tuesday update

SHORT TERM: early pullback ends positive, DOW +5

Overnight all the Asian markets were modestly lower. Europe opened lower and closed -0.60%. US index futures were lower overnight, and at 9:00 Case-Shiller reported a less positive annual gain in housing prices: +1.7% v +3.2%. The market gapped down at the open to SPX 1181. It had closed at SPX 1186 yesterday. Within the opening minutes the SPX dipped to 1178, the low for the day, and then began to recover. At 10:00 Consumer confidence was reported higher: 50.2% v 48.6%, and FHFA home prices were reported positive: +0.4% v -0.5%. Around 10:30 the SPX hit 1186, yesterday’s close, and then traded in a narrow four point range while it tried to move higher. At 11:00 the FED made the following press release: http://www.federalreserve.gov/newsevents/press/bcreg/20101025b.htm. Just past 1:00 the SPX hit the OEW 1187 pivot and then started to pullback again. At 2:00 the FED made another press release: http://www.federalreserve.gov/newsevents/press/bcreg/20101026a.htm. Just past 2:00 the market traded down to 1182, then made its final attempt at SPX 1187 for the day and closed at 1186.

For the day the SPX/DOW were +0.05%, and the NDX/NAZ were +0.25%. Bonds lost 24 ticks, Crude added 10 cents, Gold gained $1.00, and the USD was higher. Support for the SPX remains at 1176 and then 1168, with resistance at 1187 and then 1222. Short term momentum hit slightly oversold this morning and then worked its way back to neutral. Tomorrow, Durable goods orders at 8:30, then New home sales at 10:00.

The market opened lower this AM and created another one of those ‘about 20 point’ pullbacks from a new uptrend high. Since the second week of October we have seen four successive pullbacks of this type after every marginal new high. We had a congestion period like this during the last two weeks of September, when the market was trying to clear the SPX 1150 Major wave 3 high. Once the SPX finally closed above that level the rally resumed. This time we are dealing with the OEW 1187 pivot. Looks like the market will need to close above this level to finally clear it. The SPX closed at 1186 yesterday and 1186 again today. The NDX, btw, is only about 5% from its 2007 high. Best to your trading!

MEDIUM TERM: uptrend

LONG TERM: bull market

CHARTS: http://stockcharts.com/def/servlet/Favorites.CServlet?obj=ID1606987

About tony caldaro

Investor
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9 Responses to tuesday update

  1. CB says:

    HD, thanks! I had a blast watching your video . Wow, you’ve posted so much great stuff for us here …thanks a bunch! Is that you in those designer shades?

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  2. makiori says:

    nice video HD, markets are now much clearer!!!

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  3. H D says:

    The most bullish way to count this chop fest is we just put in 2 of an EDT for wave 5 up from 1159. W3 still goes to the fibs 1198-1203 in chop and 4 chop and 5 of chop. Breaking MA89 takes that off the table. If we started iv it can’t bust 1129.24

    HD is out for minute.

    Some charts
    http://flic.kr/p/8LXEZH

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  4. CB says:

    Very interesting observations, Semivolved. Thanks! 2008 was an interesting year; Tony & OEW called the new bear market in stocks already on Jan 16 2008 while HG didn’t actually peak until mid-year of 2008. It would seem that stocks in general, and financials in particular were much better barometers at that time. It seems that the falling $usd helped prolong the speculation in HG, WTIC & other commodities & helped mask problems in the financials. It’s obviously hard to speculate about people’s motivations, but we now know that some major Wall Street players were very much aware of the impending problems already in early 2008, and yet the stock collapse was delayed until after the Beijing Olympics. Isn’t the current price action in HG bit suspect, too?; we seem to have a bit of a non-confirmation (price denominated in USD vs. other major currencies ( yen)…plus all the QE talk indicating economic weakness, not strength….But …it’s an election year, of course 🙂

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  5. semievolved says:

    FWIW – Copper as leading indicator of SPX.

    In case anybody is curious about this (I am). I plotted past 3 years of data and identified minor and medium sized intermediate highs and lows and major tops and bottoms. This is what I found:

    Cu lead SPX in three minor and medium intermediate highs by 29, 0, and 24 days
    Cu lead SPX in three minor and medium intermediate lows by 94, 0, and 0 days
    Cu lead SPX in three major tops by 25, 53, and 39 days
    Cu lead SPX in one major bottom by 50 days

    I didn’t see any instances of the SPX leading Cu but of course my calling of minor highs and lows is subjective. I am trying to work out an appropriate statistical test; suggestions welcomed.

    Thanks to Tony for pointing me to a good data source.

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  6. CB says:

    Thanks Tony and mm. Appreciate the info.

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  7. mm4398 says:

    I see Tony has marked silver as having completed minute iv. Gold should follow silver shortly in confirming an uptrend.

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