tuesday update

SHORT TERM: stocks surge on April fools, DOW +391
Overnight the Asian markets were mixed, with losses in China and India. Europe came in +1.15% and the US index futures rallied. Europe closed +2.75%. At the open stock gapped up as the SPX opened at 1333. At 10:00 ISM reported manufacturing still contracting but stable, 48.6 vs. 48.3 last month. Construction spending, however, declined for the 24th month in a row. The market shrugged off the news and continued to rally. By 1:30 The SPX hit the previous high during this uptrend at 1360. After a small half-hour pullback, the market rallied to 1366 just past 3:00. Another quick small pullback occurred into 3:30, then the market rallied to 1370 and closed there. Quite a rally considering the SPX closed at 1323 yesterday. For the day the SPX/DOW were +3.40%, and the NDX/NAZ were +3.90%. Bonds were off over 1 1/4 points, Crude lost 55 cents, Gold dropped $37.00, and the Euro was lower as well. Support for the SPX has jumped up to 1364 and then 1344, with resistance at 1383 and then 1410. Short and near term momentum are overbought.
With today’s follow up rally, most of the US indices we follow are now in confirmed uptrends. The March SPX 1257 low is being counted as Intermediate wave B of a complex irregular Major B wave. We are also carrying an alternate count of five waves down into the March lows on the DOW chart. Either count suggests that this uptrend is only a rally within an ongoing bear market. Significant overhead resistance remains in the 1380 – 1400 area. The two EW resistance pivots noted above have offered resistance to every rally since the beginning of the year. Short term this market is due for a pullback, with SPX 1344 looking like a good support area. If this occurs before the market hits the next pivot at 1383, then it could move to the next level at 1410. If not, we’re likely to see a medium term top very soon. Best to your trading!   
MEDIUM TERM: uptrends confirmed in most US indices
LONG TERM: bear market

About tony caldaro

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17 Responses to tuesday update

  1. tony says:

    Hi … that count is possible.
    Using it on the DOW charts as an alternate.
    Either way I agree with the Major B wave scenario.
    Hi McKennedy … took a look at MER today.
    My study is inconclusive thus far. Will spend some more time on it though.
    They have been awefully quiet lately. Not raising any capital, and now running commercials.
    Facade, or just indifference?


  2. Luis Filipe says:

    Hi Tony. I am not saying the whole bear market is made in a 5 wave structure. What i say is that in bear cycles, the waves A and C are composed by five major waves. And i think the current bear cycle since October is showing a wave A finished in March composed by 5 waves. Now i guess we are in the wave B and then should follow a wave C to complete the bear cycle.
    Best regards.


  3. MCKennedy says:

    Financials look to have formed a triangle…..check MER on the 60 minute chart


  4. tony says:

    Hi Serg … interesting juncture for sure.
    THX for the EWI update.


  5. tony says:

    Hi Matt … using the 89-wma alone, the BSE does appear to be holding on.
    Hi Joe … counter-intuitive? I have company.
    Market rallies 3% on a $20 bln writedown by UBS, and a $4 bln capital raising offering by LEH.
    Something to ponder. This bear market has now had three uptrends: Dec, Feb and now Apr.
    The first two rallied 118 and 126 points respectively. At this mornings highs this uptrend has risen 121 points.  
    Hi GL … it\’s still a bear market.
    Five year bull markets have never been followed by 5 month bear markets.
    Hi McKennedy … H&S interesting.


  6. tony says:

    Hi Filipe … nice blog.
    I have not seen a 1-2-3-4-5 bear market decline in over 30 years.
    This last wave down has been counted by many as a diagonal, but it looks more corrective than a wedge.
    Nevertheless, if one counts the entire decline thus far completing at 1257, a 38% retracement occurred at today\’s highs.


  7. tony says:

    Hi Matt … vert nice charts.
    My best guestimate is that we have seen an AB, and C is underway now.
    Wave C will probably subdivide into five waves on the daily charts.
    The 8-dma should provide resistance.
    Sorry can\’t fit an hourly chart just yet.


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