thursday update

SHORT TERM: Q1 GDP revised upward to +0.9% market rallies, DOW +52
Overnight the Asian markets were mixed, but Europe closed +0.15%. US index futures traded lower overnight but rallied at 8:30 when Q1 GDP was revised upward from +0.6% to +0.9%, and unemployment claims rose several thousand. At the open the SPX hit 1389 and hovered around that level for about an hour. The market then rallied for the next few hours hitting 1406 by about 2:30. At that time FED chairman Bernanke’s speech was released from Switerland. It was the same speech he had already given two weeks ago: The market pulled back on the redundancy into the close. For the day the SPX/DOW were +0.45%, and the NDX/NAZ were +0.90%. Bonds lost about 1/2 point, Crude dropped $4.50, Gold slid $25.00, and the Euro was lower. Support for the SPX remains at 1383 and then 1364, with resistance at 1410 and then 1438. Short term momentum was quite overbought at the highs and has since pulled back some. The near term indicators were also approaching an overbought condition. Tomorrow at 8:30 the PCE index, and then at around 10:00 Chicago PMI and Consumer sentiment. The recent decline from SPX 1440 was a bit shorter than the usual wave one declines of this bear market, but the DOW did drop nearly 700 points. This decline is typical for the first wave of a new downtrend in the DOW. As such, we’ve labeled wave 1 on the SPX hourly chart, and anticipate this current rally to be wave 2, before the downtrend resumes in earnest. First waves of this bear market have been largely retraced by second waves. This would project about DOW 12,900 or less, and SPX 1420 or so. Since the recent decline completed between the 1364 and 1383 pivots, this rally should complete marginally above the 1410 pivot. Professor Shiller just completed an analysis of Housing price changes since 1920. The chart is self-explanatory. Best toyour trading!
MEDIUM TERM: uptrend should have ended at SPX 1440
LONG TERM: bear market
Housing prices 1930's   

About tony caldaro

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51 Responses to thursday update

  1. tony says:

    Hi HD, if you look at 2001 you will see a similar structure in the techs.
    They are not the market, the DOW is the market, and the SPX is the traders markets.


  2. tony says:

    Hi Cristian, welcome to the blog.


  3. tony says:

    Hi Greg, good questions.
    There was a confirmed bull market reversal into a bear market by OEW.
    Therefore the longer term trend is down until it reverses back up.
    These reversals do not happen often.
    The last one was when the 2000-2002 bear market reversed into a new bull market.
    Before this market should make new highs, we should see some kind of impulsive wave activity.
    Since that has not occurred yet. I do not see any new bull market forming as of this time. 


  4. Frank says:

    wow… this is better then the Laker\’s game last night… geeze… what a push to the end… they simply don\’t want to let it close above 1400… last 5 minutes was brutal….
    Still that ISEE number is way out of wack… I would like to see what they post torrow on the chart… really 400+??


  5. Frank says:

    pathi… wish you luck… only those sector… and you just said yourself… only those sector are proping market up… non-board base rally going start a new bull market?…. hm…  and look at financial… yes, financial is not going lead, but without any sort of positive participation of financial, we going start our new bull rally?? think again…


  6. Frank says:

    Is ISEE messup??  all equity at 700-900?? What the?? and ISEE value of 500+??


  7. rich says:

    Serg, if you\’re out there, come back.  you give us a lot of insight and resources.  We promise, no more tantrums and stomping our feet.  This still is the best site I\’ve found and most of the contributions are informative.  the other rich


  8. Neo says:

    the mkt is going nowhere but up. I don\’t understand why anyone here is talking abt bear? no rest until 1440. easy.


  9. booker says:

    Leadership in this week\’s rally pretty much the same. The NDX, MID, and DJTA have pretty much retraced, in this holiday-shortened week, all of that "big" selloff from last week. And look at GOOG — didn\’t even fall back down into that gap area. June is going to be a very interesting month!


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