tuesday update

SHORT TERM: day traders delight, a roller coaster ride today, DOW +51
Overnight the SPX futures traded about 14 points higher than where they closed yesterday. Then as the market prepared to open, they were sold off to unchanged. Within minutes, as the SPX hit 1433, a rally retraced that entire selloff and then some, as the SPX hit 1453 by 11:00. But the day was not done. A selling wave followed that morning high taking the SPX all the way to 1419 by 2:30. Retracing it all! Then another rally in the final hour pushed the SPX all the way to 1445 nearing the close. Of course it didn’t close there as sellers moved in again. At the close the SPX/DOW were +0.45%, and the NDX/NAZ were +0.30%. Bonds closed down about 1/4 point, Crude gained $3.70, Gold was up $25.00, and the Euro was sharply higher. Support for the SPX is at 1438 and then 1410, with resistance at 1462 and then 1484. Short term momentum bounced quite a bit today, but ended rising and at neutral.
With today’s break below SPX 1430, the diagonal triangle scenario is no longer compelling. A decent wedge can no longer be formed. Therefore, the labeling has been moved back to the labeling on the DOW weekly chart. Now both the SPX and DOW are displaying the same ongoing correction. The key levels to watch during this correction continue to be 1438, and now 1410, 1383, and 1364. With the weekly RSI currently oversold, it appears very unlikely that the market will drop much below one of those levels. The economy may be weakening, and the financial stocks discounted, but we’re definitely still bullish in the OEW camp. 
MEDIUM TERM: correction continues
LONG TERM: bullish

About tony caldaro

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5 Responses to tuesday update

  1. tony says:

    Hi Joe … Seems to me we may need to retest the SPX August lows.
    Hi Ignacio … Not quite sure I follow.
    With Major 3 ending at the July highs, wave A would be the August low.
    Wave B, the FED induced, October high. And currently we\’re in wave C.
    Wave C, so far, looks like a smaller a – b in October, and small c underway now.
    Hi! … turn bearish? When a completed wave pattern occurs, and a complete MMI cycle.
    Btw, just checked, the DOW closed below its August low today.
    Hi Marc … not evident to me yet. But it certainly is nasty out there.
    enjoy the holiday guys!


  2. marc says:

    based on the weekly charts of SPX and DOW it looks like intermediate wave C will take out the August lows. Is that evident or am I reading it totally wrong?  thanx  Tony


  3. THE ZOMBIE says:

    Good evening, Tony.Great blog. What would it take for you to swing into the bear camp?If the markets close below the August lows, wouldn\’t that confirm that we\’ve entered the bear?I would love to be bullish, but I just don\’t see how one could be (esp. if we take out August lows).Thanks so much.


  4. Ignacio says:

    Hi Tony,If we get back to the situation prior the triangle scenario, last impulse from august lows from 1369 unfolded in 5 minute waves. Minute wave 5 ended in 1553. is the ongoing correction from 1553 unfolding in ABC mode? if it is …where exactly could we be in this abc correction? Wave A ended 12 nov at 1438 or today at 1418 ? What area can we possibly expect wave B to retrace? minimum to 1484 a 50 % fibo (1553-1418)… but if a Wave C is expected to be more or less equal to wave A then the 1520 a 76 % fibo is more likely ??best trading to all, and thx for your comments and guidance.


  5. Prakash says:

    Hi Tony,Good to know we are nearing the end of major wave 4! Is it possible we may end wave 4 before s&p hits 1400 or do you think the index has to get much more oversold?Joe


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