friday update

SHORT TERM: choppy action continues as market pulls back, DOW -148
Overnight the Asian markets were mostly higher. Europe opened lower and closed -1.00%. US index futures were lower overnight, and at 8:30 Personal income weakened to -0.2% v +0.2%. Also, Consumer spending weakened 0.2% v 1.0%, and the PCE was flat 0.2% v 0.2%. Stocks gapped down at the open to SPX 822 and hit 816 by 10:00. At that time a Consumer sentiment reading was reported at 57.3 v 56.6. The market then rallied to its best levels of the day at SPX 825 by 12:00. Yesterday’s close was at SPX 833. Another pullback followed to a lower 813 by 2:00. An hour later the market had rallied to 822, but then again turned lower going into the close. For the day the SPX/DOW were -1.95%, and the NDX/NAZ were -2.50%. Bonds were off 9 ticks, Crude dropped $2.00, Gold lost $17.00, and the Euro was lower. Support for the SPX remains at 789 and then 768, with resistance at 848 and then 912. Short term momentum stayed below neutral for most of the day.
Over the past two days the market action has become quite choppy. The rally to SPX 827 thursday morning was fine, but after that the choppy action was even noticeable during the rallies. We can draw two possible short term conclusions from this activity. The first being upside momentum is waning. Or the second, the market is going through a consolidation period, by forming an irregular correction with the thursday morning low (SPX 815), the thursday close high (833), and the friday low (813). There are some short term negatives divergences in place, so some caution is warranted here. Will review over the weekend. Best to your weekend!
MEDIUM TERM: market trying to confirm an uptrend
LONG TERM: bear market

About tony caldaro

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22 Responses to friday update

  1. tony says:

    Hi S2,The suggested irregular flat scenario would have had to ended right around friday\’s lows.SPX 815 – 833 – 813.

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  2. Puddy says:

    Bud, I find it interesting that moving averages perform well under some circumstances and not under others. Figuring out when they perform well is the hard part. Especially if the data set is limited. Still, one never knows until one tries.

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  3. Bud says:

    One additional note. Timing Tools. I guess, I am rather an odd-ball. I use GS and FDXprice and EW patterns to add to my own overall market timing analysis. Now,what is GS saying right now? I have it on a Sell…..

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  4. Bud says:

    1937-1938 – first noted by Robert Farrell. Was the relationship of the March 31st 1938 low,to the March 9th, 2009 low. And, application of a set of parrell channel lines, to that of the 3/9/09 Low. Also, pointing out the center line of the 1937-38 down channel, locked in the low of 3/31/38 as it did again on 3/9/09 via the SP500 cash index….Further, once could extrapolate the 1938 advance off the 3/31 lowwith that of 3/9/09 to get a concept of what history was capable of.Off Topic….I think it is amusing, that some of us who perform TA workwill not accept certain techical functions into their analysis. For example.I do not use, moving averages. Ii would prefer momentum indicators.Now EWI has revived the use of channels, in the latest EWT issue. Overall,I find it an interesting character flaw.On another note. Presevento. Who has a hot hand. And he is using a combinationof pattern and astro timing techniques….

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  5. Puddy says:

    S2, actually I\’m not making the case that 1938 is conventional. I hope you recognize that. It was presented as an alternative and not as the conventional generic retrace based on fibs. There seems to be a misunderstanding.

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  6. S2 says:

    Thanks TP.net. Serge, Thanks for reminding me about the special URL characters %5B etc. I\’ll keep April 16th in mind depending on the action into that date, but I don\’t use astrological indicators.Puddy, I wouldn\’t say following the 1938 pattern is \’conventional\’ in the sense that I don\’t think a majority of people are doing it and in the fact that it\’s a statistical aberration. However, like I said, the analogy is intriguing but I need to see more research that links 1938 to 2009. I don\’t want to put words in Tony\’s mouth, but I believe he is looking for alternation with 1929-1932 which was a zigzag while 1937-1942 also looks like a zigzag. Maybe Tony could clarify that.

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  7. tradingpoints says:

    S2 & Others – there is a nice free service on http://www.bit.ly which can shorten URL\’s. For example your long URL that the Windows Live environment doesn\’t like can be shorted to http://bit.ly/8nRnm – which I just did. Try it. It works.

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  8. Puddy says:

    MCK, thanks. S2, Appreciate the clarification. However – to my point about few data points and so on, I think it\’s fair to note comparisons to 1938 as a counter argument given that 1) The rally was extremely steep 2) the correction from a similar place (maybe similar technical, who knows) took weeks 3) the psychology today is different than then as well as the timing of the topping of various cycles, yet not so different in some important ways (including having been through a worse bear not that long prior). To this end the Obama Hope is not so different from FDR that we can ignore it. I appreciate all the views you present as they are creative and thought through. I\’m keeping them in my back pocket as well but am going with a more \’conventional\’ view until such time as it needs to be modified. While this current fractal will diverge from the 1938 fractal at some point (sooner probably rather than later) it has been an exemplary model far longer than I had ever suspected it would be. Given the increasing popularity of the view I do expect the divergence to be oncoming – the dell knell will be CNBC picking up the story. LOL.

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