thursday update

SHORT TERM: Q3 GDP -0.3% market rallies, DOW +190
Overnight the Asian markets soared after the FED announced late yesterday temporary currency dollar swap arrangements with several countries: http://www.federalreserve.gov/newsevents/press/monetary/20081029b.htm. Europe opened higher and closed +1.2%. US index futures were sharply higher overnight, and at 8:30 the Commerce dept. reported the GDP dropped to -0.3% from 2.8% in Q2. Unemployment claims remained steady at 479K. The market gapped up nonetheless to SPX 947 at the open and continued to 963 in the opening minutes. That was the high for the day. A pullback to 929 followed by 12:00, the low for the day. After that the SPX rallied to 955 by 3:00, dropped to 938 by 3:30 and rallied to finish the day at 954. After the gap up this morning the SPX traded between the 935 and 961 pivots for the rest of the day. At the close the SPX/DOW were +2.35%, and the NDX/NAZ were +2.45%. Bonds dropped 21 ticks, Crude lost $2.00, Gold slid $16.00, and the Euro was flat. Support for the SPX notches up to 935 and then 912, with resistance at 961 and then 990. Short term momentum stayed above neutral all day. Tomorrow is the non-farm payrolls report, and core PCE at 8:30. Then the Chicago PMI and a Consumer sentiment reading around 10:00. FED chairman Bernanke also gives a speech at 2:00. Happy Halloween. October has certainly been more trick, than treat.
The rally from tuesday’s morning low at SPX 845 continues to look encouraging. The market rallied from the 848 pivot right to the 935 pivot, and has spent the past two days trading higher: between the 935 and 961 pivots. The SPX has still not broken through the recovery Oct 21st high at 985, but the DOW has done so. Tuesday’s low continues to look like the end of an ending diagonal triangle 5th wave for the downtrend. And the market continues to make progress from that low. The next objective is to break through the 990 pivot, while holding the 912 and 935 pivots. Should 990 be exceeded, the likelihood of a new uptrend looks probable. If 912 is exceeded on the downside, this rally is in jeopardy. Market breadth continues to rise, while market volatility continues to decline. Commodities pulled back today and are worth watching going forward. Best to your trading!
MEDIUM TERM: downtrend low SPX 840
LONG TERM: bear market, trying to establish an uptrend

About tony caldaro

Investor
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100 Responses to thursday update

  1. Jenifer says:

    S2, All news baked in. Even nuke going off in Manhattan baked as per bulls. How else do you explain that Chicago PMI being totally ignored?I don\’t think market cares from here what the news is, probably buying the dip is the theme.This morning oil was down 2 and every commodity stock I watch was hitting new highs for the day. This did not happen last few weeks.

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  2. Unknown says:

    I\’ve heard Nov 4th and Nov 17/20 mentioned as possible pivot dates. Maybe somebody can expand on that but, if those dates are close, it would probably be more bullish for SPX to fall through election day on Tuesday and then rise into the following week with a pre-expiration week dip and then a higher high into options expiration at 1000-1070 to complete a large ABC or 123. What dates do people have after that? It would seem an ideal time to start crapping out around bad Thanksgiving shopping reports if another 4-5 down is needed. But, it would likely need to be a swift scary drop if the govt/funds want to bounce back before end of year performance reports are sent out to investors. Hard to predict that far ahead.

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  3. Unknown says:

    I still have the 4C count from 840 in my back pocket as an alternate and my counts are only one indicator that I use anyway, but I do think odds have increased that a multi-week bottom is in. Low volume is one concern but I remember thinking that back in March 2007 and with many other bottoms. Now, having said that, I have not decided yet whether the 845 bottom could represent 5 waves down from 1303/1313 and, even if SPX has finished 5 waves from 1313, will the move from 1440 end with 3 major waves or 5? If 5, then there is at least one more 4-5 to come after doing a Fib retrace of 1313/1440 (38% retrace of those would be 1020-1070) and a large wave 5 down would likely start in a few weeks, not 4-6 months. I actually prefer that scenario fundamentally so I\’ll be scaling out of my longer-term investment accounts at 1020-1070+ just in case. Good luck.

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  4. egoldspot says:

    S2, Only reason I recommend going short on Monday, is absolutely no loss, for ppl entering. I think in past Wave 5 of 5 never materiliazes or in case it does then ppl are not taken of by Early Morning Monday blues.And there is a lot of opportunity to go down from these levels so why take any risk, let market play into our hands then other way 🙂

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  5. Forum says:

    Yes. S2\’s analysis is GR8! Looking forward to weekend commentary to go along with Tony\’s. McHugh also promised some detail this weekend concerning the elections. Forkmaster is bound to come up with some interesting observations as well. Gold stars to everyone else who has contributed.

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  6. Unknown says:

    Yes egold. Looks to me like a probable underside test of the breakdown of the 845–>860–>969 uptrend line. Danger of gap down Monday morning with my indicators turning down again and starting to cross. 10-15 pt move down should do it. SPX managed to avoid the downturn narrowly this morning but won\’t be as likely to do so this time.

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  7. egoldspot says:

    S2, market hear\’s your voice 968.xx. Gr8!

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  8. Kurt says:

    USD.JPY closed just below the downtrend line that\’s been moving it lower since this 3rd wave down began.

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  9. egoldspot says:

    Acutally PPT(Election) & Year Ending was the best these a**hole/F**/ managers could dream off. But anyways this just proves wrong people always get right things! Hard working American\’s get DEBT slavary 🙂

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  10. hawk says:

    Yup, egold, you got it. Let\’s see how far down she goes.

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