tuesday update

SHORT TERM: more FED talk more rally, DOW +115
Overnight the Asian markets were mostly higher with only Japan displaying a loss. Europe again came in higher +0.80%, and the closed the day +1.50%, very similar to yesterdays action. US index futures were mostly flat overnight, but sold off this morning after the core PPI was announced at a higher than expected +0.4%. The market opened lower and hovered around the 1364 support pivot, while a consumer sentiment reading was reported far lower than expected. By 11:00 the market reversed and started to rally taking out yesterday’s 1374 high. When FED vice chairman Kohn speech: http://www.federalreserve.gov/newsevents/speech/kohn20080226a.htm was released, and Moody’s reaffirmed the AAA rating on MBIA. The rally continued to SPX 1387 the high for the day. After 1:00 the rally lost some upside momentum and eased back into the close. For the day the SPX/DOW were + 0.80%, and the NDX/NAZ were +0.55%. Bonds gained about 4 ticks, Crude added $1.80, Gold rallied $10.00, and the Euro gained about 1%. Support for the SPX remains at 1364 and then 1344, with resistance at 1383 and then 1410. Short term momentum was overbought at today’s highs, but eased back some into the close. Tomorrow durable goods and new home sales in the morning, as well as, speeches by Bernanke and Mishkin at 10:00. Still expecting this rally to continue to the 1396 level to form a double top. Best to your trading!
MEDIUM TERM: uptrend still underway, but nearing 1396
LONG TERM: bear market

About tony caldaro

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8 Responses to tuesday update

  1. tony says:

    Hi Viral … thank you.
    Checked and still came up with the same numbers:
    "… waves i thru iii gained $207 ($641-$848)"
    Hi Marc … wouldn\’t completely rule out anything in a bear market. But the 200dma is at 1473.
    During the 2000 – 2002 bear market the 89 wma was never breeched.
    That\’s currently at SPX 1420. Think that\’s the maximum upside.   
    By my reading of the II, they are now the most bearish they have been since the bear market began.
    But only as bearish as they were at the August low of a bull market. Which doesn\’t seem very low for a bear market.


  2. tony says:

    Hi McKennedy … made it 1388 today, maybe another try to 1396 tomorrow.
    Hi Amit … long time. Doing well here.
    Can\’t see a five year bull market correcting with a three month bear market.
    Have not even considered that count.
    Hi Jeff … if the recent test of the gap low holds.
    Expecting China to top out around the summer Olympics.


  3. marc says:

    Hi Tony,  Based on the recent action and the investor intelligence readings it would appear to me that this rally has more to go.  The 61.8 fib and possibly even the 200  day MA may be upside targets. I know we are a bit overbought on the daily but it looks like can go higher after a small pullback which would set up some great shorts.  In the last bear the market usually rallied up to the 200 day before rolling over.  Just ondering your thoughts?


  4. Viral says:

    Hi Tony,
    Have been reading your amazing blogs for quite some time now.
    But i  think i just found a small error in your gold update on the 24th feb
    the potential wave 5 target if wave v =wave i thru iii should be 307 and not 207 which
    gives a target of 1080 dollars.
    is that right or u meant something else?


  5. Jeff says:

    Hi Tony,
    Thank you for your kindly response. We also get interested in Chinese stock market. Is it possible sometime to give your analysis? I would like to see when it may peak out like you indicated on last weekend comments.


  6. Amit says:

    Hi Tony,
    It has been a while.How are you doing.
    Looking at action on the three Indices,the structure from recent low appears as a zigzag.So also a burst up the move through 1396 cannot be ruled out.
    Have you checked in with the probability that recent high would have completed only wave 1 at spx 1576 and wave 2 at 1270.


  7. MCKennedy says:

    Hi Tony,
    The Dow hit & retreated from the 50MA today (daily) & the Nas stayed contained within the triangle.  Do you still think the S&P needs to trade up to the 1396 level?  the S&P is not that far away & it would seem neater that the Dow retreats from here, taking the Nas with it (and causing a break to the downside of the Nas triangle).


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