tuesday update

SHORT TERM: early pullback leads to a rally, DOW +81

Overnight the Asian markets were mixed again. Europe opened higher but closed mixed as well. US index futures were higher overnight. At 9:00 Case-Shiller housing prices were reported lower year/year: -3.1% vs -2.3%. We will provide an update on the US housing market tomorrow. The stock market opened about unchanged at SPX 1310 and immediately resumed yesterday’s pullback. In the opening minutes the SPX hit 1305, was quite oversold, and then tried to rally. At 10:00 Consumer confidence was reported sharply lower: 63.4 vs 70.4. The market continued to rally. Around 12:00 the FED released: http://www.federalreserve.gov/newsevents/press/bcreg/20110329a.htm. The rally continued. For the rest of the day the market moved higher with only two point pullbacks along the way. Then it closed at the high tick for the day SPX 1319.

For the day the SPX/DOW were +0.70%, and the NDX/NAZ were +0.95%. Bonds lost 10 ticks, Crude gained 75 cents, Gold slipped $1.00, and the USD was higher. Support for the SPX moves back up to 1313 and then 1303, with resistance at 1363 and then 1372. Short term momentum was oversold this AM and turned higher, hitting slightly overbought at the close. Tomorrow, the ADP employment index at 8:15.

This morning’s follow through on yesterday’s pullback found support just below the OEW 1313 pivot range. The market then turned right around and recouped most of the decline in a matter of hours. The short term OEW charts have remained positive since the SPX 1284 low a week ago. Nevertheless, we posted a tentative green Minor wave 3 at yesterday’s SPX 1320 high, and a Minor 4 at today’s SPX 1305 low. The recent pullback was sufficiently oversold to be counted as a fourth wave. This tentative count suggests the market is in Minor wave 5, of Intermediate wave one, for the Major wave three uptrend. With Minor 1 (52 pts), and Minor 3 (36 pts), Minor 5 should be limited to SPX 1341. Best to your trading!

MEDIUM TERM: downtrend likely bottomed

LONG TERM: bull market

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

About tony caldaro

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28 Responses to tuesday update

  1. CB says:

    Tony, I am probably wrong but I want to ask your opinion any way b/c I am curious. .. Since we made a higher daily high on RSI today, doesn’t the daily time frame override the 60 min timeframe ?


  2. H D says:

    Relentless from 1303 pivot. not even a 3 point dip. I need a dip folks!


  3. tjhere says:

    Tony, Could you share the pivots above 1363? Tks & Best Regards


  4. CB says:

    Vix just abv. tripple support ..17-17.11… below 17 would be P&F breakdown


  5. MGD says:

    Hi Tony, with minor w5 of I1 now underway I wonder what to expect for I2 ?


  6. fdbotha says:

    “With Minor 1 (52 pts), and Minor 3 (36 pts), Minor 5 should be limited to SPX 1341.”

    Tony, great work, and I really appreciate everything you do. In above scenario, you have W3 fairly short. I thought that under the rules W3 cannot be shorter than W1?

    Thanks Francois


  7. H D says:

    W5 now .618 of W3 Anybody want to sell it? :mrgreen:


  8. cpatrader says:

    Tony, the pullback a few weeks ago looks and feels much like the one from last February. I am thinking we rally to the 78% fib level or there abouts (1380-1400ish) at which time we see a more significant correction. June, July timeframe from that level to around the 1225 level or where ever the 76 week SMA is at around that time. This is currently around 1155 and rising about 3 points per week. So 20 weeks out assuming we bottom around August gets you around this level. Then we finish off the bull into the Spring of 2012. This would indicate that we are in 5th wave of the larger wave 3. Any chance we can make this fit into your bigger picture ?


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