at SPX 1532, Minute two at SPX 1505, and Minute wave three is underway. With this uptrend extension, the medium term target has now been raised to SPX 1553, the all time high. Short term support now appears at the resistance level where this breakout occurred SPX 1522. Bonds are over 1/4 point lower, Crude is 50 cents lower, Gold is up $5.00 and the Euro is up. Since the market is still in Minor wave 5, it could unfold in either of two EW forms: a normal impulse wave, or a diagonal triangle. The rallies from the SPX 1491 low both appear a bit sloppy, therefore either pattern could unfold. Since the medium term SPX target is only about 1.5% from current levels, I still feel it pays to be cautious medium term. Let’s see how Minor wave 5 unfolds over the coming days/weeks. Best to your trading!
MEDIUM TERM: cautious, and targeting SPX 1553
LONG TERM: bullish.      

About tony caldaro

Investor
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7 Responses to thursday morning

  1. tony says:

    Hi Frank,
     
    If you didn\’t make any comments/questions it would be too quiet here 🙂
     
    tony

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  2. Frank says:

    Hi no name,
     
    I\’m sure you mean \’Tony\’, not \’Frank\’… hehe
     
    Frank

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  3. LIC says:

    Just want to commend you Frank for your time and generosity in shairng this blog and answering each and every question.  All the best to you!

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  4. tony says:

    Hi Frank,
     
    The last time the market extended July-Feb\’07 it rallied through two long term pivots, topping at the third.
    With an extension underway here, the first pivot 1530, would lead to the next at 1553, and maybe a third.
    Right now all bets would be off if the SPX dropped below 1491, correct.
    Apple does look like its in the third wave of a fifth, so a pullback here would be quite normal.
    It\’s rallied more than 50% during this uptrend already.
    Relentless market … 

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  5. Frank says:

    Hi Tony,
     
    GOOG seem to be forming a evening star (or maybe a doji by the close time), AAPL is break down maybe a double top at 122?  And it seems is going to form a doji or evening star.  So maybe we get a interm pull back?  But like I said, if for whatever reason the market turns and drop below 1491 how would the count be?
     
    Frank

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  6. Frank says:

    Hi Tony,
    Sorry for asking so many question, but the other question I have is that, if for whatever reason that the rally were to end now and turn down (since this is a short week and like you said before, alot times short week tend to be the turning point), how would the count be?  Do we go back to ABC count with \’C\’ being slightly higher then wave \’V\’, or is it that once \’C\’ rise above \’V\’ it no longer can count as \’C\’?
     
    Frank

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  7. Frank says:

    Hi Tony,
     
    I think someone ask this question before also, but do you think we would break through 1553 and keep going for a while before the rally end just to suck in the last batch of side line money (because everyone would think we broke old high and we are in a new bull run so everyone would throw money in)?
     
    Frank

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