friday update

SHORT TERM: market rallies to end a nasty October, DOW +144
Overnight the Asian markets were mixed, Europe opened higher and closed +2.2%. US index futures were lower overnight and at 8:30 the core PCE was reported unchanged at +0.2%, and Consumer spending was reported the weakest since 2004 -0.3%. Non-farm payrolls is next friday, sorry. The market gapped down slightly at the open and continued to 945 by 10:00. That was the low for the day. At 10:00 the U of M was reported at 57.6 vs 57.5, as the market bottomed and started to rally. By 1:30 the SPX had made its way through the 961 resistance pivot to 981. After that the market become choppy. By 2:30 the SPX hit 970, after FED chairman Bernanke’s speech was released: A rally followed to 984 by 3:00, the high for the day. Then the market bounced around between these last two levels into the close. For the day the SPX/DOW were +1.55%, and the NDX/NAZ were +0.80%. Bonds dropped 15 ticks, Crude rallied $1.50, Gold slid $14.00, and the Euro was lower. Support for the SPX notches up to 961 and then 935, with resistance at 990 and then 1018. Short term momentum was overbought at the highs today, and then eased back some into the close. This rally continues to edge higher, and it appears we left this nasty downtrend at tuesday’s low of 845. We still have the 990 resistance pivot to overcome, but so far so good. Best to your weekend!
MEDIUM TERM: downtrend low at SPX 840
LONG TERM: bear market, trying to establish an uptrend

About tony caldaro

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30 Responses to friday update

  1. CT says:

    Catherine,Thanks for taking the time to provide valuable info on options trading.I have a few questions.I read all your posts and you indicated that you have not traded a lot of ETF\’s.I trade them for the following reasons and I would like to get your input on my rationale.I trade either DIA/SPY Options (sometimes QQQQ)You don\’t have to get a specific stock correct you just need to get the direction of the market correct.Their implied volatility is usually lower than their underlying stock.  For example the average IV a month ago was about 27%,  Currently it\’s about 48% which is relatively expensive.  But much cheaper than other stocks that average 120% IV.The spreads are extremely tight usually 1 penny which is awesome, so you can get in and get out without having to wait for a huge move.Like the other group member, I play short term.  I forecast the direction of the market, wait for the move and cash out.I also don\’t like holding over the weekend because I have physically seen the huge deterioration of the value of the options over the weekend.  Sometimes it\’s as much as 30-40%!!!  Especially if you are getting close to expiration.  With the tight spreads in the DIA/SPY it\’s easy to get back in the next week.I also like to 2 steps out of the money options, sometimes 3.I have not gotten exotic with it yet.  Simple Buying Calls and Puts based on my market direction forecast.Anyway I am curious as to what your thoughts are with that process.C.T.


  2. MT says:

    Ending diagonal:



  3. Stephen says:

    Hi Serg, are yu using DeMark indicators, which count 9 and 13 as possible turning points. I see a 9 on your Fork charts.
    Friday surge possibly a breath of air above the surface before a plunge on Monday or Tuesday, market need to confirm the bottom before another rally, which seems unlikely in Nov.


  4. Forkoholic says:

    Since when Wave 4 become impulsive?  wave 3of3 of 4


  5. spinner says:

    wave 3 of 3 completed 10-10 wave 3of3 of 4 wll be monday


  6. Forkoholic says:

    Can u imagine if we in fact get 5 waves down from Oct07 top?
    It means Wave 3 will be done in late November early December
    We\’ll be sitting here at least til the end of January and maybe February for the end of ths wave C or A or whatever it is


  7. Palroy says:

    Interesting chart; can you clarify?
    You state 3 completed on 10/10, and that Monday 3 of 3 will complete?
    I wonder if you are thinking that a gap up in the DOW on Monday will enable DXD to complete 3 of 4 (or 3 of 3 of 4)?


  8. spinner says:

    Followng the ultra short etf\’s  has helped be follow the market.  on the shorts we completed wave 3 on 10-10, wave 4 wlll cvomplete around 11-20 (dxd around 55) Monday we gap at the open to complete wave 3of 3.


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