thursday update

SHORT TERM: market reverses FED rate cut selling, DOW +208
Overnight the Asian markets were mixed, as early selling turned to gains in Australia and Japan, but led to loses in the other indices as the night wore on. Europe came in substantially lower but ended their session mixed. US stocks opened lower on overnight selling, and the higher than expected unemployment claims. Within the first few minutes the SPX slid down to 1334, but that was the low for the day. After that the market staged a broadbased rally, pausing at 1372 by 12:00, pulling back to 1360 by 1:00, and then continuing higher into the close. Almost reaching the best levels achieved after the FED announced the 50 bps cut yesterday. For the day the SPX/DOW gained 1.65%, and the NDX/NAZ added 1.70%. Bonds gained over 1 1/4 points, Crude lost $1.00, Gold gained $6.00, and the Euro was lower. Support for the SPX has moved up to 1364 and then 1344, with resistance at 1383 and then 1406. Short term momentum fell short of being oversold this morning, and is now naturally rising. Strength in the very weak sectors like the financials, banks, housing, consumer discretionary, and the transports have helped this rally thus far. Should this continue then the SPX 1438 target would appear achievable in February. Tomorrow, however, is the jobs report and ISM. This market continues its extreme volatility.
MEDIUM TERM: rally resumes from the recent SPX 1270 low
LONG TERM: bear market

About tony caldaro

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5 Responses to thursday update

  1. tony says:

    Hi Marc …. think we\’re in the C wave now.
    Hi! … Actually I missed the call. There were and are five waves up from the 2002 lows.
    My favorite indicator failed to get sufficiently oversold in August.
    I hung with it even though there were five waves up and a potentially completed bull market.
    The indicator failed, but the waves were perfect. OEW quantifies the waves.
    It also signalled the confirmed bear market. The waves were perfect, the technician was not.
    Hi Joe … the recent pullback to 1322 from 1369 could have been the B wave. Or, that FED selloff of 52 points.
    Lots of heavy resistance ahead starting at 1406, the low of wave \’a\’, right into the 89 wma, and 1423 the 50% retracement.
    Actually after a five year bull market, can\’t see how this one could end in a few months.
    There have only been four 5-year (plus) bull markets, and each bear market that followed lasted three years or more.
    enjoy the weekend!


  2. Prakash says:

    Hi Tony,It does seem that the market wants to test to confluence of resistance levels around the 1420\’s as you nailed couple of weeks back. I will also point out that the 89 week average which you called to have supported the market stands at 1417, another resistance. All ducks lined up to provide tough fight for the indices ahead. Following Marc\’s question, the current advance doesnt seem to be a clear a-b-c advance in the daily, though the \’b\’ wave in Major A clearly had 3 wave move. Does that mean we may have a strong b reaction i ahead before we get to those 1420 levels?Also, during the august timeframe, fed intervention muddled your wave count – is it possible that another bizarre scenario like a massive bailout can make this bear market a shallow one? To the second anon poster: DJI closed above that level mentioned.Joe


  3. Unknown says:

    Hi Tony:
    As we have experienced with the recent turn from rather bullish to now calling a "bear market" , wave counts can be extraordinarily subjective : perhaps the most critized aspect of EW theory .
    Without diving into your propriatary techniques: what makes your application of EW "objective" compared to others\’ ? Was  the signal change prompted by your propriatary techniques?


  4. pascal says:

    From here we should start to move down by end of day\’s trading on Friday. Wave 5 down, should see a recount, hard to see dow breaking 12735 levels in this downleg counter trend rally.
    Bearish picture very much in place. B wave not yet in place to rally either by price, structure or time.


  5. marc says:

    Hi Tony,
    Has a B wave (downwave) in this upmove developed yet or does it still have to come bfore the C wave takes us up to the 1430 level?


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