thursday update

SHORT TERM: after a gap down opening, stocks close mixed
The market gapped down at the opening this morning as the DOW lost 100 points in the first five minutes of trading. When the SPX found some support at 1451 the market started to recover as the tech sector rallied. By 12:00 the market hit its highs for the day as the SPX hit 1468. After that the market seemed to stair step down into the close. At the close the SPX/DOW were -0.40%, and the NDX/NAZ were +0.25%. Bonds closed nearly 1/2 point higher, Crude was flat, Gold lost $2.50, and the Euro was lower. The SPX has made several attempts over the past two days to penetrate the long term pivot at 1462. Today’s high of 1468 did not hold, and the market closed under the 1462 pivot, at 1458. Therefore, resistance remains at 1462 and then 1484, and support at 1438 and then 1410. Short term momentum displays a slight negative RSI divergence at the highs this morning, while the techs were extremely overbought. Momentum has eased back some since those levels were hit, and is about at neutral now. This market is beginning to remind me of the market in June, when the cyclicals wanted to correct, but the techs continued to rally. When the techs finished their rally then, a double bottom was put in place for the cyclicals. Tomorrow is the end of the month, and the friday before a 3-day weekend. The July core PCE report is released at 8:30, along with several other reports during the day. And, FED chairman Bernanke will give a speech about Housing and Monetary policy in Wyoming at 10:00. Should be an interesting day!
MEDIUM TERM: correction
LONG TERM: bullish.    

About tony caldaro

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5 Responses to thursday update

  1. tony says:

    Hi Ross … the ASX has rallied a lot and is close to an uptrend confirmation.
    Hi Newbie … Yes, just reported that on the blog.
    Hi Frank … there are serious problems still out there that will start to surface next week.
    Whether or not investors ignores them, and think the FED/Gov\’t will protect them is yet to be seen.
    Hedge funds could experience a massive liquidation. That would complete this correction.
    After Labor Day we\’ll see what happens. 


  2. Ross says:

    Hi Tony,
    I sent a message the other week asking about the Australian market.  I thought as we had done an obvious ABC correction we would then continue onto a higher market high.     After todays action in Australia do you believe this will be the case or will we retest our recent lows before perhaps going to a new high.


  3. Jim says:

    Also – when do you expect a retest of the lows?


  4. Jim says:

    Do you still belive in a retest of the lows, plus: why is the intermediate b, at the nasdaq chart, marked with a different color?


  5. Frank says:

    Just some thoughts over the market condition.  It seems everyone thinks by reducing the FED fund rate, everything would be fine and we can just go back to the old way and let the market rise automatically into indefinite future.  But if it were that simple, why wouldn\’t Big Ben (FED) just do it?  It would keep everyone happy (except the bears), financial system intact, and way we go!  There must be something far more catastrophic consequences (or at least FED thinks) that\’s prevending them to do it.  Which I guess it fits with Tony\’s analysis that this being the last wave of the bull market.  So this may be a lose/lose choice for FED, either lose now or lose later.  Eventually, everyone has to pay for all the DEBT in the system. 
    By the way Tony, might to be too early to ask, how big of a bear market do you forsee after the completion of the Bull market cycle?


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