friday update

SHORT TERM: market gaps down again, DOW -97

Overnight the Asian markets were all lower. Europe opened lower and closed -0.70%. US index futures were lower overnight and at 8:30 Q2 GDP was reported positive but lower than expected: +1.3% vs +1.9%. The market gapped down, for the third time this week, at the open. The SPX opened at 1290 and hit 1283 within the first few minutes. The market had closed at SPX 1301 yesterday. The market then started to rally. At 9:45 the Chicago PMI was reported lower: 58.8 vs 61.1 and then Consumer sentiment was reported slightly lower: 63.7 vs 63.8. The market continued to rally until about 11:30 when the SPX hit 1304. Then another pullback followed to SPX 1295 by 1:00. Then a rally attempt ended at SPX 1300 by 2:00 and the market headed lower into a 1292 close.

For the day the SPX/DOW were -0.70%, and the NDX/NAZ were -0.35%. Bonds soared 41 ticks, Crude dropped $1.50, Gold rallied $9.00, and the USD was lower. Support on the SPX remains at 1291 and then 1261, with resistance at 1303 and then 1313. Short term momentum set up a positive divergence at today’s lows and then turned higher. Last night the FED reported the Monetary base had declined. Today, the WLEI was reported higher: 52.0% vs 51.6%.

Yesterday we ended the day getting close to the important SPX 1296 level. Today, as has been customary for this market in recent years, the market gapped right through it to a SPX 1290 open. The SPX did find some support in the mid-1280’s (1283), with a positive divergence, and then staged its best rally since this decline began from SPX 1347. Some observed the decline from SPX 1347 to 1283 looked like a completed five waves, and a rally into the 1313 pivot range is now possible. That should be enough to turn the short term OEW charts positive again. They have been negative since about 1335. Overall, debt ceiling or no debt ceiling, we’re likely to get an OEW downtrend confirmation soon. Will cover it all in the weekend update. Enjoy the weekend!

MEDIUM TERM: uptrend in jeopardy

LONG TERM: bull market at inflection point

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

About tony caldaro

Investor
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14 Responses to friday update

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  3. cwallace90 says:

    fwiw this reminds me of July 2007 when the bad news started coming out, and then the market had one more high into the Oct. 2007 top. I think we are potentially setting up for that again. Good Weekend all!

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    • tony caldaro says:

      Yes, lots of similaries and differences too.

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      • cwallace90 says:

        True. I know you don’t agree with this but this time it is a much bigger top forming. And not the mortgage market ready to implode but the entire monetary system and most financial markets.

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      • cwallace90 says:

        the way I see it, this is the only solution. It will likely happen, but not until the bottom, very much like 1932 when Roosevelt devalued the dollar thereby jump starting the economy but not until the DOW lost 89% of its value. What the FED is doing now with QE is not, IMO, the same as 1932 because what they are monetizing is peanuts compared to the total amount of unpayable debt out there.

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    • CB says:

      Thanks, Cwallace. Wow, that guy has a great grasp on the situation. Under our circumstances , though, he is kinda dreaming the impossible dream because the bankers r not going to give up their interest-bearing scheme without a fight. Actually Congress has already tried to fight back…… Remember, the day before Congress was set to vote on the “Audit the Fed” bill last year, the flash crash “happened…. That guy makes perfect sense, though. Too bad, we can never see people like that in positions of power …politicians need money….and folks like Still could never get funding from you-know-whom…. Thanks again, good stuff!

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  4. MGD says:

    Alt count:
    Feb-March =A (95 points)
    March-July=B ( March-May=a; May-Jun=b; Jun-Jul=c )
    July-?= C (1.62 of A= 1.62*95=154)
    C should finish abt 1190-1205

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  5. CB says:

    thanks Tony.
    Nice break-out in bonds today. http://screencast.com/t/Qxe5dqLvB
    …and just what the doctor ordered for the much-maligned real estate stocks, huh? 🙂
    have a good weekend everyone !

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