friday update

SHORT TERM: DOW nears 7,000 after poor Q4 GDP report, DOW -119
Overnight the Asian markets were mostly lower. Europe opened lower and closed -2.35%. US index futures were quiet overnight, but sold off after the Gov’t announced that it was swapping its preferred shares in Citigroup for common at $3.25/share. Then at 8:30 the revised Q4 GDP came in at -6.2% vs. the -3.8% the Gov’t initially reported. This was the largest quarterly drop in GDP since 1982. At the open the market gapped down to SPX 735 in the first few minutes, right at the 734 pivot. The market stabilized at that level and tried to rally. Near 10:00 the Chicago PMI was reported at 34.2% v 33.3%, and Consumer sentiment edged up as well 56.3% v 56.2%. The rally continued until noon when the SPX hit 750. A pullback to 742 followed, and then a double top occurred at SPX 751 by 2:00, nearly filling this morning’s gap down. The SPX then tailed off to retest the lows at 735 and closed there. For the day the SPX/DOW were -2.00%, and the NDX/NAZ were -0.95%. Bonds gained 3 ticks, Crude slipped 75 cents, Gold was flat, and the Euro was lower. Support for the SPX remains at 734 and then 717, with resistance at 768 and then 789. Short term momentum was oversold at today’s lows and then moved higher.
With today’s new intraday bear market lows in the SPX/DOW we need to start looking for a potential completed downtrend. This last wave down, Minor 5, has met the minimum requirements by making a new low. The pivot at SPX 734 held well today, just as it did at the Nov 2008 low. Will take a close at all the markets this weekend. Best to yours!
MEDIUM TERM: downtrend
LONG TERM: bear market

About tony caldaro

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31 Responses to friday update

  1. Bud says:

    and history is repeated, in that, lessons have not been kearned.USA will do fine once the majority learn to save first for what they want.the cukture is changing…


  2. tradingpoints says:

    Bud, Will Rogers comment was actually a very witty comment in response to the lack of sophisticated approaches that were being proposed to fight the depression. This stress test of the banks is reminiscent to FDR\’s bank holiday which also described by Rogers as "kicking out the money changers from the temple, and 3 days later saying all was well and letting them all back in"


  3. Bud says:

    Stephen….have heard of such extreme violence you refer. If true,then the fault can traced back corrupt provincial leadership. USA, then.Is not alone in goverment corruption, and failures that we have seenin the USA…


  4. Bud says:

    tradingpoints….it was a simple statement by will rodgers. and in his day, maybeapplicable. since 1980-1982, the country requires a superior financial talent. since then,none, have been in charge of the treasury. just heard an interview, on kfnn. with chris wahlen with regard to the financialcrisis, extremely interesting interview with moe ansari….


  5. Bud says:

    SERG…your right. As, I have so stated. 2 parties, are one in the same. Onlythe electorate can change that with the election of a leader, whoknow\’s more, than how to write a book…


  6. Stephen says:

    >>Hey Stephen look at bright side – it is not an extinction kinda event yet! ;-)I am not the only one with SPX 100 in mind. just need a confirmation, a kiss goodbye of the neckline at 805. 730-740 is just a transient stop.Can those SPX long ETF handle a SPX=100 ?Citibank and BoA probably would be oscillating 50cents to a dollar.China is facing ever intense civil riots from jobless farmers, Tibetans.


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