friday morning

SHORT TERM: market gaps up at the open on positive FED comments, DOW +125
Overnight the Asian markets were mostly higher with the exception of China’s SSEC. Europe came in +1.15% as well, as stock index futures were being bought early last evening after FED chairman’s Bernanke speech. Bernanke reinterated the same economic concerns that vice chairman Kohn had mentioned earlier this week. This will likely lead to another rate cut at the next meeting. Within the first few minutes the SPX rallied to 1489, it has pulled back a bit since then. Bonds are down 18 ticks, Crude is off $1.90, Gold is $12.00 lower, and the Euro is down. Support for the SPX remains at 1462 and then 1438, with resistance at 1484 and then 1506. Short term momentum is again overbought. The market internals, as measured by the OEW oscillator, are starting to improve. The Dow is now reading 27% bullish, after reaching a low of 17%. The NDX has just ticked up to 21%, and the SPX sector is now 25% after reaching a low of 12%. After tuesday’s low at 1407, the market has rallied strongly, techs and leading financials up today. This appears to have been fueled by the recent FED comments, new buying, short covering, and an oversold condition. A new uptrend is not confirmed yet, but the market certainly appears to be in a year end rally. At 8:30 the core PCE was reported to have risen 0.2%, for a 1.9% annual rate. Within FED acceptable levels. Also, it was just reported that banks may agree to put a freeze on rate increases to adjustable rate mortgages. Lots of positive news this week on the economic front. Best to your trading!
MEDIUM TERM: correction may be over for now, but new uptrend unconfirmed
LONG TERM: bullish

About tony caldaro

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6 Responses to friday morning

  1. tony says:

    Hi Lee,
    The Giants … haha … surprised they have not collapsed yet.
    It\’s that time of year.
    Even if they make the playoffs, Manning 2.0 will freeze again.
    Pittsburgh is the only team in New Englands way.
    Wonder if Brady will want to be paid in Euro\’s too =)


  2. tony says:

    Hi Joe and Matt,
    OEW defines trends quantitatively.
    Each one of these trends represents an actual wave. No guess work!
    Until a trend reversal is confirmed, it may only be a short term move within the existing trend.
    The problem, at times, is determining exactly which wave it is within the overall bull market structure.
    In other words, the precise labeling. But the trend is the trend nonetheless.
    The end of Major wave 4 would make sense if the market had achieved the sufficiently oversold level expected.
    It did not. Will try to sort all this out over the weekend. Best to yours.


  3. Lee says:

    Hey Tony,
    How far are the Giants going to go this year? Have a great weekend!!


  4. Anonymous says:

    hi tony,
    so if market keeps going for year end rally, do you think major wave 4 could have been complete at 1406? thanks


  5. Prakash says:

    Hi Tony,What do you mean by \’new uptrend unconfirmed\’? Does that mean that the indices may hit new highs if uptrend is confirmed? What would it take to confirm and would that imply major 4 is over?joe


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