thursday update

SHORT TERM: DOW breaks through 11,673 at 9:45 taking the market lower, DOW -358
Overnight the Asian markets were mixed, but Europe opened lower and closed -2.50%. US index futures traded lower overnight, then at 6:30 vice chairman Kohn gave a speech in Germany: At 8:30 the weekly unemployment claims remained at 384,000 and the Q1 GDP remained the same at +1.0%. Stocks gapped down at the open as the SPX hit 1312 in the opening minutes. It closed at 1322 yesterday. At 9:45 the DOW broke through that 11,673 level we have been watching, that would indicate an extension to this downtrend. An hour later the SPX started making lower lows. In between, at 10:00 existing home sales were reported up about 0.2%, while prices continued to decline. For the rest of the day the market declined steadily, with only one six point rally between 1:30 and 2:00. At the close the SPX/DOW were -3.0%, and the NDX/NAZ -3.70%. Bonds were up 3/4 point, Crude gained $5.25 making new highs, Gold surged $36.00, and the Euro was higher. Support for the SPX slides down to 1261 and then 1240, with resistance at 1287 and then 1316. Short term momentum is overosld, and the near term indicators turned lower. Tomorrow core PCE and consumer spending at 8:30, then consumer sentiment at 10:00. While SPX 1304 looked like a good support area, as the technical indicators and short term wave counts appeared to align. The DOW wave formation suggested that an extension to the downtrend would occur if 11,673 was exceeded. Fifteen minutes into todays opening the DOW traded below that and the market followed. Today while Crude was making new highs over $140, the DOW made new bear market lows under 11,635. This confirms that Major wave C is certainly underway. For now, the next important level for the SPX is the next OEW pivot 1261. Best to your trading!
MEDIUM TERM: downtrend resumes
LONG TERM: bear market

About tony caldaro

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88 Responses to thursday update

  1. tony says:

    Hi Joe,
    From 1929 high DOW dropped 89% to 1932, then a 5 year bull market.
    In 1938 found support at Primary wave 4, rallied for a year, then retested support in 1942.
    From 2000 high NDX dropped 82% into 2002, then a 5 year bull market.
    Should find support at previous 4th (1400) in 2008, then rally for a year, and retest in 2012.
    As for EMC and others similar.
    Waiting for the next (Aug?) downtrend low to create a washout in many stocks.
    Then to start buying selected techs and cyclicals.
    good luck!


  2. Forkoholic says:

    what\’s a chop chop day?
    a "chop chop day" is when traders literally take white price candles and chop off their heads
    and red blood from those chopped candles drip down below on green Volume Bars turning them red, and they do it all day


  3. Neo says:

    what\’s a chop chop day? and what\’s range bound? how can one tell if it is chop chop? appreciate advice! Thanks


  4. Prakash says:

    Hi Tony,I got a chance to get the weekly chart of DOW from 1932 and I should say the current Nasdaq composite\’s pattern is shaping up exactly similar to DOW\’s wave pattern in 1937, including the sharp sell off that happened earlier this year. My observation is that the current pattern in Dow Industrials, SPX are different from Nasdaq Composite, which is the one actually mimicking Dow industrials in 1937…. do you observe the same? Would appreciate any thoughts you may have…Also, do you think EMC will hold the lows? Looks like major wave 2 isnt done yet?Joe


  5. Frank says:

    Most interesting… look at $VIX, on a down day, inverted hammer??!!  It is testing the broken long term support line, and failed second time… so does this mean bullish for equity?  The support line started Oct 2007 on 200 daily chart of $VIX and it got broken on a gap down on April 16… and today tested second time… we actually closed above it on June 12, but that was a head fake… anyway just something interesting…


  6. Lee says:

    Do tell?


  7. egoldspot says:

    Some late buying seen


  8. Lee says:



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