friday update

SHORT TERM: pullback continues but stabilizes, DOW -42
Overnight most of the Asian markets were lower. Europe opened higher, but closed mixed. US index futures were higher overnight and at 8:30 Durable goods orders were reported at -2.4% v +4.8%. The drop was not expected. Around 9:00 the FED chairman Bernanke gave a speech in Congress: http://www.federalreserve.gov/newsevents/speech/bernanke20090925a.htm. At the open the SPX traded between 1049 and 1046 yesterday’s low. By 10:00, the market rallied to yesterday’s short term resistance at SPX 1053. Also at 10:00 New homes sales were reported at 429K v 426K, and Consumer sentiment was 73.5% v 65.7%. The market turned over on the news. Just past noon the SPX dropped below yesterday’s low, and by 1:30 the SPX hit the OEW 1041 pivot. At that time FED governor Warsh released his speech: http://www.federalreserve.gov/newsevents/speech/warsh20090925a.htm. Holding the pivot the market started to rally. At SPX 1049 stoppend the market faded into a close at 1044. It’s lowest close in two weeks. For the day the SPX/DOW were -0.55%, and the NDX/NAZ were -0.85%. Bonds gained 11 ticks, (it gained every day this week), Crude added 15 cents, Gold dropped $8.00, and the Euro was slightly higher. Support for the SPX remains at 1041 and then 1018, with resistance at 1061 and then 1090. Short term momentum stayed oversold, then went extremely oversold at the low before turning slightly higher. The G-20 ends this weekend and reports should come forth over the next few days.
This Minor wave 4 pullback from SPX 1080 extended to 39 points at today’s low of 1041. Minor wave 2 was 47 points. On a very short basis, up to the hourly charts, the market is currently as oversold as it was at Minor wave 2. A rally back to the OEW 1061 pivot should turn short term momentum positive, and even resume the uptrend. Best to your weekend!
MEDIUM TERM: uptrend
LONG TERM: bear market

About tony caldaro

Investor
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24 Responses to friday update

  1. Gajendra says:

    Just got a H&S breakout on dollar and reverse for euro. Starting with only dollar long position. Volume was unusually high on uup last couple of weeks. It is early on week, so need to be careful of fakes.

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  2. tony says:

    Bottom line.SPX 1133 on Oct 13th sounds possible.But if 1039 is overlapped, less likely.And if 1018 is reached, very unlikely.

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  3. tony says:

    Welcome E,Your question was answered in the weekend review.

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  4. Aureliano says:

    S2: Thanks as always for your excellent contributions. Still 20% short – didn\’t do anything yesterday. Been scrounging around for as much capital as possible and transferring it over to my trading account. The combination of a possible strengthening of the $, rise in VIX, and falling stock market may prove the opportunity of a lifetime. I still need to get SPX below 950 to recoup my earlier losses right after c of C started but I\’m more hopeful than ever I\’ll get that chance. Thanks to everyone here for the analysis. Seems we\’re getting back to focus with less and less diatribe and more and more rationality. I like it!

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  5. Brett says:

    S2, how would you use RSI to confirm the top at 1080? Thanks.

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  6. S2 says:

    E, That question has been asked many times here over the couple years I have followed this blog. Tony allows 3-wave As and Cs as part of a double zigzag. Many Elliotticians label that WXY rather than ABC. It\’s just a labeling difference. Still EW rules. You\’ll notice he is expecting a 5th wave to complete c of C (or what many label c of Y). I slightly favor that 5th wave likelihood as well although I give nearly equal weight to a short 4-5 of c of C/Y having already completed at 1080. Tony mentioned his OEW 1061 pivot likely being a battleground area for that count, and I concur since it marks an approximate 50% retrace and the 8-10dSMAs. Good luck.

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  7. E says:

    Tony,please correct me if I am wrong.looks like your entire move from the March low is a simple 5-3-5 Zigzag.then shouldn\’t your major c from July low be a 5-waves move? currently you are labeling major as 3 minor waves move of minor a, b, c of the brown color.Same question also applies to major a.Thank you.

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  8. msmike says:

    Hd, like that vid.

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  9. gls says:

    I had posted that I thought the $SSEC could reaaly drop Sunday night. Don\’t think so now.ON Thursday night it traced out a contracting triangle and broke down ina n impulse. When it completed the impulse down, it rallied in an impulse, I think. So, should be no big down.As Phil ( Sarge) use to say on Hill Street Blues, " Be careful out there." Good luck.

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  10. msmike says:

    Wig, yes, cobalt plese post something.

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