tuesday update

SHORT TERM: market continues its sideways action and closes lower, DOW -8
Overnight all the Asian markets were lower. Europe opened lower and closed -1.75%. US index futures were sharply lower overnight but moved a bit higher after Case-Shiller reported home prices were declining at an annual rate of -18.6% v -19.0%. At the open the SPX gapped down to 847, and that was the low for the day. A rally followed and at 10:00 the Conference board reported Consumer confidence jumping to 39.2% v 26.9%. The rally continued until 11:00 when the SPX hit 862. After a small pullback to 855 by 12:00, the market then rallied to SPX 864 by 2:30. That was the high for the day. Then the market pulled back into the close to finish at 855. For the day the SPX/DOW were -0.20%, and the NDX/NAZ were -0.45%. Bonds were off 21 ticks, Crude slipped 45 cents, Gold dropped $13.00 and the Euro was higher. Support for the SPX remains at 848 and then 789, with resistance at 912 and then 935. Short term momentum rose to about neutral during the rally and then turned lower into the close. Tomorrow, Q1 GDP at 8:30, and after 2:00 the results of the two day FOMC meeting. Should be an interesting, volatile day.
While the SPX did trade below 850 this morning the market did not follow through on the downside. Instead it rallied back to within five points of yesterdays highs before finishing lower on the day. Short term this market continues to look lower, but remains in an upper 860 to lower 850 trading range. We should get some resolution, one way or the other, tomorrow. Best to your trading!
MEDIUM TERM: uptrend
LONG TERM: bear market

About tony caldaro

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100 Responses to tuesday update

  1. MCKennedy says:

    Frank, whether the Dow popped above the downtrend line depends on how you drew it. If you draw the lower trendline first, then create a parallel upper downtrend line, you will see that it hasn\’t broken the upper downtrend line.


  2. Frank says:

    Now whether DJT will catch up or not, time will tell (as always, the part I hate the most, fu**ing time…)


  3. Frank says:

    S2, ya I\’m just pointing to the shorter term time frame. The reason being that today move on DJI is fairly important, if you draw a line on daily chart, DJI actually pop above the down slopping resistance line, BUT DJT DID NOT! And since we are rally fairly hard from the bottom and assuming we are near an intermediate top, I\’m just looking for non-confirmations just like COMPX and SOXX


  4. S2 says:

    Frank, Aren\’t Dow theory fans waiting for Dow to rise above the January top (SPX 944 equivalent) with DJTA confirmation? Still, negative divergence on a shorter time frame could be useful too but I\’m not sure how much weight the theory puts on that.


  5. Frank says:

    And for the techi, QQQQ/compx has been making higher high since April 22, but SMH/SOXX didn\’t and worst yet, people keep on talking about diamond formation on SPX and got run over… look at SMH/SOXX, now this look like a dimond top formation with volume confirmation (where the volume is lower on the second half part of diamond). So we will see if this dimond is for real or fake because "real" diamond are rare… (I mean dimond top are rare)


  6. S2 says:

    Palroy, Agree.Looks like 5 waves from the top on SPX, INDU and NDX. If true, 868–>874 at the close was a 38% Fib retracement to the previous 4th wave. My 15min indicators rolled over below 875 but could backtest. So, we could go straight down tomorrow but a little more upside is certainly allowed and an expanded EDT 5th is still allowed too if we gap down small. Assuming NYMO moves up at least a little at the 5PM reading, my daily indicator is now on a sell signal with probable (but not guaranteed) better entry tomorrow. Using recent sell signals as an estimate, SPX should reach 859 before 889. It just so happens that the 8-10dSMAs will be at 858-860 tomorrow so 859ish becomes first support on any down move with an EW pivot and 20dSMA at 848ish for second support with lots of air below that. Up above, 876-883 is resistance, so you could ignore or exit the sell signal above that instead of waiting for 889.


  7. Buba says:

    Short @869.5.


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